Hey, ladies and gentlemen, we're going to get started with our next big gold presenter. It would be Agnico Eagle Mines. Another intriguing story, a lot going on in the portfolio. With us today from Agnico Eagle Mines is Chief Financial Officer Jamie Porter. I should mention that Jamie is a bit of an outsider for Agnico. Agnico has a lot of internally developed talent, but this is two years into his role here, previously from Alamos Gold. I think it's great because he offers a perspective on the company that not a lot of people have. Jamie, the podium is all yours.
Thank you very much, Lawson. You're exactly right. When I first joined Agnico, I attended a hockey game with a number of Agnico folks. I mentioned in a bragging way that I'd been at Alamos for 18 years. I think the first three people I spoke to had been at Agnico for at least 25 years. I am a bit of an anomaly. There's a lot of internally developed talent. We have multi-generations that often work at Agnico. Our Vice President of Exploration, Guy Gosselin, is here today. He started at Agnico 36 years ago, I believe. He's not unusual. It's a great thing about the company. I'm going to start with just a high-level overview of Agnico, where we are today and where we're going.
After that, you know, we'll get into some Q&A with Lawson. I will be making forward-looking statements as part of the presentation. Please, I would encourage you to refer to slide two of the presentation deck. What I want to start with is just an overview of how the company's evolved over time. Talk about the strategy that's brought Agnico to where it is today, from very humble beginnings 67 years ago to now the largest mining company in Canada and one of the largest gold mining companies in the world. Our strategy is pretty straightforward. I like to summarize it as regional consolidation to create a competitive advantage. We look for regions where we see the geologic potential to operate multiple mines and the political stability to be able to do so over multiple decades. That's the focus.
We're a global company. Yes, we have operations in four countries. We're in Canada, Australia, Mexico, and Finland. 85% of our production and 85% of our value comes from three key regions in Canada: Northern Ontario, Northern Quebec, and Nunavut. In those regions, we have distinct advantages, a competitive advantage that helps keep our costs low and ensures that we can operate our mines as efficiently as possible. In terms of people, again, we've been operating in those jurisdictions for decades. We have a loyal and dedicated workforce. We are the employer of choice. We've got 12,000 employees in Canada. As a result, we have some of the lowest employee turnover rates in the industry. In Northern Ontario, Northern Quebec, for example, our employee turnover rates are half of the industry average. We also have an advantage in terms of our supplier network.
Because of that long-standing operating history, especially in the Abitibi, in many cases, we helped our suppliers start their businesses years ago. When there's a challenge securing parts or supplies, we're often first in line. Given our size and scale, we benefit from economies of scale. We get purchasing volume discounts because we are the biggest buyer in those regions. Last but not least, and I think that you can't overstate this, the benefit of the technical synergies that we have by having a very strong technical team that we're able to move throughout our operations to help support and provide assistance and ensure that we're doing things as efficiently as we possibly can.
Now, what this strategy has created is, again, that competitive advantage where we operate, we're able to keep our costs low and ensure that in the face of rising gold prices, we're able to deliver margin expansion to benefit the company and ultimately to benefit our shareholders. Our track record shows that we've really done that. We look at this next slide. The table in the top left shows how the company's evolved over the last 20 years. Back in 2005, Agnico was operating the LaRonde Mine in Northern Quebec. In 2024, we were operating 11 mines across four countries. Over that period, production's gone from 240,000 oz a year to almost 3.5 million oz last year, an increase of 14 times. Most importantly, production per share has increased by a factor of three over that period.
That's something that very few of our peers can attest to: increasing and adding value per share, production per share, reserves per share over time. Obviously, the fact that the gold price has increased means our financial results have improved. Our EBITDA on a per-share basis is up tenfold over the last 20 years. We've been paying a dividend for 40 years. Over that time, we've returned over CAN 3 billion to shareholders, and the dividend's up by a factor of 50 over the past two decades. Tremendous value creation, over the long term, a focus on per-share results that influences every capital allocation, every investment decision that we make, that focus again on per-share value creation. If you look at the chart in the top right, this shows our quarterly production and cost performance over the course of the past six quarters.
What you'll notice is that is remarkably flat. Our business is, you know, based on creating a stable, reliable operating platform, and we've been delivering on that. We hit our quarterly numbers. We hit our quarterly costs. Q1, we had another great quarter, did 874,000 oz of production, had all-in sustaining costs of CAN 1,189 per ounce, below the low end of our guidance. We had a really strong start to the year, and look forward to continuing that operational success throughout the remainder of 2025. The bottom right chart here, we show the benefit again of the rising gold price by keeping costs in check. Now, our cost guidance has increased by 3% in each of the last two years, while cost inflation is running closer to 7%-8%.
We have been able to do better than the rate of inflation and, as a result, ensure that, again, that margin expansion accrues to the benefit of the company and the benefit of our shareholders. One of the top questions that we get in investor meetings these days is with respect to capital allocation. In this period of high gold prices, you know, what are we going to do with the excess free cash flow relative to what we would have budgeted, say, a year ago? At current spot gold, we should free cash flow north of CAN 3 billion this year. We are generating tremendous returns. Our focus is on ensuring that we continue to distribute a significant portion of that directly to shareholders.
Over the last 15 months, 42% of the free cash flow that we've generated has gone back to shareholders through the dividend and the share buyback. If you look at the other 58%, the majority of that has gone to indirectly benefiting shareholders by strengthening our balance sheet. We started last year with a net debt position of CAN 1.5 billion. As of the end of Q1, we're basically break even net cash, net debt. I anticipate being a billion dollars of net cash by the third quarter of this year. We're generating tremendous free cash flow. We're doing a little bit of everything. We're continuing to deliver strong returns to shareholders. We're strengthening the balance sheet. We're reinvesting in the business. We have a record exploration budget this year, CAN 525 million, and a record capital spend as we advance some of our key capital projects.
In terms of the portfolio where we're going, I'd say the company's never been in a better position. We have five, what we call key value drivers. These are big expansion or new development projects that will help propel the company into the next decade. We currently have a relatively stable outlook. We've got flat production around 3.4 million oz over the course of the next three years. In 2028 and 2029, we're working on stabilizing that so that we're flat until the end of the decade. Starting in 2030, we're going to see a step up in production as we bring some of these expansion and new development projects online. I'll just walk through them briefly, and I'm sure the Q&A with Lawson will get into them in a bit more detail. Detour Lake is the largest open-pit gold mine in Canada. We're currently operating.
Our budget for this year is to produce at a rate of about 720,000 oz a year. We put out a study in June of last year that shows expanding this operation to 1 million oz per year by 2030 and being able to sustain that level of 1 million oz a year of production for a minimum of 14 years. Now, just for context, at 1 million oz a year and current gold prices, Detour generates CAN 1.5 billion a year in after-tax free cash flow. This will be one of the top five largest gold mines in the world, one of the most profitable, and it's located, you know, in Northern Ontario, a 10-hour drive from our, from our head office in Toronto. At Canadian Malartic, we have similar potential.
Canadian Malartic's a bit different in that we're transitioning from what was Canada's largest open-pit gold mine to what will be Canada's largest underground gold mine. We're going from mining 60,000 tons per day of relatively low-grade, one gram per ton material, to mining 20,000 tons per day at three times the grade, at three grams per ton. Our gold production stays effectively flat at about 600,000 oz a year, but we're opening up 40,000 tons of daily excess mill capacity. We have a vision to fill that mill through a combination of a potential second shaft and the processing of satellite deposits to get production at Canadian Malartic up to approaching one million oz a year by the early 2030s.
You know, you look out to the early to mid-2030s, we have two mines in Northern Quebec and Northern Ontario that combined are producing 2 million oz of very low-cost production. Beyond that, at our Upper Beaver project, which is a stone's throw away from our Macassa mine in Kirkland Lake, we are looking to build a brand new mine, a new mill that will produce about 230,000 oz of incremental production. We are still in the early stages there. We are thinking, an exploration shaft, do some ramp development, do some bulk sampling, but we expect a construction decision for that project in 2027 and could see first production by 2030. If we move north to the northernmost part of North America, our Hope Bay project, we purchased off of TMAC Resources back in 2021, it was operating at the time at a rate of about 120,000 oz a year.
We made the decision to shut that project down and focus on exploration to delineate a more significant potential mine plan. Our view, given our operating expertise in Nunavut, is that you need scale. You need for this project 400,000 oz a year for 10 years. We wanted to have that runway before we sanctioned the project. We think we're there now. We're working on detailed engineering. In the first quarter of next year, we'll be announcing a construction decision on that project. 400,000 oz of new production in Nunavut, offsetting depletion from our Meadowbank mine. Last but not least, we have a 50/50 joint venture with Teck in the state of Zacatecas in Mexico on a zinc copper project called San Nicholas. We're in the permitting phase currently. We'd expect to receive the permit later this year.
At the same time, we're updating the feasibility study for this project. The potential for a construction decision at San Nicholas later this year, early next, and again, production of about 200,000 oz of gold equivalent in the early part of the 2030s. These five key value drivers combine for an additional 1.2 million oz of production. We will have depletion from some of our other assets along the way, but again, we've got a balanced production pipeline over the next five years with a step change up to potentially 4.2 million-4.3 million oz in the mid-2030s. With that, Dr. Lawson.
Fantastic. Hey, Jamie, make a little space for you there.
Thank you.
Sort of connecting the dots from everything you just said and, and just in the context of you having this, this bit of an outsider's perspective, what do you think really differentiates Agnico Eagle from peers?.
I think apart from the strategy, you know, a big factor would just be the culture of the company. You know, I came, I spent 18 years at Alamos Gold prior to Agnico. Very, very much aligned, very similar value set, very similar strategy, you know, focus on low-risk jurisdictions. But really, it's the people at Agnico that I think make it, you know, a very special place to work. Sean Boyd, our chairman, spent a lot of time and still spends a lot of time on maintaining that culture. It's one of collaboration and ensuring that, you know, everyone works together.
There's not a lot of politics. There's a real focus on ensuring that everyone's swimming in the same direction. With respect to the business, there's a lot of focus on the technical. Our view is that, you know, before we make an investment with our shareholders' money, we want to make sure that we're going to make the right decision. We try to gain a knowledge advantage, and you can see that through our investment strategy. I mean, we have over 60 companies that we have investments in. The strategy is really, you know, get in early to projects that we see having potential, get a very strong technical understanding of the merits and the potential of a project before we move forward.
You know, Agnico is very much an operational and operating and exploration company. You know, I'm fortunate in that my role as CFO, the rising gold price environment, I've been able to, we've been able to report very steady, consistent production results and pair that with excellent, you know, record financial results.
The financial results have certainly been impressive. When I think of the last period where Agnico was delivering really exceptional growth and financial results, it was that period alluded to where you built five mines. During that period, the approach to the dividend was slightly different to today when you're generating significant amounts of free cash flow. That was a bit of a progressive dividend.
There were a few moments where the dividend was increased multiple times during the same year. Fast forward to today, the approach has been one of supplementing the dividend that was originally set in 2022 with share buybacks. When you think about all the free cash flow you're generating, is there room to balance a more progressive dividend policy with the share buyback program?.
Yeah, I think at these gold prices, there absolutely is. I, you know, I think historically, if you look back at the gold industry, probably 90% of the overall direct shareholder returns have been through the dividend and, you know, around 10% through share buybacks. I think there's room certainly at Agnico for that to stabilize a bit, for the share buyback to catch up.
The dividend was set at an annual payout of about $800 million U.S. back in 2022 at, you know, $1,800-$2,000 gold. That was a, that was a healthy amount. At these gold prices, I think there's, there's definitely room for the dividend to increase. We'll be evaluating that later this year.
I wanted to ask about Canadian Malartic Odyssey, that, that huge complex. You guys have generated an enormous amount of value there. There's this issue opportunity where the open-pit mill feed will fall off. You're currently processing ore at a rate of 55,000 tons per day. The plan is to ultimately supplement and replace that with a mix of underground and open-pit ore.
Kind of the blue sky vision has been you take the one gram per ton that you're now putting through the mill, which is generating about 650,000 oz a year of gold production, and you double or triple the grade. I mean, is that a potentially sustainable outcome for this asset when you look out to the next decade?. An asset that could be generating in the range of one and a half million oz?.
Yeah, I mean, we have a vision to a million ounces. You know, never say never. There's certainly the potential for more than that. We have a current mine plan out to 2042 based on the first shaft that stabilizes production at 600,000 oz a year.
The deposit underground at Odyssey has gone from zero to 18 million oz over the course of the past eight years. So there's, you know, we've had tremendous exploration success. We're adding ounces at a discovery cost of CAN 10 an ounce. We see the potential for a second shaft. We're studying that now. That could get production at the Canadian Malartic complex up to 800,000 oz a year. Beyond that, we acquired O3 Mining in December, closed that in March. That has the potential to be mined as a satellite deposit and bring in another 100,000 oz a year. And last but not least, we have our Wasamac project, which has the potential to bring another 100,000 oz a year. So that's how we get to a million ounces by, you know, the early to mid-2030s.
If we keep having exploration success at the rate that we have, there's always the potential for a third shaft. I mean, you know, you look at Macassa, there's four shafts there. LaRonde started 37 years ago, with an eight-year mine life. It's been expanded five times and has produced 8 million oz of gold. So there's lots of upside potential at Canadian Malartic, and that will continue to be an exciting, evolving story.
I wanted to also ask about M&A. Actually, guys, if the audience has a question, we're happy to take one. There is a question right here. If this question isn't about M&A, I would like to ask about M&A before we wrap things up.
Not directly M&A. Jamie, thank you.
Just wondering, as you look at the growth projects in the portfolio, they're just interested in what gold price you're kind of building those projects for. You know, when you optimize the scope to cut-off grades and, you know, capital versus operating, all that sort of stuff. You know, gold price is hard to predict. What price are you kind of trying to build these things for?.
Yeah, so the studies on all five of those projects were completed at a gold price of about $1,800 an ounce. And each of those projects has a 15% plus IRR at around CAN 1,800 gold price. Obviously, in current spot gold prices, the returns are 30% plus. The gold price could drop CAN 1,000 tomorrow, and it doesn't impact our ability to move forward and advance those projects at all.
Jamie, and speaking of regional consolidation, one area that Agnico is not in is the Yukon. There might be a company here trying to sell a project called Coffee in the Yukon. You also have the Eagle Mine, which I understand PWC wants to find an operator to get that running again. Two assets in the Yukon. Just wondering what your view of that is, given especially Agnico's outstanding operational experience in the Arctic.
Yeah, it's a good question, Mike. I mean, we have, our job is to look at everything. You know, obviously we evaluate all assets that are available for sale. Again, you know, everything that we consider in terms of external acquisitions, external M&A, we have to weigh against the portfolio projects that we have internally.
and that's, you know, that's the lens through which we look at external M&A. You know, the Yukon at some point in the future could be another region for Agnico. I think for, you know, the short term, we'll continue to be focused on the key regions where we already operate.
Jamie, just to wrap things up, I don't see any other questions in the audience. Following up on the M&A theme, you guys took a 50% joint venture interest in the San Nicholas mine with Teck. You're earning into a 50% joint venture interest. You took a 13% interest in ATEX Mining, which is effectively a copper development firm in Chile. There's a history of mining zinc and copper at Agnico Eagle and cobalt, the name.
Could that be a sign of a potential pivot or a recentering of some element of growth onto base metals at Agnico?.
Yeah, our strategy with respect to other metals is a bit unique in that we're somewhat metal agnostic. If we have a competitive advantage or, you know, operating expertise that we can lend to a project where we can generate outsized returns, we'll consider investing in a project that's in another metal. ATEX is a bit different. That's a very early stage exploration opportunity where we wanted a seat at the table, wanted to get a better sense of the jurisdiction. Chile could well be a jurisdiction for Agnico five to ten years from now.
That is just part of our strategy of, you know, getting in and learning about a new jurisdiction and project before we make any kind of decision. We are 98% of our revenues in gold. Even with San Nicholas fully ramped up and operational, we will be 94% gold by revenue. That remains our focus. We will consider other metals if they are in our backyard and we have a competitive advantage. San Nicholas is exactly that. I mean, our gold business was in decline in Mexico. We had great people, a 20-year track record of operating in the country. Teck did not have in-country resources. It was a partnership that just made sense.
Perfect. Jamie, thank you for being here. Thank you, everyone.
Thank you.