Agnico Eagle Mines Limited (NYSE:AEM) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 11:00 am ET


Agnico Eagle Mines Limited (NYSE:AEM) Q2 2020 Earnings Conference Call - Final Transcript


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Good morning. My name is Jesse, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Second Quarter Results 2020 Conference Call. [Operator Instructions] Thank you.

Mr. Sean Boyd, you may begin your conference.

Sean Boyd

Thank you, operator and good morning, everyone and welcome to our second quarter 2020 conference call. Prior to getting into the slides, just be forewarned, we are presenting forward-looking statements in this presentation. And there are two slides which go through the disclaimers on forward-looking statements. So please at your leisure read those. What I'd like to do is talk a little bit about Q2 and how we've managed through the pandemic, but focus more on how we're positioned going forward, what the emphasis will be on our business in terms of driving free cash flow, and using that to reinvest in the business and increase our dividend as we move forward. As you know, it has been a challenge. It's been a challenge for everyone.

From a business standpoint, we had 7 of our 8 mines were impacted either with temporary shutdowns or with significant reductions in our activity levels at those mines due to COVID-19, and the fact that in some of our jurisdictions, mining was not considered an essential business. We were fortunate to be able to restart those operations earlier than we had expected. We continued our dialog with the governments and our respective regions on our safety protocols and how we were positioned to restart and keep our employees safe, and in both in Quebec, in Mexico. Both of those governments allowed the mining industry to restart before many other industries. So that allowed us to ramp up and get things moving quicker than what was in our original plan.

As we've said before, the number 1 priority for us was to ensure that our employees were not only safe, but they were comfortable with their families, were comfortable with our approach. Also, our communities were comfortable with our approach, and we used some unique -- our team put some unique ideas forward, particularly with respect to testing, and that just added an extra layer of comfort and protection, and we'll talk a little bit about that.

We closed Q2 strong, we started Q3 strong, and as a result of that, we expect to have a strong second half in terms of production, declining costs and also free cash flow generation. It was important for us, because in a lot of the meetings that we've had over the last few months with investors and analysts, the question was always, well, how much is it going to cost to manage through the pandemic in terms of impact or costs on putting mines on care and maintenance, but more importantly going forward, what was that going to do to your productivity? What was that going to do to your unit costs?

And on page 5 on the slide and our press release, we've broken