now we're going to proceed with the Agnico Eagle session. Agnico Eagle is a major gold producer, Canada's largest mining company. It has operations in other top mining jurisdictions as well: Australia, Mexico, Finland. happy to welcome Ammar Al-Joundi, President and Chief Executive Officer of Agnico Eagle.
Thanks, Matt. Well, good morning, everyone, and I'd like to start by thanking BMO and Matt, and everybody who comes to this thing and has been before appreciates what a fantastic job they do. Thank you for that. You know, I'm down here from the coldest winter I think we've ever had in Canada, in Toronto. I come to this beautiful weather. The gold price is above $5,000. I work, I think, for the best mining company in the world. I genuinely think I have the best job in Canada, there is a sadness. There's a pall over this event, we all know what that is, that Canada lost to the United States yesterday. You can't be in this business without resilience.
I think before I start, maybe a quick applause to the 2030 Canada men and women's gold hockey team. Let's- let's start with that. Some forward-looking statements, bear with me. I sort of spend only 15 minutes talking about the company and then some time with Matt to answer questions. I'm gonna go through this quickly, and what I wanna do is really hit the highlights that I think are important for you. I'm gonna start with this slide here. This slide talks. It's an opportunity for me to say, who is Agnico Eagle? What do we do? What's our strategy, and what differentiates us?
Some of you have heard me say this before, some of you haven't, but it's been our strategy for the last 70 years, so it's a good thing that you're hearing the same thing. I'll start by saying, at Agnico Eagle, we do not consider ourselves a global gold mining company. We consider ourselves a regional, gold mining company. What do I mean by that? Most of our peers, consider themselves global gold mining companies. They'll go anywhere in the world to build a gold mine, and that kinda makes sense. There's nothing wrong with that strategy. There is a certain logic to say, "If I'm going to be a big, gold mining company or any kind of mining company, I, I need to be able to go anywhere in the world." Some people do it very well.
You know, Newmont and, and Natasha, they do it as well as anybody in the world, and there's nothing wrong with that strategy. That's not our strategy. Our strategy is we are a regional miner. We will go anywhere in the world, but we will only go to regions that meet two very specific criteria. Again, since 1957. First criteria is, obviously, it has to have the geologic potential, but it has to have the geologic potential for multiple mines over multiple decades. Two, it has to have the political stability to allow you to operate multiple mines for multiple decades. Why is that? We think that going into regions that allow us to build multiple mines over multiple decades gives us a tangible, competitive advantage in those regions and in business.
If you think about it, or at least this is how we think about it, when you have 15,000 people in your company, what makes you better miner than the next person? I mean, everybody at that number, we're all kinda assume we're all equally smart, equally hardworking, equally ambitious. What really gives you an advantage? Like, honestly, if you're sitting across somebody at a dinner table, "Ammar, what is your advantage in the areas we operate?" Well, I will tell you, in the areas we operate, where we've been operating for decades. Let's take a look at Canada. You know, in Canada, we produce more than half of all the gold produced in the country. You know, we've been if I take a look at the Abitibi or Ontario, we've been there for decades. What does that mean?
It means we literally know, and I'm not exaggerating, we literally know every single junior in the areas we operate. What makes you a good miner? Do you know the contractors better? Do you know the suppliers better? Do you know the First Nations better? Do you know the permitting process better? We have third generation, third-generation workers at our mines. We don't have unions, not that there's anything wrong with that. We have one-third the turnover of our peers. Why? Because we've been the best employer for 50 years. Why wouldn't you work for us? We think that our regional approach, which is our strategy, makes sense for us because it gives us advantages in knowledge, in operation, in contract. S ome of these suppliers, we helped their grandparents start the business.
When things get rough, like in, during COVID, it wasn't just that the costs went up, it was: Could you get the supplies? Could you get the people? I'm telling you, in a situation where we've been their number one customer for 50+ years, as tough as it was, we got the suppliers, we got the contractors. You know, we, we've been, we've, we've been building, Malartic right through all of that. Does this strategy work? I think demonstrably it does. Take a look at the bottom right, if you can see, the right of this chart. In the last 20 years, we've grown production, by a factor of 14. That's good. That's great. Honestly, you shouldn't care about it. Our job is to make you money, and by definition, that means money per share.
While it's nice to talk about growth, and we've had more growth than anybody in 20 years, what you really care about is the next line: what has been our production growth per share? This is something we're proud of. It's not easy to grow, but it's really hard to grow production per share. In those 20 years, we've grown production per share by a factor of almost three. You know, we've grown EBITDA by a factor of almost 20, and our dividend's up by a factor of 50. We've outperformed the S&P. We've outperformed the XAU. Our compounded return over 20 years, it says 13% on the chart, it's actually 15%. 15% compounded return share price over 20 years. I started with what differentiates our strategy because it's not an accident.
I mean, I've been in this business for almost 30 years. I really don't think it's an accident. The next slide here is probably the one I'm the most proud of. I'm 61 years old. I'll be 62 years this summer. Like I said, I've been doing this for almost 30 years. It is hard to grow production per share consistently and create value per share consistently. It's not easy, but we've done it for 20 years. It's one thing to do it going from one mine to 10 mines, but as the second biggest gold producer in the world, producing 3.5 million ounces a year, what I'm really proud of is that I see a clean path to growing production per share for the next 10 years.
If you're a CEO like me, and, you know , I'm genuine when I say I have the best job in Canada, I am very proud personally, to be able to say to our owners, "Not only have we done this for 20 years, but there's a clean path to continuing to grow gold production per share over the next decade." That's not an easy thing to do, and that's really what I want to talk about. It's really these projects at the bottom, but it's, it's gonna be even more than that. Let's start with Detour Lake. Detour Lake is the biggest gold mine in Canada. It's been around since the 1980s. In the last five years at Detour Lake, we've grown all...
with all categories combined, we've grown from 20 million ounces to 43 million ounces while having mined 4 million ounces. A net increase of 27 million ounces in, in, the largest mine in Canada, that's already built, already has a workforce, has green electricity. We've grown 27 million ounces. This mine is gonna go from about 700,000 ounces a year to over 1 million ounces a year, starting at around the early 2030s. How is it gonna do that? Very simply. We are going to go from all open pit at around 0.9 grams to open pit and underground. We're gonna displace some of the 0.9 gram open pit with sort of 2.5 gram underground ore, and that will increase the gold throughput to over 1 million ounces. It's not that complicated.
When I'm talking about this growth, this isn't a brand-new mine in the middle of a mountain range in a country I've never been to. This is a mine we've been operating for a long time, where we've added 27 million ounces in five years, that's gonna have a mine life, frankly, out past 2070. This is going to be one of the biggest mines in the world, in the best jurisdiction, at some of the best costs. Importantly, what you really care about, if my job is to make you money per share, it's not just the best cost, it's the best return on capital. Return on capital is, frankly, a fancy way of saying return per share.
Because this is already built, and we're leveraging off existing infrastructure, it's not just low cost, it's not just profitable, it's exceptional return on capital, and that's my job to do for you, our job to do for you. Let's take a look at Canadian Malartic, the second biggest gold mine in Canada. This mine is going to go from 550,000 ounces a year to over 1 million ounces a year, about 1,050,000. That's, that's how do you get there? Well, again, this mine actually, this mine was discovered in 1923, so it's been around for 100 years. You know, we've been operating in, in the Abitibi for 70 years. We know this mine. This mine, in the last seven or eight years, Guy and his team have added 22 million ounces.
Think about this: the two biggest mines in Canada and the best jurisdictions, added almost 50 million ounces in the last 10 years. This mine is going to grow from 550,000 ounces. How? Because the open pit is depleting, we have a 60,000 ton a day mill, and that 60,000 ton a day mill, instead of producing from 0.9 gram material in the open pit, it's going to go to a higher grade underground, which is already being built. You know, the ramp is ahead of schedule, the shaft is ahead of schedule. We're gonna put in a second shaft. The same team that's building the first shaft. We're bringing in ore from Marban, we're bringing in ore from Wasamac.
I don't have time to go through all the details, but if you add that all up, it's 1,050,000 ounces a year. That's gonna come in in 2033 and ramp up beyond that. By the way, in the entire world right now, there's only maybe 4 or 5 million ounce a year producers, and only one of them is in the Western world, the Nevada Gold Mine between Barrick and Newmont, they've done a good job there. When these become million ounce producers, they will be two of only six in the world and two or three in the Western world. The others are in Uzbekistan, Indonesia and Russia. I'm running out of time, so I'll go quick. You know I like talking about our stuff.
Upper Beaver is going to be 200,000 ounces-220,000 ounces. Anybody who's been to visit, I mean, it's already well underway, well under construction. It's in a camp. If you take a look at the, the map in the bottom, this is how we do things. It's not just the 220,000 ounces from Upper Beaver that's gonna be there for decades, where we're ahead of schedule on the ramp, ahead of schedule on the shaft. You know why? Because we build our own shafts, we build our own ramps. It's also gonna open up an entire region. I'll go quickly. Hope Bay, you know, we are a third of the economy, and Nunavut, just one company, the entire economy, not just the mining economy.
This will be the third mine that Dominic and his team have built in Nunavut. we've only explored sort of 12 km of two parallel 80 km greenstone belts. we're gonna announce a go-ahead in May. It's gonna be between 400,000 ounces and 450,000 ounces a year for decades. Again, the third mine we've already built, leveraging off existing infrastructure, best return on capital, best risk-adjusted return on capital. we're going to continue to create value for our shareholders. we have a clear path to continue to do that for the next 10 years. we've publicly said we see production growth of between 20% and 30% over the next decade. I think it could be more than that, and I think it could be more than that on a per-share basis.
In the middle column, you can sort of see the individual stuff, and we're happy to send this to, to you if you want. Also on the left, I want to identify that we are not only doing the projects I talked about, but the projects we have, we're expanding, and that the projects on the right are other projects that we have that we are starting to look at, that have very good economics at these prices, none of which are included, none of which are included in that production growth per share that I talked about. I think we're in the best position we've ever been, and that's my presentation. Thank you.
Ammar, in the last few years, Agnico's gone from generating under a billion dollars a year in free cash flow to generating well over $1 billion per quarter. The company's close to $3 billion in net cash already. No surprise, there's a big market focus on capital allocation. Can you talk about how you're balancing the capital allocation priorities? You know, you've got the organic growth, the alternatives, giving it back to shareholders, buying assets, or just, you know, build it up on the balance sheet for future flexibility.
Well, thank you, and it's a good question. Look, we're delighted to be making a lot of money for our owners. I'll start with something that's obvious but really is important, which, Matt, is it's not our money, it's our owners' money. We don't get paid to waste our owners' money. We get paid to wisely invest our owners' money. I am telling you, these projects that we're working on, that we've been working on for three years, they're the same projects we started when gold was $1,800. They made our 15% hurdle rate back then, and that's why they're at 30%-60% now at these prices. I think you can take some comfort that there's not 10 other projects that I'm talking about.
In other words, we are going with your money to invest it in things that give you a very good return on capital. The truth is, right now, we're generating excess cash that we don't, you know, that frankly, we shouldn't spend otherwise, and we're returning it to our owners. Our philosophy on capital allocation is simple: it starts with, it's your money, we're only gonna invest in things that make sense, and as we're generating a lot more excess cash at these levels, we are going to re- return it to our owners, and let them decide what they want to do with it.
Okay. If we just dive in a bit more detail on the organic growth opportunities. Canadian Malartic, evaluating the second shaft, targeting production 2033. What are the key technical evaluations that you're going through this year, and how does it affect timelines, economics? There's a question in the app: When do we get a market update on those projects?
I mean, that's an excellent question. Our, our view has always been, underpromise and overdeliver. Frankly, we've been working on these already for three years. We've done a lot of work. When, when we announce Hope Bay, Dominic and his team will already have over 50% engineering done. A lot of times, people go with projects with 20% of detailed engineering. We'll have over 50% of detailed engineering. I'm just using this as an example. We've already added camps, we've already emptied the old mill building, we've already upgraded the port, upgraded the airstrip. Matt, what I'm trying to say is we've done a lot of work already, and what we're starting to do now is give a little bit more guidance as to where we are.
We're going to approve Hope Bay in May. We're going to have a tour up there. We're gonna show people what we've got. We will be announcing the go-ahead on these other projects as well. This is a tough business. Stuff always comes up. There's always something you didn't think of, but I'm telling you, we're pretty well advanced on all of these.
When you look at the future of the underground, do you think the economics favor expanding the underground over development of regional satellites?
Well, I mean, you know, it depends. I'll start by saying this: it's if I had two projects with the same return on capital, I will always go with the, with an expansion rather than a greenfield, just because it has less risk. You know, with regards to underground versus satellites, it depends on the situation at hand. For example, if I take a look at both Detour and Malartic, in both cases, the underground are higher grade. If I'm limited by mill capacity, and I can get the same volume from the underground, which is hard compared to open pit, then I would go with underground, but it depends on the specific circumstance.
Okay, moving on to Detour. You've got the underground, high-grade, mineralized corridor, you've been growing it, and you're accelerating development. What does the path to 1 million ounces look like there, and what do you need to see before you approve the underground project?
Again, we're well advanced at Detour, and before we give the final go-ahead, we wanna take a bulk sample. That's just being extra careful. I mean, Guy and his team, I think he said there's been a, a million kilometers of drilling over the last five years. We have a pretty good idea of what's there. We've already started the ramp. Once we take the bulk sample, which I think is gonna be sometime next year, once that gets confirmed, then we give the final go-ahead to spend, you know, the money to do it.
The other thing I'll say about Detour, and it's very early, very early, but if you have an ore body that's already going out to 2070, and you're and you're continuing to find more gold at depth at sort of 2 grams and above, there is a concept to the next level of growth well beyond 1 million ounces, it's, it's too early to get into details. you know, the concept, it's really not that complicated to think about.
Interesting. Okay. Hope Bay looks to be around $2 billion CapEx, 400,000 ounces a year. Do you feel like at this point, project parameters are, are well in hand, or is there still some, you know, variance to CapEx or scale you're looking at as you go through the details?
It's really more we, we do want to do that last bit of engineering. I mean, we're already... You know, we've, we've, we've said we've tripled, the budget from $100 million to $300 million. That's really to acquire, material we need to put on the barge. We're, you know, obviously very serious about it, but we wanna get to that level sort of engineering, make the final decision, and then go ahead from there.
Okay. Question on cost inflation.
Yeah.
At this stage of the gold cycle, I think, you know, that's one thing that people think about as a risk for the sector. Are you seeing any input, supply constraints? What's your view on the inflation picture?
You know, I would say there's two things on costs. There is actual inflation, and there's availability to get stuff. What really will kill you isn't the 4% or 5% increase in the price of steel, what kills you is if you can't get the steel. A big advantage that we have is we've been getting the steel from the same supplier for 50 years. You know, the contractors, we're their biggest customer. We have been for a long time. You know, and Dominic, our chief operating officer, raised this point: what you wanna make sure is not just that you get people, but that you get qualified people with experience. You are going to see capacity constraints in this business.
We're not going to be immune from that, but I genuinely believe our regional strategy, which makes us the best employer, the best customer for 60 years, puts us in a stronger position than our peers in the regions we operate. We've given guidance for next year. You know, the gold, the, the cost guidance is up a little over CAD 100 an ounce. Two-thirds of that is because we've assumed higher royalties, and we've assumed a weaker Canadian dollar. If you back that out, our, our cost increase is 4%, well below the, the sort of inflation rate of, of about 5% or 6%. The team continues to really do an exceptional job, and, and that's, that's part of the leverage we wanna give our owners.
You know, you buy gold stocks. You can just go out and buy gold. Why on earth would you buy a gold stock? By definition, a gold stock has more risk than gold. The only reason you want to buy a gold stock is if it gives you more leverage to gold. We give you leverage two ways. We give you the standard way, which says if the price of gold goes up, we control our costs, which I think we do exceptionally well, but we also give you gold leverage by giving you more gold per share. That's what I was talking about. We've done it for 20 years, and we're gonna do it for the next decade.
There's another question in the app about M&A. You mentioned, you know, the areas you operate in, you know all the players. There's been a few M&A situations in your backyard t hat Agni co hasn't participated in. You have been actively taking, you know, minority positions in juniors. Can you comment, like, how should we think about your M&A strategy moving forward?
Yeah, we, we, we've created most of the value through the drill bit. When we do M&A, it's typically not because somebody came to us and said, "Hey, here's your multiple, here's their multiple." Let's look at the M&A deals we've done recently. You know, the, the merger with, with Kirkland Lake Gold was really about solidifying a regional competitive advantage and a very strong view we had on Detour. We know the guys at Detour. W e'd been up to Detour maybe 15 times. You know, they used to ask us for advice. We had a very strong view on the underground potential. Take a look at Malartic, when we acquired the Canadian assets of Yamana Gold. You know, we paid full value for those.
Nothing's cheap in this world, we had a very strong view on the underground potential at Malartic. Now, is that because we're smarter? No, it's not because it's because we've been there for 50 years. We literally know the people there. We were the JV partners there. You know, when you take a look at TMAC, we'd been up to TMAC five or six times. We knew the, the project, we knew the exploration potential and it, and its, and its, come out. You know, those two, you know, the, the, the M&A that gave us Detour, the M&A that gave us, in two stages, Malartic, again, those two projects alone, 50 million ounces in the last 10 years of additional...
Our M&A strategy is not based on growth, it's based on get to know what the upside is. Cause let's face it, nothing's cheap. You have to have a view on the upside, again, I think our regional approach, which means we've known these projects for decades and been there 12 times. Look, we could make a mistake, but it's not because we haven't done our homework.
Great. Thank you, Ammar.
Thank you, Matt.