Unpack the positive Odyssey drill results (upper eastern extension, Artemis zone) and their potential to bring forward higher-grade zones into the production profile.

The upper eastern portion of East Gouldie is being focused on for conversion to reserves due to its shallower depth and proximity to current infrastructure. The internal Artemis zone, though more subtle, shows potential for additional mining areas near the shaft as more infill drilling is done. These high-grade zones could offer flexibility by displacing lower-grade material in the mill. “So that's currently why we are kind of focusing on this specific area being closer, shallower into the ore body, closer close from the current infrastructure we're having.”

Provide an update on detailed engineering, any contingencies tied to the MEA approval, and next steps for permits and studies for San Nicolas.

The JV is reviewing the MEA approval terms to understand additional permit needs (e.g., construction, explosives, alternative water/power solutions). Detailed engineering is 45% complete. The team is accelerating construction and operational readiness plans to derisk the project before a sanction decision. “In the meantime, though, we're continuing to advance the engineering to derisk the project. It's currently at 45% engineering.”

Discuss labor dynamics, retention rates, and attrition in Ontario, and the impact of increased labor and contractor costs.

Internal labor costs are up around 4% YoY in Ontario. Workforce is a general challenge, so the company focuses on retention and recruiting, with a centralized hub. Turnover is half that of peers and has been reduced in the last year. Efforts include building permanent homes in communities and recruiting from Western Canada. No major increase in contractor costs observed. “In terms of our internal labor, we're running around 4% year-over-year increase.”

AEM

Agnico Eagle (AEM) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Materials· Jul 30, 2026

Source: earnings call transcript

Executive summary

Agnico Eagle Q2 FY26 — Record Free Cash Flow and Shareholder Returns Amidst Operational Improvements

Agnico Eagle delivered a strong second quarter, marked by record free cash flow and significant capital returns to shareholders, driven by robust operational performance and disciplined cost management. Despite a tragic fatality and a rock movement at the Barnat pit impacting future production, the company maintains its 2026 guidance and is aggressively reinvesting in its growth pipeline, including strategic acquisitions in Finland. The focus remains on increasing gold production per share and strengthening the balance sheet, leveraging a balanced capital allocation strategy.

Highlights

Record free cash flow of over $1.3 billion for the quarter.
Record capital returns to shareholders of $625 million in Q2, including $400 million in share repurchases.
Gold production of 856,000 ounces, above budget for the second consecutive quarter.
Total cash costs of $1,054 per ounce and all-in sustaining costs of $1,459 per ounce, both within guidance and below industry average.
Net cash position increased to approximately $3.3 billion, reinforcing financial strength.

Concerns

A rock movement in the Barnat pit wall on July 1, resulting in 1 million tons of material sliding and 370,000 ounces becoming inaccessible.
Three fatalities occurred in the last year, including one tragic incident on May 1, highlighting safety challenges.
2026 production forecast, while within original guidance, is now expected towards the lower end of the 3.3 million to 3.5 million ounces range due to the Barnat incident.
Inflationary pressures, particularly in labor (3-4% for Canada CPI) and diesel (7% of overall costs), continue to impact the industry.

Guidance & targets

Category	Target	Timeline	Confidence
2026 Gold Production	3.3 million to 3.5 million ounces (towards the lower end) high materiality	FY26	High
Production Increase	20% to 30% high materiality	Next decade	High
Finland Yearly Production	over 500,000 ounces medium materiality	Yearly	High
Malartic Yearly Production	1 million ounces high materiality	Yearly	High
Shareholder Returns % of Free Cash Flow	potential to exceed original target for the full year medium materiality	FY26	High
Odyssey Shaft Commissioning	Q2 2027 medium materiality	Q2 · FY27	High
Odyssey Stope Mining Ramp-up	30% in '27 and above 90% in 2028 medium materiality	FY27-FY28	High
Hope Bay First Vessel Arrival	around August 10 low materiality	Q3 · FY26	High
Hope Bay Drilling Budget	110 kilometers low materiality	FY26	High
Detour Underground Production	20,000 to 30,000 ounces for 2028 and 2029 each year medium materiality	FY28-FY29	Medium
Detour Underground Update	mid-2027 low materiality	mid-2027 · FY27	High
Malartic Development Rate Target	2,000 meters per month low materiality	Q4 · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Nunavut First half production was on plan. Meliadine achieved a quarterly record mill throughput of over 7,000 tonnes per day, exceeding the 6,500 target. LZ5 autonomous trucking productivity increased by 65%. Meliadine Mill Throughput: over 7,000 tonnes per day (quarterly record)LZ5 Autonomous Trucking Productivity: 65% increase	—	—	—	—
Finland Kittila delivered an excellent quarter on production and costs, achieving all-time high revenue, operating margin, and cash flow. Unit costs in H1 '26 were lower than H1 '25. The company is expanding its presence in the region through consolidation. Kittila Unit Costs: lower H1 FY26 vs H1 FY25	—	—	—	—
Ontario Detour achieved consecutive quarterly records in tonnes mined and tonnes per day at the mill due to productivity initiatives. Macassa mill delivered record throughput, ramping up to 2,000 tonnes per day. Upper Beaver ramp and shaft development progressed. Detour Tonnes Mined: consecutive quarterly recordDetour Mill Throughput: record tonnes per dayMacassa Mill Throughput: record throughput	—	—	—	—
Australia Fosterville performed well, with commissioning of primary fans and a 14% increase in development rates YoY due to productivity initiatives, positioning it for higher throughput. Fosterville Development Rates: 14% increase YoY	—	—	—	—
Mexico Pinos Altos exceeded plan. San Nicolas received approvals for land use change and environmental impact assessment, with detailed engineering at 45%. San Nicolas Engineering Completion: 45%	—	—	—	—

Orderbook & backlog

Hope Bay Project Vessels 9 vessels Q2 FY26

First vessel expected to leave port for Hope Bay around August 10.

Deals & partnerships

Rupert Resources, Origio Resources, Thingol joint venture Consolidation of land package in Finnish Lapland almost $600 million

Acquired 3 companies to solidify Agnico's position in the Lapland Greenstone belt, considered one of the most prospective areas for gold exploration. Includes the Ikkari project, a significant gold discovery.

Teck San Nicolas project development

Joint venture received key permits (land use, environmental impact assessment) for the San Nicolas project in Mexico. Advancing detailed engineering and construction readiness.

Capital programs

Hope Bay Construction underway

Spent to date: 70% engineering completed

Start: May 2026

Benefit:world-class low-cost mine producing between 400,000-450,000 ounces a year for decades

Construction greenlit in May. Critical path logistics are ahead of delivery. Camp is ready for workforce ramp-up. Construction schedule aims to close building before winter.

Malartic Shaft Sinking underway

Spent to date: 1.6 kilometers underground (shaft depth)

Benefit:support annual production towards 1 million ounces per year

First phase of shaft sinking completed 3 months ahead of schedule, reaching 1.6 km underground on July 9. Now moving to changeover for production mode.

Upper Beaver Exploration Ramp and Shaft underway

Spent to date: Ramp advanced over 600 meters (165m depth); shaft reached 470 meters depth

Start: Q4 FY25 (shaft sinking)

Benefit:high-quality, low-cost brand-new mine

High-intensity drill program completed ahead of schedule, improving understanding of mineralized zones. Evaluating potential for expanded exploration by extending shaft.

San Nicolas Project pending sanction decision

Spent to date: 45% engineering completed

Received approvals for land use change and environmental impact assessment. Advancing detailed engineering and critical infrastructure to reduce execution risk and refine capital cost estimates.

Kittila Investment Program completed

Spent to date: completed

Benefit:shaft, mill expansion and surface infrastructure investments

Investment program completed in 2023, now focused on operational excellence, cost control, and productivity.

Risks & headwinds

Barnat Pit Rock Movement Q3 FY26 (mitigation), Q4 FY26 (resumption of mining)

1 million tons of material slid, resulting in 370,000 ounces becoming inaccessible (60k-80k in '26, 150k in '27, 150k in '28).

Mitigation:Building safety berms (15-25 meters high) and access roads, planning to resume mining in Q4 FY26. Milling low-grade stockpile to offset.

Fatalities and Safety Incidents Ongoing

3 fatalities in the last year, 23 in 70 years of operation.

Mitigation:Accelerating work to identify and implement critical controls, strengthening supervision, reinforcing organizational behaviors to promote safety. Learning from specific incidents (Fosterville, Canadian Malartic, Upper Beaver).

Inflationary Pressures Ongoing, 2027 outlook

Canada CPI for labor at 3-4% for 2027 outlook; diesel represents 7% of overall costs.

Mitigation:Continuous improvement and productivity initiatives have offset almost half of inflation over the last 3 years. Stronger USD, higher gold price (for royalties), and conservative by-product credit assumptions are providing some offset.

Geopolitical and Economic Volatility Q2 FY26 and ongoing

Volatile geopolitically, economically, and gold prices in Q2 FY26.

Mitigation:Company's consistency and resilience, high-quality asset portfolio, and disciplined cost management allow it to deliver solid results even in volatile environments.

Labor Challenges Next 10-15 years

Internal labor costs up 4% YoY in Ontario. Workforce is a general challenge across operations.

Mitigation:Focus on retention and recruiting (centralized hub), building permanent homes in communities, recruiting from diverse regions (e.g., Western Canada). Lowest turnover among peers.

What to watch in Q3 FY26

Barnat Pit Mining Resumption

Q4 FY26

Current Mining suspended due to rock movement; mitigation underway.

Target Resumption of mining in Q4 FY26.

Why it matters

Resumption of mining at Barnat pit is crucial for production continuity and to mitigate the impact of inaccessible ounces.

So we're planning to do those mitigation in Q3, and we expect to resume mining in Q4.

Find out whether AEM delivers this. Inve re-checks your case every morning.

Q&A highlights

Quantify the volume and grade of inaccessible material from the Barnat pit slide and potential offsets.

370,000 ounces will be inaccessible, with 60k-80k in '26, 150k in '27, and 150k in '28. The remaining 300,000 ounces in Barnat will be mined. The average grade is around 1-1.1 g/t. Low-grade stockpile will be milled, and the company has a track record of recovering from operational issues.

“Well, we disclosed that there's 370,000 ounces that will not be accessible anymore, which is 60, 80 in '26, 150 in '27, '28.”

asked by Joshua Wolfson · answered by Dominique Girard

3 min read 6 chapters

Detailed narrative

Operational Excellence and Productivity Gains

Agnico Eagle reported significant operational improvements across its portfolio, with record mill throughputs achieved at Macassa, Detour, Meliadine, and Kittila, collectively representing over half of total production. These gains are attributed to continuous optimization efforts, such as increasing shovel utilization and improving loading practices at Detour, and enhanced autonomous trucking productivity at Malartic's LZ5, which saw a 65% increase in tonnes per shift and a reduction in sequence stops from 1,700 to 700.

Strategic Growth Pipeline Advancement

The company is aggressively reinvesting in its business, with over $800 million invested in Q2 in advancing key projects and capitalized exploration. Significant progress was made on the Hope Bay project, with 70% engineering completed and the first vessel expected to arrive around August 10.

The Malartic shaft sinking is ahead of schedule, reaching 1.6 kilometers underground, with commissioning targeted for Q2 2027. Detour Underground and Upper Beaver projects are also advancing on schedule, with exploration ramps and shaft development progressing well.

Finland Consolidation and Regional Growth

Agnico Eagle completed a significant consolidation in Finnish Lapland by acquiring Rupert Resources, Origio Resources, and the Thingol joint venture, solidifying its position in what it believes is one of the most prospective areas for gold exploration. This move aims to double the European business's yearly production to over 500,000 ounces.

The integration of new colleagues is underway, and project optimization, including an unconstrained open pit scenario, is expected to yield results by the end of 2027.

Exploration Success and Resource Expansion

Exploration drilling continues to yield exceptional results, with almost 400 kilometers completed in Q2, contributing to a year-to-date total of 760,000 meters. Notable high-grade intercepts were reported at Malartic's East Gouldie and Artemis zones, and Detour Lake's Domain 54. Hope Bay also delivered spectacular results, including 28.8 grams over 21 meters.

The company is well on its way to achieving its ambitious budget of 1.4 million meters for the year, aiming to replace and grow global mineral reserves and resources.

Capital Allocation and Financial Strength

Agnico Eagle maintains a strong financial position, with a record $3.5 billion cash on hand and a net cash position of $3.3 billion at quarter-end. The company generated over $1.3 billion in free cash flow and $3.5 billion in operating cash flow in the first half of the year.

Approximately 48% of H1 free cash flow was returned to shareholders through dividends and share buybacks, exceeding the 40% target. The company opportunistically pursued strategic M&A, using almost $600 million in cash for the Finland acquisitions.

Safety and Operational Challenges

The company addressed a tragic fatality on May 1, marking the third in the last year, and emphasized its commitment to safety improvements, including accelerating critical control implementation and strengthening supervision. A rock movement in the Barnat pit wall on July 1 resulted in 1 million tons of material sliding, making 370,000 ounces inaccessible and shifting 2026 production towards the lower end of guidance.

Mitigation efforts are underway, with mining expected to resume in Q4.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.