Agnico-Eagle Reports Third Quarter Results, The Achievement Of Commercial Production In Its New Zinc Circuit And Additional Drilling Results From Laronde.

TORONTO--(BUSINESS WIRE)--Oct. 29, 1998--Agnico-Eagle Mines Limited (TSE:AGE.) (ME:AGE.) (NYSE:AEM) today reported a net loss of $3.9 million, or 7 cents per share for the quarter ended September 30, 1998 compared to a net loss of $1.4 million, or 3 cents per share in the same period last year. Operating cash flow also declined in the third quarter to a deficit of $0.2 million, or nil per share, from positive cash flow of $1.0 million, or 2 cents per share in the 1997 third quarter. These results are principally due to a significant decline in gold prices and lower gold production.

"Despite lower ore grades at LaRonde, operating performance continues to be excellent. Onsite operating costs per ton of ore milled have decreased by 14 percent and cash operating costs to produce an ounce of gold continued to remain low at US$214 per ounce," said Sean Boyd, Agnico-Eagle's President and Chief Executive Officer.

"We are also extremely pleased with the results of recent definition drilling which has extended the previously defined ore limits and continued to confirm the transition to increasing gold mineralization at depth," added Mr. Boyd.

Operating Results

Onsite operating costs reported in the third quarter were $61 per ton of ore milled compared to $71 per ton in third quarter of 1997. For the year to date, onsite operating costs of $65 per ton milled were 6 percent below those achieved in 1997. Operating efficiencies and a weaker Canadian dollar resulted in lower onsite operating costs per ounce of gold produced during both the quarter and year to date. However, significantly lower by-product metal prices and lower copper production resulted in slightly higher net cash operating costs per ounce of gold produced. For the quarter, cash operating costs were US$214 per ounce compared to US$211 per ounce in 1997. For the year to date, cash operating costs were US$214 per ounce compared to US$210 per ounce in the first nine months of 1997.

The average gold price realized during the 1998 third quarter was US$292 per ounce, down 10 percent from US$323 per ounce realized in the third quarter of 1997. A decrease in gold production to 37,075 ounces in the 1998 third quarter was attributable to lower grades. The increase in the quarterly net loss is due to substantially weaker metal prices and lower gold and copper production partly offset by a more favourable U.S./Canadian dollar exchange rate.

The higher loss for the year to date reflects a 12 percent decrease in the average gold price realized to US$296 and lower by-product revenues, offset somewhat by lower onsite operating costs. Gold production for the first three quarters of 1998 was down slightly to 113,387 ounces when compared to the same period in 1997, due to cyclical headgrades.

Strong Financial Position

At September 30, 1998 Agnico-Eagle's financial position remained strong with a cash balance, excluding bullion on hand, of $136 million and a working capital position of $160 million. Including bullion on hand, Agnico-Eagle has $171 million available to complete the expansion of the LaRonde operation. The Company is expected to invest approximately $170 million over the next three years to complete the expansion.

LaRonde Expansion and Exploration Program Update Expansion and Development

The zinc circuit commenced production in the middle of September and achieved design targets within 10 days. Commercial production has commenced and 190,000 pounds of zinc production was recorded in September.

Major modifications were made to the proposed grinding circuit in the mill. A new SAG mill was acquired with a maximum capacity of 5,000 tons per day compared to the original design capacity of 3,600 tons per day. The increased grinding capacity will facilitate any future increase in daily throughput in the event drilling results continue to be positive.

At the end of the quarter, Shaft #3 reached a depth of 5,452 feet for a total advance of 420 feet. Ground conditions continued to be excellent. Highlights for the quarter included completion of the ramp between Shaft #1 and Shaft #3, and the ore development on the 8th level. Currently, development is proceeding on the 7th level only. The shaft is in the final changeover period whereby the safety bulkhead will be moved from the 8th level to the 10th level permitting the remaining 1,900 feet of shaft to be completed. Development will resume on the 7th, 8th and 9th levels by the middle of November.

In August, Zone 20 North was exposed for the first time on Shaft #3's 8th Level. The massive sulfide zone was made up of a gold component and zinc component. The thickness of the combined zone was 110 feet compared to 75 feet indicated by earlier definition drilling. The gold and copper development grades returned from channel sampling in the drift were higher than indicated by the definition drilling averaging 0.08 ounces per ton gold compared to 0.04 ounces per ton in the drill core. The copper averaged 0.47 percent compared to 0.14 percent in the drill core. The gold grades in the zinc zone also averaged 0.04 ounces per ton compared to 0.02 ounces per ton indicated by the definition drilling. It is believed that the higher gold and copper grades are due to the presence of north-south fracturing which was responsible for the higher than expected production grades experienced over the last 10 years in the Main Zone at Shaft #1.

Exploration

Two drills were in operation during the quarter focusing on Zone 20 North.

One drill was located in the ramp between Shaft #1 and Shaft #3 drilling at the western limit of the 7th level horizon (4,000 feet below surface). The second drill was located on the 9th level station (4,800 feet below surface) testing Zone 20 North below the 10th level Horizon (5,250 feet below surface). During the middle of October, a third drill was added on the 8th level, (4,400 feet below surface) to continue with a definition drilling program along this level.

Three drill holes were completed from the ramp along the previous western ore limit on the 7th level. These drill hole intercepts were obtained from the Zone 20 North Zinc Zone and indicate that areas of higher-grade gold mineralization do occur within the upper zinc rich portion of Zone 20 North. The results were as follows: -0-

Drill Holes from Ramp on 7th Level
-----------------------------------------------------------
Drill Hole   Width   Gold     Silver    Copper      Zinc
             (ft)   (oz/ton)  (oz/ton)  (percent)  (percent)
-----------------------------------------------------------
25-73         18.7   0.03      2.11      0.03       9.00
-----------------------------------------------------------
25-75         18.4   0.12      4.29      1.90       6.70
-----------------------------------------------------------
25-78         31.2   0.01      0.80      0.04       7.00
-----------------------------------------------------------

Two drill holes were also completed below the 10th level horizon at an approximate depth of 5,600 feet below surface. These holes were drilled from the 9th level and were planned to test the lower and eastern limit of the current mineral resource outline. They have resulted in an extension of the ore limits. The results were as follows:

Drill Holes 10th Level Horizon
-----------------------------------------------------------
Drill Hole   Width   Gold     Silver    Copper      Zinc
             (ft)   (oz/ton)  (oz/ton)  (percent)  (percent)
-----------------------------------------------------------
3146-14(Gold) 19.7   0.05      6.44      0.58       1.50
-----------------------------------------------------------
3146-14(Zinc) 19.7   0.13      12.8      0.02      12.78
-----------------------------------------------------------
3146-15(Gold) 23.0   0.12      7.41      0.59      13.00
-----------------------------------------------------------
3146-15(Zinc) 16.4   0.02      2.49      0.25       8.00
-----------------------------------------------------------

Both of the drill hole results appear to be in a transition zone between the upper zinc/silver zone and the lower gold/copper zone and continue to confirm the transition to increasing gold mineralization at depth. Presently, the drill is probing the area below these values and results are expected shortly. The drill will then be moved to the 10th level to begin a series of drill holes below the 11th level (5,600 feet below surface).

On the 8th level, two definition drill holes have been completed 250 feet to the west and east of the development crosscut where 110 feet of massive sulfides were encountered. Assays were pending at this writing however continued increases in thickness over previous drill holes completed from Shaft #3 were encountered.

The drilling results continue to define and expand the reserve and resource of Zone 20 North. None of these results have been incorporated into the current reserve/resource calculation. As discussed in Agnico's last quarterly press release (August 5, 1998), a reserve/resource estimate was completed above the 10th Level for Zone 20 North and compared with initial exploration results. Initially, the reserve/resource figure totaled 9.5 million tons containing approximately 448,000 ounces of gold. At the beginning of August the figure had been revised upward to 15.6 million tons containing approximately 642,000 ounces. On a tonnage basis, this resulted in a 64 percent increase of which 12.6 million tons are now in the "Probable Reserve" category.

For the remainder of the year, three drills will be in operation. One drill will be in operation on both the 7th and 8th levels, while a third will be stationed on the 10th level and test the area below the 11th level. This area is largely untested and it is open for further expansion. Earlier results from widely spaced exploration drilling indicate that this area contains more gold/copper mineralization. This drilling will provide important information with respect to transferring mineral resource to reserve and in determining the final mining plan and ultimate daily production rate.

Year 2000

In early 1998, Agnico-Eagle commenced a year 2000 date conversion project to address the potential effects the year 2000 date change will have on all hardware and software, and the upgrades and/or purchases that may be required. The Company has completed an analysis of its current hardware and software and has looked at both information technology and non-IT systems. The Company expects to have completed all upgrades and/or purchases required as a result of this review by the second quarter of 1999. The estimated cost of upgrades and/or purchases that may be required for the year 2000 date conversion are considered immaterial to the Company. As the Company does not rely heavily on systems that will be affected by the year 2000 date change, management does not expect to encounter significant problems. However, the Company is currently in the process of conducting a survey of its key suppliers and customers to assess potential exposures related to their year 2000 compliance and readiness and to determine specific alternative and contingency plans. The survey should be completed by December 31, 1998 and the Company intends to develop a contingency plan in the first quarter of 1999.

The time frames during which the Company believes it will complete its year 2000 analysis and modifications and the cost estimates to complete these modifications are based on management's best estimates, which were made in reliance on numerous assumptions of future events, including the continued availability of certain resources and other factors.

This press release contains certain "forward-looking statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995) that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties related to year 2000 conversion are disclosed herein. Other risks and uncertainties are disclosed under the heading "Risk Factors" in the Company's Annual Information Form (AIF) filed with certain Canadian securities regulators (including the Ontario and Quebec Securities Commissions) and with the United States Securities and Exchange Commission (as Form 20-F).

Agnico-Eagle Mines Limited is an established Canadian gold producer with operations located principally in Northwestern Quebec and exploration and development activities in Quebec and Ontario. Agnico-Eagle's operating history includes 23 years of continuous gold production primarily from underground mining operations. Agnico-Eagle is currently focused on a development and expansion program at its LaRonde Division that is expected to result in increased gold production and expanded gold reserves.

Summarized Quarterly Data             Agnico-Eagle Mines Limited
----------------------------------------------------------------
(thousands of Canadian dollars,
except per share and per ounce amounts) (Note 1)

                         Three months ended   Nine months ended
                           September 30,        September 30,
                            1998       1997     1998      1997
----------------------------------------------------------------

Consolidated Financial Data

Income and cash flow
  Income from
   production           $15,266    $17,549    $ 47,152   $53,792
  Net loss for period   $(3,883)   $(1,411)   $(10,152)  $(3,404)
  Loss per share        $ (0.07)   $ (0.03)   $  (0.21)  $ (0.08)
  Operating cash
   flow (Note 2)        $  (229)   $   951    $    78    $ 6,443
  Operating cash flow
   per share            $     -    $  0.02    $     -    $  0.15
  Gold production-ounces 37,075     40,213    113,387    116,498
  Average gold price-per
   ounce realized-U.S.$ $   292    $   323    $   296    $   338
  Average exchange
   rate-U.S.$ per
   Canadian dollar       0.6607     0.7220     0.6841     0.7265
  Weighted average
   number of shares
   - basic           53,017,036 42,657,145 48,852,820 42,581,332


Operating and Financial Summary
LaRonde Division
  Income from
   gold production      $15,266   $17,549     $47,152    $53,792
  Mine operating costs
   (net of by-product
   revenues)             12,193    11,968      36,056     34,292
  --------------------------------------------------------------
  Mine operating profit  $3,073    $5,581     $11,096    $19,500
  --------------------------------------------------------------

  Tons of ore milled    207,262   183,138     588,071    577,822
  Grade-ounces of gold
   per ton                 0.19      0.24        0.21       0.22
  Gold production-ounces 37,075    40,213     113,387    116,498
  Copper
   production-pounds  1,677,246 2,102,286   4,624,208  7,006,119
  Zinc
   production-pounds    190,052         -     190,052          -
  Onsite operating costs
   per ton milled           $61       $71         $65        $69
                      ------------------------------------------
Operating costs per gold
 ounce produced (U.S.$):
  Onsite operating costs
   (including reclamation
   provision)              $226      $235        $229       $249
  Less:  Non cash
          reclamation        (3)       (4)         (3)        (4)
         Net by-product
          revenues           (9)      (20)        (12)       (35)
                      ------------------------------------------
  Cash operating costs     $214      $211        $214       $210
  Non cash costs:
         Reclamation
          provision           3         4           3          4
         Depreciation and
          amortization       34        43          43         47
                      ------------------------------------------
  Total operating costs    $251      $258        $260       $261
                      ------------------------------------------

Notes:

(1) All dollar figures are expressed in Canadian funds unless
otherwise indicated.
(2) Before non-cash working capita1 adjustments.


Consolidated Balance Sheets          Agnico-Eagle Mines Limited
---------------------------------------------------------------

(thousands of Canadian dollars)      September 30   December 31
                                             1998          1997
---------------------------------------------------------------
                                       (Unaudited)
ASSETS
Current
 Cash and cash equivalents               $135,626      $92,470
 Gold bullion and bullion
  awaiting settlement                      35,566       39,182
 Prepaid expenses, supplies and other       9,722        9,429
---------------------------------------------------------------

Total current assets                      180,914      141,081
---------------------------------------------------------------
Investments, loans, advances and
 other assets                              21,481       12,182
Mining properties                         221,417      181,382
---------------------------------------------------------------
                                         $423,812     $334,645
---------------------------------------------------------------


LIABILITIES AND SHAREHOLDERS' EQUITY

Current
 Accounts payable and accrued
  liabilities                             $11,541      $17,876
 Dividends payable                            915        2,147
 Income and mining taxes payable            7,458        6,587
 Current interest due on senior
  convertible notes                         1,209        2,711
---------------------------------------------------------------

Total current liabilities                  21,123       29,321
---------------------------------------------------------------
Senior convertible notes                  159,698      145,104
---------------------------------------------------------------
Reclamation provision                       6,247        5,501
---------------------------------------------------------------
Deferred income and mining taxes            8,318       11,542
---------------------------------------------------------------
Minority interest                           7,330        7,336
---------------------------------------------------------------

Shareholders' Equity
Common shares
 Authorized - unlimited
 Issued- 55,068,299 (1997 - 45,663,981)   231,724      242,846
Other paid in capital                      22,287       22,287
Contributed surplus                         2,971        9,482
Deficit                                   (14,749)    (111,857)
Company's own shares held by subsidiary
 companies                                (21,137)     (26,917)
---------------------------------------------------------------
Total shareholders' equity                221,096      135,841
---------------------------------------------------------------
                                         $423,812     $334,645
---------------------------------------------------------------


Consolidated Statements of Loss         Agnico-Eagle Mines Limited
(Unaudited)

----------------------------------------------------------------
(thousands of Canadian dollars,
except per share amounts)

                         Three months ended   Nine months ended
                           September 30,        September 30,
                            1998       1997     1998      1997
----------------------------------------------------------------

Income from gold
 production             $15,266   $17,549     $47,152    $53,792

Costs of production
 (net of by-product
  revenues)              12,661    12,130      37,457     34,903
----------------------------------------------------------------
                          2,605     5,419       9,695     18,889

Exploration expense         699     1,444       2,474      4,401
Depreciation and
 amortization             1,902     2,403       7,128      7,521
General and
 administrative expense   1,331     1,472       3,965      4,323
Capital taxes               575       457       1,430      1,448
----------------------------------------------------------------
Operating income (loss)  (1,902)     (357)     (5,302)     1,196
----------------------------------------------------------------

Other income (expense):
  Interest and
   sundry income          1,915     1,041       4,339      2,864
  Foreign exchange loss  (1,000)     (432)     (1,785)      (511)
  Interest expense
    Current                (165)     (109)       (543)      (242)
    Long-term            (3,250)   (2,891)     (9,320)    (8,620)
----------------------------------------------------------------
                         (2,500)   (2,391)     (7,309)    (6,509)
----------------------------------------------------------------
Loss before income
 and mining taxes        (4,402)   (2,748)    (12,611)    (5,313)
Provision for income and
 mining tax expense
 (recoveries):
    Current                 243       230         703        747
    Deferred               (762)   (1,567)     (3,162)    (2,656)
----------------------------------------------------------------
                           (519)   (1,337)     (2,459)    (1,909)
----------------------------------------------------------------
Net loss for the period $(3,883)  $(1,411)   $(10,152)   $(3,404)
----------------------------------------------------------------

Loss per share           $(0.07)   $(0.03)     $(0.21)    $(0.08)
----------------------------------------------------------------


Consolidated Statements of            Agnico-Eagle Mines Limited
Cash Flows (Unaudited)

----------------------------------------------------------------
(thousands of Canadian dollars)

                         Three months ended   Nine months ended
                           September 30,        September 30,
                            1998       1997     1998      1997
----------------------------------------------------------------

Operating activities
Net loss for the period $(3,883)  $(1,411)   $(10,152)   $(3,404)
Add (deduct) items not
 affecting cash from
 operating activities
   Depreciation and
    amortization          1,902     2,403       7,128      7,521
   Deferred income and
    mining taxes           (762)   (1,567)     (3,162)    (2,656)
   Amortization of deferred
    financing costs,
    interest and foreign
    exchange loss on senior
    convertible notes     2,390     1,529       6,096      4,555
   Other                    124        (3)        168        427
   -------------------------------------------------------------
                           (229)      951          78      6,443

Net change in non-cash
 working capital balances
 related to operations    1,161     1,773       3,629       (436)
----------------------------------------------------------------
Cash flows from
 operating activities       932     2,724       3,707      6,007
----------------------------------------------------------------
Investing activities
Additions to mining
 properties             (19,378)  (12,368)   (46,411)    (35,185)

Purchase of shares of
 subsidiary companies       (93)   (2,918)      (987)     (7,790)
Proceeds from sale
 of investments               -         3         22          24
Increase in investments
 and other                 (755)       18       (769)         (9)
----------------------------------------------------------------
Cash flows used in
 investing activities   (20,226)  (15,265)   (48,145)    (42,960)
----------------------------------------------------------------
Financing activities
Dividends paid               (5)      (10)    (1,232)     (5,200)
Shares issued under
 employee plans             231       328        691       7,808
Share issued by
 public offering              -         -    100,000      60,804
Share issue costs             -         -     (4,600)     (4,719)
(Purchase) resale of the
 Company's own shares held
 by subsidiary companies    542    (2,621)      (739)     (6,058)
Increase in (repayments of)
 amounts due to brokers  (7,526)    1,828     (6,526)      5,419
Proceeds from issuance of
 common shares by
 subsidiary companies         -        54          -         333
----------------------------------------------------------------
Cash flows from (used in)
 financing activities    (6,758)     (421)    87,594      58,387
----------------------------------------------------------------
Net increase(decrease)
 in cash and
 cash equivalents       (26,052)  (12,962)    43,156      21,434
Cash and cash equivalents,
 beginning of period    161,678   121,467     92,470      87,071
----------------------------------------------------------------
Cash and cash equivalents,
 end of period         $135,626  $108,505   $135,626    $108,505
----------------------------------------------------------------

Other operating cash
 flow information:
Interest paid
 during the period       $3,388    $3,208     $6,906      $6,301
----------------------------------------------------------------
Income and mining taxes
 paid during the period    $294      $829     $1,298      $1,335
----------------------------------------------------------------

Note:
Effective June 30, 1998, the Company retroactively adopted the new
accounting recommendations issued by the Canadian Institute of
Chartered Accountants concerning Cash Flow Statements to disclose
the change in gold bullion and bullion awaiting settlement as a
component of the net change in non-cash working capital balances
related to operations.