Good morning. My name is Shelly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle Annual General Meeting conference call. Thank you, Mr. Jim Nasso. You may begin your conference.
Thank you. Ladies and gentlemen, welcome to the annual and special meetings of the shareholders of Agnico Eagle Mines Limited. My name is Jim Nasso, and I'm the chair of the board of Agnico Eagle Mines. [Non-English content]. The name of this room is the Arcadian Room, right? Yeah, the Arcadian Room. I would like to acknowledge our Finnish shareholders, so would you please come forward and send a greeting?
Thank you.
[Non-English content].
[Non-English content]. In accordance with the bylaws of the corporation, this won't take long, folks. It's the boilerplate that we always run through, and in a few minutes, we'll be getting into the real interesting stuff, but this is necessary. In accordance with the bylaws of the corporation, I will preside as Chair of this meeting. Mr. Greg Laing, our General Counsel, Senior Vice President, Legal and Corporate Secretary of the corporation, will act as Secretary of the meeting. With the consent of the meeting, Shirley Tom and Rebecca Liu of Computershare Trust Company of Canada, the corporation's Registrar and Transfer Agent, will act as scrutineers. Could you please stand, please, and acknowledge that you're here? The ladies, there you are. Okay, good. Thank you. Since this meeting was called for 11:00 A.M. and it is now that time, I ask that the meeting come to order.
After the formal business of the meeting, Sean Boyd, the Vice President, Chief Executive Officer, and Director of the corporation, will present a corporate update followed by a question-and-answer period. I would like to take a moment to introduce the head table and the other Directors and some of the Officers of the corporation who are with us today. Seated with me at the head table are Sean Boyd, Vice Chairman, and CEO of our corporation, Ammar Al-Joundi, President, David Smith, Senior Vice President of Finance, and Chief Financial Officer, Greg Laing. Seated with me are our fellow Directors. Would you kindly stand when your name is called? Martine Celej, Robert Gemmell, Mel Leiderman, Deborah McCombe, Dr. Sean Riley, Merfyn Roberts, and Jamie Sokalsky. Unfortunately, Dr. Leanne Baker could not be with us today, but these are my fellow Directors, and they're great supporters of me and our company.
I confirm the notice of the meeting, that I've received a sworn affidavit of an Officer of Computershare Trust Company of Canada, stating that the notice of the meeting, the management information circular, and a form of proxy have been sent and made available to each shareholder, each Director, and the auditors of Agnico. The affidavit as to such mailing 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. With the consent of the meeting, I will dispense with the reading of such notice. Next item, scrutineers' report on voting. The Secretary has advised me that we have received the scrutineers' report, which indicates the number of shares voted by proxy.
I am pleased to report that to the best of my belief, if the ballot were conducted, the number of shares attached to the shares represented at the meeting required to be withheld from or voted against the election of Directors, the appointment of the auditors, and the amendment to the corporation's incentive share purchase plan is less than 5% of all the votes that might be cast at this meeting. I propose to conduct the vote on these resolutions in addition to the non-binding advisory vote on approach to the executive compensation by a show of hands. The scrutineers have also advised me that prior to the meeting, proxies were received from the holders of a sufficient number of shares to constitute a quorum. I declare the meeting to be regularly called and properly constituted for the transaction of business.
I direct that formal report of the scrutineers be annexed to the minutes of this meeting as a schedule. Next item, auditor's report and financial statements. The first item of formal business is the presentation of the audited financial statements of Agnico Eagle for the year ended December 31st, 2018, and the auditor's report on these financial statements, both of which have been previously sent or made available to the shareholders of the corporation.
If anyone would like a copy of these financial statements, additional copies are available here. I now place before the meeting the financial statements and the auditor's report. Questions regarding these statements will be entertained at the end of the meeting. Next item, election of directors. The next item of formal business is the election of directors of the corporation. The articles of the corporation provide for a minimum of five and a maximum of 15 directors.
The board of directors has determined that the total number of directors to be elected at this meeting is 10. I now declare the meeting open for nominations. May I have nominations, please? Don Elliman.
Mr. Chairman, I nominate as directors of Agnico Eagle Mines Limited, Dr. Leanne Baker, Sean Boyd, Martine Celej, Robert Gemmell, Mel Leiderman, Deborah McCombe, Jim Nasso, Dr. Sean Riley, Merfyn Roberts, and Jamie Sokalsky. All as named in the management information circular. I 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, Don. Excuse me. May I have a seconder of the motion, please?
I second the motion.
Thank you. Motion seconded. Under the bylaws of the corporation, any additional director nominations for today's meeting were required to have been received by no later than the close of business on March 27th, 2019. As no such nominations were received by the corporation prior to that date, there are no further nominees eligible to stand for election today. Accordingly, I now declare the nominations closed. You have heard the motion, which has been seconded. Is there any discussion? If there is no further discussion, I would ask the meeting to vote on the motion by a show of hands. All those in favor, please signify it by raising your hand. Contrary, if any? I declare the motion carried. Appointment of auditors. The next item of formal business is the appointment of auditors of Agnico Eagle for the current year.
It is proposed that Ernst & Young Chartered Accountants be reappointed as auditors of the corporation to hold office until the next annual meeting of shareholders of the corporation, or until their successors are appointed, and that the auditors' remuneration be fixed by the board of directors of the corporation. May I have an appropriate motion, please?
I so move, Mr. Chairman.
Thanks, Mr. Leiderman. May I have a seconder of the motion?
I second the motion.
Thank you, Jamie. Thank you. You have heard the motion, which has been seconded. Is there any discussion? If there's no further discussion, I will ask the meeting to vote on the motion by a show of hands. All those in favor, please signify it by raising your hand. Contrary, if any? I declare the motion carried. Amendment to the incentive share purchase plan. The next item of formal business to consider at this meeting is the approval of the amendment to the corporation's incentive share purchase plan, as more fully described on page 22 and in Appendix B of the management information circular. May I have an appropriate motion, please?
I move that the resolution approving the amendment to the corporation's incentive share purchase plan as set out in the management information circular dated March 12th, 2019, be approved.
Thank you, Deborah. May I have a seconder of the motion?
I second the motion.
Thank you, Dr. Riley. You have heard the motion, which has been seconded. Is there any discussion? If there is no further discussion, I will ask the meeting to vote on the motion by a show of hands. Contrary, if any? I declare the motion carried. Advisory resolution on approach to executive compensation. The next item of formal business to be considered at this meeting is the non-binding advisory resolution of the corporation's approach to executive compensation, as more fully described on page 23 and Appendix D of the management information circular. May I have an appropriate motion, please?
Mr. Chairman, I move that the resolution approving on an advisory basis the corporation's approach to executive compensation set out in Appendix D of the management information circular dated March 12th, 2019, be approved.
Thank you, Mr. Gemmell. May I have a seconder of the motion?
I second the motion.
Thank you, Martine. You have heard the motion, which has been seconded. Is there any discussion? If there's no further discussion, I will now ask the meeting to vote on the motion by a show of hands. All those in favor, please signify it by raising your hand. Contrary, if any? I declare the motion carried. If any shareholder is interested in the exact number of votes cast in a 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 a report of the voting results of this meeting. Termination of the meeting. Is there any further business? If there's no further business, I will now ask that someone to move and someone to second a motion that this meeting will now terminate.
Mr. Chairman, I so move.
Thank you, Merfyn. May I have a seconder the motion?
I'll second the motion.
Thank you, Deborah. All those in favor of the motion, please so signify by raising your hand. Contrary, if any. I declare the formal portion of this meeting is now terminated. We will now go to the Paul Penna Award. At this time, we would like to announce the Paul Penna Award winner. Mr. Penna was the founder of Agnico Eagle and was widely noted for his philanthropy and concern for the well-being of his employees and the betterment of communities in which we operate. To provide some background on Mr. Penna and to introduce the 2019 winner, I would like to call up Ms. Louise Grondin, our Senior Vice President of Environment and Sustainable Development and People. Louise, please.
Good morning, everybody. The Paul Penna Award is bestowed upon an Agnico Eagle employee who best exemplifies the philosophies of our founder through community involvement, dedication, and hard work. Paul Penna left an enormous impact on the communities he was part of and helped change the lives of many people, one person at a time. This award ensures that his values continue to play a major role in the identity of Agnico Eagle as a company, as well as allowing the legacy of Mr. Penna to live on through the positive initiatives laid forth by our employees. Now for this year, I'm pleased to announce that the winner is Marcos Mendez Banda from our Pinos Altos mine in Mexico. Congratulations, Marcos.
We would like to recognize Marcos' accomplishments and generous spirit and thank him for his efforts to inspire the youth in this community and to do better and improve their quality of life. For these reasons and more, we're proud that Marcos is the winner of the 12th annual Paul Penna Award. Let me share a little bit about Marcos. Marcos has been with Agnico Eagle since 2009 and has worked his way up from general assistant to a truck and heavy machinery operator at our Pinos Altos mine in Mexico. Marcos is driven by acts that have a positive social impact and always has his community's well-being top of mind. He sees the hope in youth and instills in them the value of helping others in need.
Through his efforts, he's changing the mentality of youth by creating positive actions in the community that keep them focused on a shared goal and away from societal pressures and vices. Growing up in a loving family, Marcos learned the value of helping others at an early age. After high school, Marcos landed his first job as park ranger at the Basaseachic Waterfall. Through his position, he discovered a passion for and a deep dedication to the environment. At Agnico Eagle, he began to transform his passion for the environment and for helping those in need into action. Today, as president of the 60-volunteer strong Ocampo Youth Action group, Marcos leads several community initiatives, including clothing and food drives, as well as environmental campaigns that involve collecting litter and creating awareness for a cleaner world. Marcos also organizes gatherings to unite people from different communities for better integration and partnerships.
Notably, he single-handedly raised funds for a young victim of a car accident to help with the cost of medical care and surgery. Thanks to his efforts, the young man is thriving and in good health today. Marcos continued to devote a large part of his time to the community and counts his blessings daily for his family, life, and job. Truly humbled to be awarded this honor, Marcos says, "Our best reward for the effort that we carry out is a sincere smile, a hug, and a thank you." Marcos, you truly embody the spirit of all that Mr. Penna valued as a leader and member of his community. [Non-English content].
[Non-English content]. That's a very important part of our DNA. We mustn't forget our founder, Mr. Penna. Rest his soul. He's responsible for all of these things that happened. Of course, the people who followed have made it what it is. We have a very special company, a very special culture, and it's extremely important to us. Our culture comes first, which means all the people. The rest is business, and we're very good at all of those things. Thank you. [Non-English content]. Once again, thank you. Safe harbor, we will now proceed with the presentation by management of the corporation. Before I turn the meeting over to Mr. Boyd, I would like to caution you that management's presentations may include certain forward-looking statements. These statements are based on management's current expectations, but are naturally subject to uncertainty and changes in circumstances.
These factors may cause the corporation's actual results to be materially different from the expectations expressed or implied by such forward-looking statements. The corporation is not under any obligation to update the forward-looking statements in today's presentations. Detailed information about risks and uncertainties is included in our most recent securities filings with the Ontario Securities Commission and the Securities and Exchange Commission. With great pleasure, I would like to introduce Sean Boyd, and I must say, he's very special. He's special to us, special to our employees, and special to the industry. He's given a very good account of himself, and him and his very senior people, as well as all our employees, are the reason we're here today, and the success we had over the many years, that constant, continual success of good numbers and good relationships with our people and communities. All of that's important.
I won't go any further other than to say, one of the finest CEOs in the mining industry. Boom. Mr. Boyd.
Thank you, Jim, and thank you to Jim and the board for their support and encouragement over the years and for keeping the spirit and legacy of Paul Penna in the forefront of the company. It's nice to be here in the Arcadian Court. Agnico, in our over 60 years of mining and running a gold company, we spent 20 years in this building, and those were 20 years that Paul Penna was with us in this building. It's not like we're trying to shift the meeting every year to make it difficult to find the hot lunch, but this was a place that we felt comfortable coming to, and we've actually booked it for next year. Put that in your diary. We'll be back here next year, last Friday in April, I think, is the date.
What we'd like to talk about today is certainly give you an update on the company, on where we're going, on the financial performance, how we see the financial metrics and the return metrics improve as we go forward. We also wanted to chat about gold, about the industry, about how we're positioned in the industry, but also some of the benefits that we're seeing from our employees' activities, particularly in Canada. There's a lot of interesting dynamics going on in the gold mining space on the M&A front, we'll also talk to you about that and how we see that playing out. One of the things that we've been fortunate to be able to do over the last 60 years is develop a strategy that's well-matched to our skills and well-matched to the opportunities and the challenges in this industry.
There's no question it's a tough business. We're fortunate that we've been able to think long-term and adopt our practices and policies to deal with the long-term nature of this business. We're patient, we're disciplined, we're focused. It also puts us in a tremendous position going forward to continue to perform, both on the bottom line but also make big contributions in the community, and we'll talk a little bit about that. Jim talked about the safe harbor statement. I'll start and talk a little bit about gold. I'll just go back a bit. I don't want to miss John Hathaway. John Hathaway, for those who don't know him, has been following the gold space for a number of years. I first met John in the early 1990s.
He runs a gold fund, he's an individual that is able to articulate a case for gold in a very simple manner. It can often be a complex topic. We would agree with John. What we're seeing now is we're seeing a number of factors that seem to be coming together at roughly the same time, which point to and make a very bullish case for gold. I think one of the overriding determinants of what gold is going to do over the next few years is really global debt. What we see is a global debt level that's increasing actually faster than the economies are able to grow. There's probably no painless way off of that debt treadmill. In fact, in the U.S., we've seen government debt double, more than double in the last ten years to $21 trillion.
That puts a lot of pressure on certainly economies. It actually puts central banks in a position where they can't really raise interest rates. Those are conditions which are generally very favorable for gold. Ultimately, how we sort ourselves out of this debt mess will determine actually what the gold price is. I was in Switzerland recently, and I was on a panel discussing gold and Bitcoin, and one of the questions that came from the audience was, how do we see Bitcoin in ten to 15 years in terms of its impact on the gold price? I answered that to say, "Well, that's the wrong question." The question should be, where is the U.S. dollar in ten to 15 years? We'll be able to tell you what the gold price is.
This debt question and how we resolve it is going to be a key driver, but sort of rounding that out is although we saw a good first quarter from GDP in the U.S., there's still some signs of weakening economies around the globe. That's also another reason why governments will not raise interest rates. We're in a period now where we've gone from a tightening policy to sort of a policy of not quite easing, but we're likely not going to see, at least for the next couple of years, interest rates go up. In fact, we could actually see some monetary easing to help with the debt situation, to help with the situation where we see a weakening economy. Inflation is not here yet, but inflation could be on the horizon. We know the labor markets are tight in the U.S. Wage rates will rise.
Wages are really the key driver of inflation. Those first four points are exactly the things that investors worry about. I think you've heard us say before, in the last couple of years, we've seen much more interest from generalist investors in what Agnico Eagle is doing and what the prospects are for Agnico Eagle, but also more broadly, what are the high-quality gold miners doing? How are they positioned going forward? What we're lacking in the gold price equation is investment demand, and they're certainly focused on these factors as being potential drivers for the gold price. We'll talk a little bit about how we think we can get to a catalyst to get them more involved in the space.
On supply and demand, certainly from a supply side, as miners, we know how difficult it is in this business to constantly replace reserves, but also to grow the business in a way that actually adds value. It's very difficult. We're probably going to see supply or mine supply be relatively flat for the next couple of years. We've seen reserves decline in the industry. We've seen the grades of deposits decline. We've seen fewer and fewer big discoveries. This is what's probably driving some of the M&A, which we'll talk about in a minute. On the demand side, we've seen some aggressive buying from central banks. In fact, in 2018, last year, we saw the largest net buying by central banks in 50 years, up over 70% from the year before.
In fact, this morning, there were numbers out for January and February, and in January and February, we saw central bank gold buying up over 60% from where it was in January and February of last year. Something's concerning the central banks to the point where they're buying gold at levels they haven't bought in five decades. Part of that is likely the diversification away from the U.S. dollar. Certainly, the Chinese and the Russians would like to diversify away from the U.S. dollar. This comes back to this question on where is the U.S. dollar going to be in five or 10 years? Is it still the reserve currency? Certainly, Russia and China are suggesting it may not be. That ultimately is going to be what we think is going to drive the gold price. Gold has sort of been quietly doing its thing.
There are still some skeptics, a lot of skeptics. There's still some stigma around owning gold investments. I was surprised when I was in Zurich a couple of weeks ago, where a Swiss bank had basically said that up until recently, they did not have a gold stock on their approved investment list, which means that they could not put a gold stock in their clients' accounts. That was shocking. Fortunately, the gold stock they added was Agnico Eagle, but it's just telling that you've got banks in Europe that still aren't comfortable putting gold stocks in their clients' portfolios. There's still a lot of work to do, but certainly, we see the interest now; the investors are just looking for the catalyst. Gold is technically acting very well. Gold bottomed in 2015. Since 2015, we've just seen a series of higher lows.
Technically, the gold price is actually working well. Think about that gold price. That gold price is doing that in the face of record-high stock markets, and recently, the U.S. dollar was at a two-year high. That's good, solid, quiet work that the gold price is doing. I think that also demonstrates that there is a segment of the investment community that still looks to gold as a store of value and a great portfolio diversifier. We can also see it in the next slide. We can see that over an extended period of time, gold's actually stacked up very well over the last 18 years against the general stock market. Again, very quietly, you wouldn't expect that to be the case, but clearly, there's a part of the investment world that sees gold as something that they would like to have.
If you actually think back to the central banks, not only are they buying more, but actually, there are several central banks that have actually requested the gold back from vaults outside of their country in banks, they actually want it brought back home. I think that tells you the focus that these central banks are having on their reserve currencies. The opportunity that we see, though, is actually not in the gold bullion. It's actually with the equities, because the equities are trading at a discount. This is courtesy of Scotiabank. The equities are trading at a discount to where the gold price is. And there's another measure which is more long-term than this period. If you actually look at the XAU index over 25 years, the XAU index is just a stock index of the major gold producers.
Over a 25-year period, the ratio of the XAU to the gold price was 0.25 on average. It's currently 0.06. Another measure that there's a huge opportunity here in gold equities, and I think that's what generalist investors are trying to determine now. I think they've concluded that going forward, the gold price is likely to do better, and it's how to play it. I think they've concluded based on a lot of the work we do, and we probably do more investor meetings than most of our peers. I think they've concluded that one of the best ways to play it going forward is to be positioned in the high-quality gold names. We look forward to that. I'll use this slide just to talk about industry M&A and our view on industry M&A.
This just depicts the top market cap companies, and this has evolved over the last six or seven months. If we looked at this probably 10 years ago, Agnico would have been probably number 15 on this list. We really never set out to be focused on how do we move up the ladder and how do we get bigger from a market cap perspective. We were just trying to focus on how do we make the business better, how do we keep the share count down so that that better business reflects on a better per-share performance. Low and behold, we found ourselves sort of moving up in terms of relative size on a market cap basis.
If you sort of roll it back a few months when Goldcorp was on its own, Agnico was sitting number four in size, Goldcorp had fallen to number five. If we think back to last year and think about those top five, I think we all know, based on what we've heard or read in the press, that we know Newmont had talked to Barrick in 2014. We know that Barrick was always talking to Randgold. We know that Newcrest, who's number three, was also in discussions with Barrick that didn't work. We know now that Barrick actually had a dialogue with Randgold and ultimately decided to do a deal to put that together. We know Newcrest was talking to Goldcorp, that deal didn't happen. Newmont shows up and takes Goldcorp.
There's only one company out of the top five that was not involved in any of that, and that was us. Why? Because we're confident in our strategy to continue to do what we've done for the last 20 years, which is to outperform the sector. We don't think the best way forward for creating value for our shareholders is big M&A. The best way forward is to actually focus on a strategy that's worked for a long time, and that is still well-positioned based on our skill set and our opportunity set to continue to deliver. You're going to see us continue to be disciplined, looking at early-stage opportunities where our exploration people and our mine-building people and ultimately our operators can turn those early-stage opportunities into meaningful parts of our business, and here's how that plays out.
As we said at the start, this industry is struggling to grow. Because Agnico Eagle made some smart investments during the period from 2012 to 2015, where we were investing in the future when a lot of the industry was still trying to deconstruct and find the right size and improve their financial position, we were actually thinking ahead and making investments. What that's done is that's put us in a position to continue to grow the output as we move forward, and we would expect that beyond 2021, we can still move that output up based on what we've built and some of the projects that are in the pipeline. Because of the grade of the new projects coming online, we expect to be able to slightly reduce our costs. You don't often see that in the industry.
We've got a really good opportunity here to drive organic growth that drives value for our shareholders. How does this look like in terms of growing operating margin relative to what our expectations are in terms of investing back in the business? In 2017 and 2018, those big chunks of yellow are essentially construction CapEx, largely to build the Meadowbank platform. Those two years were the largest two years in our 60-plus-year history where we were investing in new projects. That spend requirement has come off dramatically as we are currently in the commissioning phase of the two new projects in Meadowbank, which took up the bulk of that spending in 2017 and 2018. The production on the last slide drives the blue line, which is basically the operating margin coming out of the mines.
As we look forward, we estimate that we'll be spending somewhere between CAD 500 million and CAD 700 million in both sustaining and growth CapEx combined. The gray bar is the sustaining capital. A lot of the industry was reducing their all-in sustaining costs by actually squeezing their mines. You can see that we continue to invest steadily in all of our mines in terms of sustaining capital. We don't have to play catch-up in that sustaining capital number because we were squeezing our mines. We're confident that we have this growing gap in free cash flow generation, where we're generating much more from the mines, and required to spend much less on projects to continue the growth beyond 2 million ounces post 2020. Here it is on a per share basis.
You hear us talk often of it's not really how big you are, it's really what you're able to do from a per share perspective. There's a couple of points in this slide. This inflection point that you hear us talking about is coming very soon, because we're roughly going from a company that was producing 400,000 ounces per quarter for the last several years, to a company that's going to produce 500,000 ounces per quarter and more as we go beyond 2020. That's with keeping the share count roughly the same. We're going to drive on that basis, earnings per share, but most importantly, cash flow per share. You can see the rising yellow line, as we go into 2019 and 2020 to the point where we get to sort of the best on a cash flow per share basis in the industry.
We added a new component here. We added Franco-Nevada because as investors are looking at where they want to put their money in the space, we can tell you that the generalist investor is risk-averse . We spend the good part of our meetings, the first 20- minutes anyways, just talking about risk in the industry, potential risk in our business with new commissioning and growth projects. The investor, from what we gather, would like to be exposed to the space with as little risk as possible, and they have found their way into the royalty space, which we're not arguing is not a bad place to be. It's actually a good place to be.
What we're saying now, based on all the investments that we've made over the last little while, that we're delivering cash flow per share growth, which is better than the biggest royalty company. That's a good place to be when generalist investors are now looking at where do they want to put their money. We get asked the question often. We've had it from one of our bigger shareholders who manages $1.7 trillion, and they said, "Why don't we just invest more in the royalty companies we hold versus Agnico?" This is one reason, going forward, we're going to drive cash flow per share growth. The other reason is, the royalty companies will put up money that other people spend, which is good. It's a good model. Those companies have delivered a lot of value.
The difference with us is we give you a lot more leverage because every dollar that's spent, we're directing where it gets spent and how it gets spent, and it's the skill set of our people that have a track record of decades of knowing how to spend that money efficiently and effectively. I think that just bolsters the argument and the leverage. People ask us, and we got the question on the conference call, "Given this inflection point in cash flow and free cash flow, what are you going to do with the money?" One of the things that we've done for a big part of our 60 years is we've been focused on making sure we paid a dividend. As you've heard us say many times before, there were years when it was very difficult to keep paying a dividend.
It was clearly important, and I remember Paul Penna used to say, "Look, Sean, it's actually not exactly how much we're paying, because shareholders understand when times are tough. The fact that you've actually made a point of paying something when times are tough, they really actually appreciate it more." For 36 years, we've paid a dividend, and I think this chart says a few things. Quietly over the last five years, we've managed to increase it each year. We were increasing it each year when we were in the biggest capital investment program in our history in 2017 and 2018, and we increased it in each of the last five years during a period where the gold price was relatively flat, which is the yellow line.
I think that is a sign of the confidence we have in our business going forward to generate increasing cash flows. I would expect that as we go forward, we haven't made the decisions, because the decision on how much we pay as a dividend will be based on what is the investment opportunity in front of us based largely on our internal pipeline. We'll be focused on the internal pipeline, repaying some debt, but also very much given our history and our track record and the importance of paying a dividend, that number is likely to go up. How does the math work? This is where the generalist investor really gets focused in the meetings. Once they get over the risk and understanding the opportunity set, they'll say, "Okay, run these numbers quickly.
You're going to produce 2.2 million ounces." In one case, one of our German shareholders said, "We're using CAD 1,500. Run that math for us." We said, "Okay, that's easy. Thanks for using a nice round number." If our cash costs are CAD 600 and the margin's CAD 900 on 2.2, that's CAD 2 billion. Okay, that's good. What comes off of the CAD 2 billion? We'd have exploration, we'd have admin, we'd have interest on the debt, we'd have cash taxes, and let's use a round number of CAD 500 million, maybe CAD 450, but let's use CAD 500, keep the math simple. That's CAD 1.5 billion we're left with. Off of that, we said we're going to spend between CAD 500 and CAD 700 on investing in the business, so let's say CAD 600. We're down to CAD 900 million.
That's a lot of cash generating in the business when our dividend is basically a little over CAD 100 million. That's the type of potential we have to keep investing in the business, to keep improving our financial flexibility, but also to doing what we like to do, which is improve the dividend. You've seen this many times before. We've added something else. We've added the S&P 500 index. This is our performance over roughly a 20-year period. That shows that not only have we outperformed the gold price and outperformed the XAU index, which we referred to earlier, which just is a stock index of our peers, we've actually outperformed the S&P 500. That's through a strategy that we expect to continue to employ, that's worked well for us. We're not saying it's easy.
It's actually quite challenging, and we're fortunate to have employees that understand the strategy and understand where they fit in the strategy and understand what the expectations are for them to be able to continue to do this. The only other company that had this type of outperformance was Randgold, and Randgold has clearly made a choice that they would shift gears and take a different approach going forward, and that approach was to do a zero-premium merger with Barrick. Agnico Eagle is not looking to do a zero-premium merger with anybody. We're more focused on how we sort of execute. We've heard this. What I wanted to do is, I just wanted to spend the last minute just talking about our business in Canada, because I think it's important. The mining industry struggled over the last several years in Canada.
We've lost Alcan, we've lost Falconbridge, we've lost Inco, we've lost Miranda. We've effectively lost Goldcorp. Despite what they say about the head office in Vancouver, the reality is it's run out of Denver. We're kind of shrinking in a way in terms of the companies that are in this country doing work not only in Canada but also around the world. While that's happening, Agnico is actually growing in Canada. In fact, last year we were the largest producer of Canadian gold ounces with our mines in Canada, and that number is set to grow 50% as we bring on and optimize the platform in Nunavut and as we expand some of our other platforms. That's not a small business. That's actually quite a big business. We have 6,900 employees in Canada. Again, that's pretty big business.
In Canada last year on CapEx, we spent CAD 900 million, and on wages and goods and services and taxes, et cetera, we spent CAD 1.9 billion. That's pretty big business in Canada. Since 2007, we've invested over CAD 5 billion in Nunavut. We're currently 15% of the GDP of Nunavut, going to 25% of the GDP of Nunavut. What we do know as Canadians is we have tremendous mineral wealth in the north. As Canadians, we think that companies like Agnico, who are Canadian, based in Canada, should be the companies that help to develop those resources and create the infrastructure that allows Canadians to benefit from responsible resource development. We're working hard with the various governments, including the federal government, to make the case. That's not easy. Not easy. We've seen the challenges they've had in pipelines.
There's no coherent strategy on what to do and how to do it. We're certainly doing our part, and we think there's certainly a lot of potential to open up Canada's north, not just for the benefit of the people that live there in Nunavut, the Inuit, but also for all Canadians to take advantage of that wealth. It's there. We should take advantage of it. We can say from Agnico Eagle's perspective that we've built a model of responsible resource development, and we're looking forward to do much more. We certainly would like some help from the government in terms of infrastructure, not just in terms of transportation, but the opportunity is really on the energy side. How can we invest in clean energy, renewable technology? Maybe the answer to that, ultimately, a power line, maybe it's wind power, but we're actively working those files.
If you get the opportunity to make the case that that's a good strategy for this country to people in the government, then please do that. I'll leave it at that, and I'll turn the meeting back over to Jim. Before I do that, again, I want to thank the board for their support, but also thank the shareholders. Thank the shareholders for continuing to come out to the meeting, but to continue to track and follow Agnico. We've got, in some instances, three generations here, where their grandparents were shareholders of Agnico. I'll close by thanking our 10,000-plus employees for making it all happen, and their families for the hard work and commitment to post those results that we continue to post. Thank you very much.
Not only is he a fine young man, he's the best CEO in our industry and a credit to our industry. All of this is possible, as Sean mentioned, our very special culture made up by very special people, which makes us a special company. I thank one and every one of our employees for making all this possible because we never do anything alone. We always do it, my favorite concept in the world, together. Together in French, [Non-English content] . Thanks very much. I open the floor to questions. Anybody? Proxy holders, please state clearly your name, identify yourself as a shareholder or proxy holder, please. There's a microphone, yeah.
My name is Norma Chapman. I'm a shareholder. I have two questions. One, what is a paste plant that we read about?
Wait, I didn't get that. I'm sorry?
What is a paste plant?
Go ahead.
We have an expert on paste. He's right there.
I wouldn't say an expert, but I'll answer the question. As part of our mining method, we create openings underground, and we fill them back up. We use tailings that are from the process plant, mix them up with cement, and then create the paste and backfill material that will create good rock mechanics for future mining.
To make sure you continue mining securely.
Well, the other question is, what is the difference between production cost per ounce of gold and cash costs per ounce of gold?
The cash cost per ounce is literally all of the cash costs , the production costs, and effectively, the depreciation.
It says what?
The non-cash amortization.
Oh, I see.
They're very similar. They're both representing the cost of production in the mines.
Thank you. Any more questions? Anyone? Sir? Sir, yes, go ahead.
My name is Winfried Frühauf. I'm President of W. Frühauf Consulting Limited, which is a shareholder of Agnico. It acquired its position by buying into Paul Penna's company, which ultimately ended up with Agnico. I have a question on sustainability. Based on the company's current mining properties, reasonable escalation of tool costs, reasonably stable economic conditions at current gold prices, when do you expect to fall under the 2018 gold production?
I think the question, our cash costs this quarter were CAD 623. As we go forward, we're anticipating all-in sustaining costs to be sub CAD 900, which includes a component of capital as well as the production cost that Dave referred to. On a cash cost basis, we should be roughly CAD 625-CAD 650. I think the question was, if the gold price fell, how sustainable would the business be? I think the key for us was the timing of the big CapEx going forward. We spent the big amounts in 2017 and 2018. These mines could withstand a much lower gold price, much lower than where it is now, and keep operating and still generate cash, given the low nature of the current cash costs.
Thank you. Any more questions? If there are no further questions, go ahead, sorry.
Yes, it's more of a statement than a question. First, I'd like to congratulate Agnico Eagle. I've been a shareholder now for about 10 years or so. I'd like to congratulate them, what they're doing for our Native people in the North. On the same hand, I'd also like to say how ashamed I am of our federal and provincial governments that they haven't done more for the Native people. It seems to me, especially the federal government, the provincial, they seem to have more concern, and most of the money that they make from our taxpayers, they dump in the cities like Toronto and Vancouver. I could go as far as go back as Elliot Lake. Elliot Lake at one time made billions for the federal and provincial governments. Basically, the money was all sent to the cities like Toronto and these cities.
While the federal government doesn't wake up and do something more like put the infrastructure into the North, which is badly needed, it's just a disgrace. The provincial government is busy building LRTs in Toronto that aren't-
Is there a question there? Do you have a question?
Actually needed. No, I just wanted to say I'm quite happy with Agnico Eagle. Thank you.
Thank you.
I think what we can say there is that's an interesting point because we had the good fortune of having Prime Minister Harper visit Meadowbank, and he actually spent a night there with our employees. In response to a question about the environment, his answer was basically, the people of Nunavut have just as much of a right as the people in Toronto , Vancouver, and Montreal to a future of prosperity. That prosperity is likely going to be driven by responsible resource development. We should mention that with the Amaruq deposit and the Meliadine deposit based on reserve and part of the resource, we estimate that our payments to the Inuit associations for those two mines combined will be CAD 450 million. There's substantial benefits to be had in the north with responsible development. In the north, we're the largest industrial employer of Inuit.
We spend CAD 8 million annually in our properties in Nunavut for training of Inuit workers. Ultimately, our goal is to do exactly what we've done in Finland and Mexico, have Inuit run the entire business, just like we have in Finland and Mexico. We're a long way off from that, but we're making really good strides, and they're our partners. The people of Nunavut actually own 18% of the land mass of Nunavut, and so they're our partners in resource development. We've been up there since 2007, and we've worked very well together. We've created a lot of value and wealth, and we look forward to doing a lot more.
I might add that through our efforts through the paycheck, we've created a burgeoning middle class in Nunavut. The Inuit, wonderful people, were nomads 70, 80 years ago, and today we're moving forward, together, [Non-English content] ensemble, [Non-English content] junto. We're moving together, always. Any more questions? Go ahead.
With my wife Deborah sitting with me to Paul Penna days, I want to ask about the people of Agnico. You've given the Paul Penna Award. Chairman's talked about the CEO being the best in the industry. Compliments and congratulations to you. You've thanked thousands of people of Agnico. You've talked about partnership and your ensemble going forward. Maybe you could take a moment. You've talked about production. People also recognize that what separates companies, the caliber of their human capital, human capital infrastructure. You have a leadership team here. You have thousands of people. You know the industry. I know you, Mr. Boyd, have been with this organization a long time. You've had other companies up on the bar charts. You probably have people who've been with you for a long, long time, veterans of the company.
Not sure what their transition is in and out, and their longevity with the company, how long they've been veterans. I thought maybe you could take a moment to just talk about the caliber of the workforce at not just the leadership and management level, but all the way across. Thank you.
That's an excellent question. That's a big part of our competitive advantage is the broad range of skills, the experience, but most importantly, is how the team functions and operates together as a team. That makes my job easy, and easier because we have trust and faith in the advice that we get, and we know that advice is based on the best intentions for the company, and we take decisions accordingly. The board takes succession and leadership development extremely seriously. We take time every quarter in our quarterly board meetings to talk about people development , leadership development, and succession planning. We're fortunate as we look forward and look at the opportunity set that exists for this company, and the way that the company needs to be positioned to take advantage of those opportunities, we have all the skills in-house.
Fortunately, we're not looking forward and saying, "Oh my goodness, we have to hire a headhunter because we're short in this area or that area of the key people." It's the continuity, I think, which is key, and it's the commitment. As we like to say, mining is a tough business. You need people that show up to work every day committed to make a contribution and to make a difference. We're fortunate that, and we take comfort in the fact that knowing that those 10,000 people that show up to work each and every day are working hard for the company, for the shareholders, but they're also working hard on things like safety to make sure everybody goes home every day, and they look after each other. It's that combination. People say, "Well, how do you focus on it?
Do you need to focus on it? Isn't it all about culture?" We've been blessed over six decades to have a culture which almost feeds and grows on itself. I think we've been lucky because not only do we have highly competent, skilled people who know their job, they're just quality individuals. That's what I think makes this company special and allows us to continue to outperform. We pay a lot of attention to it, and we have plans to develop the next generation of leaders. They're going to take this company and run it for another 60+ years and do an exceptional job.
Thank you, Sean. Any more questions? If there are no further questions, I would like to thank everyone for joining us today and making this a successful meeting. We now invite you to join our directors and members of our senior management team for lunch. If you have any questions, please feel free to come forward. We'd be happy to accommodate you. Thank you for coming again. Have a good day.