11 kilometres east of the LaRonde Mine.mine. The synergies between these sites contribute to the Company's status as a low cost producer.efforts to reduce costs. The Kittila Mine,mine in Finland, which achieved commercial production in May 2009, has a long reserve life and has significant production expansion potential. In February 2012, the Board approved expansion of mining operations at the Kittila mine to a capacity of 3,750 tonnes per day. The Pinos Altos Mine,mine, in Mexico, achieved commercial production in November 2009 and also has significant production expansion potential. Commissioning of theThe Company's sixthfifth mine, Meadowbank, in Nunavut, achieved commercial production in March 2010 and is currently underwayexpected to produce the most gold (approximately 360,000 ounces) in 2013. In September 2012, the Company began the development and construction at the La India mine project in Mexico. The La India mine project and the Company had its first dore bar pour atGoldex mine project are both expected to achieve commercial production in the Meadowbank Mine in February 2010.second quarter of 2014. In addition, the Company plans to pursue opportunities for growth in gold production and gold reserves through the prudent acquisition or development of exploration properties, development properties, producing properties and other mining businesses in the Americas and Europe.

        The Company believes that its total cash costs per ounce place it among the lowest quartile2012 ANNUAL REPORT            17

Table of producers in the gold mining industry.Contents

In 2009,2012, the Company produced 492,9721,043,811 ounces of gold at total cash costs per ounce of $347$640 net of revenues from byproduct metals. For 2010,2013, the Company expects to produce 1,057,200between 970,000 and 1,010,000 ounces of gold at a total cash costscost per ounce of gold produced of approximately $399between $700 and $750 net of byproduct revenue. These expected higher total cash costs compared to 20092012 reflect the commencementhigh proportion of mining operations atproduction coming from the Meadowbank Mine,mine, which is expected to have higher total cash costs per ounce compared to the Company's average; higher costs associated with the transition to underground mining operations at the Pinos Altos Minemine and the Kittila Mine;mine; and increased production from the Company's mines and mine projects that do not contain byproduct metals.metals, revenue from which reduces total cash costs per ounce. In addition, the higher total cash costs per ounce also reflect the strength of the Canadian dollar strengthening against the U.S. dollar recentand continued escalations in labour, shipping and transportation costs and the ramp-up of operations at the Pinos Altos Mine during 2010.costs. See "Note to Investors Concerning Certain Measures of Performance" for a discussion of the use of the non-US GAAP measure total cash costs per ounce. The Company has traditionally sold all of its production at the spot price of gold due to its general policy not to sell forward its future gold production.

The Company expects its all-in sustaining costs for 2013 to be approximately $1,075 per ounce of gold. The Company calculates all-in sustaining costs as the aggregate of total cash costs (net of byproduct credits), sustaining capital expense, corporate, general and administrative expense (net of stock option expense) and exploration expenses divided by the number of ounces produced. All-in sustaining costs is a non-US GAAP measure and is used to show the full cost of gold production from current operations. The Company's methodology for calculating all-in sustaining costs may not be similar to the methodology used by other producers that disclose all-in sustaining costs. The Company may change the methodology it uses to calculate all-in sustaining costs in the future, including in response to the adoption of formal industry guidance regarding this measure by the World Gold Council.

The Company operates through four segments: Canada, Europe, Latin America and Exploration.

The Canadian Segment is comprised of the United States.

Company's operations in the Province of Quebec and the Nunavut Territory. The Company's Quebec Region includesproperties include the LaRonde Mine,mine, the LaRonde Mine extension project,Lapa mine and the Goldex Mine and the Lapa Mine,mine project, each of which is held directly by the Company. In 2009,2012, the Quebec Regionproperties accounted for 82.2%approximately 25% of the Company's gold production, comprised of 41.3%approximately 15% from the LaRonde Mine, 30.2% from the Goldex Minemine and 10.7%approximately 10% from the Lapa Mine.mine. In 2010,2013, the Company anticipates that theits Quebec Regionproperties will account for 43.4%approximately 28% of the Company's gold production, of which 17.0%, 15.5%18% and 10.9%10% of the Company's gold production will come from the LaRonde Mine, the Goldex Minemine and the Lapa Mine,mine, respectively.

The Company's operations inNunavut properties are comprised of the European RegionMeadowbank mine and the Meliadine project, which are conducted through its indirect subsidiary, Agnico-Eagle AB, which ownsboth held directly by the Kittila Mine in Finland.Company. In 2009,2012, the Kittila MineMeadowbank mine accounted for 14.6%approximately 35% of the Company's gold production and the Company anticipates that in 20102013 the Kittila MineMeadowbank mine will account for 13.9%approximately 36% of the Company's gold production.

The Company's operations in the European Segment are conducted through its indirect subsidiary, Agnico Eagle Finland Oy, which owns the Kittila mine in Finland. In 2012, the Kittila mine accounted for approximately 17% of the Company's gold production and the Company anticipates that in 2013 the Kittila mine will again account for approximately 17% of the Company's gold production.

In the Latin American Region, the Company's mining at Pinos Altos are conducted through its subsidiary, Agnico Eagle Mexico S.A. de C.V., which owns the Pinos Altos Mine andmine, including the Creston Mascota deposit. The La India mine project is owned by the Company's indirect subsidiary, Agnico Sonora, S.A. de C.V. In 2009,2012, the Pinos Altos Minemine accounted for 3.3%approximately 23% of the Company's gold production and the Company anticipates that in 20102013 the Pinos Altos Minemine will account for 14.3%approximately 19% of the Company's gold production.

The Nunavut Region is comprised ofExploration Segment includes the Meadowbank Mine, which is held directly by the Company. The Meadowbank Mine, which is expected to achieve commercial productionCompany's grassroots exploration operations in the first quarter of 2010, will account for approximately 28% ofUnited States, the Company's 2010 gold production.European exploration office, the Canadian exploration offices and the Latin American exploration office. In addition, the Company has an international exploration officeoffices in Reno, Nevada.Nevada and Vancouver, Canada.

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The following table sets out the date of acquisition, the date of commencement of construction and the date of achieving commercial production for the Company's mines and mine projects. Agnico-Eagle's expertise in acquiring and developing mines is shown through the successful launch of six operating mines.

The Company's exploration program focuses primarily on the identification of new mineral reserves and resources and new development opportunities in proven gold producing regions. Current exploration activities are concentrated in Canada, Europe, Latin America and the United States. Several projects were evaluated during the year2012 in other countries where the Company believes the potential for gold occurrences is excellent and which the Company believes to be politically stable and supportive of the mining industry. The Company currently manages 7869 properties in Canada, 11four properties in Nevada and Idaho in the United States, three groups of properties in Finland, four propertiesone property in Sweden, eight projects in Mexico and three propertiesone project in Argentina. Exploration activities are managed from offices in Val d'Or, Quebec; Reno, Nevada; Chihuahua, Mexico; Helsinki and Kittila, Finland; and Vancouver, British Columbia.

In addition, the Company continuously evaluates opportunities to make strategic acquisitions. ThreeFive of the Company's new mines or projects came from relatively recent acquisitions.

In the second quarter of 2004, the Company acquired an approximate 14% ownership interest in Riddarhyttan Resources AB ("Riddarhyttan"), a Swedish precious and base metals exploration and development company that was at the time listed on the Stockholm Stock Exchange. In November 2005, the Company completed a tender offer (the "Riddarhyttan Offer") for all of the issued and outstanding shares of Riddarhyttan that it did not own. The Company issued 10,023,882 of its common shares and paid and committed an aggregate of $5.1 million cash as consideration to Riddarhyttan shareholders in connection with the Riddarhyttan Offer. The Company, through wholly-owned subsidiaries, currently holds 100% of Riddarhyttan.On March 28, 2011, Riddarhyttan through its wholly-owned subsidiary,was merged with Agnico-Eagle AB isand Agnico-Eagle Sweden AB, with Agnico-Eagle Sweden AB as the 100% owner of thecontinuing entity. The Kittila Mine,mine, located approximately 900 kilometres north of Helsinki near the town of Kittila in Finnish Lapland.Lapland, is currently 100% owned by Agnico-Eagle Finland Oy, which is owned by Agnico-Eagle Sweden AB.

In the first quarter of 2005, the Company entered into an exploration and option agreement with Industrias Penoles S.A. de C.V. ("Penoles") to acquire the Pinos Altos property in northern Mexico. The Pinos Altos property is comprised of approximately 11,000 hectares in the Sierra Madre gold belt, approximately 225 kilometres west of the city of Chihuahua in the state of Chihuahua in northern Mexico. In February 2006, the Company exercised its option and acquired the Pinos Altos property on March 15, 2006. Under the terms of the exploration and option agreement, the purchase price of $66.8 million was comprised of $32.5 million in cash and 2,063,635 common shares of the Company.

In February 2007, the Company made an exchange offer for all of the outstanding shares of Cumberland Resources Ltd. ("Cumberland") not already owned by the Company. At the time, Cumberland was a pre-production development stage company listed on the Toronto Stock Exchange (the "TSX") and American Stock Exchange.Exchange whose primary asset was the Meadowbank property. In May 2007, the Company acquired approximately 92% of the issued and outstanding shares of Cumberland that it did not previously own and, in July 2007, the Company completed the acquisition of all Cumberland

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shares by way of a compulsory acquisition. The Company issued 13,768,510 of its common shares and paid $9.6 million in cash as consideration to Cumberland shareholders in connection with its acquisition of Cumberland.

In 2009,April 2010, the Company entered into an agreement in principle with Comaplex Minerals Corp. ("Comaplex") to acquire all of the outstanding shares of Comaplex that it did not already own. At the time, Comaplex owned a 100% interest in the advanced stage Meliadine gold property, which is located approximately 300 kilometres southeast of the Company's Meadowbank mine. In May 2010, the Company executed the definitive agreements with Comaplex and, in July 2010 by plan of arrangement, the Company acquired 100% of the Meliadine gold property through the acquisition of Comaplex, which was renamed Meliadine Holdings Inc. ("Meliadine"). Pursuant to the arrangement, Comaplex transferred to Geomark Exploration Ltd. all assets and related liabilities other than those relating to the Meliadine project. In connection with the arrangement, the Company issued 10,210,848 of its common shares as consideration to Comaplex shareholders.

In September 2011, the Company entered into an acquisition agreement with Grayd Resource Corporation ("Grayd"), a Canadian-based natural resource company listed on the TSX Venture Exchange, pursuant to which the Company agreed to make an offer to acquire all of the issued and outstanding common shares of Grayd. At the time, Grayd held a 100% interest in the La India property located in the Mulatos Gold Belt of Sonora, Mexico and had recently discovered the Tarachi gold porphyry prospect located approximately ten kilometres north of the La India property. In October 2011, the Company made the offer by way of a take-over bid circular, as amended and supplemented, and, in November 2011, acquired approximately 95% of the outstanding common shares of Grayd. In January 2012, the Company completed a compulsory acquisition of the remaining outstanding common shares of Grayd and Grayd became a wholly-owned subsidiary of the Company. In aggregate, the Company issued 1,319,418 of its common shares and paid C$179.7 million in cash as consideration to Grayd shareholders in connection with the transaction.

In 2012, the Company's capital expenditures were $657$445.6 million. The 20092012 capital expenditures included $76$75.2 million at the LaRonde Mine (which included approximately $39mine, $18.5 million of expenditures relating toat the LaRonde Mine extension), $22Lapa mine, $26.8 million at the Goldex Mine, $90mine project, $60.0 million at the Kittila Mine (which included $36 million of expenditures on construction of the underground mine), $47 million at the Lapa Mine (which included $22 million on construction of the mine), $133mine, $30.0 million at the Pinos Altos Mine and $288mine (which included approximately $5.8 million related to the Creston Mascota deposit), $39.2 million at the La India mine project, $105.1 million at the Meadowbank Mine.mine, $83.3 million at the Meliadine project and $7.5 million at other minor projects. In addition, the Company spent $36$5.0 million on mine site exploration and $104.5 million on exploration activities at the Company's grassroots exploration properties. properties, including corporate development expenses.

Budgeted 2010 exploration and2013 capital expenditures of $478$596 million include $96$91 million at the LaRonde Mine (including $67mine, $19 million onat the LaRonde Mine extension), $14Lapa mine, $63 million at the Goldex Mine, $29 million at the Lapa Mine, $92mine project (M and E Zones), $75 million at the Pinos Altos Mine (including $54mine, $92 million on the construction and development at the Creston Mascota deposit), $59La India mine project, $73 million at the Kittila Mine, $112mine, $79 million at the Meadowbank Mine (including $10.5 million on the construction of the mine)mine and $37$38 million in capitalized exploration expenditures. In addition, the Company plans exploration expenditures on grassroots exploration projects of approximately $39 million.$71 million, including $17 million at the Meliadine project. Depending on the success of the exploration programs at these and other properties, the Company may be required to make additional capital expenditures for exploration, development and pre-production.

The financingfunds for the expenditures set out above isare expected to be from internally generated cash flow from operations, from the Company's existing cash balances and from drawdowns of the Company's bank credit facilities. In addition, on March 19, 2010 the Company announced it had received non-binding commitments from institutional investors in the United States and Canada to purchase in a private placement $600 million of guaranteed senior unsecured notes due in 2017, 2020 and 2022 (the "Notes")facility. Please see "Item 10 Additional Information – Material Contracts – Credit Agreement". The Notes are expected to have a weighted average maturity of 9.84 years, weighted average yield of 6.59% and restrictive convenants and events of default substantially similar to the Company's bank credit facilities. Proceeds from the offering of the Notes will be used to repay amounts under the Company's bank credit facilities. Closing of the transaction is expected to occur in April 2010. Based on current funding available to the Company (excluding the Notes) and expected cash flows from operations, the Company believes it has sufficient funds available to fund its 2013 projected capital expenditures for all its properties.

Capital expenditures by the Company in 20082011 and 20072010 were $909$482.8 million and $523$512 million, respectively. The 20082011 capital expenditures included $75$90.7 million at the LaRonde Minemine (which was comprised of $38included approximately $49.5 million of sustaining capital expenditures and $37 million comprised primarily of expenditures onrelating to the LaRonde Minemine extension), $53$18.4 million at the Lapa mine, $42.2 million at Goldex, Mine, $196$86.5 million at the Kittila Mine, $89 million at the Lapa Mine, $176mine, $40.0 million at the Pinos Altos Mine and $314mine (which included approximately $7.6 million related to the Creston Mascota deposit), $116.9 million at the Meadowbank Mine.mine and $73.9 million at the Meliadine project. In addition, the Company spent $11.0 on mine site exploration and $64.7 million on exploration activities at the Company's grassroots exploration properties. The 2010 capital expenditures included $97 million at the LaRonde mine (which included approximately $62 million of expenditures relating to the LaRonde mine extension), $33 million at the Lapa mine, $24 million at Goldex, $72 million at the Kittila mine, $104 million at the Pinos Altos mine (which included approximately $43 million related to the Creston Mascota deposit), $174 million at the Meadowbank mine and $8 million at the Meliadine project and other minor properties. In addition, the Company spent $35 million on exploration activities at the Company's grassroots exploration properties. The 2007 capital expenditures included $87 million at the LaRonde Mine (which was comprised of $34 million of sustaining capital expenditures and $53 million comprised primarily of expenditures on the LaRonde Mine extension and the ramp below Level 215), $105 million at the Goldex Mine, $94 million at the Kittila Mine, $29 million at the Lapa Mine and $170 million at the Meadowbank Mine.

The Company was formed by articles of amalgamation under the laws of the Province of Ontario on June 1, 1972, as a result of the amalgamation of Agnico Mines Limited ("Agnico Mines") and Eagle Gold Mines Limited ("Eagle"). Agnico

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Mines was incorporated under the laws of the Province of Ontario on January 21, 1953 under the name "Cobalt Consolidated Mining Corporation Limited". Eagle was incorporated under the laws of the Province of Ontario on August 14, 1945.

On December 19, 1989, Agnico-Eagle acquired the remaining 57% interest in Dumagami Mines Limited not already owned by it, as a consequence of the amalgamation of Dumagami Mines Limited with a wholly-owned subsidiary of Agnico-Eagle, to continue as one company under the name Dumagami Mines Inc. ("Dumagami"). On December 29, 1992, Dumagami transferred all of its property and assets, including the LaRonde Mine,mine, to Agnico-Eagle and was subsequently dissolved.

On December 8, 1993, the Company acquired the remaining 46.3% interest in Goldex Mines Limited not already owned by it, as a consequence of the amalgamation of Goldex Mines Limited with a wholly-owned subsidiary of the Company, to continue as one company under the name Goldex Mines Limited. On January 1, 1996, the Company amalgamated with two wholly-owned subsidiaries, including Goldex Mines Limited.

In October 2001, under a plan of arrangement, the Company amalgamated with an associated corporation, Mentor Exploration and Development Co., Limited ("Mentor"). In connection with the arrangement, the Company issued 369,348 of its common shares in consideration for the acquisition of all of the issued and outstanding shares of Mentor that it did not already own.

On August 1, 2007, the Company, Agnico-Eagle Acquisition Corporation, Cumberland and a wholly-owned subsidiary of Cumberland, Meadowbank Mining Corporation, amalgamated under the laws of the Province of Ontario and continued under the name of Agnico-Eagle Mines Limited.

On January 1, 2011, the Company and 1816276 Ontario Inc. (the successor corporation to Meliadine, which in turn was the successor corporation to Comaplex) amalgamated under the laws of the Province of Ontario and continued under the name of Agnico-Eagle Mines Limited.

On January 1, 2013, the Company and its wholly-owned subsidiary, 1886120 Ontario Inc. (the successor corporation to 9237-4925 Québec Inc.), amalgamated under the laws of the Province of Ontario and continued under the name of Agnico-Eagle Mines Limited.

The Company's executive and registered office is located at Suite 400, 145 King Street East, Toronto, Ontario, Canada M5C 2Y7; telephone number (416) 947-1212; website: http://www.agnico-eagle.com. The information contained on the website is not part of this Form 20-F. The Company's principal place of business in the United States is located at 8725 Technology1675 E. Prater Way, Suite B, Reno,102, Sparks, Nevada 89521.89434.

Business Overview

The Company believes that it has a number of key operating strengths that provide distinct competitive advantages.

Growth Profile.    The Company has a proven track record of increasing production capacity at existing operations through a combination of acquisitions, operational improvements, expansions and development. The suspension of mining operations at the Goldex mine in October 2011 had a negative impact on the growth profile, however, the Company anticipates increasing its production to over 1.0 millionof between 970,000 and 1,010,000 ounces of gold in 2010 with continued growth to 2014. The Company's production2013 and growth in 2010 is2014 with the expected to come principally from the Meadowbank Mine, which achieved commercialcommencement of production in the first quarter of 2010, as well as from the continued operational improvements at the Kittila, LapaLa India and Pinos Altos Mines.Goldex mine projects. Over the last threefive years, the Company has spent over $2$2.7 billion on the development of five new mines and itsthe significant extension of the LaRonde Minemine at depth. With the large majority of mine development projects complete and with five mines expected to achieve steady state operational status,Future capital expenditures are expected to decline materially from 2010 onward, significantly increasing free cash flow. The remaining capital expenditure isbe primarily for incremental expansion projects and completionexploration and development of the Meadowbank Mine.La India and Goldex mine projects and the Meliadine project.

Operations in Politically Stable, Mining-FriendlyMining Friendly Regions.    The Company and its predecessors have over three decades of continuous gold production experience and expertise in metals mining. The Company's operations and exploration and development projects are located in regions that the Company believes are supportive of the mining industry. Three of theThe Company's producingLaRonde and Lapa mines and one of its construction projectsGoldex mine project are located in the Abitibi region of northwestern Quebec, one of North America's principal gold-producing regions. The Province of Quebec had the highest "policy potential index" for any mining jurisdiction in the world in the Fraser Institute's 2008-2009 survey of mining companies. The policy potential index measures the effects on exploration of a variety of government policies related to the mining industry. The Company's Kittila Minemine in northern Finland, Pinos Altos Minemine and La India mine project in northern Mexico and Meadowbank Minemine and Meliadine project in Nunavut are also located in regions which the Company believes are also supportive of the mining industry.

        Low-Cost, Efficient Operations.    The Company believes that its total cash costs per ounce place it among the lowest quartile of producers in the gold mining industry, with total cash costs per ounce of gold produced at $347 for 2009 and $162 per ounce for 2008. These relatively low cash costs are attributable to the economies of scale afforded by the Company's mining operations, as well as byproduct revenues from the LaRonde and Pinos Altos Mines and sharing of resources among its three operating mines in northwestern Quebec. In addition, the Company believes its highly motivated work force contributes significantly to continued operational improvements and to the Company's low-cost producer status.

Strong Operating Base.    Through its acquisition, exploration and development program, the Company has been transformed from a regionally focused, single mine producer to a multi-mine international gold producer with sixfive operating, 100% owned mines. The Company's existing operations at the LaRonde Mineits existing mines provide a strong economic base for additional

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mineral reserve and production development at the property and in the Abitibi region of northwestern Quebecthese properties and for the development of its mines and growth projects in Nunavut, Finland, Mexico and Mexico.the Abitibi region. The experience gained through building and operating the LaRonde Minemine has assisted with the Company's development of its other mine projects. In addition, the extensive infrastructure associated with the

LaRonde Minemine supports the nearby Lapa mine and Goldex and Lapa Mines, and the construction of infrastructure to access the depositsmine project. Experience gained at the LaRonde Mine extension.Meadowbank mine in Nunavut is assisting with the Company's permitting and exploration work at the nearby Meliadine project. Similarly, experience building and operating the Pinos Altos mine in Chihuahua, Mexico has assisted the Company's efforts to develop the La India mine project 70 kilometres away in Sonora, Mexico.

Highly Experienced Management Team.    The members of the Company's senior management team hashave an average of over 2022 years of experience in the mining industry. Management's significant experience has underpinned the Company's historical growth and provides a solid base upon which to expand the Company's operations.

Based on these strengths, the Company's corporate strategy is to grow low-cost production and reserves in mining-friendly regions.

Optimize and Further Expand Operations.    The Company continues to focus its resources and efforts on the exploration and development of its properties in Quebec, Nunavut, Finland and Mexico with a view to increasing annual gold production and gold mineral reserves.

Leverage Mining Experience.    The Company believes it can benefit not only from the existing infrastructure at its mines but also from the geological knowledge that it has gained in mining and developing its properties. The Company's strategy is to capitalize on its mining expertise to exploit fully the potential of its properties.

Expand Gold Reserves.    The Company is conducting drilling programs at all of its properties with a goal of further increasing its gold reserves. In 2009,2012, on a contained gold ounces basis, the Company increased its gold reserves to 18.4of the Company were 18.68 million ounces (162.4(184 million tonnes grading 3.523.16 grams of gold per tonne), an increase of 2% overessentially unchanged from the 18.75 million ounces reported as at December 31, 2008 levels, including the replacement of 492,972 ounces of gold mined.2011.

Growth Through Primary Exploration and Acquisitions.    The Company's growth strategy has been to pursue the expansion of its development base through the acquisition of additional properties in the Americas and Europe. Historically, the Company's producing properties have resulted from a combination of investments in advanced exploration companies and primary exploration activities. By investing in pre-development stage companies, the Company believes that it has been able to acquire control of projects at favourable prices and reasonable valuations. The Company's property acquisition strategy has evolved more recently to include joint ventures and partnerships and the acquisition of development and producing properties.

Mining Legislation and Regulation

Canada

The mining industry in Canada operates under both federal and provincial or territorial legislation governing prospecting and the exploration, development, operation and decommissioning of mines and mineral processing facilities. Such legislation relates to the method of acquisition and ownership of mining rights, labour, occupational or worker health and safety standards, royalties, mining, exports, reclamation, closure and rehabilitation of mines and other matters. Laws and regulations regarding the decommissioning, reclamation and rehabilitation of mines may require approval by provincial or territorial authorities of reclamation plans, provision of financial guarantees and long-term management of closed mines and related waste and tailings. Obligations under mining legislation may arise with respect to proposed, operating and closed facilities (including those that the Company owns but never operated).

The mining industry in Canada is also subject to extensive laws and regulations at both the federal and provincial or territorial levels concerning the protection of the environment. The primary federal regulatory authorities with jurisdiction over the Company's mining operations in respect of environmental matters are the Department of Fisheries and Oceans (Canada) and Environment Canada. The construction, development and operation of a mine, mill or refinery requires compliance with applicable environmental laws and regulations and/or review processes, including obtaining land use permits, water permits, air emissions certifications, industrial depollution attestations, hazardous substances management and similar authorizations from various governmental agencies. Environmental laws and regulations impose high standards on the mining industry to reduce or eliminate the effects of waste generated by mining and processing operations and subsequently deposited on the ground or affecting the air or water. Laws and regulations regarding the decommissioning, reclamation and rehabilitation of mines may require approval of reclamation plans, provision of financial guarantees and long-term management of closed mines.

Quebec

In Quebec, mining rights are governed by theMining Act (Quebec) and, subject to limited exceptions, are owned by the province. A mining claim entitles its holder to explore for minerals on the subject land. It remains

in force for a term of two

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years from the date it is registered and may be renewed indefinitely subject to continued exploration works in relation thereto. In order to retain title to mining claims, in addition to paying a small bi-annual rental fee currently ranging from C$2627.75 to C$120126 per claim, depending on its location ofand area (as set by Quebec government regulations), exploration work (or an equivalent value cash payment) has to be completed in advance (either on the claim or on adjacent mining claims, concessions or leases) and filed with the Ministry of Natural Resources and Wildlife (Quebec). prior to the date of expiry of the claim. The amount of exploration work required bi-annually currently ranges from C$48 to C$3,600 per claim, depending on its location, area and period of validity (as set by Quebec government regulations). In 1966, the mining concession system set out for lands containing mineralized zones in theMining Act (Quebec) was replaced by a system of mining leases, but the mining concessions sold prior to such replacement remain in force. A mining lease entitles its holder to mine and remove valuable mineral substances from the subject land, provided it pays the annual rent set by Quebec government regulations, which currently ranges from C$2121.50 per hectare (on privately held land) to C$4345 per hectare (on land owned by the province). Leases are granted initially for a term of 20 years and are renewable up to three times, each for a duration of ten years. After the third renewal, the Minister of Natural Resources and Wildlife (Quebec) may grant an extension thereof on the conditions, for the rental and for the term he or she determines.

        Bill 79, anAct to amend the Mining Act, was introduced in the Quebec National Assembly in December 2009 and, if adopted, will amend a number of rules relating to the mining regime in Quebec, mainly to stimulate mining exploration. However, it is too early to determine the final form that the amendments will take and what effect, if any, these amendments may have on the Company's operations.

In Quebec, the primary provincial regulatory authorities with jurisdiction over the Company's mining operations in respect of environmental matters are the Ministry of Sustainable Development, Environment, Wildlife and Parks (Quebec) and the Ministry of Natural Resources and Wildlife (Quebec).

Nunavut

        As a result ofUnder the Nunavut Land Claims Agreement (the "Land Claims Agreement") of July 1993,, ownership of large tracts of land in Nunavut was granted to the Inuit. These Inuit-owned lands include areas with high mineral potential. Further, as a result of other rights granted to the Inuit inunder the Land Claims Agreement, Inuit organizations play an important role in the management of natural resources and the environment in Nunavut. These duties are shared among the federal and territorial governments and Inuit organizations. Under the Land Claims Agreement, the Inuit own surface rights to certain lands representing approximately 16% of Nunavut. For a portion of the Inuit-owned lands representing approximately 2% of Nunavut, the Inuit also own mineral (subsurface) rights in addition to the surface rights.

In Nunavut, the Crown's mineral rights are administered by the Department of IndianAboriginal Affairs and Northern Affairs (Canada)Development Canada in accordance with theNorthwest Territories and Nunavut Mining Regulations (the "Territorial Mining Regulations") under theTerritorial Lands Act (Canada). The Inuit mineral rights in subsurface Inuit-owned lands are owned and administered by Nunavut Tunngavik Incorporated ("Nunavut Tunngavik"), a corporation representing the Inuit people of Nunavut.

Future production from Nunavut Tunngavik-administered mineral claims is subject to production leases which include a 12% net profits interest royalty from which annual deductions are limited to 85% of gross revenue. Production from Crown mining leases is subject to a royalty of up to 14% of adjusted net profits, as defined in the Territorial Mining Regulations. Before the operation of a major development projectMajor Development Project, as defined in the land claimLand Claims Agreement, can begin, developers must also negotiate an impact benefits agreementInuit Impact and Benefit Agreement ("IIBA") with the regional Inuit Association.

The Kivalliq Inuit Association (the "KIA"("KIA")is the Inuit organization that holds surface rightstitle to the Inuit-owned lands in the Kivalliq region and is responsible for administering surface rights on these lands on behalf of the Inuit of the region. In order to conduct exploration work on Inuit-owned lands, the Company is required to submit a project proposal or work plan. This proposal is subject to approval by the KIA for surface land tenure and to review by other boards established by the Land Claims Agreement to determine environmental effects and, if needed, to grant water rights. Federal and territorial government departments participate in the reviews conducted by these boards. For mine development, the Company requires a surface lease and water compensation agreement with the KIA and a licence under federal legislation for the use of water, including the deposit of waste.

During mine construction and operations, the Company is subject to additional Nunavut and federal government regulations related to environmental, safety, fire and other operational matters.

Finland

Mining legislation in Finland consists of the Mining Act, the Mining Decree, the Mining Safety Decree and the Mining Decree, which are currently being amended. Initial proposed amendmentsHoisting Equipment Decree. The new Mining Act was implemented on July 1, 2011 and replaced the previous Mining Act (503/1965) as a result of still on-going overall reform of mining legislation in Finland. Set out below is a general, brief overview of certain relevant aspects of Finnish mining legislation.

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In Finland, subject to certain area restrictions, anyone has a right irrespective of land ownership to conduct survey work and make geological measurements and observations, with the right to take small samples from the soil provided that these measures do not cause other than only minor damage or inconvenience. However, before sampling, a notice must be given to the Mining Act were releasedowner of the respective land.

A prospecting permit is required for more comprehensive survey work. The prospecting permit entitles its holder to conduct necessary research and exploration in October 2008 witha defined area in order to discover the aim thatquality and extent of a revised Mining Act would come into force in January 2011.deposit and to build or move temporary facilities and machinery onto the prospecting area for such purposes. The Council of State introduced the proposal forprospecting permit does not grant a revised Mining Act (the "Proposal") to Parliament on December 22, 2009, which may be amended during its reading in Parliament. Unless otherwise stated below, this summary reflects the Mining Act as currently in force.

        In Finland, any corporation having its principal place of business or central administration within the European Economic Area is entitled to the same rights to carry out prospecting, to stake a claim andright to exploit a deposit, as any Finnish citizen or corporation.for which purpose a mining permit is required, but it does grant its holder a priority to receive the mining permit on the prospecting area.

        In general, prospecting does not require any special licence fromA mining permit entitles its holder to exploit all minerals found on the authorities, except under certain circumstances as set outmining area defined in the Mining Act. The Proposal does not include any fundamental changes in this respect. If there are no impediments to granting a claim, the Ministry of Employmentpermit as well as all organic and non-organic surface material and the Economy (the "MEE")soil and bedrock, as considered necessary for the purposes of the mining work. In addition to the mining permit, a mining safety permit regarding safety measures of the contemplated mining operations is obliged to grant the applicant a prospecting licence, which is required if the prospector wishes to examine the area in order to determinebuild and operate a mine.

Generally, the sizemining area must either be owned or leased by the permit holder. However, provided that the mining project is required by the public interest, the Council of State of Finland may in certain cases grant a mining area redemption permit, which entitles the holder to establish a mining area without the consent of the landowner if the mining operator and the scopelandowner cannot come to a voluntary agreement regarding use of the deposit. Aland.

The Finnish Safety and Chemicals Agency is responsible for granting prospecting licence is in forcepermits, mining permits and mining safety permits upon an application, provided that statutory requirements are fulfilled. Prospecting permits and mining permits are transferrable and eligible to be pledged as security under Finnish law.

Prospecting permits are issued for one to five years, depending on the scopefixed periods of the search for mineable minerals, and the MEE has no power of discretion as to the material merits of the mining operation. Under the Proposal, a prospecting license would be in force for atime (a maximum period of four years and it couldat a time, which can be extended for three-year periods, up to a maximum of 15 years). Mining permits are generally granted without an expiry date. However, the Safety and Chemicals Agency investigates grounds for the continued existence of the permit at least once every ten years. The Proposal would also changeIn some cases, depending on the licensing authorityprevailing circumstances and the application procedure in order to permit more comprehensive hearingsdeposit, mining permits may only be granted for a fixed period of time (to a maximum period of ten years at a time). Prospecting permits and mining permits may be cancelled if the holder of the parties.permit does not perform mining operations in accordance with the terms of the permit or the permit holder violates rules of the Mining Act.

        In orderWithout specific permission of the National Board of Patents and Registrations of Finland, a right to obtain the rightsapply for and acquire a prospecting permit and/or mining permit is limited to Finnish corporations and individuals and foreign individuals and corporations domiciled in a state belonging to the mineable minerals located on a claim, the claimant must applyEuropean Economic Area.

In addition to the MEE for the appropriation of acompliance with mining patent. When thelegislation, all mining patent procedure has become final regarding all matters other than compensation, the MEE must issue the mining operator a mining certificate which gives the holder the right to fully exploit all mineable minerals found in the mining patent. Under the Proposal, a mining patent is to be replaced by a mining license and, before the mining operator can start exploiting the land, a mining survey under the revised Mining Act by the surveying office would be required. Also, an expropriation license relating to the mining area may be required if the mining operator and the owner of the land cannot come to a voluntary agreement on the use of the land in question for mining purposes. If in the public interest, the expropriation license will be granted by the Council of State to the mining operator. When the mining survey has become final regarding all matters other than compensation and the surveying office's decision has become non-appealable, the mining operator can start exploiting the land.

        Mining operations must be carried out in accordance with the permit terms and with laws and regulations concerning conservation and environmental protection issues. Under the Finnish Environmental Protection Act, mining activities require an environmental permit which may be issued either for a definite or indefinite period of time. The Environmental Protection Act is based on the principles of prevention and minimization of damages and hazards, the application of the best available technology, the application of the best environmental practice and the "polluter pays". principle.

The Act on Compensation for Environmental Damage includes provisions on the compensation for damage to a person or a property resulting from pollution of water, air, or soil, noise, vibration, radiation, light, heat, or smell or other similar nuisances, caused by an activity carried out at a fixed location. This act is based on the principle of strict liability.

In addition to an environmental permit,the permits listed above, mining operators may require several other permits and aremay be subject to other obligations under environmental protectionFinnish legislation.

According to the Act on Environmental Impact Assessment Procedure, certain projects require compliance with an environmental impact assessment procedure. These include major projects with a considerable impact on the environment, such as the excavation, enrichment and handling of metals and other minerals in cases where the excavated material is estimated to exceed 550,000 tonnes annually. Aannually or the operating area exceeds 25 hectares. An environmental permit authority may not give its approval to an activity covered by the scope of the Act on the Environmental Impact Assessment Procedure without having taken an environmental impact assessment report into consideration.

Mexico

Mining in Mexico is subject to the Mining Law, a federal law. Under the Mexican Constitution, all minerals belong to the Mexican Nation. Private parties may explore and extract minerals pursuant to mining concessions granted by the

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executive branch of the Mexican government, which as a general rule, are granted to whoever first claims them. While the Mining Law touches briefly upon labour, occupational and worker health and safety standards, these are primarily dealt with by the Federal Labour Law. The Mining Law also briefly addresses environmental matters, which are primarily regulated by the General Law of Ecological Balance and Protection of the Environment, also of federal jurisdiction.

The primary agencies with jurisdiction over mining activities are the Ministry of the Economy, the Ministry of Labor and Social Welfare and the Ministry of the Environment and Natural Resources. The National Water Commission has jurisdiction regarding the granting of water rights and the Ministry of Defense with respect to the use of explosives.

Concessions are granted for 50 years, renewable once. The main obligations to keep concessions current are the semi-annual payment of mining duties (taxes), based on the surface area of the concession, and the performance of work in the areas covered by the concessions, which is evidenced by minimum expenditures or by the extraction of ore.

Organizational Structure

The Company's significant subsidiaries (all of which are directly or indirectly wholly-owned by the Company, unless otherwise indicated) are Riddarhyttan, 1715495 Ontario Inc., Agnico-Eagle Mines Sweden Cooperatie U.A., which owns all of the shares of Agnico-Eagle Sweden AB, a Swedish company through which the Company holds its interest in Riddarhyttan,Oijarvi Resources Oy, and Agnico-Eagle AB,Finland Oy, a SwedishFinnish company through which Riddarhyttan holds its interest in the Kittila Mine. In addition, themine is held. The Company's interest in the Pinos Altos Minemine in northern Mexico is held through its direct and indirect wholly-owned Mexican subsidiary, Agnico Eagle Mexico, S.A. de C.V., which is, in turn, owned, in part, by 1641315 Ontario Inc. and Tenedora Agnico Eagle Mexico, S.A. de C.V., which is, in turn, owned in part by Agnico-Eagle Mines Mexico Cooperatie U.A. The Company's only other significant subsidiaries are Agnico-Eagle (Delaware) LLC, Agnico-Eagle (Delaware) II LLCinterest in the La India mine project in Mexico is held through its indirect wholly-owned Mexican subsidiary, Agnico Sonora, S.A. de C.V., which is owned by Grayd, Agnico Eagle Mexico, S.A. de C.V. and Agnico-Eagle (Delaware) III LLC, each a limited liability company organized under the laws of Delaware.Tenedora Agnico Eagle Mexico, S.A. de C.V. The LaRonde Mine (includingmine, the LaRonde Mine extension),Lapa mine, the Goldex Mine,mine project, the Lapa MineMeadowbank mine and the Meadowbank MineMeliadine project are owned directly by the Company.

        TheCertain of the Company's wholly-owned subsidiaries, Servicios Agnico Eagle Mexico, S.A. de C.V. and, Servicios Pinos Altos, S.A. de C.V. and Minera Agave, S.A. de C.V., provide services in connection with the Company's operations in Mexico. Riddarhyttan Resources Oy provides services in connection with the Company's operations at the Kittila Mine in Finland. The Company's operations in the United States are conducted through Agnico-Eagle (USA) Limited.

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The following chart sets out the corporate structure of the Company, each of its significant subsidiaries and certain other subsidiaries, together with the jurisdiction of organization of the Company and each such subsidiary as at March 22, 2010:11, 2013:

Agnico-Eagle Organizational Chart

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Property, Plant and Equipment

Location Map of the Abitibi Region (as at December 31, 2012)

LaRonde Mine

The LaRonde Minemine is situated approximately 60 kilometres westhalfway between the City of Rouyn-Noranda and the City of Val d'Or in northwestern Quebec (approximately 470 kilometres northwest of Montreal, Quebec) in the municipalities of Preissac and Cadillac. At December 31, 2009,2012, the LaRonde Minemine was estimated to containhave proven mineral reserves of approximately 358,000 ounces of gold comprised of 4.8 million tonnes of ore grading 2.34 grams per tonne and probable mineral reserves of 4.5containing approximately 4.2 million ounces of gold comprised of 29.628.8 million tonnes of ore grading 4.724.54 grams per tonne. The Company's LaRonde Minemine consists of the LaRonde property and the adjacent El Coco and Terrex properties, each of which is 100% owned and operated by the Company. The LaRonde Minemine can be accessed either from Val d'Or in the east or from Rouyn-Noranda in the west, each of which are located approximately 60 kilometres from the LaRonde Minemine via Quebec provincial highway No. 117. The LaRonde Minemine is situated approximately two kilometres north of highway No. 117 on Quebec regional highway No. 395. The Company has access to the Canadian National Railway at Cadillac, Quebec, approximately six kilometres from the LaRonde Mine. The elevation is 337 metres above sea level. mine.

The LaRonde property is relatively flat with a maximum relief of approximately 40 metres. The topography gently slopes down from north to south and is characterized by boreal-type forest on LaRonde and the nearby properties. All of the LaRonde Mine's power requirements are supplied by Hydro-Quebec through connections to its main power transmission grid. Water used in the LaRonde Mine's operations is sourced from Lake Preissac and is transported approximately four kilometres to the minesite through a surface pipeline.

        The LaRonde Minemine operates under mining leases obtained from the Ministry of Natural Resources and Wildlife (Quebec) and under certificates of approval granted by the Ministry of Sustainable Development, Environment, Wildlife and Parks (Quebec). The LaRonde property consists of 3536 contiguous mining claims and one provincial mining lease and covers in total 1,044.91,047.4 hectares. The El Coco property consists of 22 contiguous mining claims and one provincial mining lease and covers in total 356.7 hectares. The Terrex property consists of 21 mining claims that cover in total 424.4 hectares. The mining leases on the LaRonde and El Coco properties expire in 2018 and 2021, respectively, and are automatically renewable for three further ten-year terms upon payment of a small fee. The Company also has twothree surface rights leases that cover in total approximately 122.3301.5 hectares that relate to the water pipeline right of way from Lake Preissac and the eastern extension of the LaRonde tailings pond #7 on the El Coco property. The surface rights leases are renewable annually.

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Location Map of the LaRonde Mine (as at December 31, 2012)

The LaRonde Minemine includes underground operations at the LaRonde and El Coco properties that can both be accessed from the Penna Shaft, a mill, a treatment plant, a secondary crusher building and related facilities. The El Coco property is subject to a 50% net profits interest in favour of Barrick Gold Corporation ("Barrick") on future production from approximately 500 metres east of the LaRonde property boundary. The remaining 1,500 metres is subject to a 4% net smelter return royalty. This area of the property is now substantially mined out and the Company has not paid royalties since 2004 and does not expect to pay royalties in 2010.2013. In 2003, exploration work started to extend outside of the LaRonde property on toonto the Terrex property where a down-plunge extension of Zone 20 North was discovered. The Terrex property is subject to a 5% net profits royalty to Delfer Gold Mines Inc. and a 2% net smelter return royalty to Barrick. The Company does not expect to pay royalties onin respect of this part of the property in 2010.2013. In addition, the Company owns 100% of the Sphinx property immediately to the east of the El Coco property. In 2012, 18% of the ore processed from the LaRonde mine was extracted from the deeper portion of the LaRonde mine (that is, below Level 245), that was previously referred to as the "LaRonde extension". In 2013, the Company anticipates that approximately 49% of the ore processed will be from this deeper part of the mine.

In 2010,2013, payable gold production at the LaRonde Minemine is expected to declineincrease to approximately 180,000177,000 ounces, and total cash costs per ounce are expected to be approximately $227.$650. The Company expects future byproduct metal recoveries at the LaRonde mine to decline as production continues to shift towards deeper sections of the mine where gold grades are higher and byproduct metals are less prevalent. The decreased byproduct revenues will result in higher total cash costs per ounce attributable to ore extracted from these parts of the mine.

The Abitibi region has a continental climate with average annual rainfall of 64 centimetres and average annual snowfall of 318 centimetres. The average monthly temperatures range from a minimum of -23 degrees Celsius in January to a maximum of 23 degrees Celsius in July. Under normal circumstances, mining operations are conducted year roundyear-round without interruption due to weather conditions. The Company believes that the Abitibi region of northwestern Quebec has sufficient experienced mining personnel to staff its operations in the Abitibi region. The elevation is 337 metres above sea level. The LaRonde property is relatively flat with a maximum relief of approximately 40 metres. The topography gently slopes down from north to south and is characterized by boreal-type forest at LaRonde and the nearby properties. All of the LaRonde mine's power requirements are supplied by Hydro-Quebec through connections to its main power transmission grid. Water used in the LaRonde mine's operations is sourced from Lake Preissac and is transported approximately four kilometres to the minesite through a surface pipeline.

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Mining and Milling Facilities

Surface Plan of the LaRonde Mine (as at December 31, 2012)

The LaRonde Minemine was originally developed utilizing a 1,207-metre shaft (Shaft #1) and an underground ramp access system. The ramp access system is available down to the Level 25 of Shaft #1 and then continues down to Level 248 at the Penna Shaft. The mineral reserve accessible from Shaft #1 was depleted in September 2000 and Shaft #1 is no longer in use. A second production shaft (Shaft #2), located approximately 1.2 kilometres to the east of Shaft #1, was completed in 1994 to a depth of 525 metres and was used to mine Zones 6 and 7. Both ore zones were depleted in March 2000 and the workings were allowed to flood up to Level 6 (approximately 280 metres). A third shaft (the Penna Shaft), located approximately 800 metres to the east of Shaft #1, was completed down to a depth of 2,250 metres in March 2000. The Penna Shaft is used to mine Zones 20 North, 20 South, 6 and 7. In 2009, as part of the LaRonde Minemine extension, the Company completed construction of an 823-metre internal shaft from Level 206203 to access the ore below Level 245, approximately 2,858 metres below surface.

Production from the deeper levels of the LaRonde mine has only recently started to ramp-up to anticipated steady state levels and there is currently only limited development of stopes in this portion of the mine. As a result, logistical problems, such as congestion in the underground workings, occur from time to time. The Company anticipates that these issues, and any other issues that may prevent or delay extraction and transportation of ore from a particular stope, will be less prevalent when the stope development work at depth is more advanced.

Mining Methods

Four mining methods have historically been used at the LaRonde Mine:mine: open pit for the three surface deposits; sublevel retreat; longitudinal retreat with cemented rock backfill or paste backfill; and transverse open stoping with bothpaste, cemented androck backfill or unconsolidated backfill. The primary source of ore at the LaRonde Minemine continues to be from

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underground mining methods. During 2009,2012, two of the traditional mining methods were used: longitudinal retreat with cemented rock backfill or paste backfill and transverse open stoping with both cemented androck backfill, paste or unconsolidated backfill. In addition, to address concerns regarding the frequency and intensity of seismic events encountered at the lower levels of the LaRonde mine, a hybrid of these two methods was developed and used. In the underground mine, sublevels are driven at between 30-metre and 40-metre vertical intervals, depending on the depth. Stopes are undercut in 15-metre wide panels. In the longitudinal method, panels are mined in 15-metre sections and backfilled with 100% cemented rock fillbackfill or paste fill from thebackfill. The paste backfill plant was completed in 2000 and is located on the surface at the processing facility. In the transverse open stoping method, approximately 50% of the ore is mined in the first pass and filled with cemented rock fillbackfill or paste fill.backfill. On the second pass, the remainder of the ore is mined and filled with unconsolidated waste rock fillbackfill or cemented paste backfill.

The throughput at LaRonde in 2012 averaged 6,444 tonnes per day compared with 6,593 tonnes per day in 2011. The reduced throughput in 2012 was largely due to the transition to the lower mine, where factors such as heat, congestion and lack of operational flexibility underground negatively impacted the mine's ability to provide the planned tonnage to the mill.

Surface Facilities

Surface facilities at the LaRonde Minemine include a processing plant with a daily capacity of 7,200 tonnes of ore, which has been expanded four times since 1987 from the original rate of 1,630 tonnes per day. Beginning in 1999, transition to the LaRonde Mine poly-metallicmine's poly metallic massive sulphide orebody required several modifications to the processing plant, which consisted ofincluding a new coarse orecoarse-ore handling system, new SAG and ball mill,mills, the addition of a zinc flotation circuit and capacity increases to the existing copper flotation and precious metals circuits. In 2008, the installation of a limited copper/lead separation flotation circuit, following the copper flotation circuit, was completed. Also in 2008, operation of a small cyanidation plant began operation for the treatment of sulphide concentrate from the Goldex Mine, began.mine. A new carbon-in-leach ("CIL") circuit is under construction and is expected to replace the existing LaRonde precious metal Merrill-Crowe circuit at the end of March 2013. The LaRonde mine is also the site for the Lapa Minemine ore processing plant (1,500 tonnes per day), which the Company that was commissioned in the second quarter of 2009.

The ore requires a series of grinding, copper/lead flotation and separation, zinc flotation and zinc tails precious metals leaching circuits, followed by a counter-current decantation circuit and Merrill-Crowe precipitation (which will be replaced by CIL recovery in 2013). Paste backfill and cyanide destruction plants operate intermittently. The tailings area has a dedicated cyanide destruction and metals precipitation plant that water passes through prior to recirculating to the mill. A biological water treatment plant was commissioned in 2005 to address the build-up of thiocyanate in the tailings ponds at the LaRonde mine. This build-up was the result of the high sulphide content of the LaRonde mine ore and 90% recirculation of the process water. The plant uses bacteria to oxidize and destroy thiocyanate and removes phosphate from the water before it is released to the environment.

The Goldex concentrate circuit consists of pulp received from the Goldex mill via truck and subsequent leaching of the pulp with cyanide. The leached material was sent to the Lapa CIL circuit for gold recovery along with Lapa residual pulp until the Goldex circuit ceased to operate in November 2011 following the suspension of mining operations at Goldex on October 19, 2011. The Goldex circuit is currently on standby until mining begins at the M and E Zones of the Goldex mine, which is expected to occur in the second quarter of 2014. At that time, the Goldex circuit tails will be pumped directly into the new LaRonde CIL circuit, which has been designed to handle leached material from both LaRonde and Goldex. The Lapa CIL circuit is expected to be operating near full capacity by then with material from Lapa alone.

The Lapa process consists of a two-stage grinding circuit to reduce the granularity of the ore. A gravity recovery circuit that is incorporated into the grinding circuit recovers up to 45% of the available gold, depending on feed grades. The residual pulp is leached in a conventional CIL circuit to dissolve the balance of the precious metal. A carbon strip circuit recovers the gold from the carbon which is recycled to the leach circuit.

Annual production at the LaRonde mill consistsin 2013 is expected to consist of approximately 63,0002,097,023 ounces of silver, 5,223.4 tonnes of copper, concentrate, up to 2,8001,176.9 tonnes of lead concentrate and 147,00027,298.6 tonnes of zinc concentrate.zinc. Gold recovery at the LaRonde Minemine is distributed approximately 70%as follows: 57.7% in the copper concentrate, 5%6.56% in the lead concentrate, 4.25% in the zinc concentrate and 13% in the refinery.23.49% via leaching.

Mineral Recoveries

During 2009,2012, gold and silver recovery averaged 90.3%89.8% and 87.7%85.49%, respectively. Zinc recovery averaged 87.7%87.13% with a concentrate quality of 54.2%56.13% zinc. Copper recovery averaged 86.2%78.56% with a concentrate quality of 11.6%11.88% copper.

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Approximately 2.552.36 million tonnes of ore were processed averaging 6,9756,780 tonnes of ore per day at 93.6%95.39% of available time.

The following table sets out the metal recoveries, concentrate grades and contained metals for the 2.55 million2,358,499 tonnes of ore extracted by the Company at the LaRonde Minemine in 2009.2012.

Environmental Matters

Currently, water is treated at various facilities at the LaRonde Minemine operations. Water contained in the tailings to be used as underground backfill is treated to degrade cyanide using a sulphur dioxide and air process. The tailings entering the tailings pond are first decanted and the clear water subjected to natural cyanide degradation. This water is then transferred to sedimentation pond #1 to undergo a secondary treatment at a plant located between sedimentation ponds #1 and #2 that uses a peroxy-silicaperoxy-silicate process to destroy cyanide, lime and coagulant to precipitate metals. The tailings pond occupies an area of about 120175 hectares. Waste rock that is not used underground for backfill is brought up to the surface and stored in close proximity to the tailings pond to be used to build coffer dams inside the pond. A waste rock pile containing approximately one million500,000 tonnes of waste and occupying about nine hectares is located west of the mill.

Due to the high sulphur content of the LaRonde mine ore, the Company has had to address toxicity issues in the tailings ponds since the 1990's.1990s. Since introducing and optimizing a biological treatment plant in 2005,2004, the treatment process is now stable and the effluent has remained non-toxic since 2006. In 2006, the Company commenced an ammonia stripping operation ofinvolving an effluent partially treated by the biological treatment plant which allowed an increase in treatment flow rate, while keeping the final effluent toxicity free. In 2009,toxicity-free. Since 2010, the Company has operated ammonia stripping towers to further increase the treatment flow rate of the biological plant, the Company commenced construction of ammonia stripping towers, which should be in operation by April 2010.plant. In addition, water from mine dewatering and drainage water are treated to remove metals prior to discharge at a high-density sludge lime treatment plant located at the LaRonde mill.

Capital Expenditures

In 2006, the Company initiated construction to extend the infrastructure at the LaRonde Minemine to access the ore below Level 245, referred to as245. Hoisting from this deeper part of the LaRonde Mine extension. Themine began in the fourth quarter of 2011 and commercial production was achieved in November 2011. Access to the deeper part of the LaRonde Mine extensionmine is expected to begin contributing to production in 2011. The LaRonde Mine extension infrastructure includesprovided through a new 823-metre internal shaft (completed in November 2009) starting from Level 203, tofor a total depth of 2,858 metres.metres from surface. A ramp will beis used to access the lower part of the orebody (todown to 3,110 metres in depth).depth. The internal winze system will beis used to hoist ore from depth to facilities on Level 215, approximately 2,150 metres below surface, where it will beis transferred to the Penna Shaft hoist. Excavation of the underground mining facilities is in progress.

Capital expenditures at the LaRonde Minemine during 20092012 were approximately $76$75.2 million, which included $37$22.2 million on sustaining capital expenditures and $39$41.9 million comprised primarily of expenditures on the LaRonde Mine extension.in deferred expense. Budgeted 20102013 capital expenditures at the LaRonde Minemine are $96$91.3 million. Another $3 million including $29 million on sustaining capital expenditures and $67 million onwill be added to the LaRonde Mine extension. At the end of 2009, the project capital cost of construction of the LaRonde Mine extension is estimated to be $230 million, of which the Company had incurred $124 million as of the end of 2009.carbon-in-pulp ("CIP") project. Total capital expenditures for the LaRonde Mine and the LaRonde Mine extensionmine are estimated at $403$572.1 million from 20092013 to 2024.2026 (including the CIP project).

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Development

In 2009,2012, a total of 12,25613,113 metres of lateral development was completed. Development was focused on stope preparation of mining blocks for production in 20092012 and 2010,2013, especially the preparation of the lower mine production horizon. A total of 2,0045,213 metres of development work was completed for the LaRonde Minemine extension mainly for ventilation infrastructure. This development work also included construction work oninfrastructure and the ramp to access the LaRonde Minemine extension.

A total of 14,40013,500 metres of lateral development is planned for 2010.2013. The main focus of development work continues to be stope preparation. The Company plans to developpreparation and prepare the access to Zone 20 South down to Level 245. For the LaRonde Minemine extension a total of 5,365 metres of development is planned mainly to developaccess toward the ramp access from the new shaft to the orebody and to complete infrastructure around the new shaft and for future ventilation infrastructure. At the same time, development work will continue to prepare for mining below Level 245.orebody.

Geology, Mineralization and Exploration

Geology

The LaRonde property is located near the southern boundary of the Archean-age (2.7-billion(2.7 billion years old) Abitibi Subprovince and the Pontiac Subprovince within the Superior Geological Province of the Canadian Shield. The most important regional structure is the Cadillac-Larder Lake (CLL)("CLL") fault zone marking the contact between the Abitibi and Pontiac Subprovinces, located approximately two kilometres to the south of the LaRonde property.

The geology that underlies the LaRonde Minemine consists of three east-west-trending, steeply south-dipping and generally south-facing regional groups of rock formations. From north to south, they are: (i) 400 metres (approximate true thickness) of the Kewagama Group, which is made up of a thick band of interbedded wacke; (ii) 1,500 metres of the Blake River Group, a volcanic assemblage that hosts all the known economic mineralization on the property; and (iii) 500 metres of the Cadillac Group, made up of a thick band of wacke interbedded with pelitic schist and minor iron formation.

Zones of strong sericite and chlorite alteration that enclose massive to disseminated sulphide mineralization (including the ore that is mined for gold, silver, zinc, copper and lead at the LaRonde Mine)mine) follow steeply dipping, east-west-trending, anastomosing shear zone structures within the Blake River Group volcanic units across the property. These shear zones are part of the larger Doyon-Dumagami Structural Zone that hosts several important gold occurrences (including the Doyon gold mine, the Westwood project and the former Bousquet mines) and has been traced for over ten kilometres within the Blake River Group, from the LaRonde Minemine westward to the Mouska gold mine.

Mineralization

The gold-bearing zones at the LaRonde Minemine are lenses of disseminated stringers through to massive, aggregates of coarse pyrite with zinc, copper and silver content. Ten zones that vary in size from 50,000 to 40,000,000 tonnes have been identified, of which four are (or are believed to be) economic. Gold content is not proportional to the total sulphide content but does increase with copper content. Gold values are also higher in areas where the pyrite lenses are crosscut by tightly spaced north-south fractures.

These historical relationships, which were noted at LaRonde Shaft #1's Main Zone, are maintained at the Penna Shaft zones. The zinc-silver (i.e.,(i.e. Zone 20 North) mineralization with lower gold values, common in the upper mine, grades into gold-copper mineralization within the lower mine. Gold value enhancement associated with crosscutting north-south fractures also occurs within the LaRonde Mine. The predominant base metal sulphides within the LaRonde Minemine are chalcopyrite (copper) and sphalerite (zinc).

The Company believes that Zone 20 North is one of the largest gold-bearing massive sulphide mineralized zones known in the world and one of the largest known mineralized zones known in the Abitibi region of Ontario and Quebec. Zone 20 North contains the majority of the mineral reserves and resources at the LaRonde Mine,mine, including 32,467,71727.3 million tonnes of proven and probable mineral reserves grading 4.464.64 grams of gold per tonne, representing 94%95% of the total proven and probable mineral reservereserves at the LaRonde 5,280,356mine, 4.4 million tonnes of indicated mineral resourceresources grading 1.681.80 grams of gold per tonne, representing 82% of the total measured and indicated mineral resources at the LaRonde mine, and 9.6 million tonnes of inferred mineral resources grading 4.02 grams of gold per tonne, representing 81% of the total measured and indicated mineral resource at LaRonde, and 10,322,738 tonnes of inferred mineral resource grading 4.00 grams of gold per tonne, representing 94% of the total inferred mineral resourceresources at LaRonde.

        The depth of Zone 20 North extends between 700 metres below surface and at least 3,500 metres below surface, and possibly lower.remains open at depth. With increased access on the lower levels of the mine (i.e., Levelsbelow Level 215 224, 239 and 245)from the internal shaft on levels 257 and 278), the transformation from a "zinc/silver" orebody to a "gold/copper" deposit is expected to continue during 2010.2013.

Zone 20 North can be divided into an upper zinc/silver-enriched gold-poor zone and a lower gold/copper-enriched zone. The zinc zone has been traced over a vertical distance of 1,700 metres and a horizontal distance of 570 metres, with thicknesses approaching 40 metres. The gold zone has been traced over a vertical distance of over 2,200 metres and a

32            AGNICO-EAGLE MINES LIMITED

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horizontal distance of 900 metres, with thicknesses varying from 3three to 40 metres. The zinc zone consists of massive zinc/silver mineralization containing 50% to 90% massive pyrite and 10% to 50% massive light brown sphalerite. The gold zone mineralization consists of 30% to 70% finely disseminated to massive pyrite containing 1% to 10% chalcopyrite veinlets, minor disseminated sphalerite and rare specks of visible gold. Gold grades are generally related to the chalcopyrite or copper content. At depth, the massive sulphide lens becomes richer in gold and copper. During 2009, 2.42012, 2.0 million tonnes of ore grading 2.632.34 grams of gold per tonne, 63.543.35 grams of silver per tonne, 2.98%2.41% zinc, 0.33%0.26% copper and 0.32%0.28% lead were mined from Zone 20 North.

Exploration

The combined tonnage of proven and probable mineral reserves at the LaRonde Minemine for year-end 20092012 is 34.428.8 million tonnes, which represents a 3% increase13% decrease in the amount compared to year-end 2008.2011 (33.2 million tonnes). This mineral reserve includes the replacement of 2.52.4 million tonnes of ore that were mined in 2009.2012. The Company's ability to sustain its levelreduction in reserves is principally associated with ore mined during 2012 and application of proven and probable mineral reserves was primarily due to continued successful exploration results at depth as well asa mining recovery factor of 95% on the increase in the three-year average gold priceremaining reserves.

Diamond drilling is used for exploration on the year-end 2009 estimates.LaRonde property. In 2012, a total of 252 holes were drilled on the LaRonde property for a total length of 22,255 metres, compared to 181 holes for a total length of 16,190 metres in 2011. Of the drilling in 2012, 222 holes (10,194 metres) were for production stope delineation, 26 holes (8,261 metres) were for definition drilling and 4 holes (3,701 metres) were for exploration. In 2011, 165 holes (8,181 metres) were for production stope delineation, 12 holes (2,614 metres) were for definition drilling and 4 holes (5,396 metres) were for exploration. Expenditures on diamond drilling at the LaRonde mine during 2012 were approximately C$2.8 million, including C$1.6 million in definition and delineation drilling expenses charged to operating costs at the LaRonde mine. Expenditures on exploration in 2012 were C$1.2 million, and are expected to be C$2.1 million in 2013.

        AnThe main focus of the 2012 exploration program was initiated in 2009 to investigatecontinuing the ultimate depthinvestigation of Zone 20 North.North and Zone 6-7 horizons at depth. This program was conducted from the level 215 exploration drift, approximately 2,150 metres below the surface. The first deep hole of thisthe program was completed at the end of 2009 withto a final depthlength of 1,852 metres andmetres. This hole intersected Zone 20 North at a depth of 3,520 metres below surface, which is approximately 410 metres below the current reservesreserve envelope. The intersection returned 14.3 metres (true length)width) grading 3.03 grams of gold per tonne. This programIn 2010, a second branch was conducteddrilled from the Level 215 exploration drift, approximately 2,150this mother hole and returned 4.1 metres grading 1.77 grams of gold per tonne at a depth of 3,595 metres below surface. Another deep hole was initiated in 2011 and intersected Zone 6 horizon in 2012 at a depth of 3,551 meters below surface. The 22.8-meters-thick massive sulfide zone returned 1.58 grams of gold per tonne, 27.1 grams of silver per tonne, 0.38% copper and 3.36% zinc and has the surface, and drilling will continue in 2010.

        In 2009, a total of 268 holes were drilledsame characteristics as other deposits on the LaRonde property for a total lengthproperty. A follow-up campaign is planned in 2013 from level 278 to determine the extent of 30,699 metres, compared to 245 holes for a total length of 28,039 metres in 2008. Of the drilling in 2009, 140 holes (8,272 metres) were for production stope delineation, 114 holes (17,024 metres) were definition drilling and 14 holes (5,403 metres) were for exploration. In 2008, 178 holes (10,323 metres) were for production stope

delineation, 53 holes (7,628 metres) were definition drilling and 14 holes (10,088 metres) were for deep exploration (below Level 245). Expenditures on diamond drilling at the LaRonde Mine during 2009 were approximately $3.3 million, including $1.9 million in definition and delineation drilling expenses charged to operating costs at the LaRonde Mine. Expenditures on exploration in 2009 were $1.3 million, and are expected to be $3.8 million in 2010.deposit.

In addition, some definition and delineation drilling was completedundertaken in the 20 North and 20 South Zones to assist in finalfinalizing mining stope design, mainly of Zone 20 North and Zone 20 South.designs. Zone 20 North was the main focus of the definition drilling completed in 2009. The results of infill2012. Infill drilling in 2009 inmainly from Level 272 to Level 245 confirmed the previous Zone 20 North reserves.

Bousquet and Ellison Properties

The Bousquet property is located immediately west of the LaRonde mine and consists of two mining leases covering 80.0 hectares and 31 claims covering 384.9 hectares. The property, along with various equipment and other mining properties, was acquired from Level 260Barrick in September 2003 for $2.9 million in cash, $1.1 million in common shares of the Company and the assumption of specific reclamation and other obligations related to Level 215, combined with the higher gold price used forBousquet property. The property is subject to a 2% net smelter return royalty interest in favour of Barrick.

From 2004 to 2007, the 2009 year-end mineral reserve and resource estimates, contributed to an increase of mineral reserves of 57,000 ounces of gold (729,000Company recovered 108,407 tonnes of ore grading 2.432.33 grams of gold per tonne). Another focustonne from Zone 4 in a small open pit. In 2006 and 2007, the Company recovered 99,342 tonnes of definition drilling in 2009 was Zone 20 South. This zone was intersected from Level 170 to Level 152 when there were no reserves in 2008 year-end estimates. This represents a net gain of 38,400 ounces of probable mineral reserves (363,000 tonnesore grading 3.297.02 grams of gold per tonne).tonne from two small ore blocks underground at Bousquet. There has been no mining of this property since 2007.

Goldex Mine

        The Goldex Mine, which achieved commercialIn 2011, the Company completed a diamond drilling program consisting primarily of twinning and resampling historic holes to evaluate the production potential of an open pit at Bousquet Zone 5. This work led to a new resource estimate for Zone 5 and an internal feasibility study has been conducted for a resumption of production in August 2008, is located in the City of Val d'Or, Quebec, approximately 60 kilometres east ofZone 5 open pit. This study led to a positive scenario. For the LaRonde Mine. Atwhole Bousquet property, including Zone 5, as at December 31, 2009, the Goldex Mine was estimated to have proven mineral2012, probable reserves oftotalled approximately 338,858 ounces of gold comprised of 5.2 million tonnes of ore grading 2.02 grams gold per tonne and probable mineral reserves of 1.290.2 million ounces of gold comprised of 19.52.9 million tonnes grading 1.88 grams per tonne, as well as indicated mineral resources totalling approximately 9.8 million tonnes grading 2.44 grams of oregold per tonne and inferred mineral resources totalling approximately 4.6 million tonnes grading 2.064.04 grams of gold per tonne.

Location Map2012 ANNUAL REPORT            33

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The Ellison property is located immediately west of the Goldex Mine

        The Goldex Mine is accessible by provincial highway. The elevation is approximately 302 metres above sea level. All of the Goldex Mine's power requirements are supplied by Hydro-Quebec through connections to its main power transmission grid. All of the water required at the Goldex Mine is sourced directly by aqueduct from the Thompson River immediately adjacent to the minesite or through recirculation of water from the surface pondBousquet property and the auxiliary tailings pond. For additional information regarding the Abitibi region in which the Goldex Mine is located, see "— Property, Plant and Equipment — LaRonde Mine".

        The Goldex Mine operates under a mining lease obtained from the Ministry of Natural Resources and Wildlife (Quebec) and under certificates of approval granted by the Ministry of Sustainable Development, Environment and Parks (Quebec). The Goldex property, in which the Company has a 100% working interest, consists of 20 contiguous miningeight claims and, since April 2006, one provincial mining lease (98.6 hectares), covering an aggregate of 273.3101.0 hectares. The property is made up of three blocks: the Probe block (122.7 hectares); the Dalton block (10.4 hectares);was acquired in August 2002 for $0.32 million in cash and a commitment to spend $0.49 million in exploration over four years. The commitment was fulfilled in 2004 and the Goldex Extension block (140.2 hectares).property is 100% owned by the Company. The claims are renewable every second year upon payment ofproperty is subject to a small fee. The mining lease expires in 2028 and is automatically renewable for three further ten-year terms upon payment of a small fee. The Company also has one lease covering 418.5 hectares of surface rights that are used for the auxiliary tailings pond. This lease is renewable annually upon payment of a small fee.

        The Goldex Mine includes underground operations that can be accessed from two shafts, a processing plant, an ore storage facility and other related facilities. The Goldex Extension Zone ("GEZ"), which is the gold deposit on which the Company is currently focusing its production efforts, was discovered in 1989 on the Goldex Extension block (although the Company believes a small portion of the GEZ occurs on the Dalton and Probe blocks). Probe Mines Ltd. holds a 5% net smelter return royalty interest in favour of Yorbeau Resources Inc. that varies between 1.5% and 2.5% depending on the Probe block. In 2009,price of gold. Should commercial production from the Ellison property commence, the Company will be required to pay Yorbeau Resources Inc. an additional C$0.5 million in cash.

Expenditures on exploration workin 2012 on both the Bousquet and Ellison properties were C$1.4 million, which includes the cost of drilling 3,850 metres in 12 holes drilled on the Main zone located onEllison property. In 2013, the Probe blockCompany expects to spend C$0.84 million to continue the westoptimization of the current mining area continued.

        In late 1997, the Company completed a mining study that indicated the deposit was not economically viable to mine at the then-prevailing gold price (approximately $323 per ounce of gold) using the mining approach chosen and drill-hole-indicated grade. The property was placed on care and maintenance and the workings were allowed to flood. In February 2005, a new mineral reserve and resource estimate was completed for the GEZ which, coupled with ainternal feasibility study led to a probablecompleted in March 2012 regarding the Bousquet property.

The December 31, 2012 indicated mineral reserve estimate of 1.6 million ounces of gold contained in 20.1resources at Ellison were approximately 0.4 million tonnes of ore grading 2.545.68 grams of gold per tonne. The GEZ resource model was revisedtonne, and in March 2005, the Company approved a feasibility study and the construction of the Goldex Mine. The mine achieved commercial production on August 1, 2008 and has consistently operated at or above the designed rate of 6,900 tonnes per day.

        The Goldex Mine produced 148,849 ounces of gold in 2009 at total cash costs of $365 per ounce. It is anticipated to produce approximately 169,000 ounces of gold in 2010 at estimated total cash costs per ounce of approximately $325.

        Based on the results of a scoping study completed in July 2009, the Company determined to expand the mine and mill operations at the Goldex Mine to 8,000 tonnes per day. This project is expected to be completed in early 2011. Capital costs in connection with the expansion total $10 million, which are expected to be incurred in 2010.

Mining and Milling Facilities

Surface Plan of the Goldex Mine

        At the time the Company commenced construction of the Goldex Mine, the surface facilities included a headframe, a hoistroom, a surface building containing a mechanical shop, a warehouse and an office. In addition, the Goldex property had a 790-metre deep shaft (Shaft #1), which provided access to underground workings. Shaft #1 is predominantly used to hoist waste rock from development activities.

        The sinking of a new production shaft was completed in 2007. The new shaft (Shaft #2) is a 5.5-metre diameter shaft with a 50-centimetre thick concrete lining and is used for ventilation as well as hoisting services. Shaft #2 is 865 metres deep and includes five stations. A refurbished friction hoist was installed for production and service duties, and an auxiliary hoist was installed for emergency and personnel service. The production hoist is equipped with one cage-skip. Each skip has a 21.5-tonne capacity, and the shaft can hoist an average of 7,000 to 8,000 tonnes of ore per day.

Mining Method

        The Goldex Mine uses a high volume bulk mining method, which is made possible through the use of large mining stopes. Drilling and blasting of 165-millimetre production holes is used to obtain a muck size large enough to be economically efficient. Using this method requires a percentage of the broken ore to be kept in the stope to reduce the backfilling cost and to reduce sloughing on the walls. Little ore and waste development is necessary to mine out the deposit.

Surface Facilities

        Plant construction at the Goldex Mine commenced in the second quarter of 2006 and was completed in the first quarter of 2008. The plant reached design capacity in the second quarter of 2009. Grinding at the Goldex mill is done through a two-stage circuit comprised of a SAG mill and a ball mill. As part of the 2009 expansion project a surface crusher was added to reduce the size of ore transferred to the surface from 150 millimetres to

50 millimetres. Approximately two-thirds of the gold is recovered through a gravity circuit, passed over shaking tables and smelted on site. The remainder of the gold and pyrite is recovered by a flotation process. The concentrate is then thickened and trucked to the mill at the LaRonde Mine where it is further treated by cyanidation. Gold recovered is consolidated with precious metals from the LaRonde and Lapa Mines. The Company is targeting an average gold recovery of 92.1%.

        In addition, surface facilities at the Goldex Mine include an electrical sub-station, a compressor building, a service building for administration and changing rooms, a warehouse building, a concrete headframe above Shaft #2, a hazardous waste storage facility and a dome covering the ore stockpile. In 2008, the processing plant building was commissioned along with the Manitou pumping station and its associated 24-kilometre pipeline.

Mineral Recoveries

        During 2009, the Goldex mill processed approximately 2.61 million tonnes of ore, averaging approximately 7,163 tonnes of ore treated per day and operating at approximately 95% of available time. The following table sets out the metal recoveries at the Goldex Mine in 2009.

Environmental Matters

        Environmental permits for the construction and operation of an ore extracting infrastructure at the Goldex Mine were received from the Ministry of Sustainable Development, Environment and Parks (Quebec) in October 2005. The permits also covered the construction and operation of a sedimentation pond for mine water treatment and sewage facilities, and these facilities have been built at the Goldex Mine site. In June 2009, permits were revised to permit the expansion of the mine and mill operations to 8,500 tonnes per day.

        In November 2006, the Company and the Quebec government signed an agreement permitting the Company to dispose of the Goldex tailings at the Manitou minesite, a tailings site formerly used by an unrelated third party and abandoned to the Quebec government. The Manitou tailings site has issues relating to acid drainage and the construction of tailings facilities by the Company and the deposit of tailings from the Goldex plant on the Manitou tailings site was accepted by the Ministry of Sustainable Development, Environment and Parks (Quebec) as a valid rehabilitation plan to address the acid generation problem at Manitou. Under the agreement, the Company managed the construction and operation of the tailings facilities and the Quebec government paid all additional costs above the Company's budget for tailings facilities set out in the Goldex feasibility study. The Quebec government retains responsibility for all environmental contamination at the Manitou tailings site and for final closure of the facilities. In addition, the Company has built a separate tailings deposition area (auxiliary tailings pond) near the Goldex Mine. Environmental permits for the construction and operation of the auxiliary tailings pond at the Goldex Mine were received in March 2007. In 2009, 6,000 tonnes of Goldex tailings were discharged to the auxiliary pond for a total to date of 493,000 tonnes. At the Manitou site, 2.57 million tonnes of Goldex tailings were discharged for a total to date of 3.2 million tonnes.

Capital Expenditures

        Capital expenditures at the Goldex Mine in 2009 were approximately $24 million, which included $4 million on sustaining capital expenditures, $9 million for the mill expansion project, $2 million for exploration, $8 million in deferred development expenses and $1 million for other projects. Sustaining capital expenditures are expected to be $4.5 million in 2010 and $17.6 million over the period from 2010 through 2014.

Development

        During 2009, approximately 5,000 metres of lateral and vertical development were completed at a cost of $12 million. For 2010, 3,115 metres of development is planned with a budget of $10 million (including $9 million for deferred development). In addition, ramp access from Level 49 to Level 37 will be completed in 2010.

Geology, Mineralization and Exploration

Geology

        Geologically, the Goldex property is similar to the LaRonde property and is located near the southern boundary of the Archean-age (2.7 billion years old) Abitibi Subprovince, a typical granite-greenstone terrane located within the Superior Province of the Canadian Shield. The southern contact of the Abitibi Subprovince with the Pontiac Subprovince is marked by the east-southeast trending CLL Fault Zone, the most important regional structural feature. The Goldex deposit is hosted within a quartz diorite sill, the Goldex Granodiorite, located in a succession of mafic to ultramafic volcanic rocks that are all generally oriented west-northwest.

        The GEZ, which hosts all of the current mineral reserves, extends from 500 to 800 metres below the surface and is entirely hosted by the Goldex Granodiorite. The limits of the zone are defined by the intensity of the quartz vein stockwork envelope and by gold assays. The zone is almost egg-shaped; it is over 300 metres tall by 450 metres long (in a west-northwest direction) and its thickness increases rapidly from 25 metres along the east-west edges to almost 150 metres in the centre.

Mineralization

        Gold mineralization at Goldex corresponds to the quartz-tourmaline vein deposit type. The Goldex gold-bearing quartz-tourmaline-pyrite veins and veinlets have strong structural control. The most significant structure directly related to mineralization is a discrete shear zone, the Goldex Mylonite, that is up to five metres wide and occurs within the Goldex Granodiorite, just south of the GEZ and most other gold occurrences. The quartz-tourmaline-pyrite vein mineralization is controlled by minor fracture zones that are oriented west-northwest and dip steeply north or south. The fractures are parallel to but north of the Goldex Mylonite. Within the GEZ are three vein sets, the most important of which are extensional-shear veins dipping 30 degrees south and usually less than 10 centimetres thick. The vein sets and associated alteration combine to form stacked envelopes up to 30 metres thick.

        Strong albite-sericite alteration of the host-rock quartz diorite surrounds the quartz-tourmaline-pyrite veins and covers almost 80% of the mineralized zone; outside of the envelopes, prior chlorite alteration affects the quartz diorite and gives it a darker grey-green colour. Occasionally, enclaves of relatively unaltered medium grey-green-coloured quartz diorite (with no veining or gold) are found within the GEZ; they are included exceptionally as internal waste to allow for a smooth shape, required for mining purposes.

        Most of the gold occurs as microscopic particles that are almost always associated with pyrite, generally adjacent to grains and crystals but also 20% included within the pyrite. The gold-bearing pyrite occurs in the quartz-tourmaline veins and in narrow fractures in the sericite-albite-altered quartz diorite (generally immediately adjacent to the veins). Less than 1.5% of the gold occurs as the mineral calaverite, a gold telluride.

Exploration

        In 2009, 52 holes for a total length of 8,917 metres were drilled at the Goldex Mine with 212 metres of lateral development on Level 84 for exploration purposes. Four zones, all located in the Goldex Granodiorite intrusive, have been drilled. Thirty-three holes for 5,014 metres were drilled in the M-zone (a zone similar to the GEZ located 150 metres above the western end of the GEZ); M-zone is the main contributor to the increase in mineral reserves during 2009. Thirteen holes for 2,275 metres were drilled to define the western end of the S-zone, located 40 metres above the GEZ. Six holes were drilled in the E-zone to initiate the E-zone conversion program (including one hole drilled at depth below the E-zone (GEZ Deep)). Results of the 2009 exploration program converted 3.6 million tonnes of mineral resources at year-end 2008 into 3.2 million tonnes of probable mineral reserves at year-end 2009 and redefined the inferred mineral resources of the S-zone from 0.6were approximately 0.8 million tonnes at year-end 2008 to 1.5 million tonnes at year-end 2009.

        More exploration is needed to define the possible extension or repetition of the zone at depth and in its east-west extensions. The inferred mineralization in the eastern portion of the property extends 175 metres east and 125 metres below the current envelope of probable mineral reserves. The zone is open above Level 73 to the east-southeast for approximately 300 metres.

        The 2010 exploration program is projected to include 28,206 metres of drilling. The primary target is GEZ Deep below the actual production levels. The remainder of drilling will be dedicated to conversion of the E-zone resources to reserves and to explore to the west and east of the GEZ and the south zones.

Kittila Mine

        The Kittila Mine, which commenced commercial production in May 2009, is located approximately 900 kilometres north of Helsinki and 50 kilometres northeast of the town of Kittila in northern Finland. At December 31, 2009, the Kittila Mine was estimated to contain probable mineral reserves of 4.0 million ouncesgrading 5.81 grams of gold comprised of 26.0 million tonnes of ore grading 4.83 grams per tonne. The Kittila Mine is accessible by paved road from the village of Kiistala, which is located on the southern portion of the main claim block. The gold deposit is located near the small village of Rouravaara, approximately ten kilometres north of the village of Kiistala, accessible via a paved road. The property is close to infrastructure, including hydro power, an airport and the town of Kittila. The project also has access to a qualified labour force, including mining and construction contractors.

        The total landholdings surrounding and including the Kittila Mine comprise one mining licence covering an area of approximately 847 hectares, 130 individual tenements (valid claims) covering approximately 11,130 hectares and 152 claim applications covering approximately 13,730 hectares. The mineral titles form a continuous block around the Kittila mining licence. The block has been divided into the Suurikuusikko area, the Suurikuusikko West area and the Kittila mining licence centred at 25.4110 degrees longitude east and 67.9683 degrees latitude north.

        The boundary of the mining licence is determined by ground-surveyed points whereas the boundaries of the other tenements are not required to be surveyed. All of the tenements in the Kittila Mine are registered in the name of Agnico-Eagle AB, an indirect, wholly-owned subsidiary of the Company. According to the Finnish government's land tenure records, all tenements are in good standing. The expiry dates of the tenements vary from April 2010 up to June 2014. Tenements are valid between three and five years, provided a small annual fee is paid to maintain title, and extensions can be granted for three years or more. Agnico-Eagle AB also holds the mining licence in respect of the Kittila Mine. The mine is subject to a 2.0% net smelter return royalty payable to the Republic of Finland starting in 2011.

        The Kittila Mine area is sparsely populated and is situated between 200 and 245 metres elevation above sea level. The topography is characterized by low rolling forested hills separated by marshes, lakes and interconnected rivers. The gold deposit is situated on an area of land that has no special use at present and there is sufficient land available for tailings facilities. Water requirements for the Kittila Mine are sourced from the nearby Seurujoki River, recirculation of water from pit dewatering and tailings pond water. The Kittila region is located within the South-West Lapland zone of the northern boreal vegetation zone characterized by spruce forests, marshes and bogs.

        The mine is located within the Arctic Circle but the climate is moderated by the Gulf Stream off the coast of Norway such that northern Finland's climate is comparable to that of eastern Canada. Winter temperatures range from -10 to -30 degrees Celsius, whereas summer temperatures range from 10 degrees Celsius to the mid-20s. Exploration and mining work can be carried out year round. Because of its northern latitude, winter days are extremely short with a brief period of 24-hour darkness around the winter solstice. Conversely, summer days are very long with a brief period of 24-hour daylight in early summer around the summer solstice. Annual precipitation varies between five and 50 centimetres, one-third of which falls as snow. Snow accumulation usually begins in November and remains until March or April.

Location Map of the Kittila Mine

        The Company acquired its 100%, indirect interest in the Kittila Mine through the acquisition of Riddarhyttan completed in November 2005. See "— History and Development of the Company". In June 2006, on the basis of an independently reviewed feasibility study, the Company approved construction of the Kittila Mine. The Kittila Mine is currently an open pit mining operation with underground mining via ramp access expected to be gradually phased in over three years. The initial underground stope was mined in early 2010. Ore is processed in a 3,000-tonne per day surface processing plant that was commissioned in late 2008. Limited gold concentrate production started in September 2008 and gold dore bar production commenced in January 2009. The Kittila Mine is anticipated to produce approximately 147,000 ounces of gold in 2010 at estimated total cash costs per ounce of approximately $502. Over the period of 2010 to 2023, total average gold production of approximately 150,000 ounces annually is anticipated. A scoping study is underway to assess the feasibility of significantly increasing the annual gold production. This could involve sinking a new shaft and expanding the Kittila mill.

Mining and Milling Facilities

Surface Plan of the Kittila Mine

        The orebodies at Kittila are being mined initially from two open pits, followed by underground operations to mine the deposits at depth. Additional, smaller open pits will be used to mine any remaining mineral reserves close to the surface in the future. Open pit mining started in May 2008 and the extracted ore was stockpiled. As of December 2009, a total of 862,000 tonnes of ore have been processed, 263,234 tonnes of ore stockpiled and 16.9 million tonnes of waste rock had been excavated. Work on the ramp to access the underground reserves continued and total underground development to date is approximately 9,500 metres.

Mining Methods

        The Kittila Mine currently mines the Suurikuusikko orebody with a 160-metre deep open pit. Ore is mined in 7.5-metre benches together with waste rock using buffer blasting techniques and is loaded selectively to minimize dilution and maximize ore recovery. Hydraulic excavators load ore into 100-tonne trucks that haul the ore to the crusher and the waste rock to the waste disposal area. Approximately 3,000 tonnes of ore per day are fed to the concentrator. Surface mining is expected to continue through 2013, during which time the ramp access to the underground mine will continue to be developed.

        The underground mining method will be open stoping with delayed backfill. Stopes will be from 25 to 40 metres high and yield approximately 10,000 tonnes of ore per stope. To ensure sufficient ore production is available to supply the mill, approximately 5,000 metres of tunnels will be developed each year. After extraction, stopes will be filled with cemented backfill or paste fill to enable the safe extraction of ore in adjacent stopes. Ore will be trucked to the surface crusher via the ramp access system.

Surface Facilities

        Construction of the processing plant and associated equipment was completed in 2008 and facilities on site include an office building, a maintenance facility for the open pit equipment, a warehouse, a maintenance shop, an oxygen plant, a processing plant, a tank farm, a crusher, conveyor housings and an ore bin. In addition, some temporary structures house contractor offices and work areas.

        The ore at Kittila is treated by grinding, flotation, pressure oxidation and carbon-in-leach circuits. Gold is recovered from the carbon in a Zadra elution circuit and is recovered from solution using electrowinning and then poured into dore bars using an electric induction furnace.

Mineral Recoveries

        In 2009, the Kittila mill processed 750,660 tonnes of ore with an availability of 80% for an average throughput of 2,570 tonnes per day. Low mill availability was caused by maintenance issues associated with the autoclave, mainly leaking seals on valves and blocked air pipes caused by continuous start-stop cycles. During the last quarter of 2009, there were very few autoclave stoppages and leaking seals and blocked pipes were not an issue. Mill availability in the fourth quarter of 2009 was 84% with a total throughput of 250,964 tonnes.

        The following table sets out the gold production at the Kittila Mine in 2009:

        Optimization of flotation recoveries has gone well and recoveries in the latter part of the year were consistently greater than 91%. Trials are still in progress with the aim to increase the flotation recovery even further. Batch laboratory flotation test-work is underway to optimize this process.

        At the start of production, carbon-in-leach recoveries were between 60% and 75% but deteriorated quickly and were only approximately 25% by the end of February. Poor recovery was attributed to the formation of a chloride compound in the autoclave resulting in dissolved gold being absorbed by organic carbon contained in the ore before reaching the carbon-in-leach circuit. To reduce and better control the effect of the chloride, changes were made to the flow-sheet. The changes included removing the acidulation stage; stopping the recycling of autoclave discharge back to the autoclave feed; and optimizing the distribution management of the autoclave oxygen.

        By June recovery had improved to 80% and since then, in trials, recoveries have at times reached over 90%. The carbon-in-leach recovery, however, has not been consistent. Further optimization and development work is ongoing.

Environmental Matters

        The Company currently holds a mining licence, an environmental permit and operational permits in respect of the Kittila Mine. All permits necessary to begin production were received during 2008, including an environmental permit update to change from a biological oxidation process to a pressure oxidation process and to change the slopes of the waste rock pile to decrease the footprint.

        The construction of the first phase of the tailings dam and waterproof bottom layer was completed in the fall of 2008. This first phase is sufficient to hold tailings from three years of production. Work began on the second phase in 2009. Water from dewatering the mine and water used in the mine and mill is collected and treated by sedimentation. Emissions and environmental impact are monitored in accordance with the comprehensive monitoring program that has been approved by the Finnish environmental authorities. There are no material environmental liabilities related to the Kittila Mine.

Capital Expenditures

        Capital expenditures at the Kittila Mine during 2009 were approximately $90 million, which included deferred production costs prior to commencement of commercial production as of May 1, 2009, mill modification costs, underground mine development costs, exploration and conversion drilling costs within the mining licence area and sustaining capital costs. The Company expects capital expenditures at the Kittila Mine in 2010 to be approximately $57.3 million, most of which will be used for mining equipment for underground mining, development and construction of underground mining infrastructure and exploration and conversion drilling.

Development

        Mining at the Suurikuusikko open pit progressed throughout 2009 with a total of 781,000 tonnes of ore and nine million tonnes of waste mined from the open pit. The Company expects that 879,000 tonnes of ore and 8.6 million tonnes of waste will be mined from the Suurikuusikko pit during 2010. An additional 116,000 tonnes of ore and 900,000 tonnes of waste is expected to be mined from the Rouravaara pit during 2010. Total costs for open pit development in 2009 were $21 million.

        In 2009, underground development progressed in both the Rouravaara and Suurikuusikko zones with 4,232 metres of ramp and sublevel access development completed during the year. The first test stope was mined near the end of 2009. A total of 2,500 tonnes of ore from development and 1,620 tonnes of stope ore were mined in 2009. The Company expects to complete 5,040 metres of lateral development and 540 metres of vertical development during 2010.

Geology, Mineralization and Exploration

Geology

        The Kittila Mine is situated within the Kittila Greenstone belt, part of the Lapland Greenstone belt in the Proterozoic-age Svecofennian geologic province. The appearance and geology of the area is similar to that of the Abitibi region of the Canadian Shield. In northern Finland, the bedrock is typically covered by a thin but uniform blanket of unconsolidated glacial till. Bedrock exposures are scarce and irregularly distributed.

        The mine area is underlain by mafic volcanic and sedimentary rocks metamorphosed to greenschist assemblages and assigned to the Kittila Group. The major rock units trend north to north-northeast and are near-vertical. The volcanics are further sub-divided into iron-rich tholeiitic basalts (Kautoselka Formation) located to the west and magnesium-rich tholeiitic basalt, coarse volcaniclastic units, graphitic schist and minor chemical sedimentary rocks (Vesmajarvi Formation) located to the east. The contact between these two rock units consists of a transitional zone (the Porkonen Formation) varying between 50 and 200 metres in thickness. This zone is strongly sheared, brecciated and characterized by intense hydrothermal alteration and gold mineralization, features consistent with major brittle-ductile deformation zones. It includes the north-northeast-oriented Suurikuusikko Trend.

Mineralization

        The Porkonen Formation hosts the Kittila gold deposit, which contains multiple mineralized zones stretching over a strike length of more than 25 kilometres. Most of the work has been focused on the 4.5-kilometre stretch that hosts the known gold reserves and resources. From north to south, the zones are Rimminvuoma ("Rimpi-S"), North Rouravaara ("Roura-N"), Central Rouravaara ("Roura-C"), depth extension of Rouravaara and Suurikuusikko ("Suuri/Roura Deep"), Suurikuusikko ("Suuri"), Etela and Ketola. The Suuri and Suuri/Roura Deep zones include several parallel sub-zones that have previously been referred to as Main East, Main Central and Main West. The Suuri zone hosts approximately 53% of the current probable gold reserve estimate on a contained-gold basis, while Suuri/Roura Deep has approximately 23%, Roura-C approximately 13%, Roura-N approximately 3% and Rimpi-S approximately 5%.

        Gold mineralization in these zones is associated with intense hydrothermal alteration (carbonate-albite-sulphide), and is almost exclusively refractory, locked inside fine-grained sulphide minerals: arsenopyrite

(approximately 73%) or pyrite (approximately 23%). The rest is "free gold", which is manifested as extremely small grains of gold in pyrite.

Exploration

        In 1986, the discovery of coarse visible gold in quartz-carbonate veining along a road cut near the village of Kiistala alerted the Geological Survey of Finland ("GTK") to the gold exploration potential of the area. Following this discovery, GTK initiated regional exploration over the area and deployed a wide range of indirect exploration tools to explore this relatively unexplored area. Over the period from 1987 to 2005, GTK and later Riddarhyttan undertook drilling programs and other testing on the property. After it acquired the property in 1998, Riddarhyttan continued to investigate the metallurgical properties of the refractory gold mineralization with the objective of demonstrating its recoverability and assessing suitable processing scenarios and initiated engineering and environmental studies to assess the feasibility of a mining project.

        Most of the work on the mining licence area has focused on the Suuri and Roura zones. Up to the end of December 2009, a total of 1,478 drill holes, totalling 418,449 metres, have been completed on the property. In 2009, between six and 11 drill machines worked on the Kittila property: two to three drills on underground infill drilling; three to eight drills on mine exploration; and one to three drills on resource-to-reserve conversion drilling. A total of 336 holes were completed for a length of 105,886 metres. Of these drill holes, 1160 drill holes (17,138 metres) were for definition drilling, 109 drill holes (32,072 metres) were for conversion drilling and 111 drill holes (56,672 metres) were related to mine exploration. Total expenditures for diamond drilling in 2009 were $21.0 million, including $2.4 million for definition and delineation drilling.

        Exploration during 2009 increased proven and probable gold reserves to 4.0 million ounces (26.0 million tonnes of ore grading 4.8 grams per tonne). Most of the increase came from the Suuri/Roura Deep zone (921,904 ounces) and the Rimpi-S zone (194,694 ounces). Indicated mineral resources increased to 20.5 million tonnes of ore grading 2.1 grams per tonne. Inferred mineral resources were 5.3 million tonnes of ore grading 3.4 grams per tonne. This decrease reflected the successful conversion of resources to reserves, especially in the Suuri/Roura Deep and Rimpi-S zones.

        The main Suuri zone is made up of three roughly parallel subzones, each containing several ore lenses — East, Central and West. The successful deep drilling campaign during 2009 at the Suuri/Roura Deep zone immediately below the Suuri zone has confirmed that most of the Suuri ore lenses can be traced deeper in the Suuri/Roura Deep zone. Mineralization is still open at depth and to the north, and these areas will be further tested in 2010.

        An extensive resource to reserve conversion drilling campaign was carried out at Roura-N and Rimpi-S in 2009. As a result of this work, probable reserves increased by 40,021 ounces from Roura-N and by 198,694 ounces from Rimpi-S. The northernmost part of Rimpi-S is still open at depth and to the north. This area will also be tested in 2010.

        Outside of the Kittila mining licence area, systematic geochemical sampling and diamond drilling continued on targets along the Suurikuusikko Trend, and a number of new targets were tested by diamond drilling. Encouraging results were received from a new gold zone in the Kuotko area located approximately ten kilometres north of the mine construction site as well as from the Hako area located one kilometre north of the mining licence area. A total of 191 diamond drill holes totalling 41,033 metres have been drilled on exploration targets outside of the mining licence area from 2006 to 2008.

        The 2010 exploration budget for the Kittila Mine is approximately $12.6 million ($9.5 million for minesite exploration and $3.5 million for resource to reserve conversion), and includes over 65,000 metres in diamond drilling (40,000 metres for minesite exploration and 25,000 metres for resource to reserve conversion), using up to nine drills throughout the year to help further identify the gold reserve and resource potential of the Kittila property. In addition, $2.0 million of exploration expenditures, including an estimated 13,000 metres of diamond drilling, is planned for exploration along the 25-kilometre Suurikuusikko Trend.

Lapa Mine

The Lapa Mine,mine, which achieved commercial production in May 2009, is located approximately 11 kilometres east of the LaRonde Minemine near Cadillac, Quebec. At December 31, 2009,2012, the Lapa Minemine was estimated to contain proven and probable mineral reserves of 0.80.4 million ounces of gold comprised of 3.22 million tonnes of ore grading 8.26.0 grams per tonne. The Lapa property is made up of the Tonawanda property, which consists of 4344 contiguous mining claims and one provincial mining lease covering an aggregate of 702.4 hectares, and the Zulapa property, which consists of one mining concession of 93.5 hectares. The mining lease at Lapa expires in 2029.

Location Map of the Lapa Mine (as at December 31, 2012)

The Company's initial interest in the Lapa property was acquired in 2002 through an option agreement with Breakwater Resources Ltd. ("Breakwater"). The Company undertook an aggressive exploration program and discovered a new gold deposit almost 300 metres below the surface. In 2003, the Company purchased the Lapa property from Breakwater for a payment of $8.9 million, a 1% net smelter return royalty on the Tonawanda property and a 0.5% net smelter return royalty on the Zulapa property. In 2008, the Company purchased all royalties from Breakwater for C$6.35 million. In addition, both the Zulapa and Tonawanda properties are subject to a 5% net profit royalty payable to Alfer Inc. and René Amyot. In

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2004, an additional claim of 9.4 hectares was added to the Company's holdings at the Lapa Mine.mine. In January 2009, a mining lease covering 66.8366.8 hectares was entered into with the Ministry of Natural Resources and Wildlife (Quebec).

The Lapa Minemine is accessible by provincial highway. The elevation varies between approximately 320 and 390 metres above sea level. All of the Lapa Mine'smine's power requirements are supplied by Hydro-Quebec through connections to its main power transmission grid. All of the water required at the Lapa Minemine is sourced from the Heva river located 3.5 kilometres to the south of the mine. The water is pumped into an existing open pit nearby the property that has been allowed to flood and from which the mine is supplied. The topography slopes relatively gently from north to south. The property is generally covered by a boreal-type forest consisting mainly of black spruce and white pine with minor amounts of birch and poplar.

For additional information regarding the Abitibi region in which the Lapa Minemine is located, see "—"– Property, Plant and Equipment —– LaRonde Mine".

Gold production during 20102013 at the Lapa Minemine is expected to be approximately 115,000105,000 ounces at estimated total cash costs per ounce of approximately $506.$787.

Mining and Milling Facilities

Surface Plan of the Lapa Mine (as at December 31, 2012)

The Lapa site hosts an underground mining operation and the ore is trucked to the processing facility at the LaRonde Mine,mine, which has been modified to treat the ore, recover the gold and store the residues. Tailings from the Lapa Minemine are deposited in the tailings pond at the LaRonde Mine.mine.

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In July 2004, the Company initiated the sinking of an 825-metre deep shaft at the Lapa property. In April 2006, 2,800 tonnes of development ore development was extracted at Lapa and was estimated to contain on average 10.65 grams of gold per tonne. TheThese results and results from other sampling methods were incorporated into a feasibility study and in June 2006, the Company accelerated construction of the Lapa Mine.mine. This construction included extending the shaft to a depth of 1,369 metres, which was completed in October 2007. Significant additional construction was required in order for the Lapa Minemine to achieve commercial production in May 2009, including the construction of the mill.

Mining Methods

Two underground mining methods are used at the Lapa Mine:mine: longitudinal retreat with cemented backfill and locally transverse open stoping with cemented backfill. Sublevels are driven at 30-metre vertical intervals. Stopes are mined in 12-metre sections and backfilled with 100% cemented rock fill.backfill. Excavated ore from the Lapa site is trucked via provincial highway to the processing facility at the LaRonde Mine.mine.

Surface Facilities

The infrastructure on the Lapa property includes the refurbished former LaRonde Shaft #1 headframe and shafthouse, service buildings, temporary offices, a settling pond for waste water, dry facilities, an ore bin, a diesel reservoir and a cementwater treatment plant. In November 2007, lateral development began on three horizons. A backfill plant was commissioned in December 2008 and the sedimentation pond was extended in 2007 to control suspended solids from underground dewatering discharge.

Ore at the Lapa Minemine is processed through grinding, gravity and leaching circuits. Dedicated milling facilities have been integrated into the facilitiesmill at the LaRonde Mine.mine. Based on an average ore head grade of 7.296.49 grams per tonne, gold recovery averaged 76.03%79.7% in 2009. At2012. With an average production of 1,750 tonnes per day in 2012, the endmine operated consistently above its design rate of 2009, recovery was close to 80% and recovery is expected to be at the target of 85.65% after modifications to the gravity circuit1,500 tonnes per day. Dilution averaged 64% in 2010. In addition,