CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
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CONSOLIDATED BALANCE SHEETS | ||
Common shares issued | 245,435,804 | 243,301,195 |
Common shares held in trust | 433,947 | 416,881 |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2021 |
Dec. 31, 2020 |
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REVENUES | ||
Revenues from mining operations (Note 19) | $ 3,823,878 | $ 3,138,113 |
COSTS AND EXPENSES | ||
Production(i) | 1,756,688 | 1,424,152 |
Exploration and corporate development | 152,514 | 113,492 |
Amortization of property, plant and mine development (Note 9) | 738,129 | 631,101 |
General and administrative | 142,003 | 116,288 |
Finance costs (Note 14) | 92,042 | 95,134 |
Loss (gain) on derivative financial instruments (Note 21) | 11,103 | (107,873) |
Environmental remediation (Note 12) | 576 | 27,540 |
Foreign currency translation loss | 5,672 | 22,480 |
Other expenses (Note 22) | 21,742 | 48,234 |
Income before income and mining taxes | 903,409 | 767,565 |
Income and mining taxes expense (Note 25) | 360,400 | 255,958 |
Net income for the year | $ 543,009 | $ 511,607 |
Net income per share - basic (Note 16) | $ 2.23 | $ 2.12 |
Net income per share - diluted (Note 16) | 2.22 | 2.10 |
Cash dividends declared per common share | $ 1.40 | $ 0.95 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2021 |
Dec. 31, 2020 |
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income for the year | $ 543,009 | $ 511,607 |
Derivative financial instruments (Note 17) | ||
Cash flow hedge reserve | (12,823) | |
Reclassified from the cash flow hedge reserve to net income | 1,175 | 859 |
Cash flow hedge reserve, net of reclassification | 1,175 | (11,964) |
Pension benefit obligations: | ||
Remeasurement gain (loss) on pension benefit obligations (Note 15) | 4,533 | (2,721) |
Income tax impact | (1,412) | 812 |
Equity securities (Note 18): | ||
Net change in fair value of equity securities | (42,162) | 157,672 |
Income tax impact | 4,954 | (12,534) |
Total other comprehensive income that will not be reclassified to profit or loss, net of tax | (34,087) | 143,229 |
Other comprehensive (loss) income for the year | (32,912) | 131,265 |
Comprehensive income for the year | $ 510,097 | $ 642,872 |
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares |
12 Months Ended | |
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Dec. 31, 2021 |
Dec. 31, 2020 |
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CONSOLIDATED STATEMENTS OF EQUITY | ||
Cash dividends declared per common share | $ 1.40 | $ 0.95 |
CORPORATE INFORMATION |
12 Months Ended |
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Dec. 31, 2021 | |
CORPORATE INFORMATION | |
CORPORATE INFORMATION | 1.CORPORATE INFORMATION Agnico Eagle Mines Limited (“Agnico Eagle” or the “Company”) is principally engaged in the production and sale of gold, as well as related activities such as exploration and mine development. The Company’s mining operations are located in Canada, Mexico and Finland and the Company has exploration activities in Canada, Europe, Latin America and the United States. Agnico Eagle is a public company incorporated under the laws of the Province of Ontario, Canada with its head and registered office located at 145 King Street East, Suite 400, Toronto, Ontario, M5C 2Y7. The Company’s common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange. Agnico Eagle sells its gold production into the world market. On February 8, 2022, the Company completed the acquisition of Kirkland Lake Gold Ltd. (“Kirkland”) (Note 28). |
BASIS OF PRESENTATION |
12 Months Ended |
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Dec. 31, 2021 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | 2.BASIS OF PRESENTATION A)Statement of Compliance The accompanying consolidated financial statements of Agnico Eagle have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These consolidated financial statements were authorized for issuance by the Board of Directors of the Company (the “Board”) on March 24, 2022. B)Basis of Presentation Overview These consolidated financial statements were prepared on a going concern basis under the historical cost method except for certain financial assets and liabilities which are measured at fair value. The consolidated financial statements are presented in US dollars and all values are rounded to the nearest thousand, except where otherwise indicated. Subsidiaries These consolidated financial statements include the accounts of Agnico Eagle and its consolidated subsidiaries. All intercompany balances, transactions, income and expenses and gains or losses have been eliminated on consolidation. Subsidiaries are consolidated where Agnico Eagle has the ability to exercise control. Control of an investee exists when Agnico Eagle is exposed to variable returns from the Company’s involvement with the investee and has the ability to affect those returns through its power over the investee. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control. Joint Arrangements A joint arrangement is defined as an arrangement in which two or more parties have joint control. Joint control is the contractually agreed sharing of control over an arrangement between two or more parties. This exists only when the decisions about the relevant activities that significantly affect the returns of the arrangement require the unanimous consent of the parties sharing control. A joint operation is a joint arrangement whereby the parties have joint control of the arrangement and have rights to the assets and obligations for the liabilities relating to the arrangement. These consolidated financial statements include the Company’s interests in the assets, liabilities, revenues and expenses of the joint operations from the date that joint control commenced. Agnico Eagle’s 50% interest in each of Canadian Malartic Corporation (“CMC”) and Canadian Malartic GP (the “Partnership”), the general partnership that holds the Canadian Malartic mine located in Quebec, has been accounted for as a joint operation. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In a business combination, the acquisition method of accounting is used, whereby the purchase consideration is allocated to the fair value of identifiable assets acquired and liabilities assumed at the date of acquisition. Where the cost of the acquisition exceeds the fair values of the identifiable net assets acquired, the difference is recorded as goodwill. Preliminary fair values allocated at a reporting date are finalized as soon as the relevant information is available, within a period not to exceed twelve months from the acquisition date with retroactive restatement of the impact of adjustments to those preliminary fair values effective as at the acquisition date. Acquisition related costs are expensed as incurred.
The functional currency of the Company, for each subsidiary and for joint arrangements, is the currency of the primary economic environment in which it operates. The functional currency of all of the Company’s operations is the US dollar. Once the Company determines the functional currency of an entity, it is not changed unless there is a significant change in the relevant underlying transactions, events and circumstances. Any change in an entity’s functional currency is accounted for prospectively from the date of the change, and the consolidated balance sheets are translated using the exchange rate at that date. At the end of each reporting period, the Company translates foreign currency balances as follows:
The Company’s cash and cash equivalents include cash on hand and short-term investments in money market instruments with remaining maturities of three months or less at the date of purchase. The Company places its cash and cash equivalents and short-term investments in high quality securities issued by government agencies, financial institutions and major corporations and limits the amount of credit exposure by diversifying its holdings. Cash and cash equivalents are classified as financial assets measured at amortized cost.
The Company’s short-term investments include financial instruments with remaining maturities of greater than three months but less than one year at the date of purchase. Short-term investments are designated as financial assets measured at amortized cost, which approximates fair value given the short-term nature of these investments.
Inventories consist of ore stockpiles, concentrates, dore bars and supplies. Inventories are carried at the lower of cost and net realizable value (“NRV”). Cost is determined using the weighted average basis and includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories includes direct costs of materials and labour related directly to mining and processing activities, including production phase stripping costs, amortization of property, plant and mine development directly involved in the related mining and production process, amortization of any stripping costs previously capitalized and directly attributable overhead costs. When interruptions to production occur, an adjustment is made to the costs included in inventories, such that they reflect normal capacity. Abnormal costs are expensed in the period they are incurred. The current portion of ore stockpiles, ore on leach pads and inventories is determined based on the amounts expected to be processed within the next twelve months. Ore stockpiles, ore on leach pads and inventories not expected to be processed or used within the next twelve months are classified as long-term. NRV is estimated by calculating the net selling price less costs to be incurred in converting the relevant inventories to saleable product and delivering it to a customer. Costs to complete are based on management’s best estimate as at the consolidated balance sheet date. An NRV impairment may be reversed in a subsequent period if the circumstances that triggered the impairment no longer exist.
The Company’s financial assets and liabilities (financial instruments) include cash and cash equivalents, short-term investments, restricted cash, trade receivables, loans receivable, equity securities, share purchase warrants, accounts payable and accrued liabilities, long-term debt and derivative financial instruments. Financial instruments are recorded at fair value and classified at initial recognition and subsequently measured at amortized cost, fair value through other comprehensive income (“FVOCI”), or fair value through profit or loss (“FVPL”). Subsequent to initial recognition, financial instruments classified as cash and cash equivalents, short-term investments, loans receivable, accounts payable and accrued liabilities, and long-term debt are measured at amortized cost using the effective interest method. Other financial instruments are recorded at fair value subsequent to initial recognition. Equity Securities The Company’s equity securities consist primarily of investments in common shares of entities in the mining industry recorded using trade date accounting. On initial recognition of an equity investment, the Company may irrevocably elect to measure the investment at FVOCI where changes in the fair value of equity securities are permanently recognized in other comprehensive income and will not be reclassified to profit or loss. The realized gain or loss is reclassified from other comprehensive income to the deficit when the asset is de-recognized. The election is made on an investment-by-investment basis. Derivative Instruments and Hedge Accounting The Company uses derivative financial instruments (primarily option and forward contracts) to manage exposure to fluctuations in by-product metal prices, interest rates, and foreign currency exchange rates and may use such means to manage exposure to certain input costs. The Company recognizes all derivative financial instruments in the consolidated financial statements at fair value and they are classified based on contractual maturity. Derivative instruments are classified as either hedges of highly probable forecast transactions (cash flow hedges) or non-hedge derivatives. Derivatives designated as a cash flow hedge that are expected to be highly effective in achieving offsetting changes in cash flows are assessed on an ongoing basis to determine that they have actually been highly effective throughout the financial reporting periods for which they were designated. Derivative assets and derivative liabilities are shown separately in the consolidated balance sheets unless there is a legal right to offset and intent to settle on a net basis. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized in the gain or loss on derivative financial instruments line item in the consolidated statements of income. Amounts deferred in other comprehensive income are reclassified when the hedged transaction has occurred. Derivative instruments that do not qualify for hedge accounting are recorded at fair value at the balance sheet date, with changes in fair value recognized in the gain or loss on derivative financial instruments line item in the consolidated statements of income (FVPL). The Company also holds share purchase warrants of certain publicly traded entities where it has an investment in equity securities. Share purchase warrants are accounted for as derivative financial instruments and presented as part of investments in the consolidated balance sheets. Expected Credit Loss Impairment Model An assessment of the expected credit loss related to a financial asset is undertaken upon initial recognition and at the end of each reporting period based on the credit quality of the debtor and any changes that impact the risk of impairment.
Goodwill is recognized in a business combination if the cost of the acquisition exceeds the fair values of the identifiable net assets acquired. Goodwill is then allocated to the cash generating unit (“CGU”) or group of CGUs that are expected to benefit from the synergies of the combination. A CGU is the smallest identifiable group of assets that generates cash inflows which are largely independent of the cash inflows from other assets or groups of assets. The Company performs goodwill impairment tests on an annual basis as at December 31 each year. In addition, the Company assesses for indicators of impairment at each reporting period-end and, if an indicator of impairment is identified, goodwill is tested for impairment at that time. If the carrying value of the CGU or group of CGUs to which goodwill is assigned exceeds its recoverable amount, an impairment loss is recognized. Goodwill impairment losses are recorded in the consolidated statements of income and they are not subsequently reversed. The recoverable amount of a CGU or group of CGUs is measured as the higher of value in use and fair value less costs of disposal.
Mining Properties The cost of mining properties includes the fair value attributable to proven and probable mineral reserves and mineral resources acquired in a business combination or asset acquisition, underground mine development costs, deferred stripping, capitalized exploration and evaluation costs and capitalized borrowing costs. Significant payments related to the acquisition of land and mineral rights are capitalized as mining properties at cost. If a mineable ore body is discovered, such costs are amortized to income when commercial production commences, using the units-of-production method, based on estimated proven and probable mineral reserves and the mineral resources included in the current life of mine plan. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined that the property has no future economic value. Cost components of a specific project that are included in the capital cost of the asset include salaries and wages directly attributable to the project, supplies and materials used in the project, and incremental overhead costs that can be directly attributable to the project. Assets under construction are not amortized until the earlier of the end of the construction period or once commercial production is achieved. Upon achieving the production stage, the capitalized construction costs are transferred to the appropriate category within property, plant and mine development. Plant and Equipment Expenditures for new facilities and improvements that can extend the useful lives of existing facilities are capitalized as plant and equipment at cost. The cost of an item of plant and equipment includes: its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and the estimate of the costs of dismantling and removing the item and restoring the site on which it is located other than costs that arise as a consequence of having used the item to produce inventories during the period. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statements of income when the asset is derecognized. Amortization of an asset begins when the asset is in the location and condition necessary for it to operate in the manner intended by management. Amortization ceases at the earlier of the date the asset is classified as held for sale or the date the asset is derecognized. Assets under construction are not amortized until the earlier of the end of the construction period or once commercial production is achieved. Amortization is charged according to either the units-of-production method or on a straight line basis, according to the pattern in which the asset’s future economic benefits are expected to be consumed. Amortization does not cease when an asset becomes idle or is retired from active use unless the asset is fully amortized; however, under the units-of-production method of amortization, the amortization charge can be zero when there is no production. The amortization method applied to an asset is reviewed at least annually. Useful lives of property, plant and equipment are based on the lesser of the estimated mine lives as determined by proven and probable mineral reserves and the mineral resources included in the current life of mine plan and the estimated useful life of the asset. Remaining mine lives at December 31, 2021 range from an estimated to 13 years.The following table sets out the useful lives of certain assets:
Mine Development Costs Mine development costs incurred after the commencement of commercial production are capitalized when they are expected to have a future economic benefit. Activities that are typically capitalized include costs incurred to build shafts, drifts, ramps and access corridors which enables the Company to extract ore underground. The Company records amortization on underground mine development costs on a units-of-production basis based on the estimated tonnage of proven and probable mineral reserves and the mineral resources included in the current life of mine plan of the identified component of the ore body. The units-of-production method defines the denominator as the total tonnage of proven and probable mineral reserves and the mineral resources included in the current life of mine plan. Deferred Stripping In open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals can be extracted economically. The process of mining overburden and waste materials is referred to as stripping. During the development stage of the mine, stripping costs are capitalized as part of the cost of building, developing and constructing the mine and are amortized once the mine has entered the production stage. During the production stage of a mine, stripping costs are recorded as a part of the cost of inventories unless these costs are expected to provide a future economic benefit and, in such cases, are capitalized to property, plant and mine development. Production stage stripping costs provide a future economic benefit when:
Capitalized production stage stripping costs are amortized over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity. Borrowing Costs Borrowing costs are capitalized to qualifying assets. Qualifying assets are assets that take a substantial period of time to prepare for the Company’s intended use, which includes projects that are in the exploration and evaluation, development or construction stages. Borrowing costs attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as finance costs in the period in which they are incurred. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period. I)Leases At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company assesses whether:
The Company recognizes a right-of-use asset and a lease obligation at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease obligations. The cost of right-of-use assets includes the initial amount of lease obligations recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the right-of-use assets are depreciated on a straight-line basis over the shorter of the estimated useful life and the lease term. Right-of-use assets are subject to impairment. At the commencement date of the lease, the Company recognizes lease obligations measured at the present value of lease payments to be made over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The lease payments include fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees and the exercise price of a purchase option reasonably certain to be exercised by the Company. After the commencement date, the amount of lease obligations is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease obligations is remeasured if there is a modification, a change in the lease term, a change in the fixed lease payments, changes based on an index or rate or a change in the assessment to purchase the underlying asset. The Company presents right-of-use assets in the property, plant and mine development line item on the consolidated balance sheets and lease obligations in the lease obligations line item on the consolidated balance sheets. The Company has elected not to recognize right-of-use assets and lease obligations for leases that have a lease term of 12 months or less and do not contain a purchase option, for leases related to low value assets, or for leases with variable lease payments. Payments on short-term leases, leases of low value assets, and leases with variable payment amounts are recognized as an expense in the consolidated statements of income. J)Development Stage Expenditures Development stage expenditures are costs incurred to obtain access to proven and probable mineral reserves or mineral resources and provide facilities for extracting, treating, gathering, transporting and storing the minerals. The development stage of a mine commences when the technical feasibility and commercial viability of extracting the mineral resource has been determined. Costs that are directly attributable to mine development are capitalized as property, plant and mine development to the extent that they are necessary to bring the property to commercial production. Abnormal costs are expensed as incurred. Indirect costs are included only if they can be directly attributed to the area of interest. General and administrative costs are capitalized as part of the development expenditures when the costs are directly attributed to a specific mining development project. Revenue from metal sales prior to the achievement of commercial production is deducted from mine development costs in the consolidated balance sheets and is not included in revenue from mining operations. Commercial Production A mine construction project is considered to have entered the production stage when the mine construction assets are available for use. In determining whether mine construction assets are considered available for use, the criteria considered include, but are not limited to, the following:
When a mine construction project moves into the production stage, amortization commences, the capitalization of certain mine construction costs ceases and expenditures are either capitalized to inventories or expensed as incurred. Exceptions include costs incurred for additions or improvements to property, plant and mine development and open-pit stripping activities. K)Impairment and Impairment Reversal of Long-lived Assets At the end of each reporting period the Company assesses whether there is any indication that long-lived assets other than goodwill may be impaired. If an indicator of impairment exists, the recoverable amount of the asset is calculated in order to determine if any impairment loss is required. If it is not possible to estimate the recoverable amount of the individual asset, assets are grouped at the CGU level for the purpose of assessing the recoverable amount. An impairment loss is recognized for any excess of the carrying amount of the CGU over its recoverable amount. If the CGU includes goodwill, the impairment loss related to a CGU is first allocated to goodwill and the remaining loss is allocated on a pro-rata basis to the remaining long-lived assets of the CGU based on their carrying amounts. Impairment losses are recorded in the consolidated statements of income in the period in which they occur. Any impairment charge that is taken on a long-lived asset other than goodwill is reversed if there are subsequent changes in the estimates or significant assumptions that were used to recognize the impairment loss that result in an increase in the recoverable amount of the CGU. If an indicator of impairment reversal has been identified, the recoverable amount of the asset is calculated in order to determine if any impairment reversal is required. A recovery is recognized to the extent the recoverable amount of the asset exceeds its carrying amount. The amount of the reversal is limited to the difference between the current carrying amount and the amount which would have been the carrying amount had the earlier impairment not been recognized and amortization of that carrying amount had continued. The impairment reversal is allocated on a pro-rata basis to the existing long-lived assets of the CGU based on their carrying amounts. Impairment reversals are recorded in the consolidated statements of income in the period in which they occur. L)Debt Debt is initially recorded at fair value, net of financing costs incurred. Debt is subsequently measured at amortized cost. Any difference between the amounts received and the redemption value of the debt is recognized in the consolidated statements of income over the period to maturity using the effective interest rate method. M)Reclamation Provisions Asset retirement obligations (“AROs”) arise from the acquisition, development and construction of mining properties and plant and equipment due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The major parts of the carrying amount of AROs relate to tailings and heap leach pad closure and rehabilitation, demolition of buildings and mine facilities, ongoing water treatment and ongoing care and maintenance of closed mines. The Company recognizes an ARO at the time the environmental disturbance occurs or a constructive obligation is determined to exist based on the Company’s best estimate of the timing and amount of expected cash flows expected to be incurred. When the ARO provision is recognized, the corresponding cost is capitalized to the related item of property, plant and mine development. Reclamation provisions that result from disturbance in the land to extract ore in the current period is included in the cost of inventories. The timing of the actual environmental remediation expenditures is dependent on a number of factors such as the life and nature of the asset, the operating licence conditions and the environment in which the mine operates. Reclamation provisions are measured at the expected value of future cash flows discounted to their present value using a risk-free interest rate. AROs are adjusted each period to reflect the passage of time (accretion). Accretion expense is recorded in finance costs each period. Upon settlement of an ARO, the Company records a gain or loss if the actual cost differs from the carrying amount of the ARO. Settlement gains or losses are recorded in the consolidated statements of income. Expected cash flows are updated to reflect changes in facts and circumstances. The principal factors that can cause expected cash flows to change are the construction of new processing facilities, changes in the quantities of material in mineral reserves and mineral resources and a corresponding change in the life of mine plan, changing ore characteristics that impact required environmental protection measures and related costs, changes in water quality that impact the extent of water treatment required and changes in laws and regulations governing the protection of the environment. Each reporting period, provisions for AROs are remeasured to reflect any changes to significant assumptions, including the amount and timing of expected cash flows and risk-free interest rates. Changes to the reclamation provision resulting from changes in estimate are added to or deducted from the cost of the related asset, except where the reduction of the reclamation provision exceeds the carrying value of the related assets in which case the asset is reduced to nil and the remaining adjustment is recognized in the consolidated statements of income. Environmental remediation liabilities (“ERLs”) are differentiated from AROs in that ERLs do not arise from environmental contamination in the normal operation of a long-lived asset or from a legal or constructive obligation to treat environmental contamination resulting from the acquisition, construction or development of a long-lived asset. The Company is required to recognize a liability for obligations associated with ERLs arising from past acts. ERLs are measured by discounting the expected related cash flows using a risk-free interest rate. The Company prepares estimates of the timing and amount of expected cash flows when an ERL is incurred. Each reporting period, the Company assesses cost estimates and other assumptions used in the valuation of ERLs to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions have a corresponding impact on the value of the ERL. Any change in the value of ERLs results in a corresponding charge or credit to the consolidated statements of income. Upon settlement of an ERL, the Company records a gain or loss if the actual cost differs from the carrying amount of the ERL in the consolidated statements of income. N)Post-employment Benefits In Canada, the Company maintains a defined contribution plan covering all of its employees (the ”Basic Plan”). The Basic Plan is funded by Company contributions based on a percentage of income for services rendered by employees. In addition, the Company has a supplemental plan for designated executives at the level of Vice-President or above (the ”Supplemental Plan”). Under the Supplemental Plan, an additional 10.0% of the designated executives’ income is contributed by the Company. The Company provides a defined benefit retirement program (the “Retirement Program”) for certain eligible employees that provides a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. An eligible employee is entitled to a benefit if they have completed more than 10 years as a permanent employee and have attained a minimum age of 57. The Retirement Program is not funded. The Company also provides a non-registered supplementary executive retirement defined benefit plan for certain current and former senior officers (the ”Executives Plan”). The Executives Plan benefits are generally based on the employee’s years of service and level of compensation. Pension expense related to the Executives Plan is the net of the cost of benefits provided (including the cost of any benefits provided for past service), the net interest cost on the net defined liability/asset, and the effects of settlements and curtailments related to special events. Pension fund assets are measured at their current fair values. The costs of pension plan improvements are recognized immediately in expense when they occur. Remeasurements of the net defined benefit liability are recognized immediately in other comprehensive income and are subsequently transferred to retained earnings. The Company provides three defined benefit retirement plans for certain eligible employees in Mexico (the “Mexico Plans”) that provide a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. Eligible employees are entitled to a benefit if they have completed 15 years of service as a permanent employee and are 60 years of age or older. The Mexico Plans are not funded. Defined Contribution Plan The Company recognizes the contributions payable to a defined contribution plan in exchange for services rendered by employees as an expense, unless another policy requires or permits the inclusion of the contribution in the cost of an asset. After deducting contributions already paid, a liability is recorded throughout each period to reflect unpaid but earned contributions. If the contribution paid exceeds the contribution due for the service before the end of the reporting period, the Company recognizes that excess as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. Defined Benefit Plan Plan assets are measured at their fair value at the consolidated balance sheet date and are deducted from the present value of plan liabilities to arrive at a net defined benefit liability/asset. The defined benefit obligation reflects the expected future payments required to settle the obligation resulting from employee service in the current and prior periods. Current service cost represents the actuarially calculated present value of the benefits earned by the active employees in each period and reflects the economic cost for each period based on current market conditions. The current service cost is based on the most recent actuarial valuation. The net interest on the net defined benefit liability/asset is the change during the period in the defined benefit liability/asset that arises from the passage of time. Past service cost represents the change in the present value of the defined benefit obligation resulting from a plan amendment or curtailment. Past service costs from plan amendments that increase or decrease vested or unvested benefits are recognized immediately in net income at the earlier of when the related plan amendment occurs or when the entity recognizes related restructuring costs or termination benefits. Gains or losses on plan settlements are measured as the difference in the present value of the defined benefit obligation and settlement price. This results in a gain or loss being recognized when the benefit obligation settles. Actuarial gains and losses are recorded on the consolidated balance sheets as part of the benefit plan’s funded status. Gains and losses are recognized immediately in other comprehensive income and are subsequently transferred to retained earnings and are not recognized in net income. O)Contingent Liabilities and Other Provisions Provisions are recognized when a present obligation exists (legal or constructive), as a result of a past event, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the expenditure required to settle the obligation at the consolidated balance sheet date, measured using the expected cash flows discounted for the time value of money. The increase in provision (accretion) due to the passage of time is recognized as a finance cost in the consolidated statements of income. Contingent liabilities are possible obligations whose existence will be confirmed only on the occurrence or non-occurrence of uncertain future events outside the entity’s control, or present obligations that are not recognized because it is not probable that an outflow of economic benefits would be required to settle the obligation or the amount cannot be measured reliably. Contingent liabilities are not recognized but are disclosed and described in the notes to the consolidated financial statements, including an estimate of their potential financial effect and uncertainties relating to the amount or timing of any outflow, unless the possibility of settlement is remote. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, with assistance from its legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. P)Stock-based Compensation The Company offers equity-settled awards (the employee stock option plan, incentive share purchase plan, restricted share unit plan and performance share unit plan) to certain employees, officers and directors of the Company. Employee Stock Option Plan (“ESOP”) The Company’s ESOP provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Options have exercise prices equal to the market price on the day prior to the date of grant. The fair value of these options is recognized in the consolidated statements of income or in the consolidated balance sheets if capitalized as part of property, plant and mine development over the applicable vesting period as a compensation cost. Any consideration paid by employees on exercise of options or purchase of common shares is credited to share capital. Fair value is determined using the Black-Scholes option valuation model, which requires the Company to estimate the expected volatility of the Company’s share price and the expected life of the stock options. Limitations with existing option valuation models and the inherent difficulties associated with estimating these variables create difficulties in determining a reliable single measure of the fair value of stock option grants. The cost is recorded over the vesting period of the award to the same expense category as the award recipient’s payroll costs and the corresponding entry is recorded in equity. Equity-settled awards are not remeasured subsequent to the initial grant date. The dilutive impact of stock option grants is factored into the Company’s reported diluted net income per share. The stock option expense incorporates an expected forfeiture rate, estimated based on expected employee turnover. Incentive Share Purchase Plan (“ISPP”) Under the ISPP, directors (excluding non-executive directors), officers and employees (the ”Participants”) of the Company may contribute up to 10.0% of their basic annual salaries and the Company contributes an amount equal to 50.0% of each Participant’s contribution. All common shares subscribed for under the ISPP are issued by the Company. The Company records an expense equal to its cash contribution to the ISPP. No forfeiture rate is applied to the amounts accrued. Where an employee leaves prior to the vesting date, any accrual for contributions by the Company during the vesting period related to that employee is reversed. Restricted Share Unit (“RSU”) Plan The RSU plan is open to directors and certain employees, including senior executives, of the Company. Common shares are purchased and held in a trust until they have vested. The cost is recorded over the vesting period of the award to the same expense category as the award recipient’s payroll costs. The cost of the RSUs is recorded within equity until settled. Equity-settled awards are not remeasured subsequent to the initial grant date. Performance Share Unit (“PSU”) Plan The PSU plan is open to senior executives of the Company. Common shares are purchased and held in a trust until they have vested. PSUs are subject to vesting requirements based on specific performance measurements by the Company. The fair value for the portion of the PSUs related to market conditions is based on the application of pricing models at the grant date and the fair value for the portion related to non-market conditions is based on the market value of the shares at the grant date. Compensation expense is based on the current best estimate of the outcome for the specific performance measurement established by the Company and is recognized over the vesting period based on the number of units estimated to vest. The cost of the PSUs is recorded within equity until settled. Equity-settled awards are not remeasured subsequent to the initial grant date. Q)Revenue from Contracts with Customers Gold and Silver The Company sells gold and silver to customers in the form of bullion and dore bars. The Company recognizes revenue from these sales when control of the gold or silver has transferred to the customer. This is generally at the point in time when the gold or silver is credited to the metal account of the customer. Once the gold or silver has been credited to the customer’s metal account, the customer has legal title to, physical possession of, and the risks and rewards of ownership of the gold or silver; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the gold or silver. Under certain contracts with customers the transfer of control may occur when the gold or silver is in transit from the mine to the refinery. At this point in time, the customer has legal title to and the risk and rewards of ownership of the gold or silver; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the gold or silver. Revenue is measured at the transaction price agreed under the contract. Payment of the transaction price is due immediately when control of the gold or silver is transferred to the customer. Generally, all of the gold and silver in the form of dore bars recovered in the Company’s milling process is sold in the period in which it is produced. Metal Concentrates The Company sells concentrate from certain of its mines to third-party smelter customers. These concentrates predominantly contain zinc and copper, along with quantities of gold and silver. The Company recognizes revenue from these concentrate sales when control of the concentrate has transferred to the customer, which is the point in time that the concentrate is delivered to the customer. Upon delivery, the customer has legal title to, physical possession of, and the risks and rewards of ownership of the concentrate. The customer is also committed to accept and pay for the concentrates once delivered; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the concentrate. The final prices for metals contained in the concentrate are generally determined based on the prevailing spot market metal prices on a specific future date, which is established as of the date the concentrate is delivered to the customer. Upon transfer of control at delivery, the Company measures revenue under these contracts based on forward prices at the time of delivery and the most recent determination of the quantity of contained metals less smelting and refining charges charged by the customer. This reflects the best estimate of the transaction price expected to be received at final settlement. A receivable is recognized for this amount and subsequently measured at fair value to reflect variability associated with the embedded derivative for changes in the market metal prices. These changes in the fair value of the receivable are adjusted through revenue from other sources at each subsequent financial statement date. Under certain contracts with customers, the sale of gold contained in copper concentrate occurs once the metal has been processed into refined gold and is sold separately similar to the gold and silver dore bar terms described above. The transaction price for the sale of gold contained in concentrate is determined based on the spot market price upon delivery and provisional pricing does not apply. R)Exploration and Evaluation Expenditures Exploration and evaluation expenditures are the costs incurred in the initial search for mineral deposits with economic potential or in the process of obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. Evaluation expenditures are the costs incurred to establish the technical and commercial viability of developing mineral deposits identified through exploration activities or by acquisition. Exploration and evaluation expenditures are expensed as incurred unless it can be demonstrated that the project will generate future economic benefit. When it is determined that a project can generate future economic benefit the costs are capitalized in the property, plant and mine development line item in the consolidated balance sheets. The exploration and evaluation phase ends when the technical feasibility and commercial viability of extracting the mineral is demonstrable. S)Net Income Per Share Basic net income per share is calculated by dividing net income for a given period by the weighted average number of common shares outstanding during that same period. Diluted net income per share reflects the potential dilution that could occur if holders with rights to convert instruments to common shares exercise these rights. The weighted average number of common shares used to determine diluted net income per share includes an adjustment, using the treasury stock method, for stock options outstanding. Under the treasury stock method:
T)Income Taxes Current and deferred tax expenses are recognized in the consolidated statements of income except to the extent that they relate to a business combination, or to items recognized directly in equity or in other comprehensive income. Current tax expense is based on substantively enacted statutory tax rates and laws at the consolidated balance sheet date. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of such assets and liabilities measured using tax rates and laws that are substantively enacted at the consolidated balance sheet date and effective for the reporting period when the temporary differences are expected to reverse. Deferred taxes are not recognized in the following circumstances:
Deferred tax assets are recognized for unused tax losses and tax credits carried forward and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized except as noted above. At each reporting period, previously unrecognized deferred tax assets are reassessed to determine whether it has become probable that future taxable profits will allow the deferred tax assets to be recovered. U)Comparative Figures Certain figures in the consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of these financial statements as at and for the year ended December 31, 2020. Recently Issued Accounting Pronouncements Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) In May 2020, the IASB issued amendments to IAS 16 Property, Plant and Equipment that clarify the accounting for the net proceeds from selling any items produced while bringing an item of property, plant and mine development to the location and condition necessary for it to be capable of operating in the manner intended by management. The amendments prohibit entities from deducting amounts received from selling items produced from the cost of property, plant and mine development while the Company is preparing the asset for its intended use. Instead, sales proceeds and the cost of producing these items will be recognized in the consolidated statements of income. The amendments are effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The amendments apply retrospectively, but only to assets brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. Adoption of the standard on the effective date and applying it retrospectively to the fiscal year beginning January 1, 2021 will result in a restatement to increase revenue from mining operations from the sale of pre-commercial gold production in 2021 by approximately $45.7 million and related production costs by approximately $16.7 million, with a corresponding net increase in the cost of property plant and mine development of approximately $29.0 million. |
SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS |
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SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS | 4.SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates used in the preparation of the consolidated financial statements are reasonable; however, actual results may differ materially from these estimates. The key areas where significant judgments, estimates and assumptions have been made are summarized below. Uncertainty due to the COVID-19 Pandemic The duration and full financial effect of the COVID-19 pandemic is unknown at this time, as are the measures taken by governments, the Company or others related to the COVID-19 pandemic. Any estimate of the length and severity of these developments is therefore subject to significant uncertainty, and accordingly estimates of the extent to which the COVID-19 pandemic may materially and adversely affect the Company's operations, financial results and condition in future periods are also subject to significant uncertainty. Inputs and assumptions relate to, among other things, interest rates, foreign exchange rates, cost of capital, commodity prices, and the amount and timing of future cash flows, while accounting judgments take into consideration the business and economic uncertainties related to the COVID-19 pandemic and the future response of governments, the Company and others to those uncertainties. In the current environment, the inputs, assumptions and judgements are subject to greater variability than normal, which could in the future significantly affect judgments, estimates and assumptions made by management as they relate to potential impact of the COVID-19 pandemic on various financial accounts and note disclosures and could lead to a material adjustment to the carrying value of the assets or liabilities affected. The impact of current uncertainty on judgments, estimates and assumptions includes the Company's valuation of the long-term assets (including the assessment for impairment and impairment reversal), estimation of reclamation provisions, estimation of mineral reserves and mineral resources, and estimation of income and mining taxes. Actual results may differ materially from these estimates. Impairment and Impairment Reversals The Company evaluates each asset or CGU (excluding goodwill, which is assessed for impairment annually regardless of indicators and is not eligible for impairment reversals) in each reporting period to determine if any indicators of impairment or impairment reversal exist. When completing an impairment test, the Company calculates the estimated recoverable amount of CGUs, which requires management to make estimates and assumptions with respect to items such as future production levels, operating and capital costs, long-term commodity prices, foreign exchange rates, discount rates, amounts of recoverable reserves, mineral resources and exploration potential and closure and environmental remediation costs. These estimates and assumptions are subject to risk and uncertainty, particularly in circumstances where there is limited operating history of the asset or CGU. Judgment is also required in determining the appropriate valuation method for mineralization and ascribing anticipated economics to mineralization in cases where only limited or no comprehensive economic study has been completed. Therefore, there is a possibility that changes in circumstances will have an impact on these projections, which may impact the recoverable amount of assets or CGUs. Accordingly, it is possible that some or the entire carrying amount of the assets or CGUs may be further impaired or the impairment charge reversed with the impact recognized in the consolidated statements of income. Mineral Reserve and Mineral Resource Estimates Mineral reserves and mineral resources are estimates of the amount of ore that can be extracted from the Company’s mining properties. The estimates are based on information compiled by “qualified persons” as defined under the Canadian Securities Administrators’ National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Such an analysis relating to the geological and technical data on the size, depth, shape and grade of the ore body and suitable production techniques and recovery rates requires complex geological judgments to interpret the data. The estimation of mineral reserves and mineral resources is based upon factors such as estimates of commodity prices, future capital requirements and production costs, geological and metallurgical assumptions and judgments made in estimating the size and grade of the ore body and foreign exchange rates. As the economic assumptions used may change and as additional geological information is acquired during the operation of a mine, estimates of proven and probable mineral reserves may change. Such changes may affect the Company’s consolidated balance sheets and consolidated statements of income, including:
Exploration and Evaluation Expenditures The application of the Company’s accounting policy for exploration and evaluation expenditures requires judgment to determine whether future economic benefits are likely to arise and whether activities have reached a stage where the technical feasibility and commercial viability of extracting the mineral resource is demonstrable. Production Stage of a Mine As each mine is unique, significant judgment is required to determine the date that a mine enters the commercial production stage. The Company considers the factors outlined in Note 3(J) to these consolidated financial statements to make this determination. Contingencies Contingencies can be either possible assets or possible liabilities arising from past events which, by their nature, will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence and potential impact of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events. Reclamation Provisions Environmental remediation costs will be incurred by the Company at the end of the operating life of the Company’s mining properties. Management assesses its reclamation provision each reporting period and when new information becomes available. The ultimate environmental remediation costs are uncertain and cost estimates can vary in response to many factors, including estimates of the extent and costs of reclamation activities, technological changes, regulatory changes, cost increases as compared to the inflation rate and changes in discount rates. These uncertainties may result in future actual expenditures differing from the amount of the current provision. As a result, there could be significant adjustments to the provisions established that would affect future financial results. The reclamation provision at each reporting date represents management’s best estimate of the present value of the future environmental remediation costs required. Business Combinations Business combinations are accounted for using the acquisition method of accounting. The allocation of the purchase price requires estimates as to the fair value of acquired assets and liabilities. The information necessary to measure the fair values as at the acquisition date of assets acquired and liabilities assumed requires management to make certain judgments and estimates, including but not limited to the most appropriate valuation methodology, estimates of mineral reserves and mineral resources and exploration potential of the assets acquired, value of resources outside LOM plans including assumptions for market values per ounce, future production levels, future operating costs, capital expenditures and closure costs, discount rates, future metal prices and long term foreign exchange rates. Changes to the preliminary measurements of assets and liabilities acquired may be retrospectively adjusted when new information is obtained until the final measurements are determined within one year of the acquisition date. Refer to note 5 for further details on acquisitions. Income and Mining Taxes Management is required to make estimates regarding the tax basis of assets and liabilities and related deferred income and mining tax assets and liabilities, amounts recorded for uncertain tax positions, the measurement of income and mining tax expense and estimates of the timing of repatriation of income. Several of these estimates require management to make assessments of future taxable profit and, if actual results are significantly different than the Company’s estimates, the ability to realize any deferred income and mining tax assets recorded on the consolidated balance sheets could be affected. Amortization Property, plant and mine development comprise a large portion of the Company’s total assets and as such the amortization of these assets has a significant effect on the Company’s consolidated financial statements. Amortization is charged according to the pattern in which an asset’s future economic benefits are expected to be consumed. The determination of this pattern of future economic benefits requires management to make estimates and assumptions about useful lives and residual values at the end of the asset’s useful life. Actual useful lives and residual values may differ significantly from current assumptions. Leases The Company applies judgment to determine the lease term for certain lease contracts that include renewal options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which may significantly affect the amount of lease obligations and right-of-use assets recognized. Development Stage Expenditures The application of the Company’s accounting policy for development stage expenditures requires judgment to determine when the technical feasibility and commercial viability of extracting a mineral resource has been determined. Some of the factors that the Company may consider in its assessment of technical feasibility and commercial viability are set out below:
Joint Arrangements Judgment is required to determine when the Company has joint control of a contractual arrangement, which requires a continuous assessment of the relevant activities and when the decisions in relation to those activities require unanimous consent. Judgment is also continually required to classify a joint arrangement as either a joint operation or a joint venture when the arrangement has been structured through a separate vehicle. Classifying the arrangement requires the Company to assess its rights and obligations arising from the arrangement. Specifically, the Company considers the legal form of the separate vehicle, the terms of the contractual arrangement and other relevant facts and circumstances. This assessment often requires significant judgment, and a different conclusion on joint control, or whether the arrangement is a joint operation or a joint venture, may have a material impact on the accounting treatment. Management evaluated its joint arrangement with Yamana Gold Inc. to each acquire 50.0% of the shares of Osisko (now CMC) under the principles of IFRS 11 – Joint Arrangements. The Company concluded that the arrangement qualified as a joint operation upon considering the following significant factors:
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ACQUISITION |
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ACQUISITION | 5.ACQUISITION TMAC On February 2, 2021, the Company completed the acquisition of all the issued and outstanding common shares and equity instruments exchangeable for common shares of TMAC under a plan of arrangement pursuant to the Business Corporations Act (Ontario). TMAC owned and operated the Hope Bay mine, and also owned exploration properties in the Kitikmeot region of Nunavut. Management determined that the assets and processes comprised a business and therefore accounted for the transaction as a business combination using the acquisition method of accounting. The aggregate purchase consideration for the acquired assets, net of the liabilities assumed is as follows:
A fair value approach was applied by management in developing estimates of the amounts of identifiable assets of TMAC acquired and liabilities assumed. These estimates of fair value have now been finalized and adjusted retrospectively to the acquisition date, as all relevant information about facts and circumstances that existed at the acquisition date have been received. The following table sets out the allocation of the purchase price to the assets acquired and liabilities assumed based on management’s previously reported preliminary estimates and adjusted final estimates of fair value.
Notes:
Immediately prior to the closing of the transaction and in accordance with its terms, TMAC long-term debt was retired and the Company partially funded the repayment. The acquisition also triggered a one-time option for TMAC to buy-back a 1.5% net smelter return royalty on the Hope Bay property from Maverix Metals Inc. for $50.0 million, which was exercised prior to closing, with the payment made shortly after the acquisition date. The Company incurred acquisition-related costs of $2.9 million which are recorded in other expenses in the consolidated statements of income. The results of operations have been consolidated with those of the Company from the date of acquisition and included in the Hope Bay operating segment. Pro forma disclosures as if TMAC was acquired at the beginning of the fiscal year have not been presented as they are not considered material to the Company’s consolidated financial statements. |
FAIR VALUE MEASUREMENT |
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FAIR VALUE MEASUREMENT | 6.FAIR VALUE MEASUREMENT Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described, as follows, based on the lowest-level input that is significant to the fair value measurement as a whole: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 - Quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Assets and Liabilities Measured at Fair Value on a Recurring Basis For items that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing their classification at the end of each reporting period. During the year ended December 31, 2021, there were no between and fair value measurements, and no or out of fair value measurements.The fair values of cash and cash equivalents, short-term investments, and accounts payable and accrued liabilities approximate their carrying values due to their short-term nature. The following table sets out the Company's financial assets and liabilities measured at fair value on a recurring basis as at December 31, 2021 using the fair value hierarchy:
The following table sets out the Company’s financial assets and liabilities measured at fair value on a recurring basis as at December 31, 2020 using the fair value hierarchy:
Valuation Techniques Trade Receivables Trade receivables from provisional invoices for concentrate sales are valued using quoted forward rates derived from observable market data based on the month of expected settlement (classified within Level 2 of the fair value hierarchy). Equity securities and share purchase warrants Equity securities representing shares of publicly traded entities are recorded at fair value using quoted market prices (classified within Level 1 of the fair value hierarchy). Equity securities representing shares of non-publicly traded entities are recorded at fair value using external broker-dealer quotations corroborated by option pricing models (classified within Level 2 of the fair value hierarchy). The Company also holds share purchase warrants of certain publicly traded entities where it has an investment in equity securities. Share purchase warrants are classified within Level 2 of the fair value hierarchy are recorded at fair value using option pricing models that utilize a variety of inputs that are a combination of quoted prices and market-corroborated inputs. Equity securities and share purchase warrants are presented in the investments line item in the consolidated balance sheets. Derivative Financial Instruments Derivative financial instruments classified within Level 2 of the fair value hierarchy are recorded at fair value using external broker-dealer quotations corroborated by option pricing models or option pricing models that utilize a variety of inputs that are a combination of quoted prices and market-corroborated inputs. Fair Value of Financial Assets and Liabilities Not Measured and Recognized at Fair Value Long-term debt is recorded on the consolidated balance sheets at December 31, 2021 at amortized cost. The fair value of long-term debt is determined by applying a discount rate, reflecting the credit spread based on the Company's credit rating to future related cash flows which is categorized within Level 2 of the fair value hierarchy. As at December 31, 2021, the Company's long-term debt had a fair value of $1,724.1 million (2020 - $1,824.3 million) (Note 14). Lease obligations are recorded on the consolidated balance sheets at December 31, 2021 at amortized cost. The fair value of lease obligations is the present value of the future lease payments discounted at the Company's current incremental borrowing rate. It is remeasured when there is a change in the lease term, future lease payments or changes in the assessment of whether the Company will exercise a purchase, extension or termination option. The fair value of lease obligations is not materially different from the carrying amounts as a result of the difference between the incremental borrowing rates used at the initial recognition date and the current market rates at December 31, 2021. Loans receivable and other non-current receivables are included in the other asset line item in the consolidated balance sheets at amortized cost. The fair value of loans and other receivables is the present value of future cash inflows discounted at a market interest rate. The fair value of these financial assets is not materially different from the carrying amounts as at December 31, 2021 (Note 8B). |
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INVENTORIES | 7.INVENTORIES
Note:
During the year ended December 31, 2021, a charge of $28.7 million (2020 - $23.5 million) was recorded within production costs to reduce the carrying value of inventories to their net realizable value. |
OTHER ASSETS |
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OTHER ASSETS | 8.OTHER ASSETS A)Other Current Assets
B)Other Assets
On December 18, 2019, the Company entered into a loan agreement with Orla Mining Ltd. (“Orla”) to provide a five year credit facility bearing interest at 8.8% per annum payable quarterly, maturing on December 18, 2024 and collateralized by certain mining assets of Orla. The aggregate loan amount is $40.0 million. The loan is accounted for at amortized cost using the effective interest rate method. |
PROPERTY, PLANT AND MINE DEVELOPMENT |
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PROPERTY, PLANT AND MINE DEVELOPMENT | 9.PROPERTY, PLANT AND MINE DEVELOPMENT
During the year ended December 31, 2021, net additions to Plant and Equipment included $41.0 million of right-of-use assets for lease arrangements entered into during the year (2020 - $9.7 million). As at December 31, 2021, major assets under construction, and therefore not yet being depreciated, included in the carrying value of property, plant and mine development was $579.3 million (2020 - $387.6 million). During the year ended December 31, 2021, the Company produced and sold pre-commercial production ounces of gold from the Tiriganiaq open pit deposit at the Meliadine mine and the Amaruq underground project at the Meadowbank Complex. The Company deducts revenues from mining operations earned prior to commercial production from the cost of the related property, plant and mine development. During the year ended December 31, 2021, the Company earned $45.7 million of pre-commercial production revenue (2020 - $59.2 million). During the year ended December 31, 2021, the Company disposed of property, plant and mine development with a carrying value of million (2020 - $15.2 million). The net loss on disposal of $ million (2020 - $ million) was recorded in the other expenses line item in the consolidated statements of income.Geographic Information:
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INVESTMENTS |
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INVESTMENTS | 10.INVESTMENTS
The following table sets out details of the Company's investments:
Note: (i)The balance is comprised of 20 (2020 — 17) equity investments that are each individually immaterial. Disposal of Equity Securities During the year ended December 31, 2021, the Company sold its interest in certain equity securities as they no longer fit the Company’s investment strategy. The fair value at the time of sale was $4.3 million and the Company recognized a cumulative net loss on disposal of $5.9 million ($5.1 million, net of tax) which was transferred from other reserves to deficit in the consolidated balance sheets. There were no disposals of equity securities in the year ended December 31, 2020. |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 11.ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
In 2021 and 2020, the other liabilities balance consisted primarily of various employee benefits, employee payroll tax withholdings and other payroll taxes. |
RECLAMATION PROVISION |
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RECLAMATION PROVISION | 12.RECLAMATION PROVISION Agnico Eagle’s reclamation provision includes both asset retirement obligations and environmental remediation liabilities. Reclamation provision estimates are based on current legislation, third party estimates, management’s estimates and feasibility study calculations. Assumptions based on current economic conditions, which the Company believes are reasonable, have been used to estimate the reclamation provision. However, actual reclamation costs will ultimately depend on future economic conditions and costs for the necessary reclamation work. Changes in reclamation provision estimates during the period reflect changes in cash flow estimates as well as assumptions including discount and inflation rates.The discount rates used in the calculation of the reclamation provision at December 31, 2021 ranged between 0.36% and 1.56% (2020 – between – and 0.92%).The following table reconciles the beginning and ending carrying amounts of the Company’s asset retirement obligations. The settlement of the obligation is estimated to occur through to 2063.
Note:
The following table reconciles the beginning and ending carrying amounts of the Company’s environmental remediation liability. The settlement of the obligation is estimated to occur through to 2032.
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LEASES |
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LEASES | 13.LEASES The Company is party to a number of contracts that contain a lease, most of which include office facilities, storage facilities, and various plant and equipment. Leases of low value assets, short term leases and leases with variable payments proportional to the rate of use of the underlying asset do not give rise to a lease obligation and a right-of-use asset, and expenses are included in operating costs in the consolidated statements of income. The following table sets out the carrying amounts of right-of-use assets included in property, plant and mine development in the consolidated balance sheets and the movements during the period:
Note:
The following table sets out the lease obligations included in the consolidated balance sheets:
Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms are set out in the table below. Because leases with variable lease payments do not give rise to fixed minimum lease payments, no amounts are included below for these leases.
The Company recognized the following amounts in the consolidated statements of income with respect to leases:
During the year ended December 31, 2021, the Company recognized $290.8 million (2020 – $221.9 million) in the consolidated statements of cash flows with respect to leases. |
LONG-TERM DEBT |
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LONG TERM DEBT | 14.LONG-TERM DEBT
Notes:
Scheduled Debt Principal Repayments
Credit Facility On December 22, 2021, the Company amended its $1.2 billion unsecured revolving bank credit facility (the ”Credit Facility”) to, among other things, extend the maturity date from June 22, 2023 to December 22, 2026 and amend pricing terms. The amendment also increased the amount of the uncommited accordion facility available to the Company from $300 million to $600 million. As at December 31, 2021 and December 31, 2020, no amounts were outstanding under the Credit Facility. As at December 31, 2021, $1.199.1 million was available for future drawdown under the Credit Facility (December 31, 2020 - $1.199.1 million). Credit Facility availability is reduced by outstanding letters of credit which were $0.9 million as at December 31, 2021 (2020 – 0.9 million). During the year ended December 31, 2021, Credit Facility drawdowns totaled $595.0 million and repayments totaled $595.0 million. During the year ended December 31, 2020, Credit Facility drawdowns totaled $1,075.0 million and repayments totaled $1,075.0 million. The Credit Facility is available in multiple currencies through prime rate and base rate advances, priced at the applicable rate plus a margin that ranges from 0.00% to 1.00%, through LIBOR advances, bankers’ acceptances and financial letters of credit, priced at the applicable rate plus a margin that ranges from 1.00% to 2.00% and through performance letters of credit, priced at the applicable rate plus a margin that ranges from 0.60% to 1.20%. The lenders under the Credit Facility are each paid a standby fee at a rate that ranges from 0.09% to 0.25% of the undrawn portion of the facility. In each case, the applicable margin or standby fees vary depending on the Company’s credit rating and/ or the Company’s total net debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio. 2020 Notes On April 7, 2020, the Company closed a $200.0 million private placement of guaranteed senior unsecured notes (the “2020 Notes”) with a weighted average maturity of 11 years and weighted average yield of 2.83%. The following table sets out details of the individual series of the 2020 Notes:
2018 Notes On April 5, 2018, the Company closed a $350.0 million private placement of guaranteed senior unsecured notes (the “2018 Notes”). The following table sets out details of the individual series of the 2018 Notes:
2017 Notes On June 29, 2017, the Company closed a $300.0 million private placement of guaranteed senior unsecured notes (the “2017 Notes”). The following table sets out details of the individual series of the 2017 Notes:
2016 Notes On June 30, 2016, the Company closed a $350.0 million private placement of guaranteed senior unsecured notes (the “2016 Notes”). The following table sets out details of the individual series of the 2016 Notes:
2015 Note On September 30, 2015, the Company closed a private placement of a $50.0 million guaranteed senior unsecured note (the “2015 Note”) with a September 30, 2025 maturity date and a yield of 4.15%. 2012 Notes On July 24, 2012, the Company closed a $200.0 million private placement of guaranteed senior unsecured notes (the “2012 Notes”). The following table sets out details of the individual series of the 2012 Notes:
2010 Notes On April 7, 2010, the Company closed a $600.0 million private placement of guaranteed senior unsecured notes (the “2010 Notes” and, together with the 2020 Notes, 2018 Notes, the 2017 Notes, the 2016 Notes, the 2015 Note and the 2012 Notes, the “Notes”). On April 7, 2020 the Company repaid $360.0 million of the 2010 Series B 6.67% Notes at maturity. As at December 31, 2021, $125.0 million of the 2010 Series C 6.77% Notes remained outstanding with a maturity date of April 7, 2022. Covenants Payment and performance of Agnico Eagle’s obligations under the Credit Facility and the Notes are guaranteed by each of its material subsidiaries and certain of its other subsidiaries (the ”Guarantors”). The Credit Facility contains covenants that limit, among other things, the ability of the Company to incur additional indebtedness, make distributions in certain circumstances and sell material assets. The note purchase agreements pursuant to which the Notes were issued (the ”Note Purchase Agreements”) contain covenants that restrict, among other things, the ability of the Company to amalgamate or otherwise transfer its assets, sell material assets, carry on a business other than one related to mining and the ability of the Guarantors to incur indebtedness. The Credit Facility and Note Purchase Agreements also require the Company to maintain a total net debt to EBITDA ratio below a specified maximum value and the Note Purchase Agreements (other than the 2018 and 2020 Notes) require the Company to maintain a minimum tangible net worth. The Company was in compliance with all covenants contained in the Credit Facility and Note Purchase Agreements throughout the years-ended and as at December 31, 2021 and 2020. Finance Costs Total finance costs consist of the following:
Total borrowing costs capitalized to assets under construction during the year ended December 31, 2021 were at a capitalization rate of 1.20% (2020 - 1.18%). |
OTHER LIABILITIES |
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OTHER LIABILITIES | 15.OTHER LIABILITIES Other liabilities consist of the following:
Defined Benefit Obligations The Company provides the Executives Plan for certain current and former senior officers, the Retirement Program for eligible employees in Canada, and the Mexico Plans for eligible employees in Mexico, each of which are considered defined benefit plans under IAS 19 - Employee Benefits. The funded status of the plans are based on actuarial valuations performed as at December 31, 2021. The plans operate under similar regulatory frameworks and generally face similar risks. The Executives Plan pension formula is based on final average earnings in excess of the amounts payable from the registered plan. Assets for the Executives Plan consist of deposits on hand with regulatory authorities that are refundable when benefit payments are made or on the ultimate wind-up of the plan. The Company provides a Retirement Program for certain eligible employees that provides a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. An eligible employee is entitled to a benefit if they have completed at least 10 years of service as a permanent employee and are 57 years of age or older. The Retirement Program is not funded. The Mexico Plans provide a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. Eligible employees are entitled to a benefit if they have completed 15 years of service as a permanent employee and are 60 years of age or older. The Mexico Plans are not funded. The funded status of the Company's defined benefit obligations for 2021 and 2020, is as follows:
The components of Agnico Eagle’s pension expense recognized in the consolidated statements of net income relating to the defined benefit plans are as follows:
The remeasurements of the net defined benefit liability recognized in other comprehensive income relating to the Company's defined benefit plans are as follows:
In 2022, the Company expects to make contributions of $2.8 million and benefit payments of $2.5 million, in aggregate, related to the defined benefit plans. The weighted average duration of the Company’s defined benefit obligation in Canada is 12.6 years at December 31, 2021 (2020 – 14.4 years). The weighted average duration of the Company's defined benefit obligation for the Mexico Plans is 5.9 years at December 31, 2021 (2020 - 3.7 years). The following table sets out significant assumptions used in measuring the Company’s Executives Plan defined benefit obligations:
The following table sets out significant assumptions used in measuring the Company's Retirement Program defined benefit obligations:
The following table sets out significant assumptions used in measuring the Company's defined benefit obligations for the Mexico Plans:
Other significant actuarial assumptions used in measuring the Company's Retirement Program defined benefit obligations as at December 31, 2021 and December 31, 2020 include assumptions of the expected retirement age of participants. The following table sets out the effect of changes in significant actuarial assumptions on the Company's defined benefit obligations:
The summary of the effect of changes in significant actuarial assumptions was prepared using the same methods and actuarial assumptions as those used for the calculation of the Company's defined benefit obligation related to the Executives Plan, the Retirement Program and the Mexico Plans as at the end of the fiscal year, except for the change in the single actuarial assumption being evaluated. The modification of several actuarial assumptions at the same time could lead to different results. Other Plans In addition to its defined benefit pension plans, the Company maintains two defined contribution plans – the Basic Plan and the Supplemental Plan. Under the Basic Plan, Agnico Eagle contributes 5.0% of certain employees’ base employment compensation to a defined contribution plan. In 2021, $17.0 million (2020 – $13.6 million) was contributed to the Basic Plan, $0.2 million of which related to contributions for key management personnel (2020 – $0.2 million). The Company also maintains the Supplemental Plan for designated executives at the level of Vice-President or above. The Supplemental Plan is funded by the Company through notional contributions equal to 10.0% of the designated executive’s earnings for the year (including salary and short-term bonus). In 2021, the Company made $1.5 million (2020 – $1.3 million) in notional contributions to the Supplemental Plan, $0.9 million (2020 – $1.0 million) of which related to contributions for key management personnel. The Company’s liability related to the Supplemental Plan is $10.6 million at December 31, 2021 (2020 - $11.5 million). At retirement date, the notional account balance is converted to a pension payable in five annual installments. |
EQUITY |
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EQUITY | 16. EQUITY Common Shares The Company’s authorized share capital includes an unlimited number of common shares with no par value. As at December 31, 2021, Agnico Eagle’s issued common shares totaled 245,435,804 (December 31, 2020 – 243,301,195), of which 433,947 common shares are held in trusts as described below (2020 - 416,881). The common shares held in trusts relate to the Company’s RSU plan, PSU plan and a Long Term Incentive Plan (“LTIP”) for certain employees of the Partnership and CMC. The trusts have been evaluated under IFRS 10 - Consolidated Financial Statements and are consolidated in the accounts of the Company, with shares held in trust offset against the Company’s issued shares in its consolidated financial statements. The common shares purchased and held in trusts are excluded from the basic net income per share calculations until they have vested. All of the non-vested common shares held in trusts are included in the diluted net income per share calculations, unless the impact is anti-dilutive. The following table sets out the maximum number of common shares that would be outstanding if all dilutive instruments outstanding as at December 31, 2021 were exercised:
Net Income Per Share The following table sets out the weighted average number of common shares used in the calculation of basic and diluted net income per share:
Diluted net income per share has been calculated using the treasury stock method. In applying the treasury stock method, outstanding employee stock options with an exercise price greater than the average quoted market price of the common shares for the period outstanding are not included in the calculation of diluted net income per share as the impact would be anti-dilutive. For the year ended December 31, 2021, 2,806,786 (2020 – nil) employee stock options were excluded from the calculation of diluted net income per share as their impact would have been anti-dilutive. |
STOCK-BASED COMPENSATION |
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STOCK-BASED COMPENSATION | 17.STOCK-BASED COMPENSATION
The Company’s ESOP provides for the grant of stock options to directors, officers, employees and service providers to purchase common shares. Under the ESOP, stock options are granted at the fair market value of the underlying shares on the day prior to the date of grant. The number of common shares that may be reserved for issuance to any one person pursuant to stock options (under the ESOP or otherwise), warrants, share purchase plans or other arrangements may not exceed 5.0% of the Company’s common shares issued and outstanding at the date of grant. On April 24, 2001, the Compensation Committee of the Board adopted a policy pursuant to which stock options granted after that date have a maximum term of five years. In 2021, the shareholders approved a resolution to increase the number of common shares reserved for issuance under the ESOP to 38,700,000 common shares. Of the 1,590,750 stock options granted under the ESOP in 2021, 397,688 stock options vested within 30 days of the grant date. The remaining stock options, all of which expire in 2026, vest in equal installments on each anniversary date of the grant over a -year period. Of the 1,583,150 stock options granted under the ESOP in 2020, 395,164 stock options vested within 30 days of the grant date. The remaining stock options, all of which expire in 2025, vest in equal installments on each anniversary date of the grant over a three-year period. Upon the exercise of stock options under the ESOP, the Company issues common shares from treasury to settle the obligation.The following table sets out activity with respect to Agnico Eagle’s outstanding stock options:
The average share price of Agnico Eagle’s common shares during the year ended December 31, 2021 was C$76.00 (2020 - C$87.92). The weighted average grant date fair value of stock options granted in 2021 was C$18.95 (2020 - C$13.68). The following table sets out information about Agnico Eagle’s stock options outstanding and exercisable as at December 31, 2021:
The Company has reserved for issuance 4,482,941 common shares in the event that these stock options are exercised. The number of common shares available for the grant of stock options under the ESOP as at December 31, 2021 was 5,068,748. Agnico Eagle estimated the fair value of stock options under the Black-Scholes option pricing model using the following weighted average assumptions:
The Company uses historical volatility to estimate the expected volatility of Agnico Eagle’s share price. The expected term of stock options granted is derived from historical data on employee exercise and post-vesting employment termination experience. Compensation expense related to the ESOP amounted to $20.2 million for the year ended December 31, 2021 (2020 - $15.9 million). Subsequent to the year ended December 31, 2021, 1,641,225 stock options were granted under the ESOP, of which 410,306 stock options vested within 30 days of the grant date. The remaining stock options, all of which expire in 2027, vest in equal installments on each anniversary date of the grant over a -year period.B)Incentive Share Purchase Plan (“ISPP”) On June 26, 1997, the Company’s shareholders approved the ISPP to encourage Participants to purchase Agnico Eagle’s common shares at market value. In 2009, the ISPP was amended to remove non-executive directors as eligible Participants. Under the ISPP, Participants may contribute up to 10.0% of their basic annual salaries and the Company contributes an amount equal to 50.0% of each Participant’s contribution. All common shares subscribed for under the ISPP are issued by the Company. The total compensation cost recognized in 2021 related to the ISPP was $9.2 million (2020 - $6.9 million). In 2021, 497,767 common shares were subscribed for under the ISPP (2020 – 351,086) for a value of $27.5 million (2020 - $20.7 million). In May 2019, the Company’s shareholders approved an increase in the maximum number of common shares reserved for issuance under the ISPP to 8,100,000 from 7,100,000. As at December 31, 2021, Agnico Eagle has reserved for issuance 372,602 common shares (2020 –870,369) under the ISPP. C)Restricted Share Unit (“RSU”) Plan In 2009, the Company implemented the RSU plan for certain employees. Effective January 1, 2012, the RSU plan was amended to include directors and senior executives of the Company as eligible participants. A deferred compensation balance is recorded for the total grant date value on the date of each RSU plan grant. The deferred compensation balance is recorded as a reduction of equity and is amortized as compensation expense over the vesting period of up to three years. In 2021, 317,114 (2020 – 307,732) RSUs were granted with a grant date fair value of $74.45 (2020 - $60.80). In 2021, the Company funded the RSU plan by transferring $23.6 million (2020 - $18.7 million) to an employee benefit trust that then purchased common shares of the Company in the open market. The grant date fair value of the RSUs generally approximates the cost of purchasing the shares in the open market. Once vested, the common shares in the trust are distributed to settle the obligation along with a cash payment reflecting the accumulated amount that would have been paid as dividends had the common shares been outstanding. Compensation expense related to the RSU plan was $21.5 million in 2021 (2020 - $21.7 million). Compensation expense related to the RSU plan is included as part of the general and administrative line item in the consolidated statements of income. Subsequent to the year ended December 31, 2021, 366,586 RSUs were granted under the RSU plan. D)Performance Share Unit (“PSU”) Plan Beginning in 2016, the Company adopted a PSU plan for senior executives of the Company. PSUs are subject to vesting requirements over a three-year period based on specific performance measurements established by the Company. The fair value for the portion of the PSUs related to market conditions is based on the application of pricing models at the grant date and the fair value for the portion related to non-market conditions is based on the market value of the shares at the grant date. Compensation expense is based on the current best estimate of the outcome for the specific performance measurement established by the Company and is recognized over the vesting period based on the number of units estimated to vest. In 2021, 148,500 (2020 - 170,500) PSUs were granted with a grant date fair value of $92.75 (2020 - $74.55). The Company funded the PSU plan by transferring $10.8 million (2020 - $10.4 million) to an employee benefit trust that then purchased common shares of the Company in the open market. Once vested, the common shares in the trust are distributed to settle the obligation along with a cash payment reflecting the accumulated amount that would have been paid as dividends had the common shares been outstanding. Compensation expense related to the PSU plan was $10.4 million in 2021 (2020 - $12.5 million). Compensation expense related to the PSU plan is included as part of the general and administrative line item in the consolidated statements of income. Subsequent to the year ended December 31, 2021, 157,500 PSUs were granted under the PSU plan. |
OTHER RESERVES |
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OTHER RESERVES | 18.OTHER RESERVES The following table sets out the movements in other reserves for the year ended December 31, 2021 and 2020:
The cash flow hedge reserve represents the settlement of an interest rate derivative related to the Senior Notes issued in 2020. The reserve will be amortized over the term of the Notes. Amortization of the reserve is included in the finance costs line item in the consolidated statements of income. |
REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES |
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REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES | 19.REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES Agnico Eagle is a gold mining company with mining operations in Canada, Mexico and Finland. The Company earns a significant proportion of its revenues from the production and sale of gold in both dore bar and concentrate form. The remainder of revenue and cash flow is generated by the production and sale of by-product metals. The revenue from by-product metals is primarily generated by production at the LaRonde mine in Canada (silver, zinc and copper) and the Pinos Altos mine in Mexico (silver). The cash flow and profitability of the Company’s operations are significantly affected by the market price of gold and, to a lesser extent, silver, zinc and copper. The prices of these metals can fluctuate significantly and are affected by numerous factors beyond the Company’s control. During the year ended December 31, 2021, four customers each contributed more than 10.0% of total revenues from mining operations for a combined total of approximately 86.4% of revenues from mining operations in the Northern and Southern business units. However, because gold can be sold through numerous gold market traders worldwide, the Company is not economically dependent on a limited number of customers for the sale of its product. The following table sets out sales to individual customers that exceeded 10.0% of revenues from mining operations:
Trade receivables are recognized once the transfer of control for the metals sold has occurred and reflect the amounts owing to the Company in respect of its sales of concentrates to third parties prior to the satisfaction in full of the payment obligations of the third parties. As at December 31, 2021, the Company had $13.5 million (2020 - million) in receivables relating to provisionally priced concentrate sales.The Company has recognized the following amounts relating to revenue in the consolidated statements of income:
The following table sets out the disaggregation of revenue by metal:
In 2021, precious metals (gold and silver) accounted for 99.0% of Agnico Eagle’s revenues from mining operations (2020 – 99.5%). The remaining revenues from mining operations consisted of net by-product metal revenues from non-precious metals. |
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CAPITAL AND FINANCIAL RISK MANAGEMENT | 20.CAPITAL AND FINANCIAL RISK MANAGEMENT The Company’s activities expose it to a variety of financial risks: market risk (including interest rate risk, commodity price risk and foreign currency risk), credit risk and liquidity risk. The Company’s overall risk management policy is to support the delivery of the Company’s financial targets while minimizing the potential adverse effects on the Company’s performance. Risk management is carried out by a centralized treasury department under policies approved by the Board. The Company’s financial activities are governed by policies and procedures and its financial risks are identified, measured and managed in accordance with its policies and risk tolerance.
Market risk is the risk that changes in market factors, such as interest rates, commodity prices and foreign exchange rates, will affect the value of Agnico Eagle’s financial instruments. The Company can choose to either accept market risk or mitigate it through the use of derivatives and other economic hedging strategies. i.Interest Rate Risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations that have floating interest rates. There is no impact on income before income and mining taxes or equity of a 1.0% increase or decrease in interest rates, based in financial instruments in place as at December 31, 2021. ii.Commodity Price Risk a.Metal Prices Agnico Eagle’s revenues from mining operations and net income are sensitive to metal prices. Changes in the market price of gold may be attributed to numerous factors such as demand, global mine production levels, central bank purchases and sales and investor sentiment. Changes in the market prices of by-product metals (silver, zinc and copper) may be attributed to factors such as demand and global mine production levels. In order to mitigate the impact of fluctuating by-product metal prices, the Company occasionally enters into derivative financial instrument contracts under its Board-approved Risk Management Policies and Procedures. The Company has a long-standing policy of no long-term forward gold sales. However, the policy does allow the Company to use other economic hedging strategies, where appropriate, to mitigate by-product metal pricing risks. The Company’s policy does not allow speculative trading. As at December 31, 2021, there were no metal derivative positions. b.Fuel To mitigate the risks associated with fluctuating diesel fuel prices, the Company uses derivative financial instruments as economic hedges of the price risk on a portion of its diesel fuel costs (see Note 21 for further details on the Company’s derivative financial instruments). iii.Foreign Currency Risk The Company receives payment for all of its metal sales in US dollars and pays most of its operating and capital costs in Canadian dollars, Euros or Mexican pesos. This gives rise to significant foreign currency risk exposure. The Company enters into currency economic hedging transactions under the Board-approved Foreign Exchange Risk Management Policies and Procedures to hedge part of its foreign currency exposure. The policy does not permit the hedging of translation exposure (that is, the gains and losses that arise from the accounting translation of Canadian dollar, Euro or Mexican peso denominated assets and liabilities into US dollars), which does not give rise to cash exposure. The Company’s foreign currency derivative financial instrument strategy includes (but is not limited to) the use of purchased puts, sold calls, collars and forwards that are not held for speculative purposes (see Note 21 for further details on the Company’s derivative financial instruments). The following table sets out the translation impact, based on financial instruments in place as at December 31, 2021, on income before income and mining taxes and equity for the year ended December 31, 2021 of a 10.0% weakening in the exchange rate of the US dollar relative to the Canadian dollar, Euro and Mexican peso, with all other variables held constant. A 10.0% strengthening of the US dollar against the foreign currencies would have had the equal but opposite effect as at December 31, 2021.
B)Credit Risk Credit risk is the risk that a third party might fail to fulfill its obligations under the terms of a financial instrument. Credit risk arises from cash and cash equivalents, short-term investments, trade receivables, loan receivable and certain derivative financial instruments. The Company holds its cash and cash equivalents and short-term investments in highly rated financial institutions resulting in a low level of credit risk. For trade receivables and derivative financial instruments, historical levels of default have been negligible, resulting in a low level of credit risk. The Company mitigates credit risk by dealing with recognized credit-worthy counterparties and limiting concentration risk. For derivative financial instrument liabilities, the Company assumes no credit risk when the fair value of an instrument is negative. The loan receivable extended to Orla is collateralized by pledged assets which mitigates the level of credit risk. The maximum exposure to credit risk is equal to the carrying amount of the instruments as follows:
C)Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company monitors its risk of a shortage of funds by monitoring its credit rating and projected cash flows taking into account the maturity dates of existing debt and other payables. The Company manages exposure to liquidity risk by maintaining cash balances, having access to undrawn credit facilities and access to public debt markets. Contractual maturities relating to lease obligations are set out in Note 13 and contractual maturities relating to long-term debt are set out in Note 14. Other financial liabilities have maturities within one year of December 31, 2021. D)Capital Risk Management The Company’s primary capital management objective is to maintain an optimal capital structure to support current and long-term business activities and to provide financial flexibility in order to maximize value for equity holders. Agnico Eagle’s capital structure comprises a mix of lease financing, long-term debt, and total equity as follows:
The Company manages its capital structure and makes adjustments to it based on changes in economic conditions and the requirements of financial covenants. To effectively manage its capital requirements, Agnico Eagle has in place a rigorous planning, budgeting and forecasting process to ensure it has the appropriate liquidity to meet its operating and growth objectives. The Company has the ability to adjust its capital structure by various means. See Note 14 for details related to Agnico Eagle’s compliance with its long-term debt covenants. E)Changes in liabilities arising from financing activities
Note:
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DERIVATIVE FINANCIAL INSTRUMENTS |
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DERIVATIVE FINANCIAL INSTRUMENTS | 21.DERIVATIVE FINANCIAL INSTRUMENTS Currency Risk Management The Company uses foreign exchange economic hedges to reduce the variability in expected future cash flows arising from changes in foreign currency exchange rates. The Company is primarily exposed to currency fluctuations relative to the US dollar as a significant portion of the Company’s operating costs and capital expenditures are denominated in foreign currencies, primarily the Canadian dollar, the Euro and the Mexican peso. These potential currency fluctuations increase the volatility of, and could have a significant impact on, the Company’s production costs and capital expenditures. The economic hedges relate to a portion of the foreign currency denominated cash outflows arising from foreign currency denominated expenditures. As at December 31, 2021, the Company had outstanding derivative contracts related to $2,375.2 million of 2022 and 2023 expenditures (December 31, 2020 - $1,188.0 million). The Company recognized mark-to-market adjustments in the loss (gain) on derivative financial instruments line item in the consolidated statements of income. The Company did not apply hedge accounting to these arrangements. Mark-to-market gains and losses related to foreign exchange derivative financial instruments are recorded at fair value based on broker-dealer quotations corroborated by option pricing models that utilize period-end forward pricing of the applicable foreign currency to calculate fair value. The Company’s other foreign currency derivative strategies in 2021 and 2020 consisted mainly of writing US dollar call options with short maturities to generate premiums that would, in essence, enhance the spot transaction rate received when exchanging US dollars for Canadian dollars and Mexican pesos. All of these derivative transactions expired prior to period-end such that no derivatives were outstanding as at December 31, 2021 or December 31, 2020. The call option premiums were recognized in the loss (gain) on derivative financial instruments line item in the consolidated statements of income. Commodity Price Risk Management To mitigate the risks associated with fluctuating diesel fuel prices, the Company uses derivative financial instruments as economic hedges of the price risk on a portion of diesel fuel costs associated primarily with its Nunavut operations' diesel fuel exposure as it relates to operating costs. There were derivative financial instruments outstanding as at December 31, 2021 relating to 10.9 million gallons of heating oil (December 31, 2020 - 24.0 million). The related mark-to-market adjustments prior to settlement were recognized in the loss (gain) on derivative financial instruments line item in the consolidated statements of income. The Company did not apply hedge accounting to these arrangements. Mark-to-market gains and losses related to heating oil derivative financial instruments are based on broker-dealer quotations that utilize period-end forward pricing to calculate fair value. Share Purchase Warrants The Company holds warrants to acquire equity securities of certain issuers in the mining industry. These warrants are not part of the Company's core operations, and accordingly, gains and losses from these investments are not representative of the Company's performance during the year. The following table sets out a summary of the amounts recognized in the loss (gain) on derivative financial instruments line item in the consolidated statements of income.
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OTHER EXPENSES |
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OTHER EXPENSES (INCOME) | 22.OTHER EXPENSES The following table sets out amounts recognized in the other expenses line item in the consolidated statements of income:
On March 19, 2021, the Company completed the sale of certain non-strategic exploration properties in exchange for aggregate consideration of $10.0 million in cash and shares of the purchasers, receivable over time on the transaction anniversary each year until March 19, 2024. As all exploration costs related to these properties were expensed when incurred, the carrying value of the properties at the transaction closing was nil and the Company recognized a gain on sale equal to the consideration amount of $10.0 million. In the year ended December 31, 2021 the Company incurred transaction costs of $2.9 million in connection with the acquisition of TMAC (Note 5) and $10.0 million in connection with the prospective acquisition of Kirkland (Note 28). In the year ended December 31, 2021, other costs due to the COVID-19 pandemic include primarily payroll costs of Nunavut-based employees who were not permitted to return to work to prevent or curtail community transmission of COVID-19. In the year ended December 31, 2020, temporary suspension and other costs due to COVID-19 included primarily payroll and other incidental costs associated with maintaining the sites and properties placed on temporary suspension or reduced operations, and payroll costs associated with employees who were not working during the period of reduced or suspended operations. |
SEGMENTED INFORMATION |
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SEGMENTED INFORMATION | 23.SEGMENTED INFORMATION Agnico Eagle operates in a single industry, namely exploration for and production of gold. The Company’s primary operations are in Canada, Mexico and Finland. The Company identifies its reportable segments as those operations whose operating results are reviewed by the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer for the purpose of allocating resources and assessing performance and that represent more than 10.0% of the combined revenue from mining operations, income or loss or total assets of all operating segments. Each of the Company’s significant operating mines and projects are considered to be separate operating segments. Certain operating segments that do not meet the quantitative thresholds are still disclosed where the Company believes that the information is useful. The CODM also reviews segment income (defined as revenues from mining operations less production costs, exploration and corporate development expenses and impairment losses and reversals) on a mine-by-mine basis. The following are the Company’s reportable segments organized according to their relationship with the Company’s three business units and reflect how the Company manages its business and how it classifies its operations for planning and measuring performance:
Revenues from mining operations and production costs for the reportable segments are reported net of intercompany transactions. Corporate and other assets and specific income and expense items are not allocated to reportable segments.
The following table sets out total assets by segment:
The following table sets out the carrying amount of goodwill by segment for the years ended December 31, 2021 and December 31, 2020:
The following table sets out capital expenditures by segment:
The following table sets out revenues from mining operations by geographic area(i):
Note:
The following table sets out non-current assets by geographic area:
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IMPAIRMENT |
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IMPAIRMENT | 24.IMPAIRMENT Goodwill impairment tests Canadian Malartic Joint Operation The estimated recoverable amount of the Canadian Malartic joint operation CGU as at December 31, 2021 and 2020 was determined on the basis of fair value less costs to dispose of the Canadian Malartic mine. The estimated recoverable amount of the Canadian Malartic mine was calculated by discounting the estimated future net cash flows over the estimated life of the mine, consisting of both open pit and underground operations, using a nominal discount rate of 6.00% (2020 - 6.40%). The recoverable amount calculation was based on an estimate of future production levels applying short-term gold prices of $1,600 to $1,800 per ounce and long-term gold prices of $1,600 per ounce (in real terms) (2020 - short-term gold prices of $1,800 to $1,900 and long term gold prices of $1,500), foreign exchange rates of US$0.79:C$1.00 (2020 - US$0.78: C$1.00), an inflation rate of 2.0% (2020 - 2.0%), and capital, operating and reclamation costs based on applicable life of mine plans. Certain mineralization was valued by a cashflow extension approach where the mineralization is expected to have sufficiently similar economics to the mineralization of the Canadian Malartic mine. At December 31, 2021 and 2020, the Canadian Malartic joint operation segment estimated recoverable amount exceeded its carrying amount. The discounted cash flow approach uses significant unobservable inputs and is therefore considered Level 3 fair value measurement under the fair value hierarchy. CMC Exploration Assets As a result of the acquisition of the additional 50.0% of the CMC Exploration Assets on March 28, 2018, the Company separated the CMC Exploration Assets from the Canadian Malartic joint operation into a distinct goodwill test performed for the Exploration segment as at December 31, 2021 and 2020. The estimated recoverable amount of the CMC Exploration Assets CGU was calculated by reference to comparable market transactions or by discounting the estimated future net cash flows over the estimated life of the mine using a nominal discount rate of 7.90% (2020 – 8.10%). The recoverable amount calculation was based on an estimate of future production levels applying gold prices of $1,600 per ounce (in real terms) (2020 - $1,500), foreign exchange rates of US$0.79:C$1.00 (2020- US$0.78:C$1.00), an inflation rate of 2.0% (2020 - 2.0%), and capital, operating and reclamation costs based on applicable life of mine plans. At December 31, 2021 and 2020, the CMC Exploration Assets CGU estimated recoverable amount exceeded its carrying amount. Key Assumptions The determination of the recoverable amount within level 3 of the fair value hierarchy, includes the following key applicable assumptions:
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INCOME AND MINING TAXES | 25.INCOME AND MINING TAXES Income and mining taxes expense is made up of the following components:
The income and mining taxes expense is different from the amount that would have been calculated by applying the Canadian statutory income tax rate as a result of the following:
The following table sets out the components of Agnico Eagle’s net deferred income tax assets:
The following table sets out the components of Agnico Eagle’s net deferred income and mining tax liabilities:
Changes in net deferred tax assets and liabilities for the years ended December 31, 2021 and 2020 are as follows:
The Company operates in different jurisdictions and, accordingly, it is subject to income and other taxes under the various tax regimes in the countries in which it operates. The tax rules and regulations in many countries are highly complex and subject to interpretation. The Company may be subject, in the future, to a review of its historic income and other tax filings and, in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain tax rules and regulations to the Company’s business conducted within the country involved. The deductible temporary differences in respect of which a deferred tax asset has not been recognized in the consolidated balance sheets are as follows:
The Company has $469.1 million (2020 - $411.4 million) of taxable temporary differences associated with its investments in subsidiaries for which deferred income tax has not been recognized, as the Company is able to control the timing of the reversal of the taxable temporary differences and it is probable that they will not reverse in the foreseeable future. The Company is subject to taxes in Canada, Mexico and Finland, each with varying statutes of limitations. Prior taxation years generally remain subject to examination by applicable taxation authorities. |
EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL |
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EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL | 26.EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL During the year ended December 31, 2021, employee benefits expense recognized in the statements of income was $736.9 million (2020 - $657.0 million). In 2021 and 2020, there were no related party transactions other than compensation of key management personnel. Key management personnel include the members of the Board and the senior leadership team. The following table sets out the compensation of key management personnel:
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COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES | 27.COMMITMENTS AND CONTINGENCIES As part of its ongoing business and operations, the Company has been required to provide assurance in the form of letters of credit for environmental and site restoration costs, custom credits, government grants and other general corporate purposes. As at December 31, 2021, the total amount of these guarantees was $533.2 million. Certain of the Company’s properties are subject to royalty arrangements. Set out below are the Company's most significant royalty arrangements related to operating mines:
The Company regularly enters into various earn-in and shareholder agreements, often with commitments to pay net smelter return and other royalties. The Company had the following contractual commitments as at December 31, 2021, of which $62.3 million related to capital expenditures:
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SUBSEQUENT EVENTS |
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SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 28.SUBSEQUENT EVENTS Dividends Declared On February 23, 2022, Agnico Eagle announced that the Board approved the payment of a quarterly cash dividend of $0.40 per common share (a total value of approximately $181.7 million), payable on March 15, 2022 to holders of record of the common shares of the Company on March 7, 2022. Acquisition of Kirkland On February 8, 2022, the Company completed the acquisition of all the issued and outstanding shares of Kirkland in exchange for the issuance of Agnico Eagle common shares to former Kirkland shareholders. Each Kirkland shareholder received 0.7935 of a common share of Agnico as consideration for each Kirkland share, which resulted in the issuance of 209,274,263 Agnico common shares. The Company has determined that this transaction represents a business combination with Agnico identified as the acquirer. Kirkland owns and operates the Detour Lake and Macassa mines in Canada and the Fosterville mine in Australia, and also owns exploration properties in Canada and Australia. Agnico will consolidate the operating results, cash flows and net assets of Kirkland from February 8, 2022. The Company will report the financial statement impact of the acquisition, including the allocation of the purchase price based on the fair values of identifiable assets acquired and liabilities assumed as at the acquisition date, in its interim financial statements for the first quarter ending March 31, 2022. Suspension of mining operations at Hope Bay The Company announced in February 2022 that production activities at the Hope Bay mine will be suspended for the remainder of 2022 and 2023 and the Company’s focus during this time will be accelerating exploration at the Hope Bay property and the evaluation of future production scenarios for Hope Bay. Care and maintenance activities will continue during the period of suspension.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||||||||||||||||
Business Combinations |
In a business combination, the acquisition method of accounting is used, whereby the purchase consideration is allocated to the fair value of identifiable assets acquired and liabilities assumed at the date of acquisition. Where the cost of the acquisition exceeds the fair values of the identifiable net assets acquired, the difference is recorded as goodwill. Preliminary fair values allocated at a reporting date are finalized as soon as the relevant information is available, within a period not to exceed twelve months from the acquisition date with retroactive restatement of the impact of adjustments to those preliminary fair values effective as at the acquisition date. Acquisition related costs are expensed as incurred. |
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Foreign Currency Translation |
The functional currency of the Company, for each subsidiary and for joint arrangements, is the currency of the primary economic environment in which it operates. The functional currency of all of the Company’s operations is the US dollar. Once the Company determines the functional currency of an entity, it is not changed unless there is a significant change in the relevant underlying transactions, events and circumstances. Any change in an entity’s functional currency is accounted for prospectively from the date of the change, and the consolidated balance sheets are translated using the exchange rate at that date. At the end of each reporting period, the Company translates foreign currency balances as follows:
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Cash and Cash Equivalents |
The Company’s cash and cash equivalents include cash on hand and short-term investments in money market instruments with remaining maturities of three months or less at the date of purchase. The Company places its cash and cash equivalents and short-term investments in high quality securities issued by government agencies, financial institutions and major corporations and limits the amount of credit exposure by diversifying its holdings. Cash and cash equivalents are classified as financial assets measured at amortized cost. |
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Short-term Investments |
The Company’s short-term investments include financial instruments with remaining maturities of greater than three months but less than one year at the date of purchase. Short-term investments are designated as financial assets measured at amortized cost, which approximates fair value given the short-term nature of these investments. |
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Inventories |
Inventories consist of ore stockpiles, concentrates, dore bars and supplies. Inventories are carried at the lower of cost and net realizable value (“NRV”). Cost is determined using the weighted average basis and includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories includes direct costs of materials and labour related directly to mining and processing activities, including production phase stripping costs, amortization of property, plant and mine development directly involved in the related mining and production process, amortization of any stripping costs previously capitalized and directly attributable overhead costs. When interruptions to production occur, an adjustment is made to the costs included in inventories, such that they reflect normal capacity. Abnormal costs are expensed in the period they are incurred. The current portion of ore stockpiles, ore on leach pads and inventories is determined based on the amounts expected to be processed within the next twelve months. Ore stockpiles, ore on leach pads and inventories not expected to be processed or used within the next twelve months are classified as long-term. NRV is estimated by calculating the net selling price less costs to be incurred in converting the relevant inventories to saleable product and delivering it to a customer. Costs to complete are based on management’s best estimate as at the consolidated balance sheet date. An NRV impairment may be reversed in a subsequent period if the circumstances that triggered the impairment no longer exist. |
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Financial Instruments |
The Company’s financial assets and liabilities (financial instruments) include cash and cash equivalents, short-term investments, restricted cash, trade receivables, loans receivable, equity securities, share purchase warrants, accounts payable and accrued liabilities, long-term debt and derivative financial instruments. Financial instruments are recorded at fair value and classified at initial recognition and subsequently measured at amortized cost, fair value through other comprehensive income (“FVOCI”), or fair value through profit or loss (“FVPL”). Subsequent to initial recognition, financial instruments classified as cash and cash equivalents, short-term investments, loans receivable, accounts payable and accrued liabilities, and long-term debt are measured at amortized cost using the effective interest method. Other financial instruments are recorded at fair value subsequent to initial recognition. Equity Securities The Company’s equity securities consist primarily of investments in common shares of entities in the mining industry recorded using trade date accounting. On initial recognition of an equity investment, the Company may irrevocably elect to measure the investment at FVOCI where changes in the fair value of equity securities are permanently recognized in other comprehensive income and will not be reclassified to profit or loss. The realized gain or loss is reclassified from other comprehensive income to the deficit when the asset is de-recognized. The election is made on an investment-by-investment basis. Derivative Instruments and Hedge Accounting The Company uses derivative financial instruments (primarily option and forward contracts) to manage exposure to fluctuations in by-product metal prices, interest rates, and foreign currency exchange rates and may use such means to manage exposure to certain input costs. The Company recognizes all derivative financial instruments in the consolidated financial statements at fair value and they are classified based on contractual maturity. Derivative instruments are classified as either hedges of highly probable forecast transactions (cash flow hedges) or non-hedge derivatives. Derivatives designated as a cash flow hedge that are expected to be highly effective in achieving offsetting changes in cash flows are assessed on an ongoing basis to determine that they have actually been highly effective throughout the financial reporting periods for which they were designated. Derivative assets and derivative liabilities are shown separately in the consolidated balance sheets unless there is a legal right to offset and intent to settle on a net basis. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized in the gain or loss on derivative financial instruments line item in the consolidated statements of income. Amounts deferred in other comprehensive income are reclassified when the hedged transaction has occurred. Derivative instruments that do not qualify for hedge accounting are recorded at fair value at the balance sheet date, with changes in fair value recognized in the gain or loss on derivative financial instruments line item in the consolidated statements of income (FVPL). The Company also holds share purchase warrants of certain publicly traded entities where it has an investment in equity securities. Share purchase warrants are accounted for as derivative financial instruments and presented as part of investments in the consolidated balance sheets. Expected Credit Loss Impairment Model An assessment of the expected credit loss related to a financial asset is undertaken upon initial recognition and at the end of each reporting period based on the credit quality of the debtor and any changes that impact the risk of impairment. |
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Goodwill |
Goodwill is recognized in a business combination if the cost of the acquisition exceeds the fair values of the identifiable net assets acquired. Goodwill is then allocated to the cash generating unit (“CGU”) or group of CGUs that are expected to benefit from the synergies of the combination. A CGU is the smallest identifiable group of assets that generates cash inflows which are largely independent of the cash inflows from other assets or groups of assets. The Company performs goodwill impairment tests on an annual basis as at December 31 each year. In addition, the Company assesses for indicators of impairment at each reporting period-end and, if an indicator of impairment is identified, goodwill is tested for impairment at that time. If the carrying value of the CGU or group of CGUs to which goodwill is assigned exceeds its recoverable amount, an impairment loss is recognized. Goodwill impairment losses are recorded in the consolidated statements of income and they are not subsequently reversed. The recoverable amount of a CGU or group of CGUs is measured as the higher of value in use and fair value less costs of disposal. |
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Mining Properties, Plant and Equipment and Mine Development Costs |
Mining Properties The cost of mining properties includes the fair value attributable to proven and probable mineral reserves and mineral resources acquired in a business combination or asset acquisition, underground mine development costs, deferred stripping, capitalized exploration and evaluation costs and capitalized borrowing costs. Significant payments related to the acquisition of land and mineral rights are capitalized as mining properties at cost. If a mineable ore body is discovered, such costs are amortized to income when commercial production commences, using the units-of-production method, based on estimated proven and probable mineral reserves and the mineral resources included in the current life of mine plan. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined that the property has no future economic value. Cost components of a specific project that are included in the capital cost of the asset include salaries and wages directly attributable to the project, supplies and materials used in the project, and incremental overhead costs that can be directly attributable to the project. Assets under construction are not amortized until the earlier of the end of the construction period or once commercial production is achieved. Upon achieving the production stage, the capitalized construction costs are transferred to the appropriate category within property, plant and mine development. Plant and Equipment Expenditures for new facilities and improvements that can extend the useful lives of existing facilities are capitalized as plant and equipment at cost. The cost of an item of plant and equipment includes: its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management; and the estimate of the costs of dismantling and removing the item and restoring the site on which it is located other than costs that arise as a consequence of having used the item to produce inventories during the period. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statements of income when the asset is derecognized. Amortization of an asset begins when the asset is in the location and condition necessary for it to operate in the manner intended by management. Amortization ceases at the earlier of the date the asset is classified as held for sale or the date the asset is derecognized. Assets under construction are not amortized until the earlier of the end of the construction period or once commercial production is achieved. Amortization is charged according to either the units-of-production method or on a straight line basis, according to the pattern in which the asset’s future economic benefits are expected to be consumed. Amortization does not cease when an asset becomes idle or is retired from active use unless the asset is fully amortized; however, under the units-of-production method of amortization, the amortization charge can be zero when there is no production. The amortization method applied to an asset is reviewed at least annually. Useful lives of property, plant and equipment are based on the lesser of the estimated mine lives as determined by proven and probable mineral reserves and the mineral resources included in the current life of mine plan and the estimated useful life of the asset. Remaining mine lives at December 31, 2021 range from an estimated to 13 years.The following table sets out the useful lives of certain assets:
Mine Development Costs Mine development costs incurred after the commencement of commercial production are capitalized when they are expected to have a future economic benefit. Activities that are typically capitalized include costs incurred to build shafts, drifts, ramps and access corridors which enables the Company to extract ore underground. The Company records amortization on underground mine development costs on a units-of-production basis based on the estimated tonnage of proven and probable mineral reserves and the mineral resources included in the current life of mine plan of the identified component of the ore body. The units-of-production method defines the denominator as the total tonnage of proven and probable mineral reserves and the mineral resources included in the current life of mine plan. Deferred Stripping In open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals can be extracted economically. The process of mining overburden and waste materials is referred to as stripping. During the development stage of the mine, stripping costs are capitalized as part of the cost of building, developing and constructing the mine and are amortized once the mine has entered the production stage. During the production stage of a mine, stripping costs are recorded as a part of the cost of inventories unless these costs are expected to provide a future economic benefit and, in such cases, are capitalized to property, plant and mine development. Production stage stripping costs provide a future economic benefit when:
Capitalized production stage stripping costs are amortized over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity. Borrowing Costs Borrowing costs are capitalized to qualifying assets. Qualifying assets are assets that take a substantial period of time to prepare for the Company’s intended use, which includes projects that are in the exploration and evaluation, development or construction stages. Borrowing costs attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as finance costs in the period in which they are incurred. Where the funds used to finance a qualifying asset form part of general borrowings, the amount capitalized is calculated using a weighted average of rates applicable to the relevant borrowings during the period. |
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Leases | I)Leases At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company assesses whether:
The Company recognizes a right-of-use asset and a lease obligation at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease obligations. The cost of right-of-use assets includes the initial amount of lease obligations recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the right-of-use assets are depreciated on a straight-line basis over the shorter of the estimated useful life and the lease term. Right-of-use assets are subject to impairment. At the commencement date of the lease, the Company recognizes lease obligations measured at the present value of lease payments to be made over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The lease payments include fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees and the exercise price of a purchase option reasonably certain to be exercised by the Company. After the commencement date, the amount of lease obligations is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease obligations is remeasured if there is a modification, a change in the lease term, a change in the fixed lease payments, changes based on an index or rate or a change in the assessment to purchase the underlying asset. The Company presents right-of-use assets in the property, plant and mine development line item on the consolidated balance sheets and lease obligations in the lease obligations line item on the consolidated balance sheets. The Company has elected not to recognize right-of-use assets and lease obligations for leases that have a lease term of 12 months or less and do not contain a purchase option, for leases related to low value assets, or for leases with variable lease payments. Payments on short-term leases, leases of low value assets, and leases with variable payment amounts are recognized as an expense in the consolidated statements of income. |
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Development Stage Expenditures | J)Development Stage Expenditures Development stage expenditures are costs incurred to obtain access to proven and probable mineral reserves or mineral resources and provide facilities for extracting, treating, gathering, transporting and storing the minerals. The development stage of a mine commences when the technical feasibility and commercial viability of extracting the mineral resource has been determined. Costs that are directly attributable to mine development are capitalized as property, plant and mine development to the extent that they are necessary to bring the property to commercial production. Abnormal costs are expensed as incurred. Indirect costs are included only if they can be directly attributed to the area of interest. General and administrative costs are capitalized as part of the development expenditures when the costs are directly attributed to a specific mining development project. Revenue from metal sales prior to the achievement of commercial production is deducted from mine development costs in the consolidated balance sheets and is not included in revenue from mining operations. Commercial Production A mine construction project is considered to have entered the production stage when the mine construction assets are available for use. In determining whether mine construction assets are considered available for use, the criteria considered include, but are not limited to, the following:
When a mine construction project moves into the production stage, amortization commences, the capitalization of certain mine construction costs ceases and expenditures are either capitalized to inventories or expensed as incurred. Exceptions include costs incurred for additions or improvements to property, plant and mine development and open-pit stripping activities. |
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Impairment and Impairment Reversal of Long-lived Assets | K)Impairment and Impairment Reversal of Long-lived Assets At the end of each reporting period the Company assesses whether there is any indication that long-lived assets other than goodwill may be impaired. If an indicator of impairment exists, the recoverable amount of the asset is calculated in order to determine if any impairment loss is required. If it is not possible to estimate the recoverable amount of the individual asset, assets are grouped at the CGU level for the purpose of assessing the recoverable amount. An impairment loss is recognized for any excess of the carrying amount of the CGU over its recoverable amount. If the CGU includes goodwill, the impairment loss related to a CGU is first allocated to goodwill and the remaining loss is allocated on a pro-rata basis to the remaining long-lived assets of the CGU based on their carrying amounts. Impairment losses are recorded in the consolidated statements of income in the period in which they occur. Any impairment charge that is taken on a long-lived asset other than goodwill is reversed if there are subsequent changes in the estimates or significant assumptions that were used to recognize the impairment loss that result in an increase in the recoverable amount of the CGU. If an indicator of impairment reversal has been identified, the recoverable amount of the asset is calculated in order to determine if any impairment reversal is required. A recovery is recognized to the extent the recoverable amount of the asset exceeds its carrying amount. The amount of the reversal is limited to the difference between the current carrying amount and the amount which would have been the carrying amount had the earlier impairment not been recognized and amortization of that carrying amount had continued. The impairment reversal is allocated on a pro-rata basis to the existing long-lived assets of the CGU based on their carrying amounts. Impairment reversals are recorded in the consolidated statements of income in the period in which they occur. |
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Debt | L)Debt Debt is initially recorded at fair value, net of financing costs incurred. Debt is subsequently measured at amortized cost. Any difference between the amounts received and the redemption value of the debt is recognized in the consolidated statements of income over the period to maturity using the effective interest rate method. |
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Reclamation Provisions | M)Reclamation Provisions Asset retirement obligations (“AROs”) arise from the acquisition, development and construction of mining properties and plant and equipment due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The major parts of the carrying amount of AROs relate to tailings and heap leach pad closure and rehabilitation, demolition of buildings and mine facilities, ongoing water treatment and ongoing care and maintenance of closed mines. The Company recognizes an ARO at the time the environmental disturbance occurs or a constructive obligation is determined to exist based on the Company’s best estimate of the timing and amount of expected cash flows expected to be incurred. When the ARO provision is recognized, the corresponding cost is capitalized to the related item of property, plant and mine development. Reclamation provisions that result from disturbance in the land to extract ore in the current period is included in the cost of inventories. The timing of the actual environmental remediation expenditures is dependent on a number of factors such as the life and nature of the asset, the operating licence conditions and the environment in which the mine operates. Reclamation provisions are measured at the expected value of future cash flows discounted to their present value using a risk-free interest rate. AROs are adjusted each period to reflect the passage of time (accretion). Accretion expense is recorded in finance costs each period. Upon settlement of an ARO, the Company records a gain or loss if the actual cost differs from the carrying amount of the ARO. Settlement gains or losses are recorded in the consolidated statements of income. Expected cash flows are updated to reflect changes in facts and circumstances. The principal factors that can cause expected cash flows to change are the construction of new processing facilities, changes in the quantities of material in mineral reserves and mineral resources and a corresponding change in the life of mine plan, changing ore characteristics that impact required environmental protection measures and related costs, changes in water quality that impact the extent of water treatment required and changes in laws and regulations governing the protection of the environment. Each reporting period, provisions for AROs are remeasured to reflect any changes to significant assumptions, including the amount and timing of expected cash flows and risk-free interest rates. Changes to the reclamation provision resulting from changes in estimate are added to or deducted from the cost of the related asset, except where the reduction of the reclamation provision exceeds the carrying value of the related assets in which case the asset is reduced to nil and the remaining adjustment is recognized in the consolidated statements of income. Environmental remediation liabilities (“ERLs”) are differentiated from AROs in that ERLs do not arise from environmental contamination in the normal operation of a long-lived asset or from a legal or constructive obligation to treat environmental contamination resulting from the acquisition, construction or development of a long-lived asset. The Company is required to recognize a liability for obligations associated with ERLs arising from past acts. ERLs are measured by discounting the expected related cash flows using a risk-free interest rate. The Company prepares estimates of the timing and amount of expected cash flows when an ERL is incurred. Each reporting period, the Company assesses cost estimates and other assumptions used in the valuation of ERLs to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions have a corresponding impact on the value of the ERL. Any change in the value of ERLs results in a corresponding charge or credit to the consolidated statements of income. Upon settlement of an ERL, the Company records a gain or loss if the actual cost differs from the carrying amount of the ERL in the consolidated statements of income. |
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Post-employment Benefits | N)Post-employment Benefits In Canada, the Company maintains a defined contribution plan covering all of its employees (the ”Basic Plan”). The Basic Plan is funded by Company contributions based on a percentage of income for services rendered by employees. In addition, the Company has a supplemental plan for designated executives at the level of Vice-President or above (the ”Supplemental Plan”). Under the Supplemental Plan, an additional 10.0% of the designated executives’ income is contributed by the Company. The Company provides a defined benefit retirement program (the “Retirement Program”) for certain eligible employees that provides a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. An eligible employee is entitled to a benefit if they have completed more than 10 years as a permanent employee and have attained a minimum age of 57. The Retirement Program is not funded. The Company also provides a non-registered supplementary executive retirement defined benefit plan for certain current and former senior officers (the ”Executives Plan”). The Executives Plan benefits are generally based on the employee’s years of service and level of compensation. Pension expense related to the Executives Plan is the net of the cost of benefits provided (including the cost of any benefits provided for past service), the net interest cost on the net defined liability/asset, and the effects of settlements and curtailments related to special events. Pension fund assets are measured at their current fair values. The costs of pension plan improvements are recognized immediately in expense when they occur. Remeasurements of the net defined benefit liability are recognized immediately in other comprehensive income and are subsequently transferred to retained earnings. The Company provides three defined benefit retirement plans for certain eligible employees in Mexico (the “Mexico Plans”) that provide a lump-sum payment upon retirement. The payment is based on age and length of service at retirement. Eligible employees are entitled to a benefit if they have completed 15 years of service as a permanent employee and are 60 years of age or older. The Mexico Plans are not funded. Defined Contribution Plan The Company recognizes the contributions payable to a defined contribution plan in exchange for services rendered by employees as an expense, unless another policy requires or permits the inclusion of the contribution in the cost of an asset. After deducting contributions already paid, a liability is recorded throughout each period to reflect unpaid but earned contributions. If the contribution paid exceeds the contribution due for the service before the end of the reporting period, the Company recognizes that excess as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. Defined Benefit Plan Plan assets are measured at their fair value at the consolidated balance sheet date and are deducted from the present value of plan liabilities to arrive at a net defined benefit liability/asset. The defined benefit obligation reflects the expected future payments required to settle the obligation resulting from employee service in the current and prior periods. Current service cost represents the actuarially calculated present value of the benefits earned by the active employees in each period and reflects the economic cost for each period based on current market conditions. The current service cost is based on the most recent actuarial valuation. The net interest on the net defined benefit liability/asset is the change during the period in the defined benefit liability/asset that arises from the passage of time. Past service cost represents the change in the present value of the defined benefit obligation resulting from a plan amendment or curtailment. Past service costs from plan amendments that increase or decrease vested or unvested benefits are recognized immediately in net income at the earlier of when the related plan amendment occurs or when the entity recognizes related restructuring costs or termination benefits. Gains or losses on plan settlements are measured as the difference in the present value of the defined benefit obligation and settlement price. This results in a gain or loss being recognized when the benefit obligation settles. Actuarial gains and losses are recorded on the consolidated balance sheets as part of the benefit plan’s funded status. Gains and losses are recognized immediately in other comprehensive income and are subsequently transferred to retained earnings and are not recognized in net income. |
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Contingent Liabilities and Other Provisions | O)Contingent Liabilities and Other Provisions Provisions are recognized when a present obligation exists (legal or constructive), as a result of a past event, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the expenditure required to settle the obligation at the consolidated balance sheet date, measured using the expected cash flows discounted for the time value of money. The increase in provision (accretion) due to the passage of time is recognized as a finance cost in the consolidated statements of income. Contingent liabilities are possible obligations whose existence will be confirmed only on the occurrence or non-occurrence of uncertain future events outside the entity’s control, or present obligations that are not recognized because it is not probable that an outflow of economic benefits would be required to settle the obligation or the amount cannot be measured reliably. Contingent liabilities are not recognized but are disclosed and described in the notes to the consolidated financial statements, including an estimate of their potential financial effect and uncertainties relating to the amount or timing of any outflow, unless the possibility of settlement is remote. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, with assistance from its legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. |
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Stock-based Compensation | P)Stock-based Compensation The Company offers equity-settled awards (the employee stock option plan, incentive share purchase plan, restricted share unit plan and performance share unit plan) to certain employees, officers and directors of the Company. Employee Stock Option Plan (“ESOP”) The Company’s ESOP provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Options have exercise prices equal to the market price on the day prior to the date of grant. The fair value of these options is recognized in the consolidated statements of income or in the consolidated balance sheets if capitalized as part of property, plant and mine development over the applicable vesting period as a compensation cost. Any consideration paid by employees on exercise of options or purchase of common shares is credited to share capital. Fair value is determined using the Black-Scholes option valuation model, which requires the Company to estimate the expected volatility of the Company’s share price and the expected life of the stock options. Limitations with existing option valuation models and the inherent difficulties associated with estimating these variables create difficulties in determining a reliable single measure of the fair value of stock option grants. The cost is recorded over the vesting period of the award to the same expense category as the award recipient’s payroll costs and the corresponding entry is recorded in equity. Equity-settled awards are not remeasured subsequent to the initial grant date. The dilutive impact of stock option grants is factored into the Company’s reported diluted net income per share. The stock option expense incorporates an expected forfeiture rate, estimated based on expected employee turnover. Incentive Share Purchase Plan (“ISPP”) Under the ISPP, directors (excluding non-executive directors), officers and employees (the ”Participants”) of the Company may contribute up to 10.0% of their basic annual salaries and the Company contributes an amount equal to 50.0% of each Participant’s contribution. All common shares subscribed for under the ISPP are issued by the Company. The Company records an expense equal to its cash contribution to the ISPP. No forfeiture rate is applied to the amounts accrued. Where an employee leaves prior to the vesting date, any accrual for contributions by the Company during the vesting period related to that employee is reversed. Restricted Share Unit (“RSU”) Plan The RSU plan is open to directors and certain employees, including senior executives, of the Company. Common shares are purchased and held in a trust until they have vested. The cost is recorded over the vesting period of the award to the same expense category as the award recipient’s payroll costs. The cost of the RSUs is recorded within equity until settled. Equity-settled awards are not remeasured subsequent to the initial grant date. Performance Share Unit (“PSU”) Plan The PSU plan is open to senior executives of the Company. Common shares are purchased and held in a trust until they have vested. PSUs are subject to vesting requirements based on specific performance measurements by the Company. The fair value for the portion of the PSUs related to market conditions is based on the application of pricing models at the grant date and the fair value for the portion related to non-market conditions is based on the market value of the shares at the grant date. Compensation expense is based on the current best estimate of the outcome for the specific performance measurement established by the Company and is recognized over the vesting period based on the number of units estimated to vest. The cost of the PSUs is recorded within equity until settled. Equity-settled awards are not remeasured subsequent to the initial grant date. |
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Revenue from Contracts with Customers | Q)Revenue from Contracts with Customers Gold and Silver The Company sells gold and silver to customers in the form of bullion and dore bars. The Company recognizes revenue from these sales when control of the gold or silver has transferred to the customer. This is generally at the point in time when the gold or silver is credited to the metal account of the customer. Once the gold or silver has been credited to the customer’s metal account, the customer has legal title to, physical possession of, and the risks and rewards of ownership of the gold or silver; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the gold or silver. Under certain contracts with customers the transfer of control may occur when the gold or silver is in transit from the mine to the refinery. At this point in time, the customer has legal title to and the risk and rewards of ownership of the gold or silver; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the gold or silver. Revenue is measured at the transaction price agreed under the contract. Payment of the transaction price is due immediately when control of the gold or silver is transferred to the customer. Generally, all of the gold and silver in the form of dore bars recovered in the Company’s milling process is sold in the period in which it is produced. Metal Concentrates The Company sells concentrate from certain of its mines to third-party smelter customers. These concentrates predominantly contain zinc and copper, along with quantities of gold and silver. The Company recognizes revenue from these concentrate sales when control of the concentrate has transferred to the customer, which is the point in time that the concentrate is delivered to the customer. Upon delivery, the customer has legal title to, physical possession of, and the risks and rewards of ownership of the concentrate. The customer is also committed to accept and pay for the concentrates once delivered; therefore, the customer is able to direct the use of and obtain substantially all of the remaining benefits from the concentrate. The final prices for metals contained in the concentrate are generally determined based on the prevailing spot market metal prices on a specific future date, which is established as of the date the concentrate is delivered to the customer. Upon transfer of control at delivery, the Company measures revenue under these contracts based on forward prices at the time of delivery and the most recent determination of the quantity of contained metals less smelting and refining charges charged by the customer. This reflects the best estimate of the transaction price expected to be received at final settlement. A receivable is recognized for this amount and subsequently measured at fair value to reflect variability associated with the embedded derivative for changes in the market metal prices. These changes in the fair value of the receivable are adjusted through revenue from other sources at each subsequent financial statement date. Under certain contracts with customers, the sale of gold contained in copper concentrate occurs once the metal has been processed into refined gold and is sold separately similar to the gold and silver dore bar terms described above. The transaction price for the sale of gold contained in concentrate is determined based on the spot market price upon delivery and provisional pricing does not apply. |
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Exploration and Evaluation Expenditures | R)Exploration and Evaluation Expenditures Exploration and evaluation expenditures are the costs incurred in the initial search for mineral deposits with economic potential or in the process of obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore. Evaluation expenditures are the costs incurred to establish the technical and commercial viability of developing mineral deposits identified through exploration activities or by acquisition. Exploration and evaluation expenditures are expensed as incurred unless it can be demonstrated that the project will generate future economic benefit. When it is determined that a project can generate future economic benefit the costs are capitalized in the property, plant and mine development line item in the consolidated balance sheets. The exploration and evaluation phase ends when the technical feasibility and commercial viability of extracting the mineral is demonstrable. |
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Net Income Per Share | S)Net Income Per Share Basic net income per share is calculated by dividing net income for a given period by the weighted average number of common shares outstanding during that same period. Diluted net income per share reflects the potential dilution that could occur if holders with rights to convert instruments to common shares exercise these rights. The weighted average number of common shares used to determine diluted net income per share includes an adjustment, using the treasury stock method, for stock options outstanding. Under the treasury stock method:
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Income Taxes | T)Income Taxes Current and deferred tax expenses are recognized in the consolidated statements of income except to the extent that they relate to a business combination, or to items recognized directly in equity or in other comprehensive income. Current tax expense is based on substantively enacted statutory tax rates and laws at the consolidated balance sheet date. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of such assets and liabilities measured using tax rates and laws that are substantively enacted at the consolidated balance sheet date and effective for the reporting period when the temporary differences are expected to reverse. Deferred taxes are not recognized in the following circumstances:
Deferred tax assets are recognized for unused tax losses and tax credits carried forward and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized except as noted above. At each reporting period, previously unrecognized deferred tax assets are reassessed to determine whether it has become probable that future taxable profits will allow the deferred tax assets to be recovered. |
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Comparative Figures | U)Comparative Figures Certain figures in the consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of these financial statements as at and for the year ended December 31, 2020. |
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) In May 2020, the IASB issued amendments to IAS 16 Property, Plant and Equipment that clarify the accounting for the net proceeds from selling any items produced while bringing an item of property, plant and mine development to the location and condition necessary for it to be capable of operating in the manner intended by management. The amendments prohibit entities from deducting amounts received from selling items produced from the cost of property, plant and mine development while the Company is preparing the asset for its intended use. Instead, sales proceeds and the cost of producing these items will be recognized in the consolidated statements of income. The amendments are effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The amendments apply retrospectively, but only to assets brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. Adoption of the standard on the effective date and applying it retrospectively to the fiscal year beginning January 1, 2021 will result in a restatement to increase revenue from mining operations from the sale of pre-commercial gold production in 2021 by approximately $45.7 million and related production costs by approximately $16.7 million, with a corresponding net increase in the cost of property plant and mine development of approximately $29.0 million. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||||
Schedule of details of property, plant and equipment, estimated useful lives |
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ACQUISITION (Tables) |
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Schedule of allocation of the purchase price to assets acquired and liabilities assumed |
Notes:
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Schedule of allocation of the purchase price to assets acquired and liabilities assumed |
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FAIR VALUE MEASUREMENT (Tables) |
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FAIR VALUE MEASUREMENT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial assets and liabilities measured at fair value on a recurring basis | The following table sets out the Company's financial assets and liabilities measured at fair value on a recurring basis as at December 31, 2021 using the fair value hierarchy:
The following table sets out the Company’s financial assets and liabilities measured at fair value on a recurring basis as at December 31, 2020 using the fair value hierarchy:
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INVENTORIES (Tables) |
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INVENTORIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories |
Note:
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OTHER ASSETS (Tables) |
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OTHER ASSETS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other current assets |
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Schedule of other non-current assets |
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PROPERTY, PLANT AND MINE DEVELOPMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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PROPERTY, PLANT AND MINE DEVELOPMENT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property, plant and mine development |
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Schedule of geographical information of property, plant and mine development |
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INVESTMENTS (Tables) |
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INVESTMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of investments |
The following table sets out details of the Company's investments:
Note: (i)The balance is comprised of 20 (2020 — 17) equity investments that are each individually immaterial. |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts payable and accrued liabilities |
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RECLAMATION PROVISION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Asset retirement obligation and environmental remediation liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of environmental remediation liability and reclamation provisions |
Note:
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Environmental remediation liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset retirement obligation and environmental remediation liability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of environmental remediation liability and reclamation provisions |
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LEASES (Tables) |
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LEASES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of carrying amounts of right-of-use assets |
Note:
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Summary of lease obligations included in the consolidated balance sheets |
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Summary of future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms |
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Summary of amounts recognized in consolidated statements of income (loss) with respect to leases |
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LONG-TERM DEBT (Tables) |
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Schedule of long-term debt |
Notes:
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Schedule of Debt Principal Repayments |
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Schedule of finance costs |
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2020 Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of long-term debt |
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2018 Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt |
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2017 Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt |
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2016 Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt |
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.2012 Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt |
|
OTHER LIABILITIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LIABILITIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of information related to other liabilities |
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Schedule of funded status of the Company's defined benefit obligations |
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Schedule of components of Agnico Eagle's pension expense recognized in the consolidated statements of net income (loss) |
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Schedule of remeasurement of net defined benefit liability recognized in other comprehensive income (loss) |
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Schedule of significant assumptions used in measuring Executive Plan defined benefit obligations |
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Schedule of significant assumptions used in measuring Company Retirement Program defined benefit obligations |
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Schedule of significant assumptions used in measuring Company's defined benefit obligations for Mexico Plans |
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Schedule of sensitivity analysis for significant actuarial assumptions |
|
EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of maximum number of common shares that would be outstanding if all dilutive instruments outstanding were exercised |
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of weighted average number of common shares used in the calculation of basic and diluted net income per share |
|
STOCK-BASED COMPENSATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of outstanding stock options activity |
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Summary of stock options outstanding and exercisable |
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Summary of significant assumptions used to estimate the fair value |
|
OTHER RESERVES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER RESERVES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other reserves and the movements in other reserves |
|
REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUES FROM MINING OPERATIONS AND TRADE RECEIVABLES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of sales to individual customers that exceeded 10% revenues from mining operations |
|
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Schedule of total revenues from mining operations |
|
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Schedule of revenues from contracts with customers by metal |
|
CAPITAL AND FINANCIAL RISK MANAGEMENT (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CAPITAL AND FINANCIAL RISK MANAGEMENT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of translation impact on income before income and mining taxes and equity |
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Schedule of carrying amounts of financial instruments with exposure to credit risk |
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Schedule of lease financing, long-term debt, and total equity |
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Schedule of changes in liabilities arising from financing activities |
Note:
|
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of amounts recognized in gain on derivative financial instruments line item of consolidated statements of income |
|
OTHER EXPENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER EXPENSES (INCOME) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of amounts recognized in other expenses (income) line item of consolidated statements of income |
|
SEGMENTED INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENTED INFORMATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of company's revenues, production costs, Corporate and other assets, specific income and expense by segment |
The following table sets out total assets by segment:
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Schedule of carrying amount of goodwill by segment |
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Schedule of capital expenditures by segment |
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Schedule of company's revenues from mining operations and non-current assets by geographic area |
Note:
The following table sets out non-current assets by geographic area:
|
INCOME AND MINING TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME AND MINING TAXES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of income and mining tax expense |
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Schedule of effective income and mining tax reconciliation |
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Schedule of Components of Net Deferred Income Assets |
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Schedule and continuity of components of deferred income and mining tax liabilities |
Changes in net deferred tax assets and liabilities for the years ended December 31, 2021 and 2020 are as follows:
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Schedule of deductible temporary differences and unused tax losses in respect of which a deferred tax asset has not been recognized |
|
EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL | ||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of compensation of key management personnel |
|
COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||||||||||||||||||||||||
Schedule of contractual commitments |
|
BASIS OF PRESENTATION (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Canadian Malartic Corporation and Canadian Malartic GP. | |
BASIS OF PRESENTATION | |
Percentage of ownership in Joint Venture | 50.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Post-employment Benefits and Stock-based Compensation (Details) - item |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Post employment benefits | ||
Contribution under supplemental plan (as a percent) | 10.00% | |
Minimum number of years of service for retirement program | 10 years | |
Minimum age limit to be eligible for retirement program (in years) | 57 years | |
Stock-based Compensation | ||
Contribution by directors (excluding non-executive directors), officers and employees under ISPP (as a percent) | 10.00% | |
Contribution by company under ISPP to participants (as a percent) | 50.00% | |
Mexico Plans | ||
Post employment benefits | ||
Minimum number of years of service for retirement program | 15 years | |
Minimum age limit to be eligible for retirement program (in years) | 60 years | 60 years |
Number of defined benefit retirement plans | 3 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Issued Accounting Pronouncements (Details) - Property, Plant and Equipment-Proceeds before Intended Use $ in Millions |
Jan. 01, 2021
USD ($)
|
---|---|
Disclosure of initial application of standards or interpretations [line items] | |
Increase in revenue | $ 45.7 |
Increase in production costs | 16.7 |
Property, plant and equipment | $ 29.0 |
SIGNIFICANT JUDGMENTS, ESTIMATES AND ASSUMPTIONS (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
CMC Exploration Assets | |
Disclosure of detailed information about business combination [line items] | |
Percentage of ownership in Joint Venture | 50.00% |
ACQUISITION (Details) - TMAC Resources Inc. $ in Thousands |
Feb. 02, 2021
USD ($)
$ / shares
|
---|---|
ACQUISITION | |
Share Purchased Price Per Share At Acquisition Date | $ / shares | $ 2.20 |
Purchase of TMAC | $ | $ 225,580 |
INVENTORIES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
INVENTORIES | ||
Ore in stockpiles and on leach pads | $ 140,288 | $ 80,722 |
Concentrates and dore bars | 125,738 | 111,100 |
Supplies | 612,918 | 438,652 |
Total current inventories | 878,944 | 630,474 |
Non-current ore in stockpiles and on leach pads (Note 7B) | 274,576 | 198,044 |
Total inventories | 1,153,520 | 828,518 |
Inventory write-down | $ 28,700 | $ 23,500 |
OTHER ASSETS (Details) - USD ($) $ in Thousands |
Dec. 18, 2019 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Disclosure Of Detailed Information Of Other Current Assets [Line Items] | |||
Federal, provincial and other sales taxes receivable | $ 81,450 | $ 67,666 | |
Prepaid expenses | 90,681 | 72,502 | |
Other receivables | 24,594 | 17,299 | |
Other | 2,121 | 1,745 | |
Total other current assets | 198,846 | 159,212 | |
Non-current ore in stockpiles and on leach pads | 274,576 | 198,044 | |
Non-current prepaid expenses | 27,481 | 26,945 | |
Non-current loan receivable - Orla | 37,942 | 21,247 | |
Non-current other receivables | 10,098 | 8,238 | |
Other | 3,101 | 4,780 | |
Total other assets | $ 353,198 | $ 259,254 | |
Orla Mining Ltd. | |||
Disclosure Of Detailed Information Of Other Current Assets [Line Items] | |||
Loan receivable term | 5 years | ||
Interest rate on loan receivables | 8.80% | ||
Aggregate financing commitment | $ 40,000 |
PROPERTY, PLANT AND MINE DEVELOPMENT - Geographic Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Property, plant and mine development | |||
Property, plant and equipment | $ 7,646,281 | $ 7,325,418 | $ 7,003,665 |
Canada.. | |||
Property, plant and mine development | |||
Property, plant and equipment | 5,529,486 | 5,166,239 | |
Finland | |||
Property, plant and mine development | |||
Property, plant and equipment | 1,435,881 | 1,428,331 | |
Sweden | |||
Property, plant and mine development | |||
Property, plant and equipment | 13,812 | 13,812 | |
Mexico | |||
Property, plant and mine development | |||
Property, plant and equipment | 659,469 | 714,576 | |
United states | |||
Property, plant and mine development | |||
Property, plant and equipment | $ 7,633 | $ 2,460 |
INVESTMENTS - Disposals of Equity Securities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
INVESTMENTS | ||
Fair value at the time of sale of equity investment | $ 4.3 | |
Cumulative net gain before tax on disposal of equity investment | 5.9 | |
Cumulative net gain on disposal of equity investment | $ 5.1 | |
Disposals of equity securities | $ 0.0 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ||
Trade payables | $ 189,069 | $ 167,127 |
Wages payable | 70,584 | 58,068 |
Accrued liabilities | 104,551 | 95,860 |
Other liabilities | 50,469 | 42,746 |
Total accounts payable and accrued liabilities | $ 414,673 | $ 363,801 |
LEASES - Right-of-use assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Carrying amounts of right-of-use assets | ||
Balance, beginning of year | $ 112,715 | $ 117,581 |
Net additions and modifications, net of disposals | 41,024 | 9,688 |
Amortization | (19,717) | (14,554) |
Balance, end of year | 134,022 | $ 112,715 |
TMAC. Resources Inc. | ||
Carrying amounts of right-of-use assets | ||
Net additions and modifications, net of disposals | $ 1,800 |
LEASES - Lease obligations (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Lease liabilities included in the statement of financial position | ||
Current | $ 32,988 | $ 20,852 |
Lease obligations (Note 13) | 98,445 | 99,423 |
Total lease obligations | $ 131,433 | $ 120,275 |
LEASES - Future minimum lease payments (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Future minimum lease payments | ||
Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms | $ 136,258 | $ 123,701 |
2022 | ||
Future minimum lease payments | ||
Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms | 33,952 | 20,464 |
Between 1-3 years | ||
Future minimum lease payments | ||
Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms | 37,825 | 28,090 |
Between 3 - 5 years | ||
Future minimum lease payments | ||
Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms | 16,674 | 17,846 |
Thereafter | ||
Future minimum lease payments | ||
Future minimum lease payments required to meet obligations that have initial or remaining non-cancellable lease terms | $ 47,807 | $ 57,301 |
LEASES - Recognition of amounts in the consolidated statements of income (loss) with respect to leases (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
LEASES | ||
Amortization of right-of-use assets | $ 19,717 | $ 14,554 |
Interest expense on lease obligations | 2,252 | 1,997 |
Variable lease payments not included in the measurement of lease liabilities | 137,369 | 117,317 |
Expenses relating to short-term leases | 3,883 | 4,926 |
Expenses relating to leases of low value assets, excluding short-term leases of low value assets | $ 1,105 | $ 792 |
LEASES - Additional information (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
LEASES | ||
Cash outflow for leases | $ 290.8 | $ 221.9 |
LONG-TERM DEBT (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
LONG-TERM DEBT | ||
Total debt | $ 1,565,223 | $ 1,565,241 |
Less: current portion | 225,000 | |
Total long-term debt | 1,340,223 | 1,565,241 |
Credit Facility | ||
LONG-TERM DEBT | ||
Deferred financing costs | (3,851) | (2,768) |
Outstanding borrowings | 0 | 0 |
2020 Notes | ||
LONG-TERM DEBT | ||
Total long-term debt | 198,585 | 198,505 |
2018 Notes | ||
LONG-TERM DEBT | ||
Total long-term debt | 348,316 | 348,145 |
2017 Notes | ||
LONG-TERM DEBT | ||
Total long-term debt | 298,670 | 298,454 |
2016 Notes | ||
LONG-TERM DEBT | ||
Total long-term debt | 349,053 | 348,790 |
2015 Note | ||
LONG-TERM DEBT | ||
Total long-term debt | 49,755 | 49,690 |
.2012 Notes | ||
LONG-TERM DEBT | ||
Total long-term debt | 199,745 | 199,575 |
2010 Notes | ||
LONG-TERM DEBT | ||
Total long-term debt | $ 124,950 | $ 124,850 |
LONG-TERM DEBT - 2020 Notes (Details) $ in Thousands |
Apr. 07, 2020
USD ($)
|
---|---|
2020 Notes | |
Disclosure of detailed information about borrowings [line items] | |
Principal | $ 200,000 |
Series A | |
Disclosure of detailed information about borrowings [line items] | |
Principal | $ 100,000 |
Interest rate | 2.78% |
Series B | |
Disclosure of detailed information about borrowings [line items] | |
Principal | $ 100,000 |
Interest rate | 2.88% |
Weighted Average | 2020 Notes | |
Disclosure of detailed information about borrowings [line items] | |
Maturity period | 11 years |
Interest rate | 2.83% |
LONG-TERM DEBT - 2018 Notes (Details) $ in Thousands |
Apr. 05, 2018
USD ($)
|
---|---|
2018 Notes | |
LONG-TERM DEBT | |
Principal | $ 350,000 |
Series.. A. | |
LONG-TERM DEBT | |
Principal | $ 45,000 |
Interest rate | 4.38% |
Series.. B. | |
LONG-TERM DEBT | |
Principal | $ 55,000 |
Interest rate | 4.48% |
Series C | |
LONG-TERM DEBT | |
Principal | $ 250,000 |
Interest rate | 4.63% |
LONG-TERM DEBT - 2017 Notes (Details) $ in Thousands |
Jun. 29, 2017
USD ($)
|
---|---|
2017 Notes | |
LONG-TERM DEBT | |
Principal | $ 300,000 |
Series.. A | |
LONG-TERM DEBT | |
Principal | $ 40,000 |
Interest rate | 4.42% |
Series.. B | |
LONG-TERM DEBT | |
Principal | $ 100,000 |
Interest rate | 4.64% |
Series. C. | |
LONG-TERM DEBT | |
Principal | $ 150,000 |
Interest rate | 4.74% |
Series D | |
LONG-TERM DEBT | |
Principal | $ 10,000 |
Interest rate | 4.89% |
LONG-TERM DEBT - 2016 Notes (Details) $ in Thousands |
Jun. 30, 2016
USD ($)
|
---|---|
2016 Notes | |
LONG-TERM DEBT | |
Principal | $ 350,000 |
Series A.. | |
LONG-TERM DEBT | |
Principal | $ 100,000 |
Interest rate | 4.54% |
Series B.. | |
LONG-TERM DEBT | |
Principal | $ 200,000 |
Interest rate | 4.84% |
Series C.. | |
LONG-TERM DEBT | |
Principal | $ 50,000 |
Interest rate | 4.94% |
LONG-TERM DEBT - 2015 Note (Details) - 2015 Note $ in Millions |
Sep. 30, 2015
USD ($)
|
---|---|
LONG-TERM DEBT | |
Principal | $ 50.0 |
Interest rate | 4.15% |
LONG-TERM DEBT - 2012 Notes (Details) $ in Thousands |
Jul. 24, 2012
USD ($)
|
---|---|
.2012 Notes | |
LONG-TERM DEBT | |
Principal | $ 200,000 |
Series. A. | |
LONG-TERM DEBT | |
Principal | $ 100,000 |
Interest rate | 4.87% |
Series. B. | |
LONG-TERM DEBT | |
Principal | $ 100,000 |
Interest rate | 5.02% |
LONG-TERM DEBT - 2010 Notes (Details) - USD ($) $ in Millions |
Apr. 07, 2020 |
Dec. 31, 2021 |
Apr. 07, 2010 |
---|---|---|---|
2010 Notes | |||
LONG-TERM DEBT | |||
Principal | $ 600.0 | ||
Series B. | |||
LONG-TERM DEBT | |||
Repayments of debt | $ 360.0 | ||
Interest rate | 6.67% | ||
Series C. | |||
LONG-TERM DEBT | |||
Interest rate | 6.77% | ||
Outstanding borrowings | $ 125.0 |
LONG-TERM DEBT - Finance Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
LONG-TERM DEBT | ||
Interest on Notes | $ 72,795 | $ 77,739 |
Stand-by fees on credit facilities | 5,546 | 5,107 |
Amortization of credit facilities, financing and note issuance costs | 3,778 | 3,594 |
Interest on Credit Facility | 1,549 | 5,304 |
Accretion expense on reclamation provisions | 6,554 | 3,502 |
Interest on lease obligations, other interest and penalties | 5,329 | 2,684 |
Interest capitalized to assets under construction | (3,509) | (2,796) |
Total finance costs | $ 92,042 | $ 95,134 |
Capitalization rate (as a percent) | 1.20% | 1.18% |
OTHER LIABILITIES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Disclosure of defined benefit plans [line items] | ||
Pension benefit obligations | $ 51,210 | $ 49,822 |
Other | 19,051 | 13,514 |
Total other liabilities | $ 70,261 | $ 63,336 |
Minimum number of years of service for retirement program | 10 years | |
Age limit to eligible for retirement program (in years) | 57 years | |
Minimum Age Limit to Eligible for Retirement Program | 57 years | |
Mexico Plans | ||
Disclosure of defined benefit plans [line items] | ||
Minimum number of years of service for retirement program | 15 years | |
Minimum Age Limit to Eligible for Retirement Program | 60 years | 60 years |
OTHER LIABILITIES - Components of pension expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Defined benefit pension plan expense | ||
Current service cost | $ 2,624 | $ 12,827 |
Past service cost | 5,351 | |
Administrative expenses | 130 | 115 |
Interest cost on defined benefit obligation | 1,240 | 809 |
Interest on assets | (72) | (77) |
Pension expense | $ 9,273 | $ 13,674 |
OTHER LIABILITIES - Remeasurements of net defined benefit liability (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Disclosure of defined benefit plans [line items] | ||
Actuarial (gains) losses relating to the defined benefit obligation | $ (4,634) | $ 2,584 |
Net return on assets excluding interest | 72 | 77 |
Total remeasurements of the net defined benefit liability | (4,562) | $ 2,661 |
Estimate of contributions expected to be paid to plan for next annual reporting period | 2,800 | |
Estimate of benefit payments expected to be paid to plan for next annual reporting period | $ 2,500 | |
Canada | ||
Disclosure of defined benefit plans [line items] | ||
Weighted average duration of defined benefit obligation | 12 years 7 months 6 days | 14 years 4 months 24 days |
Mexico Plans | ||
Disclosure of defined benefit plans [line items] | ||
Weighted average duration of defined benefit obligation | 5 years 10 months 24 days | 3 years 8 months 12 days |
OTHER LIABILITIES - Significant weighted average assumptions (Details) |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Executives Plan | |||
Significant weighted average assumptions | |||
Discount rate (as a percent) | 3.00% | 2.50% | 3.00% |
Retirement Program | |||
Significant weighted average assumptions | |||
Discount rate (as a percent) | 2.50% | 1.80% | 2.80% |
Retirement Program | Minimum | |||
Significant weighted average assumptions | |||
Termination of employment per annum | 2.00% | 2.00% | |
Retirement Program | Maximum | |||
Significant weighted average assumptions | |||
Termination of employment per annum | 10.00% | 10.00% |
OTHER LIABILITIES - Significant actuarial assumptions for Mexico Plans (Details) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Mexico Plans | ||
Disclosure of defined benefit plans [line items] | ||
Discount rate (as a percent) | 7.50% | 5.50% |
OTHER LIABILITIES - Effect of changes in significant actuarial assumptions (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Effect of changes in significant actuarial assumptions | |
Increase in actuarial assumption (as a percent) | 0.50% |
Decrease in actuarial assumption (as a percent) | 0.50% |
Increase in actuarial assumption | $ (1,703) |
Decrease in actuarial assumption | $ 1,839 |
EQUITY - Common Shares (Details) - $ / shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
EQUITY | ||
Common stock, par value (in dollars per share) | $ 0 | |
Common stock, shares issued | 245,435,804 | 243,301,195 |
Common shares held in trust | 433,947 | 416,881 |
EQUITY - Common shares outstanding (Details) - shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Common shares held in trusts in connection with the RSU plan (Note 17C), PSU plan (Note 17D) and LTIP | 433,947 | 416,881 | |
Total | 249,918,745 | ||
Employee stock options. | |||
Employee stock options | 4,482,941 | ||
Common Shares Outstanding | |||
Common shares outstanding | 245,001,857 | 242,884,314 | 239,619,035 |
EQUITY - Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
EQUITY | ||
Net income for the year | $ 543,009 | $ 511,607 |
Weighted average number of common shares outstanding - basic | 243,708,000 | 241,508,000 |
Add: Dilutive impact of common shares related to the RSU plan, PSU plan and LTIP | 598,000 | 695,000 |
Add: Dilutive impact of employee stock options | 426,000 | 869,000 |
Weighted average number of common shares outstanding - diluted | 244,732,000 | 243,072,000 |
Net income per share - basic | $ 2.23 | $ 2.12 |
Net income per share - diluted | $ 2.22 | $ 2.10 |
Anti-dilutive employee stock options | 2,806,786 | 0 |
STOCK-BASED COMPENSATION - Stock options (Details) - Employee stock options. |
12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 01, 2021
Options
$ / shares
shares
|
Dec. 31, 2021
CAD ($)
Options
shares
|
Dec. 31, 2021
CAD ($)
Options
shares
|
Dec. 31, 2021
CAD ($)
Options
shares
|
Dec. 31, 2021
CAD ($)
Options
$ / shares
shares
|
Dec. 31, 2021
CAD ($)
Options
shares
|
Dec. 31, 2020
CAD ($)
Options
|
Dec. 31, 2020
CAD ($)
Options
|
Dec. 31, 2020
CAD ($)
Options
shares
|
Dec. 31, 2020
CAD ($)
Options
$ / shares
|
Dec. 31, 2020
CAD ($)
Options
|
|
Share based compensation | |||||||||||
Number of common shares that reserved for issuance to any one person under ESOP (in percentage) | 5.00% | ||||||||||
Maximum number of common shares reserved for issuance | shares | 38,700,000 | 38,700,000 | 38,700,000 | 38,700,000 | 38,700,000 | ||||||
Number of stock options vested within 30 days of grant date | shares | 397,688 | 395,164 | |||||||||
Vesting period | 3 years | ||||||||||
Number of stock options | |||||||||||
Outstanding, beginning of year | Options | 3,421,404 | 3,421,404 | 4,122,300 | ||||||||
Granted during the year | 1,590,750 | 1,590,750 | 1,583,150 | 1,583,150 | |||||||
Exercised during the year | Options | (471,765) | (2,170,460) | |||||||||
Forfeited during the year | Options | (57,448) | (113,586) | |||||||||
Outstanding, end of year | Options | 4,482,941 | 3,421,404 | |||||||||
Options exercisable, end of year | Options | 2,077,187 | 2,077,187 | 2,077,187 | 2,077,187 | 2,077,187 | 852,588 | 852,588 | 852,588 | 852,588 | 852,588 | |
Weighted average exercise price | |||||||||||
Options outstanding, beginning of year | $ 65.27 | $ 65.27 | $ 54.86 | ||||||||
Granted during the year | 89.59 | 80.04 | |||||||||
Exercised during the year | 58.40 | 56.33 | |||||||||
Forfeited during the year | 80.35 | 63.88 | |||||||||
Options outstanding, end of year | 74.43 | 65.27 | |||||||||
Options exercisable, end of year | 68.28 | 60.61 | |||||||||
Average share price of common shares | $ 76.00 | $ 87.92 | |||||||||
Fair value at grant date | $ | $ 18.95 | $ 18.95 | $ 18.95 | $ 18.95 | $ 18.95 | $ 13.68 | $ 13.68 | $ 13.68 | $ 13.68 | $ 13.68 | |
Common stock reserved for future issuance | shares | 4,482,941 | 4,482,941 | 4,482,941 | 4,482,941 | 4,482,941 | ||||||
Number of common shares available for grant | shares | 5,068,748 | 5,068,748 | 5,068,748 | 5,068,748 | 5,068,748 | ||||||
Maximum | |||||||||||
Share based compensation | |||||||||||
Option term (expiration period) | 5 years | ||||||||||
Vesting period | 3 years | ||||||||||
Subsequent events | |||||||||||
Share based compensation | |||||||||||
Number of stock options vested within 30 days of grant date | shares | 410,306 | ||||||||||
Vesting period | 3 years | ||||||||||
Number of stock options | |||||||||||
Granted during the year | Options | 1,641,225 |
CAPITAL AND FINANCIAL RISK MANAGEMENT - Credit Risk and Capital Risk Management (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
CAPITAL AND FINANCIAL RISK MANAGEMENT | |||
Cash and cash equivalents | $ 185,786 | $ 402,527 | $ 321,897 |
Short-term investments | 5,288 | 3,936 | |
Lease obligations | 131,433 | 120,275 | |
Long-term debt | 1,565,223 | 1,565,241 | |
Total equity | 5,980,835 | 5,683,213 | $ 5,111,514 |
Credit Risk | |||
CAPITAL AND FINANCIAL RISK MANAGEMENT | |||
Cash and cash equivalents | 185,786 | 402,527 | |
Short-term investments | 5,288 | 3,936 | |
Trade receivables. | 13,545 | 11,867 | |
Derivative financial instrument assets | 12,305 | 35,516 | |
Loan receivable - Orla | 37,942 | 21,247 | |
Total | 254,866 | 475,093 | |
Capital Risk | |||
CAPITAL AND FINANCIAL RISK MANAGEMENT | |||
Lease obligations | 131,433 | 120,275 | |
Long-term debt | 1,565,223 | 1,565,241 | |
Total equity | 5,980,835 | 5,683,213 | |
Total | $ 7,677,491 | $ 7,368,729 |
CAPITAL AND FINANCIAL RISK MANAGEMENT - Changes in liabilities arising from financing activities (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Changes in liabilities arising from financing activities | |
Beginning balance | $ 1,685,516 |
Changes from Financing Cash Flows | (27,573) |
Foreign Exchange | (4,846) |
Other | 43,559 |
Ending balance | 1,696,656 |
Long-term debt. | |
Changes in liabilities arising from financing activities | |
Beginning balance | 1,565,241 |
Changes from Financing Cash Flows | (2,553) |
Other | 2,535 |
Ending balance | 1,565,223 |
Lease obligations | |
Changes in liabilities arising from financing activities | |
Beginning balance | 120,275 |
Changes from Financing Cash Flows | (25,020) |
Foreign Exchange | (4,846) |
Other | 41,024 |
Ending balance | $ 131,433 |
DERIVATIVE FINANCIAL INSTRUMENTS - Currency Risk Management (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
U S Dollar Call Options | ||
Disclosure of detailed information about financial instruments [line items] | ||
Notional amount | $ 0 | $ 0 |
2022 | ||
Disclosure of detailed information about financial instruments [line items] | ||
Non-hedge derivatives | $ 2,375,200 | $ 1,188,000 |
DERIVATIVE FINANCIAL INSTRUMENTS - Commodity Price Risk Management (Details) $ in Thousands, gal in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2021
USD ($)
gal
|
Dec. 31, 2020
USD ($)
gal
|
|
Disclosure of detailed information about financial instruments [line items] | ||
Premiums realized on written foreign exchange call options | $ (2,276) | $ (1,779) |
Unrealized loss (gain) on warrants | 16,736 | (82,003) |
Realized (gain) loss on currency and commodity derivatives | (47,754) | 5,988 |
Unrealized loss (gain) on currency and commodity derivatives | 44,397 | (30,079) |
Loss (gain) on derivative financial instruments | $ 11,103 | $ (107,873) |
Heating Oil Commodity Derivative | ||
Disclosure of detailed information about financial instruments [line items] | ||
Derivative financial instruments outstanding (in volume) | gal | 10.9 | 24.0 |
OTHER EXPENSES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 19, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Other Income | |||
Loss on disposal of property, plant and mine development (Note 9 ) | $ 9,451 | $ 14,182 | |
Interest income | (3,937) | (4,867) | |
Temporary suspension and other costs due to COVID-19 | 13,353 | 33,540 | |
Acquisition costs | $ 10,000 | 12,943 | |
Gain on sale of exploration properties | (10,000) | ||
Other | 68 | (5,379) | |
Total other expenses | 21,742 | $ 48,234 | |
Aggregate consideration in cash | 10,000 | ||
Carrying value of the properties at the transaction closing | $ 0 | ||
TMAC Resources Inc. | |||
Other Income | |||
Acquisition costs | 2,900 | ||
Kirkland | |||
Other Income | |||
Acquisition costs | $ 10,000 |
SEGMENTED INFORMATION - Goodwill (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating segments | ||
Goodwill | $ 407,792 | $ 407,792 |
Canadian Malartic joint operation | ||
Operating segments | ||
Goodwill | 347,792 | |
Exploration | ||
Operating segments | ||
Goodwill | 60,000 | |
Gross carrying amount | ||
Operating segments | ||
Goodwill | 657,792 | |
Gross carrying amount | Canadian Malartic joint operation | ||
Operating segments | ||
Goodwill | 597,792 | |
Gross carrying amount | Exploration | ||
Operating segments | ||
Goodwill | 60,000 | |
Accumulated impairment | ||
Operating segments | ||
Goodwill | (250,000) | |
Accumulated impairment | Canadian Malartic joint operation | ||
Operating segments | ||
Goodwill | $ (250,000) |
SEGMENTED INFORMATION - Geographic (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Operating segments | ||
Revenues from Mining Operations | $ 3,823,878 | $ 3,138,113 |
Total non-current assets | 8,884,388 | 8,367,567 |
Canada.. | ||
Operating segments | ||
Revenues from Mining Operations | 3,004,117 | 2,296,637 |
Total non-current assets | 6,720,595 | 6,168,927 |
Mexico | ||
Operating segments | ||
Revenues from Mining Operations | 405,105 | 469,344 |
Total non-current assets | 671,691 | 736,908 |
Finland | ||
Operating segments | ||
Revenues from Mining Operations | 414,656 | 372,132 |
Total non-current assets | 1,458,838 | 1,447,157 |
Sweden | ||
Operating segments | ||
Total non-current assets | 16,128 | 13,812 |
United states | ||
Operating segments | ||
Total non-current assets | $ 17,136 | $ 763 |
IMPAIRMENT (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021
$ / $
$ / oz
|
Dec. 31, 2020
$ / $
$ / oz
|
Mar. 28, 2018 |
|
Canadian Malartic joint operation | |||
Impairment | |||
Nominal discount rate (as a percent) | 6.00% | 6.40% | |
Estimate of future long-term gold price | 1,600 | 1,500 | |
Foreign exchange rates | $ / $ | 0.79 | 0.78 | |
Inflation rate (as a percent) | 2.00% | 2.00% | |
Canadian Malartic joint operation | CMC Exploration Assets | |||
Impairment | |||
Percentage of voting equity interests acquired | 50.00% | ||
Canadian Malartic joint operation | Minimum | |||
Impairment | |||
Estimate of future short-term gold price | 1,600 | 1,800 | |
Canadian Malartic joint operation | Maximum | |||
Impairment | |||
Estimate of future short-term gold price | 1,800 | 1,900 | |
CMC Exploration Assets | |||
Impairment | |||
Nominal discount rate (as a percent) | 7.90% | 8.10% | |
Estimate of future short-term and long-term gold price | 1,600 | 1,500 | |
Foreign exchange rates | $ / $ | 0.79 | 0.78 | |
Inflation rate (as a percent) | 2.00% | 2.00% |
INCOME AND MINING TAXES - Components of income and mining taxes expense (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
INCOME AND MINING TAXES | ||
Current income and mining taxes | $ 181,812 | $ 180,202 |
Deferred income and mining taxes: | ||
Origination and reversal of temporary differences | 178,588 | 75,756 |
Total income and mining taxes expense | $ 360,400 | $ 255,958 |
INCOME AND MINING TAXES - Calculation of expense by applying the Canadian statutory income tax (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income and mining taxes expense calculated by applying the Canadian statutory income tax rate | ||
Combined federal and composite provincial tax rates | 26.00% | 26.00% |
Expected income tax expense at statutory income tax rate | $ 234,887 | $ 199,568 |
Increase (decrease) in income and mining taxes resulting from: | ||
Mining taxes | 119,692 | 94,511 |
Impact of foreign tax rates | (9,531) | (7,471) |
Permanent differences | (5,718) | (19,197) |
Impact of foreign exchange on deferred income tax balances | 21,070 | (11,453) |
Total income and mining taxes expense | $ 360,400 | $ 255,958 |
INCOME AND MINING TAXES - Components of net deferred income tax assets (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Net deferred tax assets | $ 133,608 |
Mining Properties | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Net deferred tax assets | 9,439 |
Net operating loss carry forwards | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Net deferred tax assets | 107,489 |
Reclamation provisions and other labilities | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |
Net deferred tax assets | $ 16,680 |
INCOME AND MINING TAXES - Components of net deferred income and mining tax liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Total deferred income and mining tax liabilities | |||
Total deferred income and mining tax liabilities | $ 1,212,750 | $ 1,036,061 | $ 948,142 |
Mining Properties | |||
Total deferred income and mining tax liabilities | |||
Total deferred income and mining tax liabilities | 1,514,017 | 1,390,600 | |
Net operating loss carry forwards | |||
Total deferred income and mining tax liabilities | |||
Total deferred income and mining tax liabilities | (27,459) | (100,026) | |
Mining taxes | |||
Total deferred income and mining tax liabilities | |||
Total deferred income and mining tax liabilities | (98,807) | (90,706) | |
Reclamation provisions and other labilities | |||
Total deferred income and mining tax liabilities | |||
Total deferred income and mining tax liabilities | $ (175,001) | $ (163,807) |
INCOME AND MINING TAXES - Reconciliation of deferred income and mining tax liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Deferred income and mining tax liabilities | ||
Deferred income and mining tax liabilities - beginning of year | $ 1,036,061 | $ 948,142 |
Income and mining tax impact recognized in net income | 179,720 | 76,197 |
Income tax impact recognized in other comprehensive income and equity | (3,542) | 11,722 |
Deferred income tax assets acquired on the purchase of TMAC | (133,097) | |
Net deferred income and mining tax liabilities - end of year | $ 1,079,142 | $ 1,036,061 |
INCOME AND MINING TAXES - Temporary differences and unused tax losses (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Temporary Differences and Unused Tax Losses | ||
Taxable temporary difference not recognized as deferred income tax | $ 469,100 | $ 411,400 |
Other deductible temporary differences | ||
Temporary Differences and Unused Tax Losses | ||
Unrecognized deductible temporary differences and unused tax losses | $ 420,154 | $ 214,520 |
EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
EMPLOYEE BENEFITS AND COMPENSATION OF KEY MANAGEMENT PERSONNEL | ||
Employee benefits expense | $ 736,900 | $ 657,000 |
Salaries, short-term incentives and other benefits | 13,582 | 16,964 |
Post-employment benefits | 1,581 | 1,634 |
Share-based payments | 23,475 | 28,631 |
Total | $ 38,638 | $ 47,229 |
SUBSEQUENT EVENTS (Details) |
Feb. 23, 2022
USD ($)
$ / shares
|
Feb. 08, 2022
USD ($)
shares
|
---|---|---|
SUBSEQUENT EVENTS | ||
Dividend declared (in dollars per share) | $ / shares | $ 0.40 | |
Dividend declared | $ 181,700,000 | |
Kirkland | ||
SUBSEQUENT EVENTS | ||
Business Combination Exchange Ratio of Shares | shares | 0.7935 | |
Number of instruments or interests issued or issuable | 209,274,263 |