Ladies and gentlemen, welcome to the Annual and Special Meetings of the Shareholders of Agnico Eagle Mines Limited. My name is Jim Naso, and I am the Chair of the Board of Agnico of Minas Limited. Of Agnik Oligo Mines Limited. Leona Kalawitki, of Directors. Please welcome our brothers and sisters and stakeholders at Nunavut.
Of Directors. I want to make Jani Buba Hilda, could you please address of our employees and stakeholders in Finland.
Thank you, Mr. Chair. Thank you, Mr.
Chairman. Yes. Tito, as announced in the corporation's management information circular due to the continuing public health impact of the COVID-nineteen pandemic and having regard to the health and safety of the corporation's employees and shareholders as well as public health guidelines to limit gatherings of people. The corporation is conducting today's meeting in the virtual format in which we are currently convened. We look forward to returning to an in person Annual General Meeting after public health conditions have improved.
Joining me for the meeting today are Sean Boyd, the Vice Chairman rather, the Vice Chairman, our Chief Executive Officer and Director of the Corporation and Chris of Omer Schausen, Senior Vice President, Legal, General Counsel and Corporate Secretary of the Corporation. As this meeting is being held virtually via live webcast, we think it might be appropriate to set out a few procedures for the orderly conduct of the meeting. I will now turn it over to Mr. Olmershausen to go over these procedures.
Thank you, Mr. Chairman. As mentioned, I will now outline the procedures for the orderly conduct of the meeting. First, questions in respect of a motion can be submitted by any registered shareholder or duly appointed proxy holder using the instant messaging service of the virtual meeting interface. Please note that there may be a slight delay in of the communications received.
Questions that relate to a specific motion must indicate which motion they relate to at the start of the question and must be submitted prior to voting on the motion that they may be addressed at the appropriate time. If questions do not indicate which motion they relate to or are received after voting on the motion, they will be addressed during the general question and answer session at the end of the meeting. 2nd, questions for the question and answer period will appear shortly after they are submitted, I will only be addressed during the question and answer session at the end of the meeting. We will try to answer as many questions as we can that are submitted through the portal. If your question does not get answered during the meeting today, we will respond to you by e mail after the meeting.
For the purposes of the meeting today, Voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders who have not previously voted or who wish to change their votes will be asked to vote on each business item after the presentation of all business items. If you have submitted your vote prior to this meeting, there is nothing for you to do Unless you wish to change your vote. When you are asked to vote, you will receive a message on the virtual meeting interface requesting you to register your votes. You will only have a limited amount of time to do so when the polls are open.
A virtual AGM user guide, including instructions on how to vote, was distributed to shareholders and available under the corporation's profile on the SEDAR website. Mr. Chair? Thank you, Chris.
Since this meeting was called for 11 am, and it is now that time I ask that the meeting come to order. In accordance with the bylaws of the corporation, I will preside as Chair of this meeting. Mr. Balmichaelson will act as secretary of the meeting, and I hereby appoint Shirley Tom and Amanda Castigliano of Computershare Trust Company of Canada, the corporation's register and transfer agent to act as scrutineers. After the formal business of the meeting.
Mr. Boyd will present a brief corporate update followed by a question and answer period. In order to expedite matters today, Mr. Bob Moschowson We'll move all motions and Mr. Boyd will second all motions with respect to business at this meeting.
Notice of the meeting. I confirm that I have received the sworn affidavit of an officer of Computershare Trust Company of Canada stating that the notice of the meeting, the management information circular and the form of proxy have been sent or made available to each shareholder, each Director and the auditors of Agnico Weigel. The affidavit as such mainly has been signed by Computershare, and I direct the Secretary of the meeting to keep a copy of the affidavit with the minutes of the meeting. Unless there is any objection, I will dispense with the reading of the notice of the meeting. The scrutineers have advised me that prior to the meeting, proxies were received from holders of a sufficient number of shares to constitute a quorum.
I therefore declare the meeting to be regularly called and properly constituted for the transaction of business. I directed the formal report of the scrutineers be annexed to the business of this meeting as a schedule. Of Directors' report and financial statements. The first item of formal business is the presentation of the audited financial statements of Agnew Weagle for the year ended December 31, 2020, and the auditors report these financial statements, both of which have been previously sent or made available to the shareholders of the corporation. Questions regarding these statements will be entertained at the end of the meeting.
Of Directors. The next item of Forel Business is the election of directors of the corporation. The articles of the corporation provide for a minimum of 5 and a maximum of 15 directors. The Board of Directors It has determined that the total number of directors to be elected at this meeting is 10. And Before we get to that point, I'd just like to mention that we still feel the loss of Leanne Baker.
She was a very valued Director and we miss her terribly. It's It's been some time since a number of months that we had the opportunity to say something and we really like to to express her condolences to her family and my fellow directors feel the very same way as I do. As a Board, we miss her. She was a very, very confident Director and of God Rest Your Soul. May she rest in peace.
Thank you. I declare the meeting open for nominations. May I have the nominations, please?
Mr. Chair, I nominate as Directors of Anico Eagle Mines Limited, the Honorable Leona Aglukak, Sean Boyd, Martin Selej, Robert Campbell, Mel Lederman, Deborah McComb, James Naso, Doctor. Sean Reilly, Merton Roberts and Jamie Sokolsky, all as named in the management information circular and move that they be elected directors of the corporation to hold office until the next annual Shareholders meeting following this meeting or until their respective successors are elected or appointed.
Thank you, Chris. May I have a second to the motion? I second the motion. Thank you, Sean. Thank you.
Under the bylaws of the corporation, any additional director nominations for today's meeting of Directors. We're required to have been received by no later than the close of business on March 31, 2021. As no such nominations were received of the Corporation prior to that date. There are no further nominees eligible to stand for election today. Accordingly, I now declare of the nominations closed.
Unless there are any questions, I will move to the next item of business. Of Directors. The next item of formal business is the appointment of auditors of Agnew Kaweco for the current year. It is proposed that Ernst and Young LLP Chartered Accountants We are reappointed as the auditors of the corporation to hold office until the next annual meeting of the shareholders of the corporation until the shareholders are appointed and that the auditor's remuneration be fixed by the Board of Directors of the corporation. May I have an appropriate motion?
I so move. May I have thank you, Chris. May I have a second to the motion? I second the motion. Thank you, Sean.
Unless there are any questions, I will move to the next item of business. Amendment to the Corporation's Stock Option Plan. The next item of formal business to consider at this meeting is the approval of an amendment to the Corporation's Stock Option Plan. As more fully described on Page 26 in Appendix B of the Management Information Circular. May I have an appropriate motion, please?
Mr. Chair, I move that the resolution approving the amendment to the Corporation Stock Option Plan I set out an Appendix B for the management information circular dated March 22, 2021 be approved. Thank you, Chris. May I have
a second of the motion? I second the motion. Thank you, Sean. Unless there are any questions, I will move to the next item of business. Advisory Resolution on Approach to the Executive Compensation.
The next item of formal business to consider at this meeting is a non binding advisory resolution of the corporation's approach to executive compensation. May I have an appropriate motion, please?
Mr. Chair, I move that the resolution approving on an advisory basis the corporation's approach to executive compensation as set out in Appendix D to the management information circular dated March 22, 2021 be approved.
Thank you, Chris. May I have a second of the motion? I second the motion. Thank you, Sean. Unless there are any questions, we will now move on to the voting.
As mentioned, voting today will be conducted by electronic ballot. I will now take a moment to ask if the shareholders We open to registered holders and appointees proxy holders. And we will take a pause for 3 minutes and return to the meeting. The polls are now closed. The secretary has advised me that we have received the scrutineers' report, which indicates the number of shares voted by proxy prior to the meeting.
I'm pleased to report that the election of each of the directors, the appointment of the auditors, the amendments to the corporation's stock option plan as a non binding advisory vote on approach to executive compensation has been passed. If any shareholders is interested in the exact number of votes casting the ballot for or withheld or against. With respect to each of these motions, he or she may obtain particulars after the meeting by contacting the Secretary. The corporation will also issue a press release and file on SEDAR of Directors. I'm also pleased to report that we have a report of the voting results at this meeting.
Termination of the meeting as there is no of Directors. I will now ask Sumner to move and Sumner to second a motion that this meeting now terminates.
Mr. Chair, I so move.
Thank you, Chris. May I second the motion? I second the motion. Thank you, Sean. I declare the formal portion of this meeting is now terminated.
We will now proceed with the presentation of Mr. Boyd. Sean, please. Before we begin, Sean, I just want to tell you folks that this is the finest CEO in the industry, of Navy in the World. So Mr.
Boyd, please, if you can handle it, go ahead.
Thank you, Jim, and Welcome, everybody, and I hope all of you and your families and friends are all keeping well. And unfortunately, as Jim mentioned, we can't be together in person to share each other's company, but we hope that at the next annual meeting, We can all be together and meet in person. What I would like to do today is talk a little bit about gold and then provide an overview of the business and where we're focused and the strategy and talk about our ESG program and some of the highlights there and what focused on there. First, as far as gold goes and there's a bit of disappointment, I'm sure, out there among investors in gold and gold peaked, as you know, in August of last year. And at that time, interest rates were bottoming.
And so gold has since August been up against 3 major headwinds. 1 has been interest rates trending up. The second has been the U. S. Dollar being strong, which is also hurting gold and also Equity markets have also been strong and at record levels.
And those have caused gold to come off the highs that we saw in August of last year. And now they're currently in the range of between 17,800. And as a result of that, here you go again. We've seen this many times over our long careers in the gold business. Everybody's quick to write gold's obituary.
Gold is finished again according to some and They're using things like Bitcoin being sort of a nail that's sort of been driven into gold to Take gold down and take it down permanently. We've seen different examples being used over the years to say that Gold is a relic, gold is finished, gold no longer matters. I think that's wrong, and we've seen it rebound of times before. I think what we've seen in the past is that when gold makes a move, it does tend to pause and settle. And I think that's exactly what we've seen over the last several months as we've seen gold hit a new all time high in August.
It's settled back Now to these levels, it got a bit lower. It's moving its way back up. I think the biggest question that investors are trying to answer with respect to gold Is at what point will we see inflation or at what point will inflationary expectations begin to set in? And again, we've seen over the last couple of decades where inflation looked like it was going to take hold and then it didn't. Here, I think we're seeing a lot of signs that inflationary pressures are stronger than they have been at any time over the last 20 years.
And even when we look at a lot of the big public companies in their Q1 conference call this year, Almost all of them are making reference to higher input prices. Many of them are making reference to the fact that they may have to increase their prices To end users and that's the thing you generally see at the start of building inflationary expectations. So it's our view that Inflation is coming. What we're not sure about is the timing. And that really sets gold up very nicely.
Gold does well in an inflationary environment. The question others may have is what about interest rates? Well, I think one of the key drivers for gold is that global debt levels are rising Dramatically, they're rising at rates that are much faster than economies can grow. And certainly, we're in a position now as we move through the pandemic that Economies will begin to improve and open up, but the reality is that governments around the world are continuing to put forward accommodating policies, including More fiscal policies, where they're piling on massive amounts of debt and they're incurring loss of spending. We think that's a favorable environment for gold.
So we're extremely positive about gold. In fact, Mark Merle, who we follow closely, he's made the argument Over many, many years that the only way out, the absolute only way out or the only palatable way out for the general population and government is to actually inflate the debt away rather than go through fiscal austerity measures, which I think everybody agrees would not be acceptable and not appropriate at this time. So we're very positive about the gold price. And that sets us up nicely because we're in a position to grow. So I'm going to move through a couple of slides.
I'll talk about the business. I will be talking about Some forward looking statements. There is Safe Harbor language in our slide deck that you I should read, just as a cautionary statement that I will be using projections and giving my opinions on Where things could go. And so just be forewarned on that. If we look back on the last year, it's been challenging for many.
We've been fortunate. We started out, as you know, back in March having several of our mines impacted by governments of Closing Businesses and we were fully supportive of that. Importantly, our people reacted extremely well, protected of Directors. The workforce and the employees and stepped up for the communities. As a result of that, we closed 2020 extremely strong.
The second half of twenty twenty was our strongest 6 month period in our 60 plus year history. And we've continued that strong performance in the Q1 of this year where for the 2nd consecutive quarter, We set a record gold production amount of over 500,000 ounces. We currently have Interesting enough, as we continue to grow over 12,000 employees. So not only are we producing more gold, we have more employees than we've ever had and we're operating at levels where we're operating more safely than we ever had. Several of our mines have won safety awards.
So that's critical for us as we move as we grow our business to ensure that we maintain the safety of our workforce. Our costs in Q1 were better than forecast. As a result, we had strong earnings and strong cash flow per share. Our financial position remains strong. We used cash to buy the Hope Bay asset, which closed in early February and we're in a fortunate position when that asset became available that we had some Knowledge of that asset having done prior work on it and we were able to move quickly and we're able to write a check because of our strong financial position to do that.
We're an investment grade credit rate rated company. Our debt is investment grade. So it speaks to the high quality nature of not only our business, but our balance sheet and our financial position. As we said earlier, we have the ability to grow. So we're in an industry that's still having a difficult time actually growing output.
With our strong Q1, we would expect to be producing over 300,000 ounces more in 2021 that we produced in 2020. We would expect that growth to continue. We're looking for growth off of last year's production base of 24% from 2020 to 2024 and that's supported by of Directors. What is a record reserve position that we put out in February of this year. But one of the key themes that's emerging for us over the last year, but in fact has been a strength for us for decades is our exploration success.
And as a result of that success, our strategy has been to increase our investments in exploration. This year, we're planning on our largest exploration budget in the history of the company at over $160,000,000 and we've seen early results of that spending this year. We've seen what potentially could be a significant drill result in the underground of the Odyssey Canadian Malartic project. As you know, that's a large gold mine. We're a fifty-fifty partner with Yamana Gold on that.
We announced in early February that Yamana and Agnico are going to proceed with the construction of what will become of Canada's largest underground gold mine. This deposit is still open in our study To analyze the merits of this as an investment, we used about 7,000,000 ounces of what we know is a mineralized envelope that contains over 14,000,000 ounces. So we're being conservative and how many ounces we were actually putting in the study. What that did is that took the mine life for Canadian Malartic based on those 7,000,000 ounces out to 2,039. Based on the fact that the envelope is a lot bigger than the number of ounces we included in the study, We would certainly expect that that mine life goes well beyond 2,039.
The recent exploration news suggests though that this deposit could get significantly bigger. We drilled a hole that is about 1,000 meters To the east of the main mineralized East Goldie structure, which is the thickest and highest grade part of the planned underground mine. It was where our team expected it to appear based on the projections of how the current mineralization is oriented. It is in the same rock type. It looks exactly the same.
It's got thickness. It's got decent grade and it suggests that that whole extent between the drill hole and the main East Goli deposit is wide open for future expansion. Not only that, the partnership controls over 20 kilometers of property that covers that same rock type. And so that opens up that entire area for additional expansion and potential exploration upside. So we're very hopeful.
We see a lot of potential there. We were excited about that opportunity back in 2014 when we were able to acquire of Directors. We did it on the basis that we felt strongly that there was a potential for an underground component, and here we see it, and we're still defining that. People have asked us, investors have asked us since the release came out over the last several hours. Does this drill result, does it change the way you see the current plan that was put out in February changing?
Do you see you adjusting the location or the type of infrastructure? It's far too early for that. I think we know what we want to do on the main deposit. The current shaft position has been cited. What we think the potential exploration upside shows is that we know we have of Directors.
Lots of spare capacity or will have in the processing facility. And What we're hopeful is we identify additional sources of underground mineralization so that we can actually increase The mining rate increased the throughput and potentially hopefully increase production rate at this deposit. We also continue to have good results at several other of Properties, LaRonde, Goldex, Meliadine, Santa Gertrudis in Mexico, Kittila, we announced a significant step out hole in our last press release there. But in this press release, we focused on Hope Bay. Hope Bay, as you know, we acquired earlier this year.
That project to us is Very similar to the thinking that we've gone through over the last 20 years in this company by geology early, by Good Geology Early. And the Hope Bay project comes with 2 significant greenstone belts that cover individually each about 80 kilometers. There's a reserve and resource that's over 7,000,000 ounces as calculated by Hope Bay. We will continue to work and drill that project. We continue to get good results, which we have announced in the recent press release.
But we just want to emphasize, we're not in a hurry here. We're in a hurry to drill it. We're in a hurry to understand the potential and understand what we own, but we're not in a hurry to spend a lot of capital here. That will come, But it'll take some time. And we've got some of our best people from our Nunavut operations that are focused on this opportunity on how we can turn this into a much bigger, more meaningful part of Ignico Eagle's business.
So we're hopeful. Again, those are the types of bets we like to make. We like to go in early, but there's a lot of geological potential. We like to get things at a fair price and we like to drill them and we like to use our mine building expertise. So it's tailor made for this.
So our focus as we go forward, we have several brownfield opportunities at existing mines. We're going to extend the mine lives of some of our major cash flow generators and we're going to steadily and consistently move our project pipeline forward in a way that doesn't increase the risk in our business, but also allows us to generate net free cash flow and return more of that net free cash flow to our shareholders. As far as other elements of the strategy, there's no desire to increase the geopolitical risk. It's already low. We're comfortable working in those regions that we're currently operating in.
Those regions allow us to do business, allow us to do what we do and do the things that have created value for us over time. So we're very comfortable. The focus is also anchored on the philosophy that it's all about per share value. And as a result, the focus is moving these projects forward, funding them internally and keeping our share count down so that those exploration results, those new projects that get built, those brownfield ounces that we add to the pipeline and the mine plan to maximize our per share value. The other thing that we're really strong on is ESG.
We continue to rank extremely high and we're recognized as having industry leading ESG group and Practice. And as we said on the slide, you can see some of the rankings that rank us at the top of the industry. That's no accident. ESG has not been important for Envigo just because it's the focus of investors and the public's attention over the last few years. Our mission statement actually calls for us not only to deliver for our owners, but to deliver for our employees and to deliver for the broader community.
So we've been focused over the last year on the environmental side of ESG and focused on greenhouse gas emissions and ultimately lowering our greenhouse gas emissions. Already, as you can see on this slide, on a relative basis, we're of Far Lower Than Our Peers in Terms of Group Greenhouse Gas Emissions Intensity, Largely Because WE Source A Lot of Our Power From Electricity. And what we're focused on going forward is we're focused on expanding our investments, particularly in the far north in Nunavut on renewable sources of energy, but also working with the federal government on an idea to potentially extend the power line from Northern Manitoba into Nunavut to service several communities as well as and potential power source for our operations and our businesses in Nunavut. We've put out some new numbers in our latest sustainability report, which has been issued this week and new targets, targets for 0 net emissions by 2,050 and we also disclosed our partial disclosure of Scope 3 emissions. All of this design as we move through the balance of this year to come out with definite targets on overall reductions of greenhouse gas emissions as we go forward.
We talked about our safety performance. So we continue to see steady improvement in records and safety, which is critical to the well-being of our employees. But where we've really shined this year is on the social side. When the pandemic struck in March, it was very challenging. There's no doubt about it, because the information set It's changing on a daily basis.
And there was a lot of uncertainty, as everybody knows. Everybody was trying to understand where it was all headed. As we gather to talk about how we would manage through it, we all discussed this as an opportunity at the time to really step up, not that we weren't doing good things in the community at that time, but to really step up and make a difference in these communities that were likely struggle as they were battling through the pandemic. And we realized at the time that given the size of our businesses, largely in some cases remote locations that we would have much more capacity to do things in the community than our governments would have. And our teams have stepped up in a big way in those communities and providing essentials like food In some instances, where it was difficult to get, supplying PPE, having workers stay home And not come to work to protect not only them, but to protect the communities, particularly in Canada's far north.
And those employees are still at home. We're still paying them, which we're happy to be doing. We want them back. And It looks like as we move forward over the next couple of months, there's a clear pathway to get them back largely because vaccinations and the vaccination program have gone well in Nunavut. It started early than it did in the general population.
And that was a good thing to put Those communities in a position where they can get back to normal sooner and get back to work. So we're working hard at that. So what I would like to
do is just I'll close with
thanking our Board, thanking our shareholders for all the support, particularly in the last year, When it's been challenging dealing with a lot of new issues, but mostly to thank our employees, not only for The hard work and the dedication over the past year, but for the professionalism, for the class that they've shown As they've reached out before being asked that they've reached out to our communities, they've reached out to our governments and they've reached out to those in need and they've collectively stepped up and made a really big difference. So on that Jim, I would like to turn it back to you.
Thanks very much, Sean. That was a very comprehensive overview of what we do, who we are and what we propose to do. We are an extremely well run company, well managed and that's not just today that's over a long period of time. We started with employees in the 100 and now we're in the 1,000. And we've got a great, great future ahead of us with great people.
If there are any questions at this point, What I'd like to do, I'd be remiss if I didn't mention that
of Directors.
A very welcome addition to our Board. The Board has received a with whom in arms Leona Aglicard, who came with a tremendous resume. Not only that, but she will be providing us with insight into the Inuit culture, of Nunavutant, the territory, a very valued addition and we're so happy to have her and We look forward to working together. So if there are no further questions, of Directors. This concludes the meeting.
I would like to thank everyone for joining us today and making this a successful virtual meeting and CEO at this time next year hopefully in person. Thank you. God bless you all the best. Thanks.