Published on Gold Anti-Trust Action Committee (http://www.gata.org)

Will Britain ever get its gold back?

By cpowell
Created 1999-12-16 08:00

11:10p EST Thursday, December 16, 1999

Dear Friend of GATA and Gold:

You might be interested in this press release today
from Agnico-Eagle Mines Ltd., which stresses that the
company's hedging is entirely a matter of obtaining
downside protection by buying puts while leaving the
company fully exposed to any rise in the price of gold.

No gold price-depressing forward sales here.

Gold Anti-Trust Action Committee Inc.

* * *


TORONTO, Dec. 16 -- Agnico-Eagle Mines Limited (AEM)
announced today the closing of its US$100 million,
eight-year bank facility with a syndicate of banks.

The facility was underwritten in August 1999 by
Barclays Bank PLC and Deutsche Bank AG and was
subsequently syndicated to a number of banks including
The Bank of Nova Scotia (Administrative Agent),
Standard Bank London, Dresdner Bank Canada, National
Bank of Canada, NM Rothschild & Sons Limited, and
Canadian Imperial Bank of Commerce.

The facility, which is secured by a first charge on the
LaRonde Mine, is intended partly to finance capital
costs related to the expansion of the LaRonde Mine to
5,000 tons per day and partly for general corporate
purposes. Under the facility's terms, an initial
tranche of US$75 million will be made available over
the next 15 months as key construction and ore reserve
conversion milestones are met. A second tranche of
US$25 million will also be made available, at the
company's option, once the milestones are met and
contingent upon continued covenant compliance.

The banks have also provided for up to US$75 million of
eight-year credit lines for metal price, interest rate
and foreign exchange hedging. To secure the facility,
Agnico-Eagle was required to purchase downside price
protection on a portion of its gold production over the
life of the loan. As a result, the company has
purchased put options on more than 950,000 ounces of
gold, representing approximately 20 percent of current
gold reserves and resources at LaRonde's Shaft No. 3.

This is consistent with Agnico-Eagle's policy of not
selling the price upside on any of its future gold
production, as put options act as a form of downside
insurance only. Agnico-Eagle remains positioned to
participate 100 percent in future gold price appreciation.

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