Exhibit 99.1

Annual Information Form
for the year ended December 31, 2016

Dated as of March 27, 2017

AGNICO EAGLE MINES LIMITED

ANNUAL INFORMATION FORM

Table of Contents

i

INTRODUCTORY NOTES

Currency and Exchange Rates

Currencies:     Agnico Eagle Mines Limited ("Agnico Eagle" or the "Company") presents its consolidated financial statements in United States dollars. All dollar amounts in this Annual Information Form ("AIF") are stated in United States dollars ("U.S. dollars", "$" or "US$"), except where otherwise indicated. Certain information in this AIF is presented in Canadian dollars ("C$") or European Union euros ("Euro" or "€").

Exchange Rates:     The following tables set out, in Canadian dollars, the exchange rates for the U.S. dollar, based on the noon buying rate as reported by the Bank of Canada (the "Noon Buying Rate"). On March 22, 2017, the Noon Buying Rate was US$1.00 equals C$1.3347.

On December 30, 2016 and March 22, 2017, US$1.00 equaled €1.0541 and €1.0807, respectively, as reported by the European Central Bank.

Forward-Looking Statements

Forward-Looking Statements:     Certain statements in this AIF, referred to herein as "forward-looking statements", constitute "forward-looking information" under the provisions of Canadian provincial securities laws and constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, the Company's plans, objectives, expectations, estimates, beliefs, strategies and intentions and can generally be identified by the use of words such as "anticipate", "believe", "budget", "could", "estimate", "expect", "forecast", "likely", "may", "plan", "project", "schedule", "should", "target", "will", "would" or other variations of these terms or similar words. Forward-looking statements in this AIF include, but are not limited to, the following:

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the Company's outlook for 2017 and future periods;



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statements regarding future earnings, and the sensitivity of earnings to gold and other metal prices;



•

anticipated levels or trends for prices of gold and by-product metals mined by the Company or for exchange rates between currencies in which capital is raised, revenue is generated or expenses are incurred by the Company;



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estimates of future mineral production and sales;

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•

estimates of future costs, including mining costs, total cash costs per ounce, all-in sustaining costs per ounce, minesite costs per tonne and other costs;



•

estimates of future capital expenditures, exploration expenditures and other cash needs, and expectations as to the funding thereof;



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statements regarding the projected exploration, development and exploitation of ore deposits, including estimates of exploration, development and production and other capital costs and estimates of the timing of such exploration, development and production or decisions with respect thereto;



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estimates of mineral reserves and mineral resources and their sensitivities to gold prices and other factors, ore grades and mineral recoveries and statements regarding anticipated future exploration results;



•

estimates of cash flow;



•

estimates of mine life;



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anticipated timing of events at the Company's mines, mine development projects and exploration projects;



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estimates of future costs and other liabilities for environmental remediation;



•

statements regarding anticipated legislation and regulations, including with respect to climate change, and estimates of the impact on the Company; and



•

other anticipated trends with respect to the Company's capital resources and results of operations.

Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Agnico Eagle as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions of Agnico Eagle upon which the forward-looking statements in this AIF are based, and which may prove to be incorrect, include the assumptions set out elsewhere in this AIF as well as: that there are no significant disruptions affecting Agnico Eagle's operations, whether due to labour disruptions, supply disruptions, damage to equipment, natural or man-made occurrences, mining or milling issues, political changes, title issues or otherwise; that permitting, development and expansion at each of Agnico Eagle's mines, mine development projects and exploration projects proceed on a basis consistent with expectations, and that Agnico Eagle does not change its exploration or development plans relating to such projects; that the exchange rates between the Canadian dollar, Euro, Mexican peso and the U.S. dollar will be approximately consistent with current levels or as set out in this AIF; that prices for gold, silver, zinc and copper will be consistent with Agnico Eagle's expectations; that prices for key mining and construction supplies, including labour costs, remain consistent with Agnico Eagle's expectations; that production meets expectations; that Agnico Eagle's current estimates of mineral reserves, mineral resources, mineral grades and mineral recoveries are accurate; that there are no material delays in the timing for completion of development projects; and that there are no material variations in the current tax and regulatory environments that affect Agnico Eagle.

The forward-looking statements in this AIF reflect the Company's views as at the date of this AIF and involve known and unknown risks, uncertainties and other factors which could cause the actual results, performance or achievements of the Company or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risk factors set out in "Risk Factors" below. Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as otherwise required by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based. This AIF contains information regarding estimated total cash costs per ounce, all-in sustaining costs per ounce and minesite costs per tonne in respect of the Company or at certain of the Company's mines and mine development projects. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing year over year comparisons. Investors are cautioned that this information may not be suitable for other purposes.

Meaning of "including" and "such as":     When used in this AIF, the terms "including" and "such as" mean including and such as, without limitation.

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Presentation of Financial Information

International Financial Reporting Standards:     The Company reports its financial results using International Financial Reporting Standards ("IFRS"). The Company adopted IFRS as its basis of accounting, replacing United States generally accepted accounting principles ("US GAAP") effective July 1, 2014. As a result, Agnico Eagle's consolidated financial statements for 2015 and 2016 are reported in accordance with IFRS, with comparative information for prior periods restated under IFRS and a transition date of January 1, 2013. The Company's transition to IFRS reporting had no significant impact on the design or effectiveness of the Company's internal controls over financial reporting. The Company adopted IFRS as its basis of accounting to maintain comparability with other gold mining companies. Unless otherwise specified, all references to financial results herein are to those calculated under IFRS.

Note to Investors Concerning Estimates of Mineral Reserves and Mineral Resources

The mineral reserve and mineral resource estimates contained in this AIF have been prepared in accordance with the Canadian securities regulatory authorities' (the "CSA") National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). These standards are similar to those used by the United States Securities and Exchange Commission's (the "SEC") Industry Guide No. 7, as interpreted by Staff at the SEC ("Guide 7"). However, the definitions in NI 43-101 differ in certain respects from those under Guide 7. Accordingly, mineral reserve information contained or incorporated by reference herein may not be comparable to similar information disclosed by U.S. companies. Under the requirements of the SEC, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC does not recognize measures of "mineral resource".

The mineral reserve and mineral resource data presented herein are estimates, and no assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated level of recovery will be realized. The Company does not include equivalent gold ounces for by-product metals contained in mineral reserves in its calculation of contained ounces.

Cautionary Note to Investors Concerning Estimates of Measured and Indicated Mineral Resources

This document uses the terms "measured mineral resources" and "indicated mineral resources". Investors are advised that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into mineral reserves.

Cautionary Note to Investors Concerning Estimates of Inferred Mineral Resources

This document uses the term "inferred mineral resources". Investors are advised that while this term is recognized and required by Canadian regulations, the SEC does not recognize it. "Inferred mineral resources" have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that any part or all of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian regulations, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that any part or all of an inferred mineral resource exists, or is economically or legally mineable.

Note to Investors Concerning Certain Measures of Performance

This AIF discloses certain measures, including "total cash costs per ounce", "all-in sustaining costs per ounce" and "minesite costs per tonne" that are not recognized measures under IFRS. These measures may not be comparable to similar measures reported by other gold producers. For a reconciliation of these measures to the most directly comparable financial information presented in the Annual Financial Statements (as defined below) prepared in accordance with IFRS, and for an explanation of how management uses these measures, please see the Company's management discussion and analysis for the period ended December 31, 2016 (the "Annual MD&A").

The total cash costs per ounce of gold produced is reported on both a by-product basis (deducting by-product metal revenues from production costs) and co-product basis (before deducting by-product metal revenues). The total cash costs per ounce of gold produced on a by-product basis is calculated by adjusting production costs as recorded in the consolidated statements of income (loss) for by-product revenues, unsold concentrate inventory production costs, smelting, refining and marketing charges and other adjustments, and then dividing by the number of ounces of gold

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produced. The total cash costs per ounce of gold produced on a co-product basis is calculated in the same manner as the total cash costs per ounce of gold produced on a by-product basis, except that no adjustment is made for by-product metal revenues. Accordingly, the calculation of total cash costs per ounce of gold produced on a co-product basis does not reflect a reduction in production costs or smelting, refining and marketing charges associated with the production and sale of by-product metals. The total cash costs per ounce of gold produced is intended to provide information about the cash-generating capabilities of the Company's mining operations. Management also uses these measures to monitor the performance of the Company's mining operations. As market prices for gold are quoted on a per ounce basis, using the total cash costs per ounce of gold produced on a by-product basis measure allows management to assess a mine's cash-generating capabilities at various gold prices.

All-in sustaining costs per ounce is used to show the full cost of gold production from current operations. The Company calculates all-in sustaining costs per ounce of gold produced on a by-product basis as the aggregate of total cash costs per ounce on a by-product basis, sustaining capital expenditures (including capitalized exploration), general and administrative expenses (including stock options) and reclamation expenses, and then dividing by the number of ounces of gold produced. The all-in sustaining costs per ounce of gold produced on a co-product basis is calculated in the same manner as the all-in sustaining costs per ounce of gold produced on a by-product basis, except that the total cash costs per ounce on a co-product basis is used, meaning no adjustment is made for by-product metal revenues. The Company's methodology for calculating all-in sustaining costs per ounce may differ from the methodology used by other producers that disclose all-in sustaining costs per ounce. The Company may change the methodology it uses to calculate all-in sustaining costs per ounce in the future, including in response to the adoption of formal industry guidance regarding this measure by the World Gold Council.

Management is aware that these per ounce measures of performance can be affected by fluctuations in exchange rates and, in the case of total cash costs per ounce of gold produced on a by-product basis, by-product metal prices. Management compensates for these inherent limitations by using these measures in conjunction with minesite costs per tonne as well as other data prepared in accordance with IFRS.

Management also performs sensitivity analyses in order to quantify the effects of fluctuating exchange rates and metal prices. This AIF also contains information as to estimated future total cash costs per ounce, all-in sustaining costs per ounce and minesite costs per tonne. The estimates are based upon the total cash costs per ounce, all-in sustaining costs per ounce and minesite costs per tonne that the Company expects to incur to mine gold at its mines and projects and, consistent with the reconciliation of these actual costs referred to above, do not include production costs attributable to accretion expense and other asset retirement costs, which will vary over time as each project is developed and mined. It is therefore not practicable to reconcile these forward-looking non-GAAP financial measures to the most comparable IFRS measure.

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(1)

Figures reported for 2016, 2015, 2014 and 2013 are presented in accordance with IFRS.

(2)

As set out in note 5 of the annual audited consolidated financial statements as of and for the period ended December 31, 2015, certain previously reported December 31, 2014 consolidated balance sheet line items were updated to reflect adjusted final estimates of fair value related to the June 16, 2014 joint acquisition of Osisko Mining Corporation ("Osisko") by the Company and Yamana Gold Inc. ("Yamana").

(3)

Figures reported for 2012 have not been restated to conform to IFRS and are presented in accordance with US GAAP.

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CORPORATE STRUCTURE

Agnico Eagle Mines Limited is a corporation organized under the Business Corporations Act (Ontario). The Company was formed by articles of amalgamation under the laws of the Province of Ontario on June 1, 1972, as a result of the amalgamation of Agnico Mines Limited ("Agnico Mines") and Eagle Gold Mines Limited ("Eagle"). Agnico Mines was incorporated under the laws of the Province of Ontario on January 21, 1953 under the name "Cobalt Consolidated Mining Corporation Limited" and changed its name to Agnico Mines Limited on October 25, 1957. Eagle was incorporated under the laws of the Province of Ontario on August 14, 1945.

Since 1972, several corporate alterations have taken place. On August 22, 1972, the Company's articles were amended to permit the Company to: (i) borrow money on the credit of the Company, (ii) issue, sell or pledge debt obligations and (iii) charge, mortgage or pledge the Company's property. On June 27, 1980, Articles of Amendment were filed to allow the Company to use the name "Mines Agnico-Eagle Limitée". On July 5, 1984, the Company's articles were amended to delete all of the objects of the Company listed and specify that no restrictions apply to the business or powers that the Company may exercise. On July 3, 1986, Articles of Amendment were filed to set the minimum number of directors of the Company at five and the maximum at nine. On July 29, 1988, the Company's articles were amended to provide that the Company is authorized to issue an unlimited number of shares.

On December 31, 1992, the Company amalgamated with Lucky Eagle Mines Limited. On June 30, 1993, the maximum number of directors of the Company was increased from nine to 12. On January 1, 1996, the Company amalgamated with Goldex Mines Limited and 1159885 Ontario Limited. On October 17, 2001, the Company filed Articles of Arrangement which provided for the amalgamation of the Company and Mentor Exploration and Development Co. On July 12, 2002, the name of the Company was changed to "Agnico-Eagle Mines Limited/Mines Agnico-Eagle Limitee". On August 1, 2007, the Company amalgamated with Cumberland Resources Ltd., Agnico-Eagle Acquisition Corporation and Meadowbank Mining Corporation. On May 4, 2010, the maximum number of directors of the Company was increased from 12 to 15.

On January 1, 2011, the Company amalgamated with 1816276 Ontario Inc. (the ultimate successor entity to Comaplex Minerals Corp.). On January 1, 2013, the Company amalgamated with 1886120 Ontario Inc. (the successor corporation to 9237-4925 Québec Inc.). On April 26, 2013, Articles of Amendment were filed to eliminate the hyphen between "Agnico" and "Eagle" and the official name of the Company became "Agnico Eagle Mines Limited/Mines Agnico Eagle Limitée".

The Company's head and registered office is located at Suite 400, 145 King Street East, Toronto, Ontario, Canada M5C 2Y7; telephone number (416) 947-1212; website: www.agnicoeagle.com . The information contained on the Company's website is not part of this AIF. The Company's principal place of business in the United States is located at 1675 E. Prater Way, Suite 102, Sparks, Nevada 89434.

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The following chart sets out the corporate structure of the Company, each of its significant subsidiaries and certain other entities, together with the jurisdiction of organization of the Company and each such subsidiary or entity as at March 22, 2017 (all of which are directly or indirectly wholly-owned by the Company, unless otherwise indicated).

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DESCRIPTION OF THE BUSINESS

The Company is an established Canadian-based international gold producer with mining operations in northwestern Quebec, northern Mexico, northern Finland and Nunavut and exploration activities in Canada, Europe, Latin America and the United States. The Company's operating history includes over three decades of continuous gold production, primarily from underground operations. Since its formation on June 1, 1972, the Company has produced approximately 14.4 million ounces of gold.

The Company's strategy is to deliver high quality growth while maintaining high performance standards in health, safety, environmental matters and social acceptability; build a strong pipeline of projects to drive future production; and employ the best people and motivate them to reach their potential. Over the past eight years, the Company transformed itself from a regionally focused, single mine producer to a multi-mine international gold producer with seven operating, 100% owned mines, one operating 50% owned mine, and the Meliadine advanced development project.

The Company announced on February 15, 2017 that it intends to build mining operations at the Amaruq satellite deposit at Meadowbank and the Meliadine project, both of which are expected to commence mining operations in the third quarter of 2019.

The following table sets out the date of acquisition, the date of commencement of construction, the date of achieving commercial production and the estimated mine life for the Company's mines.

(1)

Date when 100% ownership was acquired, other than the Canadian Malartic mine, which is the date when 50% ownership was acquired.

(2)

Estimated end date for gold production based on the Company's current life of mine plans. The estimated mine life at Meadowbank includes production from the Amaruq satellite deposit at Meadowbank.

(3)

Construction of infrastructure for purposes of mining the Goldex Extension Zone (the "GEZ") commenced in July 2005 and the GEZ achieved commercial production in August 2008. Mining operations on the GEZ have been suspended since October 2011. In late 2013, mining and production began from the M and E Zones of the Goldex mine.

Since 1988, the LaRonde mine, in the Abitibi region of Quebec, has been the Company's flagship operation, producing approximately 5.3 million ounces of gold as well as valuable by-products. The Lapa mine is 11 kilometres east of the LaRonde mine, and the Goldex mine, which achieved commercial production from the M and E Zones in October 2013, is 60 kilometres east of the LaRonde mine. The synergies between these sites contribute to the Company's efforts to reduce costs. The Company's 50% owned Canadian Malartic mine, also in the Abitibi region of Quebec, was acquired in June 2014. The Kittila mine in Finland, has a long reserve life and has significant production expansion potential. The Company's Meadowbank mine, in Nunavut, is expected to produce the most gold (approximately 320,000 ounces) of any of the Company's mines in 2017. The Pinos Altos mine, in Mexico, has significant production expansion potential. In addition, the Company plans to pursue opportunities for growth in gold production and gold reserves through the prudent acquisition or development of exploration properties, development properties, producing properties and other mining businesses in the Americas and Europe.

In 2016, the Company produced 1,662,888 ounces of gold at production costs per ounce of gold of $621 and total cash costs per ounce of gold on a by-product basis of $573 and at all-in sustaining costs per ounce of $824 on a by-product basis. For 2017, the Company expects to produce approximately 1,555,000 ounces of gold at total cash costs per ounce

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of gold on a by-product basis between $595 and $625 and at all-in sustaining costs per ounce between $850 and $900 on a by-product basis. See "Introductory Notes – Note to Investors Concerning Certain Measures of Performance" for a discussion of the use of the non-GAAP measures total cash costs per ounce and all-in sustaining costs per ounce. The Company has traditionally sold all of its production at the spot price of gold due to its general policy not to sell forward its future gold production.

GENERAL DEVELOPMENT OF THE BUSINESS

Three-Year History

2014

As of February 1, 2014, commercial production was achieved at the La India mine.

On June 16, 2014, the Company and Yamana jointly acquired 100% of the outstanding shares of Osisko pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act (the "Osisko Arrangement") for consideration of approximately C$3.9 billion, consisting of approximately C$1.0 billion in cash and a combination of common shares of the Company, common shares of Yamana and shares of a new company that was spun-off under the Osisko Arrangement. Osisko was a Canadian based producing gold mining company that was, at the time, listed on the Toronto Stock Exchange (the "TSX"). Osisko was 100% owner of the Canadian Malartic mine in the Abitibi region of Quebec. Under the Osisko Arrangement, each Osisko share was exchanged for: (i) C$2.09 in cash (C$1.045 per share from each of the Company and Yamana); (ii) 0.07264 of a common share of the Company; (iii) 0.26471 of a common share of Yamana; and (iv) 0.1 of one common share of Osisko Gold Royalties Ltd ("New Osisko"), the newly formed spun-off company that commenced trading on the TSX immediately following the Osisko Arrangement.

In connection with the Osisko Arrangement, substantially all of the assets and obligations relating to the Canadian Malartic mine in Quebec were transferred to Canadian Malartic GP (the "Partnership"), a newly formed general partnership in which the Company and Yamana each own an indirect 50% interest. The Company and Yamana formed a joint management committee to operate the Canadian Malartic mine. On June 17, 2014, Osisko and the acquisition corporation formed by the Company and Yamana to acquire Osisko amalgamated to form "Canadian Malartic Corporation" in which Agnico and Yamana each hold an indirect 50% interest. Canadian Malartic Corporation continues to hold, among other things, Osisko's Kirkland Lake, Hammond Reef, Pandora and Wood-Pandora (50% interest) assets and properties. The Company and Yamana are jointly exploring and may potentially develop the Kirkland Lake assets, and continue exploration at the Hammond Reef project and the Pandora and Wood-Pandora properties, in each case through Canadian Malartic Corporation.

Pursuant to the Osisko Arrangement, the following assets of Osisko were transferred to New Osisko: (i) a 5.0% net smelter royalty on the Canadian Malartic mine; (ii) C$157.0 million in cash; (iii) a 2.0% net smelter royalty on the Kirkland Lake assets, the Hammond Reef project, and certain other exploration properties retained by Canadian Malartic Corporation; (iv) all assets and liabilities of Osisko relating to the Guerrero camp in Mexico; and (v) certain other investments and assets.

The Company's and Yamana's relationship with respect to the Canadian Malartic mine is governed by a unanimous shareholders agreement with respect to Canadian Malartic Corporation and a general partnership agreement with respect to the Partnership.

Direct transaction costs totaling C$16.7 million were included in the cost of the investment in Osisko. The Company's share of Osisko's June 16, 2014 purchase price was comprised of 33,923,212 of the Company's common shares issued to former holders of Osisko shares, C$502,059,784.01 in cash and 871,680 of the Company's common shares issued and held by the depositary in respect of unsecured convertible debentures previously issued by Osisko that remained outstanding following the Osisko Arrangement. On June 30, 2015, the negotiated early settlement of all of the outstanding unsecured convertible debentures was completed. As a result of this settlement, 871,680 common shares of the Company with a fair value of approximately $24.8 million were released by the depositary to the debentureholders, along with a cash payment of approximately $10.1 million. Additional cash consideration of $3.2 million was paid to the holders of the convertible debentures upon settlement.

A business acquisition report in respect of the Osisko Arrangement was filed by the Company on the System for Electronic Document Analysis and Retrieval ("SEDAR") on August 22, 2014.

On November 28, 2014, the Company completed its acquisition of all of the issued and outstanding common shares of Cayden Resources Inc. ("Cayden"), a Canadian based gold exploration company that was, at the time, listed on the TSX

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Venture Exchange (the "TSX-V"), pursuant to a court-approved plan of arrangement under the Business Corporations Act (British Columbia). Cayden indirectly held a 100% interest, or an option to earn a 100% interest, in certain mining properties in Jalisco and Guerrero, Mexico, including the El Barqueno property. Under the terms of the arrangement, each shareholder of Cayden received 0.09 of a common share of the Company and C$0.01 in cash.

Capital expenditures by the Company in 2014 were $475.4 million. This included $76.6 million at the LaRonde mine, $20.2 million at the Lapa mine, $34.3 million at the Goldex mine, $36.1 million at the Canadian Malartic mine, $106.2 million at the Kittila mine, $48.4 million at the Pinos Altos mine, $10.9 million at the Creston Mascota deposit at Pinos Altos, $22.7 million at the La India mine, $65.9 million at the Meadowbank mine, $48.3 million at the Meliadine project and $5.9 million at other properties. In addition, the Company incurred $25.9 million of expenditures on mine site exploration and $56.0 million on exploration activities at the Company's exploration properties and on corporate development activities.

2015

On February 23, 2015, Agnico Eagle entered into a binding letter of intent (the "LOI") with Canadian Malartic GP, Yamana and Abitibi Royalties Inc. ("Abitibi Royalties") regarding the Malartic CHL prospect which abuts the Canadian Malartic mine and in which Canadian Malartic Corporation held a 70% interest, with the remaining 30% interest held by Abitibi Royalties. On March 19, 2015, Abitibi Royalties sold its 30% interest in the Malartic CHL prospect to Canadian Malartic GP (the "CHL Transaction") in exchange for 459,197 common shares of the Company and 3,549,685 Yamana common shares, with a value of approximately C$35 million (based on the respective closing prices of such shares on the TSX on February 20, 2015, the date immediately prior to the public announcement by Abitibi Royalties of entering into the LOI), and 3% net smelter return royalties to Abitibi Royalties and New Osisko on the prospect. In addition, as part of the CHL Transaction all prior agreements, claims and proceedings relating to the Malartic CHL prospect, including those previously instituted by Abitibi Royalties against Osisko prior to the Company and Yamana completing the Osisko Arrangement, were terminated, settled and released.

Prior to completion of the Osisko Arrangement on June 6, 2014, Clifton Star Resources Inc. ("Clifton") instituted proceedings against Osisko (now Canadian Malartic Corporation) seeking, among other things, an order that Osisko pay Clifton C$22.5 million in damages. In the proceedings, Clifton alleged, among other things, that Osisko was obligated to lend Clifton C$22.5 million on or around December 1, 2012 pursuant to a December 10, 2009 commitment letter and a December 10, 2009 option and joint venture agreement, each between Clifton and Osisko, and that Osisko's failure to advance such loan resulted in damages to Clifton. Clifton further alleged that such loan was intended to be used to make payments under certain option agreements between Clifton and third parties which entitled Clifton to acquire shares of such third parties that owned interests in the concessions comprising the "Duparquet Project". Following the joint acquisition of Osisko by the Company and Yamana on June 16, 2014, the Company and Yamana engaged in discussions with Clifton to advance the settlement of such claims. Effective March 2, 2015, Canadian Malartic Corporation (as the successor to Osisko) entered into a settlement agreement with Clifton, pursuant to which Canadian Malartic Corporation paid Clifton approximately C$5.27 million in consideration for a full and final release of all claims arising from the facts described in the Clifton proceedings. Concurrently, under two separate non-brokered private placements, each of the Company and Yamana subscribed for 4,772,786 common shares of Clifton at a price of C$0.60 per share, for total proceeds to Clifton of approximately C$5.73 million.

On June 9, 2015, the Company completed its acquisition of all of the issued and outstanding common shares of Soltoro Ltd. ("Soltoro"), a Canadian based gold exploration company that was, at the time, listed on the TSX-V, pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act . Soltoro indirectly held a 100% interest, or an option to earn a 100% interest, in certain mining properties in Jalisco, Mexico, including the El Rayo property which is contiguous with the Company's El Barqueno property. Under the terms of the arrangement, each shareholder of Soltoro received 0.00793 of a common share of the Company, C$0.01 in cash and one common share of a newly formed Ontario company named Palamina Corp. valued at C$0.02 per share.

On June 11, 2015, the Company acquired from Orex Minerals Inc. ("Orex") 55.0% of the issued and outstanding common shares of Gunnarn Mining AB ("Gunnarn"), which holds the Barsele project in northern Sweden. Consideration for the acquisition was comprised of $6 million paid to Orex at closing and additional payments of $2 million in cash or Agnico Eagle common shares (at the Company's sole discretion) due to Orex on each of the first and second anniversaries of the closing. The Company has also committed to incurring $7.0 million in exploration expenditures associated with the Barsele project by June 11, 2018, and may earn an additional 15.0% interest in Gunnarn if the Company completes a pre-feasibility study related to the Barsele project. The Company holds a majority of the seats on the board of directors of Gunnarn and is the sole operator of the Barsele project.

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On September 30, 2015, the Company entered into a note purchase agreement with Ressources Québec Inc., a subsidiary of Investissement Québec, providing for the issuance of $50 million principal amount of 4.15% senior unsecured notes due 2025 (the "2015 Note Purchase Agreement"). The Company agreed to apply an amount equal to or greater than the net proceeds from the issuance of the notes towards the expansion, development, upgrade or maintenance of mining projects in the Province of Québec. For additional details see "Material Contracts – Note Purchase Agreements" below.

Capital expenditures by the Company in 2015 were $449.8 million. This included $67.3 million at the LaRonde mine, $6.5 million at the Lapa mine, $48.8 million at the Goldex mine, $43.4 million at the Canadian Malartic mine, $56.4 million at the Kittila mine, $61.8 million at the Pinos Altos mine, $4.2 million at the Creston Mascota deposit at Pinos Altos, $23.4 million at the La India mine, $65.2 million at the Meadowbank mine, $66.7 million at the Meliadine project and $6.0 million at other properties. In addition, the Company incurred $10.2 million of expenditures on mine site exploration and $100.2 million on exploration activities at the Company's exploration properties and on corporate development activities.

2016

On June 30, 2016, the Company entered into a note purchase agreement with certain institutional investors, providing for the issuance of notes consisting of $100 million 4.54% Series A senior notes due 2023, $200 million 4.84% Series B senior notes due 2026 and $50 million 4.94% Series C senior notes due 2028. For additional details see "Material Contracts – Note Purchase Agreements" below.

The following table sets out the Company's capital expenditures in 2016.

2017

The Company announced on February 15, 2017 that it intends to build mining operations at the Amaruq satellite deposit at Meadowbank and the Meliadine project, both of which are expected to commence mining operations in the third quarter of 2019.

The Company is currently marketing notes to institutional investors on a private placement basis and expects to receive bids from prospective purchasers prior to the end of March 2017. At this time, the principal amount of the offering, interest rates and tenor of the notes have not been determined, though the Company currently anticipates that the notes will be issued in tranches with maturities of approximately 8, 10 and 12 years from issuance. All other terms of the notes are expected to be substantially the same as the terms of the existing notes of the Company issued under note purchase agreements in 2010, 2012, 2015 and 2016. See "Material Contracts — Note Purchase Agreements" below. The Company expects that the issuance of the notes would close within the next six months and the proceeds would be used for working capital and general corporate purposes. However, until the Company receives bids from, and enters into a definitive agreement with, investors, there can be no assurance that the offering will be completed.

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The following table sets out the Company's expected capital expenditures for 2017.

Pre-2014

In the second quarter of 2004, the Company acquired an approximate 14% ownership interest in Riddarhyttan Resources AB ("Riddarhyttan"), a Swedish precious and base metals exploration and development company that was at the time listed on the Stockholm Stock Exchange. In November 2005, the Company completed a tender offer (the "Riddarhyttan Offer") for all of the issued and outstanding shares of Riddarhyttan that it did not own. The Company issued 10,023,882 of its common shares and paid and committed an aggregate of $5.1 million cash as consideration to Riddarhyttan shareholders in connection with the Riddarhyttan Offer. On March 28, 2011, Riddarhyttan was merged with Agnico Eagle AB and Agnico Eagle Sweden AB, with Agnico Eagle Sweden AB as the continuing entity. The Kittila mine is currently 100% owned by Agnico Eagle Finland Oy, which is wholly-owned by Agnico Eagle Sweden AB, an indirect subsidiary of the Company.

In the first quarter of 2005, the Company entered into an exploration and option agreement with Industrias Penoles S.A. de C.V. ("Penoles") to acquire the Pinos Altos property in northern Mexico. The Pinos Altos property is comprised of approximately 11,000 hectares in the Sierra Madre gold belt, approximately 225 kilometres west of the city of Chihuahua in the state of Chihuahua in northern Mexico. In February 2006, the Company exercised its option and acquired the Pinos Altos property on March 15, 2006. Under the terms of the exploration and option agreement, the purchase price of $66.8 million was comprised of $32.5 million in cash and 2,063,635 common shares of the Company.

In February 2007, the Company made an exchange offer for all of the outstanding shares of Cumberland Resources Ltd. ("Cumberland") not already owned by the Company. At the time, Cumberland was a pre-production development stage company listed on the TSX and American Stock Exchange whose primary asset was the Meadowbank property. In May 2007, the Company acquired approximately 92% of the issued and outstanding shares of Cumberland that it did not previously own and, in July 2007, the Company completed the acquisition of all Cumberland shares by way of a compulsory acquisition. The Company issued 13,768,510 of its common shares and paid $9.6 million in cash as consideration to Cumberland shareholders in connection with its acquisition of Cumberland.

In April 2010, the Company entered into an agreement in principle with Comaplex Minerals Corp. ("Comaplex") to acquire all of the outstanding shares of Comaplex that it did not already own. At the time, Comaplex owned a 100% interest in the advanced stage Meliadine gold property, which is located approximately 300 kilometres southeast of the Company's Meadowbank mine. In May 2010, the Company executed the definitive agreements with Comaplex and, in July 2010 by plan of arrangement, the Company acquired 100% of the Meliadine gold property through the acquisition of Comaplex, which was renamed Meliadine Holdings Inc. Pursuant to the arrangement, Comaplex transferred to Geomark

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Exploration Ltd. all assets and related liabilities other than those relating to the Meliadine project. In connection with the arrangement, the Company issued 10,210,848 of its common shares as consideration to Comaplex shareholders.

In September 2011, the Company entered into an acquisition agreement with Grayd Resource Corporation ("Grayd"), a Canadian-based natural resource company that was, at the time, listed on the TSX-V, pursuant to which the Company agreed to make an offer to acquire all of the issued and outstanding common shares of Grayd. At the time, Grayd held a 100% interest in the La India property located in the Mulatos Gold Belt of Sonora, Mexico and had recently discovered the Tarachi gold porphyry prospect located approximately ten kilometres north of the La India property. In October 2011, the Company made the offer by way of a take-over bid circular, as amended and supplemented, and, in November 2011, acquired approximately 95% of the outstanding common shares of Grayd. In January 2012, the Company completed a compulsory acquisition of the remaining outstanding common shares of Grayd and Grayd became a wholly-owned subsidiary of the Company. In aggregate, the Company issued 1,319,418 of its common shares and paid C$179.7 million in cash as consideration to Grayd shareholders in connection with the transaction.

In May 2013, the Company completed its acquisition of all of the issued and outstanding common shares of Urastar Gold Corp. ("Urastar"), a Canadian-based gold exploration company that was, at the time, listed on the TSX-V, pursuant to a court-approved plan of arrangement under the Business Corporations Act (British Columbia). Urastar held a 100% interest in certain mining properties in Sonora, Mexico. Under the terms of the arrangement, each shareholder of Urastar received C$0.25 per common share and holders of unexercised in-the-money warrants of Urastar received C$0.15 per warrant. In aggregate, the Company paid $10.1 million in cash to Urastar shareholders and warrantholders in connection with the transaction.

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OPERATIONS AND PRODUCTION

Business Units and Foreign Operations

The Company operates through three business units: Northern Business, Southern Business and Exploration.

The Company's Northern Business is comprised of the Company's operations in Canada and Finland. The Company's Canadian properties include the LaRonde mine, the Lapa mine, the Goldex mine, the Meadowbank mine (including the Amaruq satellite deposit) and the Meliadine project, each of which is a 100% interest held directly by the Company, and a 50% interest in the Canadian Malartic Mine, which is held indirectly through a wholly-owned subsidiary of the Company and Canadian Malartic Corporation. The Company's operations in Finland are conducted through its indirect subsidiary, Agnico Eagle Finland Oy, which owns the Kittila mine. In 2016, the Northern Business accounted for approximately 79% of the Company's gold production. In 2017, the Company anticipates that the Northern Business will account for approximately 80% of the Company's gold production.

The Company's Southern Business is comprised of the Company's operations in Mexico. The Company's Pinos Altos mine, including the Creston Mascota deposit, is held through its indirect subsidiary, Agnico Eagle Mexico, S.A. de C.V. The La India mine is owned by the Company's indirect subsidiary, Agnico Sonora, S.A. de C.V. In 2016, the Southern Business accounted for approximately 21% of the Company's gold production. In 2017, the Company anticipates that the Southern Business will account for approximately 20% of the Company's gold production.

The Company's Exploration group focuses primarily on the identification of new mineral reserves and mineral resources and new development opportunities in politically stable and proven gold producing regions. Current exploration activities are concentrated in Canada, Europe, Latin America and the United States. Several projects were evaluated during 2016 in these regions where the Company believes the potential for gold occurrences is excellent and which the Company believes to be politically stable and supportive of the mining industry. The Company currently manages 79 properties in Canada, four properties in the United States, four groups of properties in Finland, two properties in Sweden and 18 properties in Mexico. Exploration activities are managed from offices in: Val d'Or, Quebec; Reno, Nevada; Chihuahua, Hermosillo and Jalisco, Mexico; Kittila, Finland; Storuman, Sweden; and Vancouver, British Columbia.

Northern Business

LaRonde Mine

The LaRonde mine is situated approximately halfway between Rouyn-Noranda and Val d'Or in northwestern Quebec (approximately 470 kilometres northwest of Montreal, Quebec) in the municipalities of Preissac and Cadillac. At December 31, 2016, the LaRonde mine was estimated to have proven and probable mineral reserves containing approximately 3.05 million ounces of gold comprised of 17.6 million tonnes of ore grading 5.40 grams per tonne. The LaRonde mine consists of the LaRonde property and the adjacent El Coco and Terrex properties, each of which is 100% owned and operated by the Company. The LaRonde mine can be accessed either from Val d'Or in the east or from Rouyn-Noranda in the west, each of which are located approximately 60 kilometres from the LaRonde mine via Quebec provincial highway No. 117. The LaRonde mine is situated approximately two kilometres north of highway No. 117 on Quebec regional highway No. 395. The Company has access to the Canadian National Railway at Cadillac, Quebec, approximately six kilometres from the LaRonde mine.

The Company first acquired an interest in the LaRonde property in 1974 through an indirect investment in Dumagami Mines Limited ("Dumagami"). The Company acquired 100% of the outstanding shares of Dumagami on December 19, 1989 and, on December 29, 1992, Dumagami transferred all of its property and assets, including the LaRonde mine, to the Company and subsequently dissolved.

The LaRonde mine operates under mining leases obtained from the Ministry of Energy and Natural Resources (Quebec) and under certificates of approval granted by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). The LaRonde property consists of 36 contiguous mining claims and one provincial mining lease. The El Coco property consists of 22 contiguous mining claims and one provincial mining lease. The Terrex property consists of 21 mining claims and one provincial mining lease that was acquired in July 2014. The mining leases on the LaRonde, El Coco and Terrex properties expire in 2018, 2021 and 2034, respectively, and are automatically renewable for three further ten-year terms upon payment of a small fee. The Company also has three surface rights leases that relate to the water pipeline right of way from Lake Preissac and the eastern extension of the LaRonde tailings pond #7 on the El Coco property. The surface rights leases are renewable annually.

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Location Map of the LaRonde Mine (as at December 31, 2016)

The LaRonde mine includes underground operations at the LaRonde and El Coco properties that can both be accessed from the Penna Shaft, a mill, a treatment plant, a secondary crusher building and related facilities. In 2003, exploration work started to extend outside of the LaRonde property onto the Terrex property where a down-plunge extension of Zone 20 North was discovered. The Terrex property is subject to a 5% net profits royalty in favour of Delfer Gold Mines Inc. The Company does not expect to pay royalties in respect of this part of the property in 2017. In addition, the Company owns 100% of the Sphinx property immediately to the east of the El Coco property. In 2016, 86% of the ore processed from the LaRonde mine was extracted from the deeper portion of the LaRonde mine (that is, below Level 245) or the "LaRonde mine extension". In 2017, the Company anticipates that approximately 87% of the ore processed will be from this deeper part of the mine.

The Company expects future by-product metal production at the LaRonde mine to decline as operations continue to shift towards deeper sections of the mine where gold grades are higher and by-product metals are less prevalent. The associated decrease in by-product revenues is expected to result in higher total cash costs per ounce on a by-product basis attributable to ore extracted from these parts of the mine.

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Map of the Abitibi region showing the location of the LaRonde, Lapa, Goldex and Canadian Malartic Mines

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Mining and Milling Facilities

Surface Plan of the LaRonde Mine (as at December 31, 2016)

The LaRonde mine was originally developed with a 1,207-metre shaft (Shaft #1) and an underground ramp access system. The ramp access system is available down to Level 25 of Shaft #1 and continues down to Level 299 at the Penna Shaft. The mineral reserve accessible from Shaft #1 was depleted in September 2000 and Shaft #1 is no longer in use. A second production shaft (Shaft #2), located approximately 1.2 kilometres to the east of Shaft #1, was completed in 1994 to a depth of 525 metres and was used to mine Zones 6 and 7. Both ore zones were depleted in March 2000 and the workings were allowed to flood up to Level 6 (approximately 280 metres). A third shaft (the Penna Shaft), located approximately 800 metres to the east of Shaft #1, was completed down to a depth of 2,250 metres in March 2000. The Penna Shaft is used to mine Zones 20 North, 20 South, 6 and 7.

In 2006, the Company initiated construction of the LaRonde mine extension. Hoisting from this deeper part of the LaRonde mine began in the fourth quarter of 2011 and commercial production was achieved in November 2011. Access to the deeper part of the LaRonde mine is provided through a 823-metre internal shaft (Shaft #4) starting from Level 203, for a total depth of 2,858 metres below the surface which was completed in November 2009. A ramp is used to access the lower part of the orebody down to 3,110 metres below the surface. An internal winze system is used to hoist ore from depth to facilities on Level 215, approximately 2,150 metres below the surface, where it is transferred to the Penna Shaft hoist.

Production from the LaRonde mine extension continues to move towards anticipated steady-state levels. Most of the delays encountered during 2016 were related to seismicity, as some areas of the mine were under periodic closure to mitigate seismicity risk. The Company expects the levels of seismicity to continue to evolve and the Company adjusts the mining methods, ground support, protocols and monitoring to adapt to the evolving levels.

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In 2016, the development of the western portion of the mine continued to advance and two silos (excavation and construction) were delivered and are currently in commissioning. These silos are expected to increase the flexibility surrounding the coarse ore conveyor system that extends from Level 292 to the crusher on Level 280. In 2017, the Company expects to reach Level 311 in the eastern part of the mine. The Company expects to mine the first stopes in the western portion of the mine in 2017, following the commissioning of the coarse ore conveyor.

Mining Methods

The primary source of ore at the LaRonde mine continues to be from underground mining methods. During 2016, two mining methods were used: longitudinal retreat with paste backfill and transverse open stoping with paste or unconsolidated backfill. In addition, to address concerns regarding the frequency and intensity of seismic events encountered at the lower levels of the LaRonde mine, a hybrid of these two methods has been used. In the underground mine, sublevels are driven at between 30-metre and 40-metre vertical intervals, depending on the depth. Stopes are undercut in 15-metre wide panels. In the longitudinal method, panels are mined in 15-metre sections and backfilled with 100% cemented rock backfill or cemented paste backfill. The paste backfill plant was completed in 2000 and is located on the surface at the processing facility. In the transverse open stoping method, approximately 50% of the ore is mined in the first pass and filled with cemented paste backfill. On the second pass, the remainder of the ore is mined and filled with unconsolidated waste rock backfill or cemented paste backfill.

The throughput at LaRonde in 2016 averaged 6,171 tonnes per day, compared with 6,141 tonnes per day in 2015. The increased throughput in 2016 was due to the maturity of the new mining horizon in the deepest portion of the mine.

The Company's operations at the LaRonde mine reach more than three kilometres below the surface. There are very few resources available to model the geomechanical conditions at this depth, where operations are subject to high stress levels. The Company conducts periodic technical reviews of its operations at these levels using consultants with experience in deep mining. The Company uses the results of these technical reviews to adapt best mining practices and adjust the mining sequence for its operations at these levels. The Company believes that the experience it has gained mining at those levels has provided a successful model for future mining at depth.

Surface Facilities

Surface facilities at the LaRonde mine include a processing plant with a daily capacity of 7,200 tonnes of ore, which has been expanded four times since 1987 from the original rate of 1,630 tonnes per day. Beginning in 1999, transition to the LaRonde mine's polymetallic massive sulphide orebody required several modifications to the processing plant. In 2008, the installation of a limited copper/lead separation flotation circuit, following the copper flotation circuit, was completed. Also in 2008, a cyanidation plant began operation for the treatment of sulphide concentrate from the Goldex mine. A CIL circuit was completed and began operation in April 2013 to replace the existing LaRonde precious metal Merrill-Crowe circuit. The LaRonde mine is also the site for the Lapa mine ore processing plant (1,500 tonnes per day), which was commissioned in the second quarter of 2009.

The ore requires a series of grinding, copper/lead flotation and separation, zinc flotation and zinc tails precious metals leaching circuits, now followed by CIP recovery. Paste backfill and cyanide destruction plants operate intermittently. The tailings area has a dedicated cyanide destruction and metals precipitation plant that water passes through prior to recirculating to the mill. A biological water treatment plant addresses the presence of thiocyanate in the tailings ponds at the LaRonde mine. The plant uses bacteria to oxidize and destroy thiocyanate in the water and removes phosphate prior to its release to the environment.

The Goldex concentrate circuit consists of pulp received from the Goldex mill via truck. The material is sent to the LaRonde leaching/CIP circuit for gold recovery along with LaRonde residual pulp.

The Lapa mine ore processing plant consists of a two-stage grinding circuit to reduce the granularity of the ore. A gravity recovery circuit that is incorporated into the grinding circuit recovers up to 45% of the available gold, depending on feed grades. The residual pulp is leached in a conventional CIL circuit to dissolve the balance of the precious metal. A carbon strip circuit recovers the gold from the carbon which is recycled to the leach circuit.

Production and Mineral Recoveries

During 2016, the LaRonde mine had payable production of 305,788 ounces of gold, 987,918 ounces of silver, 4,687 tonnes of zinc and 4,416 tonnes of copper from 2.24 million tonnes of ore grading 4.44 grams of gold per tonne and 17.75 grams of silver per tonne, 0.37% zinc and 0.24% copper. The production costs per ounce of gold produced at

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LaRonde in 2016 were $587. The total cash costs per ounce of gold produced at LaRonde in 2016 were $501 on a by-product basis and were $668 on a co-product basis. The LaRonde processing facility averaged 6,137 tonnes of ore per day and operated 92% of available time. Gold and silver recovery averaged 95.60% and 85.39%, respectively. Zinc recovery averaged 66.85% with a concentrate quality of 53.61% zinc. Copper recovery averaged 86.50% with a concentrate quality of 20.01% copper. The production costs per tonne at LaRonde were C$106 and the minesite costs per tonne were C$106 in 2016.

The following table sets out the metal recoveries and concentrate grades at the LaRonde mine in 2016.

Annual production at the LaRonde mine in 2017 is expected to be approximately 315,000 ounces of gold, 1,072,000 ounces of silver, 4,482 tonnes of copper and 7,286 tonnes of zinc from 2.2 million tonnes of ore grading 4.77 grams per tonne of gold, 20.03 grams per tonne of silver, 0.25% copper and 0.51% zinc. The total cash costs per ounce of gold produced in 2017 on a by-product basis are expected to be $510, with estimated gold recovery at 95.6%, silver recovery of 77.5%, copper recovery of 82.0% and zinc recovery of 66.9%. Gold recovery at the LaRonde mine is distributed approximately as follows: 72% in the copper concentrate, 2% in the zinc concentrate and 22% via leaching. Minesite costs per tonne of C$115 are expected in 2017.

Environmental, Permitting and Social Matters

Currently, water is treated at various facilities at the LaRonde mine. Water contained in the tailings that is to be used as underground backfill is treated to degrade cyanide using a sulphur dioxide and air process. The tailings entering the tailings pond are first decanted and the clear water subjected to natural cyanide degradation. This water is then transferred to polishing pond #1 to undergo a secondary treatment at a plant located between polishing ponds #1 and #2 that uses a peroxy silicate process to destroy cyanide, and lime and coagulant (ferric sulfate) are used to precipitate metals. The tailings pond occupies an area of approximately 175 hectares. Waste rock that is not used underground for backfill is brought up to the surface and stored in close proximity to the tailings pond to be used to build cofferdams and berms inside the pond to increase storage capacity. A waste rock pile containing less than 100,000 tonnes of waste and occupying approximately nine hectares is located north of the mill.

Due to the high sulphur content of the LaRonde mine ore, the Company has to address toxicity issues in the tailings ponds. This problem was resolved by the commissioning of a biological treatment plant in 2004, and the effluent has remained non-toxic since 2006. In 2006, the Company commenced an ammonia stripping operation involving an effluent partially treated by the biological treatment plant which allowed an increase in treatment flow rate, while keeping the final effluent free of toxicity. An increase in biological treatment efficiency allowed the ammonia treatment plant to be placed out of service in 2015. In 2016, final effluent was fully compliant and treatment of the backlog of water in the tailings pond that had been accumulating between 2000 and 2004, when the effluent was shutdown while determining a treatment solution, was completed. In 2017, the Company expects to maintain in the tailings pond the minimum quantity of water required to feed the mill with recirculation water. In addition, water from acid rock drainage around the mills and the waste stockpile are treated to remove metals prior to discharge at a high density sludge lime treatment plant located at the LaRonde mill.

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Capital Expenditures

Capital expenditures at the LaRonde mine during 2016 were approximately $64.3 million, which included sustaining capital expenditures, deferred expense and included capitalized drilling. Budgeted 2017 capital expenditures at the LaRonde mine are $102.7 million, excluding capitalized drilling.

Development

In 2016, a total of 13.9 kilometres of lateral development was completed. Development was focused on the preparation of the lower mine production horizon. More than 90% of the development work has been completed for the LaRonde mine extension infrastructure and the ramp to access the LaRonde mine extension.

Following the completion of a positive internal technical study, LaRonde Zone 5 (formerly referred to as Bousquet Zone 5) has been approved for development (subject to permitting approval). The mining method will be similar to that currently employed at the Goldex and LaRonde mines (long-hole stoping, with cemented paste backfill), and processing will use excess capacity from the Lapa circuit at LaRonde. Permits are expected to be received by mid-2018, with mining expected to commence shortly thereafter.

A total of 12.4 kilometres of lateral development is planned for 2017. The main focus of development remains the lower mine (LaRonde extension area), the development toward the lowest levels and the West mine portion.

Geology, Mineralization, Exploration and Drilling

Geology

The LaRonde property is located near the southern boundary of the Archean-age (2.7 billion years old) Abitibi Subprovince and the Pontiac Subprovince within the Superior Geological Province of the Canadian Shield. The most important regional structure is the Cadillac-Larder Lake ("CLL") fault zone, marking the contact between the Abitibi and Pontiac Subprovinces, located approximately two kilometres to the south of the LaRonde property.

The geology that underlies the LaRonde mine consists of three east-west-trending, steeply south-dipping and generally south-facing regional groups of rock formations. From north to south, they are: (i) 400 metres (approximate true thickness) of the Kewagama Group, which is made up of a thick band of interbedded wacke; (ii) 1,500 metres of the Blake River Group, a volcanic assemblage that hosts all the known economic mineralization on the property; and (iii) 500 metres of the Cadillac Group, made up of a thick band of wacke interbedded with pelitic schist and minor iron formation.

Zones of strong sericite and chlorite alteration that enclose massive to disseminated sulphide mineralization (including the ore that is mined for gold, silver, zinc and copper at the LaRonde mine) follow steeply dipping, east-west-trending, anastomosing shear zone structures within the Blake River Group volcanic units across the property. These shear zones are part of the larger Doyon-Dumagami Structural Zone that hosts several important gold occurrences (including the Doyon gold mine, the Westwood project and the former Bousquet mines) and has been traced for over ten kilometres within the Blake River Group, from the LaRonde mine westward to the Mouska gold mine.

Mineralization

The LaRonde deposit is a gold-rich volcanogenic massive sulphide (VMS) deposit. LaRonde lenses were formed mainly by sulphide precipitation from hydrothermal fluids on the seafloor and by replacement below lenses. The stacking of the LaRonde lenses is the result of successive volcanic events, intercalated by cycles of hydrothermat activity associated with reactivation of synvolcanic faults.

The gold-bearing zones at the LaRonde mine are lenses of disseminated stringers through to massive aggregates of coarse pyrite with zinc, copper and silver content. Ten zones that vary in size from 50,000 to 40,000,000 tonnes have been identified, of which four are (or are believed to be) economic. Gold content is not proportional to the total sulphide content but does increase with copper content. Gold values are also higher in areas where the pyrite lenses are crosscut by tightly spaced north-south fractures.

These historical relationships, which were noted at LaRonde Shaft #1's Main Zone, are maintained at the Penna Shaft zones. The zinc-silver ( i.e.  Zone 20 North) mineralization with lower gold values, common in the upper mine, grades into gold-copper mineralization within the lower mine. The predominant base metal sulphides within the LaRonde mine are chalcopyrite (copper) and sphalerite (zinc).

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The Company believes that Zone 20 North is one of the largest gold-bearing massive sulphide mineralized zones in the world and one of the largest known mineralized zones in the Abitibi region of Ontario and Quebec. Zone 20 North contains the majority of the mineral reserves and mineral resources at the LaRonde mine, including 17.3 million tonnes of proven and probable mineral reserves grading 5.44 grams of gold per tonne, representing 98% of the total proven and probable mineral reserves at the LaRonde mine, 5.1 million tonnes of indicated mineral resources grading 3.32 grams of gold per tonne, representing 90% of the total measured and indicated mineral resources at the LaRonde mine, and 6.5 million tonnes of inferred mineral resources grading 7.4 grams of gold per tonne, representing 84% of the total inferred mineral resources at the LaRonde mine.

Zone 20 North extends between 700 metres below the surface and at least 3,700 metres below the surface, and remains open at depth. With increased access on the lower levels of the mine ( i.e. , below Level 215 and from the internal shaft on levels 257 and 278), the transformation from a zinc/silver orebody to a gold/copper deposit is expected to continue during 2017. The development of the western part of the mine, between Levels 278 and 314, is expected to give access to a new zinc/silver rich sector.

Zone 20 North can be divided into an upper zinc/silver enriched gold poor zone and a lower gold/copper enriched zone. The zinc/silver zone has been traced over a vertical distance of 1,700 metres and a horizontal distance of 570 metres, with thicknesses approaching 40 metres. The gold/copper zone has been traced over a vertical distance of over 2,200 metres and a horizontal distance of 900 metres, with thicknesses varying from three to 40 metres. The zinc/silver zone consists of massive zinc/silver mineralization containing 50% to 90% massive pyrite and 10% to 50% massive light brown sphalerite. The gold/copper zone mineralization consists of 30% to 70% finely disseminated to massive pyrite containing 1% to 10% chalcopyrite veinlets, minor disseminated sphalerite and rare specks of visible gold. Gold grades are generally related to the chalcopyrite or copper content. At depth, the massive sulphide lens becomes richer in gold and copper.

Exploration and Drilling

The combined amount of gold in proven and probable mineral reserves at the LaRonde mine at the end of 2016 was 3.05 million ounces (17.6 million tonnes of ore grading 5.40 grams of gold per tonne, 19.14 grams of silver per tonne, 0.24% copper and 0.87% zinc), which represents a reduction of 55,759 contained ounces of gold from the end of 2015, after producing 305,788 ounces of gold (319,887 ounces in situ gold mined in 2016). The reduction in mineral reserves is principally associated with ore mined during 2016 and delineation and definition drilling done at the edges and in the deepest part of the orebody, but was partly offset by the conversion of mineral resources into mineral reserves located on three levels below 3.1 km depth in the eastern part of the mine, referred to as LaRonde 3. Underground indicated mineral resources at the LaRonde mine decreased by 1.2 million tonnes of ore to a total of 5.7 million tonnes of ore grading 3.27 grams of gold per tonne, 20.51 grams of silver per tonne, 0.21% copper and 0.93% zinc, primarily due to the conversion of mineral resources into mineral reserves in the eastern portion of the mine, as described above. Underground inferred mineral resources at the LaRonde mine decreased by 1.4 million tonnes of ore to a total of 7.7 million tonnes of ore grading 6.68 grams of gold per tonne, 14.48 grams of silver per tonne, 0.25% copper and 0.60% zinc.

Diamond drilling is used for exploration on the LaRonde property. In 2016, 35 holes (13,327 metres) were drilled for definition (conversion) drilling and 15 holes (10,011 metres) were for exploration. Expenditures on diamond drilling at the LaRonde mine during 2016 were approximately C$4.9 million, including C$1.7 million in drilling expenses charged to capital costs at the LaRonde mine, and C$3.2 million expensed as exploration drilling.

The main focus of the 2016 exploration program was continuing the investigation and conversion of Zone 20 North at depth and exploration of the Zone 6 and 7 horizons at depth from the new accesses developed toward the west on Levels 290 and 293. The 2016 conversion program on Zone 20 North was focused on conversion from inferred to indicated mineral resources below Level 311 at depth, in the centre and western portions of the deposit (below the actual limit of mineral reserves). The positive results obtained in this program allowed the addition of indicated mineral resources below 3.1 kilometres on the eastern portion and continued to confirm the extension of the orebody to 3.4 kilometres below the surface, or 300 metres below the current maximum depth of mineral reserves, in the western portion, and also confirmed some high grade intersections and the extension of a massive lens that had been previously identified. The conversion program will continue in 2017 through 2018, and will investigate the continuity of the orebody to 3.7 kilometres below the surface and to the west. Another drilling access is currently being developed to provide better positioning for an extensive diamond drilling program on Zone 6 to a depth of 3.7 kilometres.

In 2017, the Company expects to spend C$2.1 million on 15,200 metres of definition (conversion) drilling and C$2.4 million on 12,850 metres of exploration drilling, for a total of C$4.5 million at the LaRonde mine.

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Lapa Mine

At December 31, 2016, the Lapa mine was estimated to contain proven and probable mineral reserves of 38,000 ounces of gold comprised of 259,000 tonnes of ore grading 4.58 grams per tonne. The Lapa property is made up of the Tonawanda property, which consists of 44 contiguous mining claims and one provincial mining lease, and the Zulapa property, which consists of one mining concession. The mining lease at Lapa expires in 2029. Based on the life of mine plan, production is expected to cease in 2017.

Location Map of the Lapa Mine (as at December 31, 2016)

During 2016, the Lapa mine had payable production of 73,930 ounces of gold from 0.59 million tonnes of ore grading 4.64 grams of gold per tonne. The production costs per ounce of gold produced at Lapa in 2016 were $717. The total cash costs per ounce of gold produced at Lapa in 2016 were $732 on a by-product basis and on a co-product basis. The Lapa processing facility averaged 1,619 tonnes per day and operated approximately 89.5% of available time. Gold recovery averaged 83.82%. The production costs per tonne at Lapa were C$118 and the minesite costs per tonne were C$121 in 2016. In 2016, the Company incurred no capital expenditures at the Lapa mine. No capital expenditures at the Lapa mine are expected in 2017.

The following table sets out the metal recoveries at the Lapa mine in 2016.

Gold production during 2017 at the Lapa mine is expected to be approximately 15,000 ounces from 0.14 million tonnes of ore grading 4.0 grams of gold per tonne at estimated total cash costs per ounce of approximately $1,002 on a by-product basis, and estimated gold recovery of 82.5%. Minesite costs per tonne of approximately C$134 are expected in 2017.

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Goldex Mine

The Goldex mine is located in the City of Val d'Or, Quebec, approximately 60 kilometres east of the LaRonde mine, and is accessible by Quebec provincial highway No. 117. The proven and probable mineral reserves at Goldex as at December 31, 2016 were estimated at approximately 0.89 million ounces of gold comprised of 16.8 million tonnes of ore grading 1.64 grams per tonne.

The Goldex mine operates under a mining lease obtained from the Ministry of Energy and Natural Resources (Quebec) and under certificates of approval granted by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). The Goldex property consists of 22 contiguous mining claims and, since April 2008, one provincial mining lease. The property is made up of three blocks: the Probe block; the Dalton block; and the Goldex Extension block. The claims are renewable every second year upon payment of a small fee. The mining lease expires in 2028 and is automatically renewable for three further ten-year terms upon payment of a small fee. The Company also has one surface lease that is used for the auxiliary tailings pond. This lease is renewable annually upon payment of a fee.

Location Map of the Goldex Mine (as at December 31, 2016)

Agnico Eagle has held a 100% interest in the Goldex property since December 1993, when the Company acquired the remaining 46.3% interest in Goldex Mines Limited that it did not already own. In February 2005, a mineral reserve and mineral resource estimate was completed for the GEZ (which was the deposit on which the Company was focusing its production efforts before production was suspended on October 19, 2011) which, coupled with a feasibility study, led to a probable mineral reserve estimate of 1.6 million ounces of gold contained in 20.1 million tonnes of ore grading 2.54 grams of gold per tonne. The GEZ resource model was revised and, in March 2005, the Company approved a feasibility study and the construction of the Goldex mine. The mine achieved commercial production on August 1, 2008.

Based on the results of a scoping study completed in July 2009, the Company decided to expand the mine and mill operations at Goldex to 8,000 tonnes per day. This project was completed in 2010. Capital costs in connection with the expansion totaled $10 million. The crusher for the expansion was commissioned at the end of the first quarter of 2010 at a rate of 7,811 tonnes per day.

On October 19, 2011, the Company suspended mining operations and gold production from the GEZ, following the receipt of recommendations from independent consultants to halt underground mining operations during the investigation into

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geotechnical concerns with the rock above the mining horizon. The Company does not expect to produce more gold from the GEZ until the geotechnical concerns with the rock above the mining horizon are resolved, which may never occur.

In July 2012, the Company approved the development of the M and E Zones of the Goldex mine. Production from these zones began in the fourth quarter of 2013 and commercial production was achieved in October 2013. Development work is continuing underground on the M and E Zones.

In 2015, following the completion of a positive internal technical study, the Goldex Deep 1 project was approved for production by Agnico Eagle's board of directors (the "Board" or "Board of Directors") and is on schedule for commissioning in early 2018. The study focused on mining the lower part of the Dx Zone and the top part of the D Zone,from a depth of 850 metres to 1,200 metres. The Company plans to undertake development from the current Goldex infrastructure, with existing equipment and personnel. The planned mining method is long-hole stoping with cemented paste backfill, which is the same method as currently used at the M and E Zones.

Mining and Milling Facilities

Surface Plan of the Goldex Mine (as at December 31, 2016)

The surface facilities at Goldex include a head frame, a hoist room, an ore storage facility, a processing plant, a paste backfill plant and a surface building containing a mechanical shop, a warehouse and an office. In addition, the Goldex property has a 790-metre deep shaft (Shaft #1), which historically was used to provide access to underground workings. Shaft #1 is now predominantly used for getting material into the mine and serves as an emergency exit from the mine.

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The sinking of a new production shaft was completed in 2007. This shaft (Shaft #2) is a 5.5-metre diameter shaft with a 50-centimetre thick concrete lining and is used for ventilation as well as hoisting purposes. Shaft #2 is 865 metres deep and includes five stations. A refurbished friction hoist was installed for production and service duties, and an auxiliary hoist was installed for emergency and personnel service.

Rehabilitation of the old ramp near Shaft #1 was completed in 2015 to access the upper portion of the M Zone. The ramp will be used for getting material into the mine and as an emergency exit. In addition, a new heating system at surface was installed in early 2015.

Mining Method

The Company mines the M and E Zones using primary and secondary stope methods. Drilling is carried out with ITH drills. Production holes are either 4.5 or 6.5 inches in diameter. Bulk emulsion is used as the primary explosive for stope blasting. For both zones, stopes are approximately 55 metres high. The width and length of individual stopes vary based on local rock mass quality, but an average stope is expected to range between 60,000 and 120,000 tonnes. Ore handling in the M Zone is done with 15 yard load-haul-dump machines. This equipment unloads into an ore pass accessible from each level. In the E Zone, located below the bottom of Shaft #2, ore handling is done with 15 yard load-haul-dump machines and 45 tonne trucks.

All stopes are supported with 10-15 metre cable bolts. In addition, the stability of certain stopes is remotely monitored in real time. The Company also uses paste backfill to allow for a high extraction ratio and to increase long term stability.

The same mining method will be used in the Deep 1 Zone as is used in the M and E Zones, except that a Rail-Veyor system will be used for ore handling between the lowermost level of Deep 1 (Level 120) and the current ore handling facilities (Level 76). The Rail-Veyor loading system on Level 120 will be fed via a rock breaker room at Level 115. For Levels 85 to 115, 15 yard load haul dump machines will unload into an ore pass reporting to the rock breaker room on Level 115. For the stopes on Level 120, 45 tonne trucks will be used for ore handling to Level 115.

Surface Facilities

Plant construction at Goldex commenced in the second quarter of 2006 and was completed in the first quarter of 2008. The plant reached design capacity in the second quarter of 2009. Grinding at the Goldex mill was initially done through a two-stage circuit comprised of a SAG mill and a ball mill. In 2009, a surface crusher was added to reduce the size of ore transferred to the surface from 150 millimetres to 50 millimetres. A lamellar decanter was also added to recover small particles present in the water overflow of the concentrate thickener. The underflow pump for this thickener was upgraded following flotation circuit modification to increase the pull rate of the small particles. Approximately two-thirds of the gold is recovered through a gravity circuit, passed over shaking tables and smelted on site. The remainder of the gold and pyrite is recovered through a flotation process. The concentrate is then thickened and trucked to the mill at the LaRonde mine where it is further treated by cyanidation. Gold recovered is consolidated with precious metals from the LaRonde and Lapa mines.

In 2013, a new backfill plant was built on the site. The tailing thickener underflow feeds the backfill plant and two disk filters increase the density before the continuous mixer where binder is added at a ratio of approximately 3.6% before being sent to the underground mine with a positive displacement pump. Currently, the capacity of the backfill plant is approximately 6,200 tonnes per day.

In 2013, metallurgical testing on ore from the M and E Zones showed that the cement in the backfill would have a negative impact on the efficiency of the flotation circuit. As a result, a pH control (using carbon dioxide), a reservoir and control valves were added to the mill.

Production and Mineral Recoveries

During 2016, the Goldex mine had payable production of 120,704 ounces of gold from 2.55 million tonnes of ore grading 1.60 grams of gold per tonne. The production costs per ounce of gold produced at Goldex in 2016 were $525. The total cash costs per ounce of gold produced at Goldex in 2016 were $532 on a by-product basis and on a co-product basis and the processing facility averaged 6,954 tonnes of ore per day and operated 95.8% of available time. During 2016, gold recovery averaged 92.36%. The production costs per tonne at Goldex were C$33 and the minesite costs per tonne were C$33 in 2016.

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The following table sets out the metal recoveries at the Goldex mine in 2016.

Gold production during 2017 at the Goldex mine is expected to be approximately 105,000 ounces from 2.36 million tonnes of ore grading 1.51 grams of gold per tonne at estimated total cash costs per ounce of approximately $667 on a by-product basis, with estimated gold recovery of 92.0%. Minesite costs per tonne of approximately C$38 are expected in 2017.

Environmental, Permitting and Social Matters

Environmental permits for the construction and operation of the Goldex mine were received from the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec) in October 2005. The permits also covered the construction and operation of a sedimentation pond for mine water treatment and sewage facilities. In June 2011, the permits were revised to allow for the expansion of the mine and mill operations to 9,500 tonnes per day. In June 2012, environmental permits were received for the construction and operation of a paste backfill plant in connection with the development of the M and E Zones.

In November 2006, the Company and the Quebec government signed an agreement permitting the Company to dispose Goldex tailings at the Manitou site, a tailings site formerly used by an unrelated third party and abandoned to the Quebec government. The Manitou tailings site has issues relating to acid drainage, and the construction of tailings facilities by the Company and the deposition of tailings from Goldex on the Manitou tailings site was accepted by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec) as a valid rehabilitation method to address the acid generation problem at Manitou. Under the agreement, the Company manages the construction and operation of the tailings facilities and contributes an amount equivalent to the Company's budget for tailings facilities set out in the Goldex feasibility study. The Quebec government pays for all costs in excess of this amount and retains responsibility for all environmental contamination at the Manitou tailings site and for final closure of the facilities. The Company has also built a separate tailings deposit area (auxiliary tailings pond) near the Goldex mine to be used during tailings pipeline work. Environmental permits for the construction and operation of the auxiliary tailings pond were received in March 2007. The rehabilitation of the Manitou tailings site is expected to continue during the mining of the M and E Zones and additional mining zones, including the Deep 1 Zone.

Internal dykes are used at the Manitou tailings site to make optimal use of the available tailings for rehabilitation of the Manitou site.

As at December 31, 2016, the estimated remaining reclamation costs relating to the Goldex mine are approximately $6.1 million.

Capital Expenditures

Capital expenditures at the Goldex mine during 2016 were approximately $81.3 million, which included sustaining capital expenditures, expansion construction and deferred expenses, but excluded capitalized drilling. Total estimated capital expenditures for 2017 are $72.8 million, excluding capitalized drilling.

Development

During 2016, approximately 12,421 metres of lateral development were completed at the Goldex mine. A total of 806 metres of vertical development was also completed in order to establish both the ore pass system servicing the M Zone and the ventilation network servicing the M and Deep 1 Zones.

A total of 8,660 metres of lateral development is planned for all zones in 2017, while 555 metres of vertical development will be necessary to extend the ore pass system and to ensure proper ventilation of the Deep 1 Zone. In 2017, 2,500 metres of additional drilling is planned for the Deep 1 Zone.

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Geology, Mineralization, Exploration and Drilling

Geology

The Goldex property is located near the southern boundary of the Archean-age (2.7 billion years old) Abitibi Subprovince, a typical granite-greenstone terrane located within the Superior Province of the Canadian Shield. The southern contact of the Abitibi Subprovince with the Pontiac Subprovince is marked by the east-southeast trending CLL fault zone, the most important regional structural feature. The Goldex deposit is hosted within a quartz diorite sill, the "Goldex Granodiorite", located in a succession of mafic to ultramafic volcanic rocks that are all generally oriented west-northwest.

The M Zone has an approximate length of 440 metres, a height of 350 metres and a thickness of 130 metres. The E Zone, adjacent to the eastern end of the GEZ, has an approximate length of 250 metres, a height of 290 metres and a thickness of 130 metres. The Deep 1 Zone is approximately 90 metres below the GEZ and extends to 1,500 metres below the surface. It appears to have an approximate strike length of 350 metres, a height of 600 metres and thickness of 120 metres.

Mineralization

Gold mineralization at Goldex corresponds to the classical quartz-tourmaline vein lode-gold deposit type. The gold-bearing quartz-tourmaline pyrite veins and vein stockwork, hosted within a quartz-diorite dyke, are the result of a strong structural control, related to ductile shearing and brittle faulting. The most significant structure directly related to mineralization is a discrete shear zone, the Goldex Mylonite, which is up to five metres wide and occurs within the Goldex Granodiorite, just south of the Deep 1 Zone and north of the M Zone.

A couple of vein sets exist within the M, E, Deep 1 and P Zones, of which the main set consists of extensional-shear veins dipping approximately 30 degrees south. The vein sets and associated alteration halos combine to form stacked envelopes up to 30 metres thick.

Moderate to strong albite-carbonate alteration of the host-rock quartz diorite surrounds the quartz-tourmaline-pyrite veins and covers almost 80% of the mineralized zone; outside of the envelopes, prior chlorite alteration affects the quartz diorite and gives it a darker grey-green colour. Occasionally, enclaves of relatively unaltered medium grey-green-coloured quartz diorite (with no veining or gold) are found within the M, E and Deep 1 Zones. They are removed with the rest of the stope's ore to allow for a smooth stope shape, required for mining purposes.

Most of the gold occurs as microscopic particles that are almost always associated with pyrite, generally adjacent to grains and crystals but also 20% included within the pyrite. The gold-bearing pyrite occurs in the quartz-tourmaline veins and in narrow fractures in the albite-carbonate-altered quartz diorite (generally immediately adjacent to the veins).

Exploration and Drilling

Exploration on the Goldex property was concentrated in three periods from 1963 to 1996. During the period from 1985 to 1996, Shaft #1 was sunk to 457 metres, followed by 3,810 metres of lateral development and 520 metres of slashing, a bulk sample of roughly 55,886 tonnes and approximately 32,000 metres of diamond drilling in the Main Zone. Concurrently, widely spaced drilling, comprised of approximately 50 diamond drill holes, led to the discovery and beginning of the development of the GEZ. In 1996, Shaft #1 was deepened to 790 metres, followed by 853 metres of lateral development, cross-cuts and slashing, two bulk samples for 136,200 tonnes and 23,000 metres of underground drilling in GEZ.

The combined amount of gold in proven and probable mineral reserves at the Goldex mine at the end of 2016 was 0.89 million ounces (16.8 million tonnes of ore grading 1.64 grams of gold per tonne), which represents an increase of approximately 0.2 million ounces of gold in reserves from the end of 2015, after producing 120,704 ounces of gold (130,687 ounces in situ gold mined). The increase is largely due to the successful conversion of mineral resources to mineral reserves, mainly in the D Zone as well as in the M and E Zones. The mineral reserve grade increased from 1.61 grams of gold per tonne at the end of 2015 to 1.64 grams of gold per tonne at the end of 2016. Underground measured and indicated mineral resources at the Goldex mine decreased by 4.12 million tonnes of ore to 30.3 million tonnes of ore grading 1.82 grams of gold per tonne, primarily due to conversion of indicated to measured mineral resources, positive drilling results in the Deep 1 Zone and the removal of non-recoverable resources in the M and E Zones, primarily due to mining sequencing. In 2016, there was a decrease in inferred mineral resources of approximately 2.75 million tonnes of ore to 21.88 million tonnes of ore grading 1.60 grams of gold per tonne. This decrease in the inferred mineral resources was primarily due to the conversion of inferred to indicated mineral resources and positive

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drilling results in the E, M, Dx and Deep 1 Zones and the removal of non-recoverable resources in the M and E Zones primarily due to mining sequencing.

Diamond drilling at Goldex in 2016 totaled 373 holes for a total length of 62,210 metres. Of this total, 84 holes (17,438 metres) were for exploration of the M, Deep 1 and South Zones at a cost of $0.83 million, 248 holes (41,254 metres) were for conversion drilling, principally in the Deep 1 and M Zones, at a cost of $2.33 million, 24 holes (1,596 metres) were delineation drilling in the M and E Zones at a cost of $0.07 million and 17 holes (1,922 metres) were drilled for the engineering and mining departments at a cost of $0.15 million.

In 2017, the Company expects to spend $1.26 million on 18,150 metres of exploration drilling, $2.54 million on 33,350 metres of conversion drilling, $0.77 million on 10,000 metres of delineation drilling and $0.3 million on 3,000 metres of expensed drilling.

Canadian Malartic Mine

The Canadian Malartic mine is located approximately 25 kilometres west of the City of Val-d'Or and 80 kilometres east of City of Rouyn-Noranda. The mine lies within the town of Malartic. It straddles the townships of Fournière, Malartic and Surimau. At December 31, 2016, the Canadian Malartic mine was estimated to have proven and probable mineral reserves containing approximately 3.55 million ounces of gold comprised of 101.8 million tonnes of ore grading 1.08 grams per tonne (representing the Company's 50% interest).

The Company acquired its 50% interest in the Canadian Malartic mine on June 16, 2014 through its joint acquisition of Osisko with Yamana. See "General Development of the Business – Three-Year History – 2014" for further details of the Company's acquisition of its 50% interest in the Canadian Malartic mine.

The Canadian Malartic mine operates under mining leases obtained from the Ministry of Energy and Natural Resources (Quebec) and under certificates of approval granted by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). The Canadian Malartic property is comprised of the East Amphi property, the CHL Malartic prospect, the Canadian Malartic mine and the Fourniere, Midway and Piche-Harvey properties. The Canadian Malartic property consists of a contiguous block comprising one mining concession, five mining leases and 199 mining claims.

Expiration dates for the mining leases on the Canadian Malartic property vary between March 23, 2019 and February 17, 2034, and are automatically renewable for three further ten-year terms upon payment of a small fee.

The Canadian Malartic mine can be accessed either from Val d'Or in the east or from Rouyn-Noranda in the west via Quebec provincial highway No. 117. A paved road running north-south from the town of Malartic towards Mourier Lake cuts through the central area of the Canadian Malartic property. The Canadian Malartic property is further accessible by a series of logging roads and trails. The Canadian Malartic mine is also serviced by a rail-line which cuts through the middle of the town of Malartic. The nearest airport is located in Val-d'Or.

A buffer zone 135 metres wide has been developed along the northern limit of the open pit to mitigate the impacts of mining activities on the citizens of Malartic. Inside this buffer zone, a landscaped ridge was built primarily using rock and topsoil produced during pre-stripping work. The height of this landscaped ridge is 15 metres where the concentration of residents is higher and five to six metres near less populated areas.

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Location Map of the Canadian Malartic Mine (as at December 31, 2016)

The Canadian Malartic mine includes open pit operations, an administration/warehouse building, a mine office/truck shop building, a process plant and the crushing plant.

Following the joint acquisition of the Canadian Malartic mine by the Company and Yamana, most of the mining claims are subject to a 5% net smelter return royalty payable to New Osisko. The mining claims comprising the CHL Malartic prospect are subject to 3% net smelter return royalties payable to each of New Osisko and Abitibi Royalties Inc. In addition, of the mining claims constituting the Canadian Malartic property, 101 are also subject to other net smelter return royalties that vary between 1% and 2%, payable under varying circumstances. In 2016 the Partnership, which is the operator of the Canadian Malartic mine, paid C$61.1 million in the aggregate with respect to these net smelter return royalties, and expects to pay approximately C$60.6 million in 2017.

Gold was first discovered in the Malartic area in 1923. Gold production on the Canadian Malartic property began in 1935 and continued uninterrupted until 1965. Following various ownership changes over the ensuing years, Osisko acquired ownership of the Canadian Malartic property in 2004. Based on a feasibility study completed in December 2008, Osisko completed construction of a 55,000 tonne per day mill complex, tailings impoundment area, five million cubic metre polishing pond and road network by February 2011, and the mill was commissioned in March 2011.

As of December 31, 2010, the Canadian Malartic mine had received all formal government permits required for its construction and related activities, with the exception of the authorization for the mill and mine operations. The official certificate of authorization for the mill and operations was granted on March 31, 2011, at which point the Canadian Malartic mine was fully permitted. The Canadian Malartic mine achieved commercial production on May 19, 2011.

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Mining and Milling Facilities

Surface Plan of the Canadian Malartic Mine (as at December 31, 2016)

The Canadian Malartic mine is a large open pit operation comprised of the Canadian Malartic pit. The Partnership continues to work with the Quebec Ministry of Transport and the town of Malartic on the deviation of Quebec provincial highway No. 117 to gain access to the higher grade Barnat and Jeffrey deposits. The final layout and an environmental impact assessment were completed at the end of January 2015. The environmental impact assessment is under review by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). The Quebec Bureau d'audiences publiques sur l'environment ("BAPE") issued its report on the Canadian Malartic pit extension on October 5, 2016. The BAPE report concluded that the project is acceptable and provides several recommendations intended to enhance social acceptability.

Mining Methods

Mining at the Canadian Malartic mine is done by open pit method using excavators and trucks. In order to maximize productivity and limit the number of units operating in the pit, large scale equipment was selected for the mine operation. The primary loading tools are hydraulic excavators, with wheel loaders used as a secondary loading tool. The mine production schedule was developed to feed the mill at a nominal rate of 55,000 tonnes per day. The continuity and consistency of the mineralization, coupled with tight definition drilling, and confirmed by seven years of mining operations, demonstrate the amenability of the mineral reserves and mineral resources to the selected mining method.

The throughput at the Canadian Malartic mine in 2016 averaged 53,665 tonnes per day compared with 52,300 tonnes per day in 2015. The increased throughput in 2016 was largely due to mill optimization, additional crushed ore from the portable crusher and mill stability.

Surface Facilities

Surface facilities at the Canadian Malartic mine include the administration/warehouse building, the mine office/truck shop building, the process plant and the crushing plant. The processing plant has a daily capacity of 55,000 tonnes of ore.

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Ore is processed through conventional cyanidation. Ore blasted from the pit is first crushed by a gyratory crusher followed by secondary crushing prior to grinding. Ground ore feeds successively into leach and CIP circuits. A Zadra elution circuit is used to extract the gold from the loaded carbon. Pregnant solution is processed via electrowinning and the resulting precipitate is smelted into gold/silver dore bars. Mill tails are thickened and detoxified using a Caro acid process, reducing cyanide levels below 20 parts per million. Detoxified slurry is subsequently pumped to a conventional tailings facility.

Production and Mineral Recoveries

Since the June 16, 2014 acquisition of Osisko, Agnico Eagle and Yamana have each held a 50% interest in the Canadian Malartic mine. During 2016, Agnico Eagle's share of the Canadian Malartic mine's payable production was 292,514 ounces of gold and 339,974 ounces of silver from 9,620,697 tonnes of ore grading 1.038 grams of gold per tonne and 1.35 grams of silver per tonne. The production costs per ounce of gold produced at Canadian Malartic in 2016 were $628. The total cash costs per ounce of gold produced at Canadian Malartic in 2016 were $606 on a by-product basis and were $626 on a co-product basis. The Canadian Malartic processing facility averaged 53,665 tonnes per day and operated approximately 95.0% of available time. Gold and silver recovery averaged 89.3% and 79.6%, respectively. The production costs per tonne at Canadian Malartic were C$25 and the minesite costs per tonne were C$25 in 2016.

The following table sets out the metal recoveries at the Canadian Malartic mine on a 100% basis in 2016.

The Company's 50% share of annual production at the Canadian Malartic mine in 2017 is expected to consist of approximately 300,000 ounces of gold and 324,000 ounces of silver from 9.4 million tonnes of ore grading 1.11 grams of gold per tonne and 1.34 grams of silver per tonne. The total cash costs per ounce in 2017 are expected to be approximately $578 per ounce on a by-product basis, with estimated gold recovery of 89.3% and silver recovery of 80.0%. Minesite costs per tonne of approximately C$24 are expected in 2017.

Environmental, Permitting and Social Matters

In 2015, an action plan was developed and implemented by the Partnership to mitigate noise, vibrations, atmospheric emissions and ancillary issues. Mitigation measures were put in place to improve the process and avoid any environmental non-compliance. As a result, in 2016, the Partnership improved its environmental performance compared to previous years. With respect to activities in 2016, the Partnership received one non-compliance blast notice and ten non-compliance noise notices (which included notices received in instances where noise levels were otherwise within the municipal noise limits). The mine's team of on-site environmental experts continue to monitor regulatory compliance in terms of approvals, permits and observance of directives and requirements and continue to implement improvement measures.

On August 2, 2016, the Partnership was served with a class action lawsuit with respect to allegations involving the Canadian Malartic mine. See "Legal Proceedings and Regulatory Actions" for further details on the class action lawsuit.

Beginning in the spring of 2015, the Partnership has been working collaboratively with the community of Malartic and its citizens to develop a "Good Neighbour Guide" that addresses the allegations contained in the lawsuit. Implementation of the recommendations in the Good Neighbour Guide began on September 1, 2016.

The original design of the waste rock pile was developed to accommodate approximately 326 million tonnes of mechanically placed waste rock requiring a total storage volume of approximately 161 million cubic metres.

In December 2015, the Partnership completed the construction of a new polishing pond east of dyke A, which has been operational since May 2016. The existing polishing pond, with a capacity of approximately 48 million tonnes, has been converted into the eighth cell of the tailings management facility, adding 2.5 years of operation to the tailings management facility capacity for a total of 148 million tonnes and 7.5 years of operation. The total capacity of the current tailings management facility is estimated at 198 million tonnes. The expansion of the open pit, with the production from the

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Canadian Malartic pit extension (Barnat deposit), will increase the total amount of tailings to 342 million tonnes, requiring an additional 144 million tonnes in tailings storage capacity. The Partnership plans to store tailings in an extended tailings facility and in the Canadian Malartic pit at the end of its operations. According to the mine plan, at the end of mine life, 50 to 100 million tonnes of tailings will be deposited in the pit. The rest of the tailings, comprising a minimum of 59 and a maximum of 109 million tonnes, will be deposited in the extended tailings facility.

Regulatory approval for the proposed tailings deposition in the Canadian Malartic pit and the expansion of the currently authorized tailings area are part of the approval process for the Canadian Malartic pit extension (Barnat deposit) subject to the environmental impact assessment process of the Quebec Environment Quality Act . The environmental impact assessment has been completed and is under review by the Ministry of Sustainable Development, Environment and the Fight Against Climate Change (Quebec). Golder Associates Ltd. is designing the tailings extension component and is preparing a hydrogeological study to demonstrate that the Canadian Malartic pit would provide a hydraulic trap and contain the tailings with minimum environmental risk. Delay in the expected timing of the permits required for the Canadian Malartic pit extension could have a negative impact on the mining sequence at Canadian Malartic.

The public hearings (BAPE process) took place in June and July 2016 for the Canadian Malartic pit extension and the BAPE issued their report in October 2016, with a recommendation to the Minister that the project be accepted with certain conditions. A decision by the Minister is expected in the first half of 2017.

An annual hydrological site balance is maintained to provide a yearly estimate of water volumes that must be managed in the different structures of the water management system of the Canadian Malartic mine during an average climatic year (in terms of precipitation). Results of this hydrological balance indicate that excess water from the southeast pond will eventually need to be released into the environment. A water treatment plant was commissioned in 2015 to ensure that the water to be released to the environment meets water quality requirements. This water treatment plant reduces the risks associated with surface water management and adds flexibility to the system. In 2016, modifications on water management were made in order to improve water quality segregation and reduce the volumes of water potentially requiring treatment.

Reclamation and closure costs have been estimated for rehabilitating the tailings facility and waste dump, vegetating the surrounding area, dismantling the plant and associated infrastructure, and performing environmental inspection and monitoring for a period of ten years. The reclamation and closure cost is estimated to be C$65.5 million. Financial assurance has been provided based on the closure plan.

Capital Expenditures

The Company's portion of capital expenditures at the Canadian Malartic mine during 2016 were approximately $60.4 million, which included sustaining capital expenditures and deferred expense, but excluded capitalized drilling. Budgeted 2017 capital expenditures at the Canadian Malartic mine are $67.6 million, excluding capitalized drilling.

Development

Development activities at the Canadian Malartic mine in 2016 primarily consisted of minor stripping activities. Development activities in 2017 are expected to include additional stripping activities. Permitting activities are ongoing.

Geology, Mineralization, Exploration and Drilling

Geology

The Canadian Malartic property straddles the southern margin of the eastern portion of the Abitibi Subprovince, an Archean greenstone belt situated in the southeastern part of the Superior Province of the Canadian Shield. The Abitibi Subprovince is limited to the north by gneisses and plutons of the Opatica Subprovince, and to the south by metasediments and intrusive rocks of the Pontiac Subprovince. The contact between the Pontiac Subprovince and the rocks of the Abitibi greenstone belt is characterized by a major fault corridor, the east-west trending Larder Lake – Cadillac Fault Zone ("LLCFZ"). This structure runs from Larder Lake, Ontario through Rouyn-Noranda, Cadillac, Malartic, Val-d'Or and Louvicourt, Québec, at which point it is truncated by the Grenville Front.

The regional stratigraphy of the southeastern Abitibi area is divided into groups of alternating volcanic and sedimentary rocks, generally oriented at N280 – N330 and separated by fault zones. The main lithostratigraphic divisions in this region are, from south to north, the Pontiac Group of the Pontiac Subprovince and the Piché, Cadillac, Blake River, Kewagama and Malartic groups of the Abitibi Subprovince. The various lithological groups within the Abitibi Subprovince are metamorphosed to greenschist facies. Metamorphic grade increases toward the southern limit of the Abitibi belt, where

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rocks of the Piché Group and the northern part of the Pontiac Group have been metamorphosed to upper greenschist facies.

The majority of the Canadian Malartic property is underlain by metasedimentary units of the Pontiac Group, lying immediately south of the LLCFZ. The north-central portion of the property covers an approximately 9.5 kilometre section of the LLCFZ corridor and is underlain by mafic-ultramafic metavolcanic rocks of the Piché Group cut by intermediate porphyritic and mafic intrusions. The Cadillac Group covers the northern part of the property (north of the LLCFZ). It consists of greywacke containing lenses of conglomerate.

Mineralization

Surface drilling by Lac Minerals Ltd. in the 1980s defined several near-surface mineralized zones now included in the Canadian Malartic deposit (the F, P, A, Wolfe and Gilbert zones), all expressions of a larger, continuous mineralized system located at depth around the historical underground workings of the Canadian Malartic and Sladen mines. In addition to these, the Western Porphyry Zone occurs one kilometre northeast of the main Canadian Malartic deposit and the Gouldie mineralized zone occurs approximately 1.2 kilometres southeast of the main Canadian Malartic deposit, although the relationship between these zones and the main deposit is presently unknown.

Mineralization in the Canadian Malartic deposit occurs as a continuous shell of 1% to 5% disseminated pyrite associated with fine native gold and traces of chalcopyrite, sphalerite and tellurides. The gold resource is mostly hosted by altered clastic sediments of the Pontiac Group (70%) overlying an epizonal dioritic porphyry intrusion. A portion of the deposit also occurs in the upper portions of the porphyry body (30%).

The South Barnat deposit is located to the north and south of the old South Barnat and East Malartic mine workings, largely along the southern edge of the LLCFZ. The disseminated/stockwork gold mineralization at South Barnat is hosted both in potassic-altered, silicified greywackes of the Pontiac Group (south of the fault contact) and in potassic-altered porphyry dykes and schistose, carbonatized and biotitic ultramafic rocks (north of the fault contact).

Several mineralized zones have been documented within the LLCFZ (South Barnat, Buckshot, East Malartic, Jeffrey, Odyssey, East Amphi, Fourax), most of which are generally spatially associated with stockworks and disseminations within mafic or intermediate porphyritic intrusions.

Exploration and Drilling

Gold was first discovered in the Malartic area in 1923 by the Gouldie Brothers at what is now designated the Gouldie Zone. During the period from 1935 to 1983, the Canadian Malartic, Barnat/Sladen and East Malartic mines produced approximately 5.5 million ounces of gold and 1.9 million ounces of silver, mostly from underground operations.

The combined amount of gold in proven and probable mineral reserves at the Canadian Malartic mine at the end of 2016 was 3.55 million ounces (101.8 million tonnes of ore grading 1.08 grams per tonne of gold), which represents a decrease of approximately 314,000 ounces of gold as compared to the end of 2015, after producing 292,514 ounces of gold (335,665 ounces in situ gold mined). The reduction in mineral reserves was principally associated with ore mined during 2016. Measured and indicated mineral resources at the Canadian Malartic mine increased by 0.35 million tonnes of ore in 2016 to 13.1 million tonnes grading 1.53 grams of gold per tonne, due to a reduction in the cut-off grade related to gold price and exchange rate movements. Inferred mineral resources at the Canadian Malartic mine increased by 10.5 million tonnes in 2016 to 14.9 million tonnes grading 1.93 grams of gold per tonne, due to the initial inferred mineral resources at the Odyssey zone. All numbers shown for Canadian Malartic reflect Agnico Eagle's indirect 50% ownership in the mine.

Diamond drilling is used for exploration on the Canadian Malartic property. In 2016, 155 holes (119,393 metres) were drilled for definition (conversion) drilling and 39 holes (24,496 metres) were for exploration. Exploration expenditures at the Canadian Malartic mine during 2016 were approximately C$10.9 million (50% basis), which includes the purchase of the Midway property located 6 kilometres from the Canadian Malartic mine. The main focus of the 2016 exploration program concentrated on drill definition of the Odyssey deposit located 1.5 kilometres east of the current limit of the Canadian Malartic pit.

In 2017, the Partnership expects to spend approximately C$4.7 million on exploration drilling at Canadian Malartic. Exploration programs are planned to identify and extend already known mineralized zones below the pit.

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Kittila Mine

The Kittila mine, which commenced commercial production in May 2009, is located in northern Finland approximately 900 kilometres north of Helsinki and 50 kilometres northeast of the town of Kittila. At December 31, 2016, the Kittila mine was estimated to contain proven and probable mineral reserves of 4.48 million ounces of gold comprised of 30.1 million tonnes of ore grading 4.64 grams of gold per tonne. The Kittila mine is accessible by paved road from the village of Kiistala, which is located on the southern portion of the main claim block. The gold deposit is located near the small village of Rouravaara, approximately ten kilometres north of the village of Kiistala.

The total landholdings surrounding and including the Kittila mine comprise two mining licences and 172 tenements. The tenements form a continuous block around the Kittila and Kuotko mining licences. The block has been divided into the Suurikuusikko area (which includes the Rouravaara area), the Suurikuusikko West area, the Suurikuusikko East area, and the Kittila and Kuotko mining licences. The Kuotko mining licence is located approximately 15 kilometres north of the Kittila mine. The Kuotko mining licence is currently in the environmental review process.

The boundary of the mining licence is determined by ground-surveyed points, whereas the boundaries of the tenements are not required to be surveyed. All of the tenements at the Kittila mine are registered in the name of Agnico Eagle Finland Oy, an indirect, wholly-owned subsidiary of the Company. The expiry dates of the tenements vary, with the earliest expiry date being April 2017. Tenements are initially valid for four years, provided exploration work in the area is reported annually and a small annual fee is paid to maintain title. Extensions of titles can be granted for 11 additional years upon payment of a slightly higher fee and active exploration in the area. Agnico Eagle Finland Oy also holds the mining licence in respect of the Kittila mine. The mine is subject to a 2.0% net smelter return royalty payable to the Republic of Finland.

The mine is located within the Arctic Circle, but the climate is moderated by the Gulf Stream off the coast of Norway, such that northern Finland's climate is comparable to that of eastern Canada. Winter temperatures range from minus ten to minus 30 degrees Celsius, whereas summer temperatures range from ten degrees Celsius to the mid-20s. Exploration and mining work can be carried out year-round. Because of its northern latitude, winter days are extremely short with a brief period of 24-hour darkness around the winter solstice. Conversely, summer days are very long with a brief period of 24-hour daylight around the summer solstice.

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Location Map of the Kittila Mine (as at December 31, 2016)

The Company acquired its 100%, indirect interest in the Kittila mine through the acquisition of the Swedish company Riddarhyttan Resources AB in November 2005. In June 2006, on the basis of an independently reviewed feasibility study, the Company approved construction of the Kittila mine. Mining at Kittila started initially as open pit mining. Open pit mining ended in November 2012 and all mining is currently carried out from the underground via ramp access. The initial underground stope was mined in early 2010. Ore is processed in a 3,750-tonne per day surface processing plant that was commissioned in late 2008, and expanded from 3,000 to 3,750 tonnes per day in 2014. Limited gold concentrate production started in September 2008 and gold dore bar production commenced in January 2009.

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Mining and Milling Facilities

Surface Plan of the Kittila Mine (as at December 31, 2016)

The orebodies at Kittila were initially mined from two open pits, followed by underground operations to mine the deposits further beneath the surface. Smaller additional open pits may be used to mine any remaining mineral reserves close to the surface in the future. Open pit mining started in May 2008 and the extracted ore was stockpiled. As of December 31, 2016, a total of 9.86 million tonnes of ore have been processed, including ore from the open pits and underground,

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0.44 million tonnes of ore are currently stockpiled and 39.9 million tonnes of waste rock have been excavated, including both open pit and underground excavation. Work continued throughout 2016 to develop the exploration and Rimpi ramps, as well as other work to access the underground mineral reserves, including development of a ramp towards the Sisar Zone. Total underground (lateral and vertical) development at the end of 2016 was approximately 85 kilometres. Underground mining commenced in the fourth quarter of 2010 and, at the end of 2016, a total of 6.5 million tonnes of ore has been mined from the underground portion of the mine.

Mining Methods

At the Kittila mine, the Suurikuusikko and the Rouravaara orebodies are currently mined by underground mining methods and access to the underground mine is via ramp. Approximately 5,000 tonnes of ore per day are fed to the concentrator, exceeding the nominal capacity of 3,750 tonnes per day. The underground mining method is open stoping with delayed backfill. Stopes are between 25 and 40 metres high and yield between 8,000 and 40,000 tonnes of ore per stope. To ensure sufficient ore production is available in the future to supply the mill, over 15,000 metres of tunnels will be developed each year. After extraction, stopes are filled with paste backfill or cemented backfill to enable the safe extraction of ore in adjacent stopes. Ore is trucked to the surface crusher via the ramp access system.

Surface Facilities

Construction of the processing plant and associated equipment was completed in 2008. Facilities at the Kittila mine include office buildings, a maintenance facility for mining equipment, a warehouse, a second maintenance shop, an oxygen plant, a processing plant, a paste backfill plant, a tank farm, a crusher, conveyor housings, an ore bin and a sulfate removal plant at the NP3 tailings area. In addition, there are some temporary structures for contractor offices and work areas.

The ore at the Kittila mine is treated by grinding, flotation, pressure oxidation and CIL circuits. After grinding, ore processing consists of two stages. In the first stage, ore is enriched by flotation and, in the second stage, the gold is extracted by pressure oxidation and CIL processes. At the end of the second stage, gold is recovered from the carbon in a Zadra elution circuit and recovered from the solution using electrowinning and finally poured into dore bars using an electric induction furnace.

Production and Mineral Recoveries

In 2016, the Kittila mine had payable production of 202,508 ounces of gold from 1.67 million tonnes of ore grading 4.41 grams of gold per tonne. The production costs per ounce of gold produced at Kittila in 2016 were $701. The total cash costs per ounce of gold produced at Kittila in 2016 were $699 on a by-product basis and were $701 on a co-product basis and the processing facility averaged 5,251 tonnes of ore per day and operated 86.7% of available time. During 2016, flotation recoveries averaged 93.0%. Recoveries in the second stage of the process in 2016 averaged 92.1% and global recoveries were 85.7%. The production costs per tonne at Kittila were €77 and the minesite costs per tonne were €77 in 2016.

The following table sets out the metal recoveries at the Kittila mine in 2016.

In 2017, the Kittila mine is expected to produce approximately 190,000 ounces of gold from 1.6 million tonnes of ore grading 4.30 grams of gold per tonne at estimated total cash costs per ounce of approximately $728 on a by-product basis, with estimated gold recovery of 86.0%. Minesite costs per tonne of approximately €78 are expected in 2017.

Environmental, Permitting and Social Matters

Agnico Eagle Finland Oy currently holds a mining licence, an environmental permit and operational permits in respect of the Kittila mine.

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The construction of the first phase of the tailings dam was completed in the fall of 2008. Work on the second phase was completed in 2010 and included the expansion of the tailings area. Work on the third phase began in 2013 and includes work to heighten the dam. Work on the third phase is expected to continue for several years.

On September 14, 2015, during routine inspections of the dam, water seepage was discovered from a holding pond (NP3). A detailed action plan for a permanent solution was developed by a team of internal and external experts and this plan and has been implemented. The action plan consisted of filling the entire area where the water seepage had occurred with tailings. In the beginning of 2016, all seepage beneath the dam had stopped and the Company expects no further risk of seepage occurring through the liner.

Water from dewatering the mine and water used in the mine and mill is collected and treated by sedimentation. Emissions and environmental impact are monitored in accordance with the comprehensive monitoring program that has been approved by the Finnish environmental authorities. Work on enhancing the scrubbing of mill gases has resulted in a design to recover heat loss and use it to heat buildings, and this work is continuing. Financial assurance is provided to the environmental authorities on an annual basis in the amount prescribed by the environmental permit.

The environmental permit renewal was received in July 2013. This renewal contains additional effluent criteria and the Company has appealed the timing of compliance with such criteria to allow for studies and design to take place for new water treatment as required. A decision by the Administrative Court reviewing the appeal was received in the first quarter of 2015, granting the Company's appeal in part. The Company has also responded to another appeal lodged by a third party. The final decision from the Supreme Administrative Court was received in May 2016, and to comply with the requirements of the new permit, a water treatment plant for sulfate was built and commissioned in the fourth quarter of 2016.

Capital Expenditures

Capital expenditures at the Kittila mine during 2016 totaled approximately $75.9 million, which included mill modification, mine site exploration, Rimpi and Sisar area development, underground development and sustaining capital costs, but excludes capitalized drilling.

The Company expects capital expenditures during 2017 at the Kittila mine to be approximately $76.8 million, excluding capitalized drilling.

Development

In 2016, underground development continued in both the Suurikuusikko and Rouravaara mining areas. A total of 14,415 metres of ramp and sublevel access development were completed during the year. A total of 187,790 tonnes of ore from development and 1,465,184 tonnes of stope ore were mined in 2016. The Company expects to complete approximately 17,084 metres of lateral development (excluding the Rimpi area) and 1,258 metres of vertical development during 2017.

Geology, Mineralization, Exploration and Drilling

Geology

The Kittila mine is situated within the Kittila Greenstone belt, part of the Lapland Greenstone belt in the Proterozoic-age Svecofennian geologic province. The appearance and geology of the area is similar to that of the Abitibi region of the Canadian Shield. In northern Finland, the bedrock is typically covered by a thin but uniform blanket of unconsolidated glacial till. Bedrock exposures are scarce and irregularly distributed.

The mine area is underlain by mafic volcanic and sedimentary rocks metamorphosed to greenschist assemblages and assigned to the Kittila group. The major rock units trend north to north-northeast and are near-vertical. The volcanics are further sub-divided into iron-rich tholeiitic basalts located to the west and magnesium-rich tholeiitic basalt, coarse volcaniclastic units, graphitic schist and minor chemical sedimentary rocks located to the east. The contact between these two rock units consists of a transitional zone (the "Porkonen Formation") varying between 50 and 200 metres in thickness. This zone is strongly sheared, brecciated and characterized by intense hydrothermal alteration and gold mineralization, features consistent with major brittle-ductile deformation zones. The zone is part of a major north-northeast-oriented shear zone (the "Suurikuusikko Trend").

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Mineralization

The Porkonen Formation hosts the Kittila gold deposit, which contains multiple mineralized zones stretching over a strike length of more than 25 kilometres. Most of the work at the Kittila mine has been focused on the 4.5-kilometre stretch that hosts the known gold in mineral reserves and mineral resources. From north to south, the zones are Rimminvuoma ("Rimpi-S"), the deep extension of Rimminvuoma ("Rimpi Deep"), North Rouravaara ("Roura-N"), Central Rouravaara ("Roura-C"), depth extension of Rouravaara and Suurikuusikko ("Suuri/Roura Deep"), Suurikuusikko ("Suuri"), Etela and Ketola. The Suuri and Suuri/Roura Deep zones include several parallel sub-zones that have previously been referred to as Main East, Main Central and Main West. The Suuri zone hosts approximately 15% of the current probable gold reserve estimate on a contained-gold basis, while Suuri Deep has approximately 21%, Roura-C approximately 4%, Roura Deep approximately 27%, Rimpi Deep approximately 28% and Rimpi-S approximately 5%.

Gold mineralization in these zones is associated with intense hydrothermal alteration (carbonate-albite-sulphide), and is almost exclusively refractory, locked inside fine-grained sulphide minerals: arsenopyrite (approximately 73%) or pyrite (approximately 23%). The rest is free gold, which is manifested as extremely small grains of gold in pyrite.

Exploration and Drilling

In 2016, proven and probable gold reserves increased by approximately 125,915 ounces to 4.48 million ounces of gold (30.06 million tonnes of ore grading 4.64 grams per tonne), after producing 202,508 ounces of gold (236,317 ounces in situ gold mined). This increase was primarily due to successful conversion of mineral resources to mineral reserves in the Sisar Zone. Measured and indicated mineral resources at December 31, 2016 increased by 4.8 million tonnes from 2015 to 20.7 million tonnes of ore grading 2.92 grams of gold per tonne due to successful exploration and conversion drilling in the Roura and Rimpi deep zones. Inferred mineral resources decreased by 0.77 million tonnes from 2015 to 11.06 million tonnes of ore grading 4.05 grams of gold per tonne.

Diamond drilling is used for exploration on the Kittila property. In 2016, all of the work on the mining licence area focused on the Roura, Rimpi and Sisar areas. From 1987 through the end of 2016, a total of 4,520 drill holes, totaling 895,000 metres, have been completed on the property. A total of 486 drill holes were completed in 2016 for a length of 59,900 metres. Of these drill holes, 399 holes (26,585 metres) were for delineation drilling, 26 holes (6,922 metres) were for conversion drilling and 55 holes (24,930 metres) were related to mine exploration. Total expenditures for diamond drilling in 2016 were €8.3 million, including €0.73 million for conversion drilling and €5.52 million for exploration.

In 2016, a total of 19 exploration drill holes, totaling 4,634 metres, were drilled on the Kuotko mining licence area. Total expenditures for the exploration drilling carried out in the Kuotko area in 2016 were $€0.67 million. At the end of 2016, the Kuotko deposit contained inferred mineral resources of 0.4 million tonnes of ore grading 2.88 grams of gold per tonne.

Outside of the Kittila and Kuotko mining licence areas, systematic diamond drilling and target-focused ground geophysics continued along the Suurikuusikko Trend, and a number of new targets were tested by diamond drilling in 2016. A total of 19 diamond drill holes, totaling 4,479 metres, were drilled on exploration targets outside of the mining licence area in 2016, at a cost of $2.2 million.

The 2017 exploration budget for the Kittila mine is approximately €8.38 million (for 40,000 metres of minesite exploration drilling and 8,000 metres of resource conversion drilling). This drilling is planned to further explore the Kittila mineral reserve and mineral resource potential and to evaluate the potential to develop the Sisar Zone as a new mining horizon at Kittila. In addition, €0.62 million of exploration expenditures, including 6,000 metres of diamond drilling, is planned in 2017 for further exploration on the Kuotko area. Outside of the mining licence areas, $3.7 million of exploration expenditures, including 7,000 metres of diamond drilling, is planned in 2017 for exploration along the Suurikuusikko, Kapsa and Hanhimaa Trends.

Meadowbank Mine

The Meadowbank mine, which achieved commercial production in March 2010, is located in the Third Portage Lake area in the Kivalliq District of Nunavut in northern Canada, approximately 70 kilometres north of Baker Lake. At December 31, 2016, the Meadowbank mine was estimated to contain proven and probable mineral reserves of 0.71 million ounces of gold comprised of 8.2 million tonnes of ore grading an average of 2.69 grams of gold per tonne. The Company acquired its 100% interest in the Meadowbank mine in 2007 as the result of the acquisition of Cumberland Resources Ltd.

In 2016, the Company completed an internal technical study on the Amaruq satellite deposit at Meadowbank, which is located 50 kilometres northeast of the Meadowbank mine. Based on this study, the Company has approved the project for

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development pending the receipt of the required permits, which are currently expected to be received by the second quarter of 2018.

Location Map of the Meadowbank Mine, Including Amaruq (as at December 31, 2016)

The Meadowbank mine is held under ten Crown mining leases, four exploration concessions and 40 Crown mineral claims. The Crown mining leases, which cover the Portage, Goose and Goose South deposits, are administered under federal legislation. The Crown mining leases, which have renewable ten-year terms, have no annual work commitments but are subject to annual rent fees that vary according to their renewal date. The production lease with the Kivalliq Inuit Association ("KIA") is a surface lease and requires the payment of C$158,865 annually. Production from subsurface lease areas is subject to a royalty of up to 14% of the adjusted net profits, as defined in the Northwest Territories and Nunavut Mining Regulations . In order to conduct exploration on the Inuit-owned lands at Meadowbank, the Company must receive approval for an annual work proposal from the KIA, the body that holds the surface rights in the Kivalliq District and administers land use in the region through various boards. The Nunavut Water Board (the "NWB"), one such board, provided the recommendation to the Department of Aboriginal Affairs and Northern Development Canada to grant the Meadowbank mine's construction and operating licences in July 2008. The Company has obtained all of the approvals and licences required to build and operate the Meadowbank mine.

Meadowbank holds two mineral exploration agreements granted by Nunavut Tunngavik Inc. ("NTI"), the corporation responsible for administering subsurface mineral rights on Inuit owned lands in Nunavut. In 2017, exploration concessions covering the Vault and Amaruq deposits will require annual rental fees of C$113,442 and C$81,678,

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