Agnico Eagle Mines

We have set out to build a company that focuses on quality, growth and a strong financial position, while retaining full leverage to gold process. Penna gains control of Equity Exploration Ltd. and renames it Eagle Gold Mines. Agnico-Eagle Mines Limited is a Toronto-based Canadian gold producer, with its shares trading on the Toronto Stock Exchange and the New York Stock Exchange. The company no longer mines its founding properties, the silver-producing Agnico mine and Eagle Gold mine, instead limiting its mining activities to the LaRonde Mine in northwestern Quebec, which possesses proven and probable gold reserves of 5.3 million ounces and produces silver, copper, and zinc as a byproduct of the gold mining process. Agnico-Eagle's other properties, not currently in production, contain gold reserves of another 2.6 million ounces. The company also is conducting exploration on 56 properties located in eastern Canada and the western United States. It is pursuing opportunities in northern Mexico as well and owns a stake in the Surrikuusikko gold field in Finland. For many years Agnico-Eagle has been one of the lowest cost producers in North America, a company that has steadfastly refused to engage in hedging (selling future gold production at a set price as a precautionary measure), instead selling all of its production at the spot price of gold. Agnico-Eagle was created in 1972 by Canadian businessman Paul Penna when he merged Agnico Mines Limited and Eagle Gold Mines Limited. The origins of the Agnico property can be traced to 1903, at a time when northern Ontario remained wilderness. A pair of timber scouts, James McKinley and Ernest Darragh, were boating along the shore of what was then known as Long Lake when they noticed the sun reflecting off the rocks in a curious manner. They investigated, and took samples of the rocks they found, which were then assayed in Montreal. The report showed that the men had found silver, an astounding 4,000 ounces to the ton. The boom town of Cobalt sprang up, as more than a dozen silver mines opened in the area over the next few years. Silver was so prevalent in Cobalt that in the early years mining was done at the surface, and only later were the first shafts dug. Production peaked in 1911, a year in which Cobalt shipped 31 million ounces of silver, or roughly one-eighth of the world's silver production. In the 1930s the area appeared to be played out, as repeatedly the silver veins refused to yield beyond 300 feet below the surface. Some of the original claims continued to be picked over for a number of years, and during the 1950s the area was revitalized by the mining of cobalt, used in the United States in cutting tools, heat-resistant alloys, and cancer radiation therapy. But this market dried up as well when new sources of cobalt became available in the United States. A handful of Cobalt-area silver mining companies remained operational into the 1950s, but the cost of production was higher than the price of silver. In 1953 they banded together to form Cobalt Consolidated Mining Co. Four years later the company took a new name, Agnico Mines Ltd., its name combining the symbols of silver (Ag), nickel (Ni), and cobalt (Co). By employing new diamond drills and other modern mining techniques, the company was able to recover high-grade silver and began to buy up other mining properties in the area. In 1960 Agnico discovered a major silver deposit, but poor management squandered the company's opportunities and unwisely opted to lease out two of its best properties. It was at this time that Paul Penna, a new Agnico shareholder, began building a stake in the company and took steps to seek control through a proxy fight. Naturally athletic, Penna was a superb golfer, but lacked the necessary killer instinct to become a professional. Penna began running a pro shop, but because it was a seasonal business he was in need of work during the winter months. He found it as a messenger with one of the