LOGO

Audited Annual Financial Statements and
Management's Discussion and Analysis(Prepared in accordance with US GAAP)

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AUDITED ANNUAL FINANCIAL STATEMENTS AND MANAGEMENT'S  DISCUSSION AND ANALYSIS

Management's Discussion and Analysis should be read in conjunction with the accompanying audited annual financial statements. These financial statements have been
prepared in accordance with United States generally accepted accounting principles. All dollar amounts are presented in US dollars unless otherwise specified.

TABLE OF CONTENTS

|                                     |                                                            | Page
|------------------------------------ | ---------------------------------------------------------- | ----
|Management's Discussion and Analysis |                                                            |     
|                                     | Overview                                                   |     
|                                     | Highlights                                                 |     
|                                     | 2004 Outlook                                               |     
|                                     | Results of Operations                                      |     
|                                     | Liquidity and Capital Resources                            |     
|                                     | Risk Profile                                               |     
|                                     | Outstanding Securities                                     |     
|                                     | Critical Accounting Estimates                              |     
|                                     | Forward-Looking Statements                                 |     
|                                     | Summarized Quarterly Data                                  |     
|                                     | Five Year Financial and Operating Summary                  |     
|                                     | Mineral Reserve & Mineral Resource Data                    |     
|Audited Annual Financial Statements  |                                                            |     
|                                     | Management's Responsibility for Financial Reporting        |     
|                                     | Auditors' Report                                           |     
|                                     | Summary of Significant Accounting Policies                 |     
|                                     | Balance Sheet                                              |     
|                                     | Statement of Income (Loss) and Comprehensive Income (Loss) |     
|                                     | Statement of Shareholders' Equity                          |     
|                                     | Statement of Cash Flows                                    |     
|                                     | Notes to Financial Statements                              |     

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL  CONDITION AND RESULTS OF OPERATIONS

Overview

Agnico-Eagle Mines Limited is an intermediate-sized gold producer centered in one of the mining industry's most favorable political and regulatory environments in
the world: Quebec, Canada. In its over 30 year history, Agnico-Eagle has never hedged away increases in the price of gold. Our LaRonde Mine is a proven gold producer with a long reserve life.
We have amassed a large land position in one of the most prolific gold producing regions and we have the cash resources and experience to grow reserves and create a multi-mine platform.

The
most important driver of financial performance for Agnico-Eagle is the spot price of gold. As we have never sold gold forward, we are positioned to benefit from rising gold prices.
Due to the poly-metallic nature of the LaRonde orebody, spot prices of silver, copper and zinc are also key drivers of financial performance. Since the sale of these byproduct metals is
important to both revenue and production costs per ounce, we occasionally implement hedging strategies to mitigate the effects of fluctuating prices. We have never sold gold forward because we believe
that low-cost production is the best protection against decreasing gold prices. The US$/C$ exchange rate is an important financial driver to achieving low-cost production as
practically all our operating costs are paid in Canadian dollars. As such, we also use hedging strategies to mitigate the impact of fluctuating exchange rates on our per ounce production costs.

In
the last two years, we have encountered some operational challenges at LaRonde. We have fallen short of our production targets due to expansion related problems in 2002 and a
rock-fall and production drilling challenges in 2003. However, with the expansion now complete and the implementation of a more focused and more conservative mining plan, we believe we
have reduced mining risk and are well positioned to profit from higher gold and by-product metal prices. The production challenges of the past few years have accentuated the risks of
reliance on the LaRonde Mine. Our strategy over the next few years will be to reduce our dependence on LaRonde as our sole source of production while still taking advantage of the mine's personnel and
infrastructure. Our strategy envisions the development of multiple mines within a short distance of LaRonde with growing reserves and increasing production in one of
the most mining friendly areas of the world. With our Lapa property only 7 miles away, and our Goldex property only 35 miles away, and with over 2.8 million ounces of cumulative gold
reserves on these properties, we feel we can achieve long term-growth while capitalizing on internal synergies. Our strategy is to capitalize on these opportunities by using the expertise
of the LaRonde team, the mine's large processing capacity and the Company's large pool of available tax deductions.

While
regional expansion represents the core of our strategy, we continue to seek growth opportunities elsewhere. Our focus will be on politically stable regions and on situations where
the expertise developed at LaRonde can add value.

We
anticipate that LaRonde will generate strong free cash flow in 2004 and, coupled with our strong working capital position and completely undrawn credit facility, we are in a strong
position to achieve our growth strategy. With a world class mine and promising properties in a mining friendly environment, we believe we can build per share value by focusing on these assets while
retaining full leverage to rising gold prices.

Highlights

In 2003, an operationally challenging year, we produced 236,653 ounces of gold which was well below our original production target of 375,000 ounces. In the first
quarter of 2003, we experienced a rock-fall at the LaRonde Mine in Quebec which forced us to change our mining sequence resulting in a delay in the extraction of higher grade gold mining
blocks from the lower part of the mine. The effects of the rock-fall continued to adversely affect production in the second quarter. In the third quarter we faced production drilling
challenges and realized lower than planned recoveries in the mill.

Despite
these challenges, we achieved significant improvements in operating performance in the fourth quarter of 2003 as 73% of ore production came from the lower level mining horizon.
This mining horizon contains ore that has substantially higher gold grades than that of the upper mine and is also substantially richer in copper. Onsite operating costs showed a steady improvement
during the quarter and we were also able to

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begin
accumulating a surface ore stockpile which will mitigate the inherent risks associated with mining and will act as a source of ore should unforeseen events, such as those we faced in 2003,
affect mining operations.

The
operational challenges in 2003 led to a net loss of $19.5 million or $0.23 per share compared to income of $4.0 million or $0.06 per share in 2002. Total cash operating
costs to produce an ounce of gold were $269 for 2003 which was above our original estimate of $125 per ounce and above 2002 total cash operating costs of $182 per ounce. Total cash operating costs is
a non-GAAP measure and is explained in
"Results of Operations  Production Costs." Lower production, higher operating costs, and the stronger Canadian dollar were the major contributors to the
increased cost per ounce. Other factors that contributed to the 2003 net loss were increased exploration expenditures resulting from the work conducted on the Lapa property, increased amortization,
increased interest expense as no interest was capitalized in the current year, increased administrative expenditures and a one time charge related to the adoption of a new accounting standard.

In
the fourth quarter, as a result of operational improvements, we achieved net earnings of $2.4 million or $0.03 cents per share compared to earnings of $0.8 million or
$0.01 per share in the fourth quarter of 2002. Compared to 2002, we produced 7% fewer ounces in the fourth quarter of 2003, however revenue increased 32% driven by increased gold and byproduct metal
prices. Fourth quarter 2003 earnings also reflected a higher tax recovery than the fourth quarter of 2002. Total cash operating costs in the fourth quarter of 2003 increased to $220 per ounce of gold
produced from $198 in the same period of 2002 due to lower gold production and a stronger Canadian dollar, offset by higher byproduct revenue.

We
ended the year with over $140 million in working capital, which includes $110 million in cash. Despite the production difficulties, stronger gold and byproduct prices
helped the Company generate positive operating cash flow (before working capital changes) of $4 million in 2003. Operating cash flow was well below 2002 levels of $20 million due mainly
to the operational challenges and stronger Canadian dollar, offset by increased metal prices. In the fourth quarter of 2003, we generated $10 million of operating cash flow compared to
$5 million in the fourth quarter of 2002. The increase was mainly due to increased metal prices offset somewhat by the stronger Canadian dollar.

2003
brought exploration success which culminated in record year-end gold reserves of 7.9 million ounces. At LaRonde, not only did we replace 2003 production, but we
also increased gold reserves by an additional one million ounces from four to five million ounces of gold. At Lapa, located only 7 miles east of LaRonde, the 2003 drilling program led to a conversion
of 1.2 million ounces of gold resource into reserves. At Goldex, located 35 miles east of LaRonde, a new geological model and an independent engineering review led to a year end reserve
of 1.6 million ounces of gold. A summary of our year end mineral reserve position can be found on page 19. Driven by this exploration success, the Company also acquired more property
along the prolific Cadillac-Bousquet gold belt and the Cadillac-Larder Lake Break immediately to the south.

By
the end of 2003, we had addressed LaRonde's operational problems. By the end of the year, we implemented a focused, more conservative mining plan and we ended the year with available
cash resources of $210 million, which includes $100 million available under our revolving bank facility. We now look forward to 2004 with a renewed focus on implementing our growth
strategy.

2004 Outlook

For 2004, we expect to produce 300,000 ounces of gold at total cash operating costs ranging between $155 and $165 per ounce. The
estimated decline in total cash operating costs is due to the elimination of the El Coco royalty and projected increase in gold and byproduct metal production. Our estimated silver and byproduct
copper and zinc production, along with metal price assumptions and sensitivities, can be found in "Results of Operations  Production costs". At an estimated $340
gold price and US$/C$ exchange rate of $1.30, we expect to generate strong operating cash flow which we will use to fund capital additions at LaRonde and the continued development of our promising
Lapa and Goldex properties.

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Results of Operations

Revenues from Mining Operations

In 2003, revenue from mining operations increased 17% to $127 million from $108 million in 2002. The majority of our revenue is derived from
precious metal sales. Sales of gold and silver typically account for more than 80% of Agnico-Eagle's revenue. Revenues from mining operations are accounted for net of related smelting, refining and
other charges. In 2003, precious metal sales accounted for 84% of revenue down, slightly from 87% in 2002. This slight decrease over 2002 was due to surging metal prices in the latter half of the year
for byproduct copper and zinc. In 2004, we anticipate precious metal sales to account for 80% of overall revenue. The table below summarizes net revenue by metal:

2003

2002

% ChangeGold

$
85,566

$
80,177

7%Silver


20,584


14,115

46%Copper


6,452


(1,027
)
728%Zinc


14,218


14,762

(4)%$
126,820

$
108,027

17%


The
increase in gold revenue was due to an 18% increase in realized prices offset by a 9% decrease in gold production. Revenues benefited from a 28% increase in silver production and a
10% increase in realized silver prices. Copper production increased by 126% while copper prices realized increased 17%. In 2002, net copper revenue had a negative effect on total revenue due to
historically low copper prices not being sufficient to recover the smelting, refining and transportation charges. However, since a majority of the gold ounces we recover is contained in our copper
concentrate, this negative net revenue represents a necessary cost of producing gold. Finally, zinc production declined 7% while realized zinc price increased 12% leaving net zinc revenue essentially
unchanged.

Decreased
gold production in 2003 was due to a number of factors. In the first quarter of 2003, we experienced a rock-fall which delayed extraction of higher grade gold
mining blocks from the lower part of the mine. The affected area stabilized on its own and we were able to recover and process most of the ore. We filled the affected area with cemented rock fill and
paste fill to further stabilize the area, and reduced the widths of certain mining blocks to accelerate the establishment of the pyramidal mining sequence. Due to the remedial work conducted in this
area, we reduced tonnage from the gold/copper rich lower levels and replaced it with tonnage from the upper zinc/silver rich areas of the mine. This resequencing of production led to increased silver
production for 2003. For 2004, most of the production will come from secondary, de-stressed mining blocks which should reduce the risk of such an event reoccurring.

In
the third quarter of 2003, we encountered production drilling challenges. Squeezing drill holes slowed down the planned extraction time of mining blocks from the lower part of the
mine. These drilling challenges resulted in shortages of ore which lead to numerous "stop-start" cycles in the mill but were resolved in the third and fourth quarters and are not expected
to affect production in 2004. To address these drilling challenges, we added two production drills, increased drill hole diameter and changed our blasting method. The new blasting method has been
successful in decreasing dilution and improving fragmentation and, coupled with the completion of the Level 219 crushing plant, has improved ore flow and increased productivity.

Although
more ore was being mined from the upper areas of the mine, zinc production declined and copper production increased over 2002 as we were able to steadily increase tonnage from
the lower levels throughout the year. In the fourth quarter, LaRonde delivered record quarterly production from the lower gold/copper rich levels with 73% of total tonnage processed coming from these
levels. This led to fourth quarter production of 70,299 ounces which was 7% lower than the same quarter in 2002 but in line with our expectations.

In
light of the operational challenges encountered in 2003, in the fourth quarter, the Company undertook a comprehensive review of short-term and long-term
production targets. Based on recent experience, we implemented a more conservative mining plan. We have also taken a number of measures to reduce our exposure to normal mining risk such as increasing
our surface ore stockpile. This stockpile will ensure that the

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mill
can temporarily continue to process ore in the event of production stoppages due to unforeseen circumstances such as those encountered in 2003.

2004 Outlook:Revenues from mining operations are expected to increase significantly in 2004 as production for all metals is
projected to increase and current market conditions indicate that metal prices will be higher than those realized in 2003. The table below summarizes our estimated production for
2004:

|                      |  | 2004 Estimate |  | 2003 Actual |  | % Change
|--------------------- |  | ------------- |  | ----------- |  | --------
|Gold (ounces)         |  | 300,000       |  | 236,653     |  | 27%     
|Silver (000's ounces) |  | 4,700         |  | 3,953       |  | 19%     
|Copper (000's pounds) |  | 24,000        |  | 20,131      |  | 19%     
|Zinc (000's pounds)   |  | 120,000       |  | 100,337     |  | 20%     

Interest and Sundry Income

Interest and sundry income consists of interest on cash balances, realized gains on the disposition of available-for-sale securities, and
amortization related to our gold put option contracts expiring in the year. Interest and sundry income was $2.8 million in 2003 compared to $1.9 million in 2002. The $0.9 million
increase was due to a number of factors. While interest on cash balances remained relatively unchanged over 2002, in 2003, we realized approximately $2.5 million in gains on the disposition of
available-for-sale securities. This gain was offset by a $1.8 million charge relating to the cost of gold puts purchased in 1999.

2004 Outlook:Interest and sundry income is projected to be essentially nil in 2004 as interest income on our cash balance is
expected to be offset by the non-cash amortization of the cost of our gold put option contracts.

Production Costs

In 2003, production costs increased 38% to $105 million from $76 million. Operating costs per ton milled remained essentially unchanged compared to
2002 at C$52 per ton. (Operating costs per ton is a non-GAAP measure and is explained below.) The following table summarizes the components of operating cost per ton.

2003

2002Definition Drilling

C$
0.29

C$
0.35Stope Development


6.75


6.90Mining


9.84


8.77Underground Services


14.73


13.27Milling


15.67


16.48Surface Services


1.28


1.54Administration


3.69


4.29C$
52.25

C$
51.60


The
rock-fall in the first quarter and the production drilling challenges encountered in the third quarter caused mining and underground service costs to increase in 2003.
However, we addressed the production drilling challenges in the third quarter and steadily ramped up tonnage milled in the fourth quarter. We milled 627,000 tons in the fourth quarter of 2003
which represents a 17% increase over the same quarter of 2002. Fourth quarter gold production was 7% lower than 2002 due to decreased gold grades as a result of the implementation of a more
conservative mining plan. Onsite operating costs per ton in the fourth quarter were C$54 per ton compared to C$53 per ton in the prior year; however, steady improvement was made throughout the
quarter as our operating costs decreased to C$48 per ton in December. For 2004 we expect a slight increase in operating costs to be offset by an estimated 4% increase in total tons milled.
Therefore, we expect operating costs per ton to decrease to between C$49 and C$51 per ton.

In
2003, total cash operating costs to produce an ounce of gold increased 48% to $269 from $182 in 2002. Total cash operating costs are comprised of onsite operating costs reduced by net
silver, zinc and copper

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revenue.
The table below summarizes the components of the increase in total cash operating costs per ounce of gold produced.

|                                |  | 4th Quarter |     | Year to Date |  
|------------------------------- |  | ----------- | --- | ------------ | -
|2002 total cash operating costs |  | $           | 198 |              | $
|Lower gold production           |  |             | 14  |              |  
|Stronger Canadian dollar        |  |             | 29  |              |  
|Higher El Coco royalty          |  |             | (30 | )            |  
|Increased operating costs       |  |             | 79  |              |  
|Higher byproduct revenue        |  |             | (70 | )            |  
|                                |  |             |     |              |  
|2003 total cash operating costs |  | $           | 220 |              | $
|                                |  |             |     |              |  

Increased
operating costs for both the fourth quarter and year to date were a result of increased tonnage mined and processed coupled with increased mining and underground services costs
resulting from the first quarter rock-fall and the production drilling challenges encountered in the third quarter. Increasing byproduct metal prices had a more significant effect in the
fourth quarter than on the entire year as most of the yearly increase in metal prices occurred in the fourth quarter. Copper and zinc prices increased 8% and 2%, respectively in the first nine months
of 2003 and increased 22% and 17%, respectively in the fourth quarter. For 2004, we expect the El Coco royalty to be completely eliminated as that area of the mine is essentially mined out. As
byproduct metal prices increased throughout the year, we took the opportunity to liquidate our hedges of byproduct production. Therefore, at the end of the year, we had full leverage to increasing
byproduct metal prices.

Total
cash operating cost data is not a recognized measure under US GAAP and this data may not be comparable to data presented by other gold producers. We believe that this
generally accepted industry measure is a realistic indication of operating performance and is useful in allowing year over year comparisons in production costs. Cost per ton data is computed as
minesite operating costs, excluding the El Coco royalty, divided by tons processed through the mill. Total cash operating cost data can be affected by fluctuations in byproduct metal prices and
exchange rates, and royalty expenses. We have included these measures as we understand some investors use this data to assess our operating performance and ability to generate earnings and cash flow
at various gold prices. All of the non-GAAP measures used should be considered together with other data prepared in accordance with US GAAP, and none of the measures taken by
themselves is necessarily indicative of operating costs or cash flow measures prepared in
accordance with US GAAP. The tables presented below reconcile total cash operating costs and operating costs per ton to the figures presented in the financial statements prepared in accordance
with US GAAP.

Reconciliation of Total Cash Operating Costs per ounce

|                                                             |                                                                     | 2003 |         | 2002    |   | 2001    |        
|------------------------------------------------------------ | ------------------------------------------------------------------- | ---- | ------- | ------- | - | ------- | -------
|
|Production costs per Consolidated Statement of Income (Loss) |                                                                     | $    | 104,990 |         | $ | 75,969  |        
|Adjustments:                                                 |                                                                     |      |         |         |   |         |        
|                                                             | Inventory adjustments(i)                                            |      |         | 368     |   |         | 593    
|                                                             | Byproduct revenues, net of smelting, refining and marketing charges |      |         | (41,254 | ) |         | (27,850
|                                                             | El Coco royalty                                                     |      |         | (12,888 | ) |         | (10,764
|                                                             | Non-cash reclamation provision                                      |      |         | (519    | ) |         | (1,301 
|                                                             |                                                                     |      |         |         |   |         |        
|Cash operating costs                                         |                                                                     | $    | 50,697  |         | $ | 36,647  |        
|Gold production (ounces)                                     |                                                                     |      | 236,653 |         |   | 260,183 |        
|                                                             |                                                                     |      |         |         |   |         |        
|Cash operating costs (per ounce)                             |                                                                     | $    | 215     |         | $ | 141     |        
|El Coco royalty                                              |                                                                     |      | 54      |         |   | 41      |        
|                                                             |                                                                     |      |         |         |   |         |        
|Total cash operating costs                                   |                                                                     | $    | 269     |         | $ | 182     |        
|                                                             |                                                                     |      |         |         |   |         |        

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Reconciliation of Operating Costs per Ton

|                                                             |                                          | 2003 |         | 2002    |   | 2001    |        
|------------------------------------------------------------ | ---------------------------------------- | ---- | ------- | ------- | - | ------- | -------
|
|Production costs per Consolidated Statement of Income (Loss) |                                          | $    | 104,990 |         | $ | 75,969  |        
|Adjustments:                                                 |                                          |      |         |         |   |         |        
|                                                             | Inventory(i) and hedging(ii) adjustments |      |         | 54      |   |         | 609    
|                                                             | El Coco royalty                          |      |         | (12,888 | ) |         | (10,764
|                                                             | Non-cash reclamation provision           |      |         | (519    | ) |         | (1,301 
|                                                             |                                          |      |         |         |   |         |        
|Minesite operating costs (US$)                               |                                          | $    | 91,637  |         | $ | 64,513  |        
|                                                             |                                          |      |         |         |   |         |        
|Minesite operating costs (C$)                                |                                          | $    | 127,931 |         | $ | 101,289 |        
|Tons milled (000's tons)                                     |                                          |      | 2,449   |         |   | 1,963   |        
|                                                             |                                          |      |         |         |   |         |        
|Operating costs per ton (C$)                                 |                                          | $    | 52      |         | $ | 52      |        
|                                                             |                                          |      |         |         |   |         |        

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Notes:

2004 Outlook:For 2004, we expect our total cash operating costs to be in the range
of $155 to $165 per ounce of gold. As net silver, zinc and copper revenue are treated as a reduction of operating costs in arriving at total cash operating costs per ounce, production and price
assumptions play an important role in our 2004 estimate. As our operating costs are denominated in Canadian dollars, the US$/C$ exchange rate can also affect our estimate. The table below
summarizes the metal price assumptions and exchange rate assumptions used in deriving our 2004 estimate. 2004 production estimates for each metal are shown in the section entitled "Revenues from
mining operations".

Silver

$5.00Zinc

$0.40Copper

$0.85US$/C$ exchange rate

$1.30


As we have currently not hedged any of the above production, changes in the prices of these metals will impact our total cash operating cost estimate. We
currently have hedges in place to protect the downside risk associated with a strengthening Canadian dollar. For 2004, we have hedged approximately 30% of our estimated Canadian dollar operating costs
at a US$/C$ exchange rate of $1.59. The chart below shows the impact on total cash operating costs per ounce of changes in the variables discussed above. The sensitivities presented for the changes in
the US$/C$ exchange rate take into account the above hedges.

LOGO

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Exploration and Corporate Development Expense

In 2003, our exploration team continued to focus on the Lapa property which is located only 7 miles east of LaRonde. Their efforts resulted in a resource
to reserve conversion of 1.2 million ounces of gold. The property did not have reserves in 2002. In conjunction with our exploration success, our corporate development team was active in
acquiring a 100% interest in the Lapa property, a transaction completed late in the second quarter. We also acquired the Bousquet property adjacent to the LaRonde Mine, expanding our property
interests along the gold belt which hosts our LaRonde Mine. The former Bousquet mine office is now being used by a dedicated regional development team to evaluate and prioritize the Company's
exploration and development projects in the region.

In
2003, we re-evaluated our Goldex project. A new reserve and resource model was estimated which showed positive economics and led to a resource to reserve conversion of
1.6 million ounces of gold. The property did not have reserves in 2002. We have now decided to undertake an underground program to provide additional geological information. Over the course of
2004, we expect to complete three vertical slot raises through the orebody. We expect to process this material early in 2005. The objective of this bulk sample and additional drilling planned for 2004
is to attempt to increase the level of confidence in the gold grade. Although our current focus is growth in our own backyard, we continue to evaluate corporate development opportunities which could
potentially increase returns for our shareholders.

Total
exploration and corporate development expense, including equity losses of Sudbury, increased 102% in 2003 to $7.6 from $3.8 million in 2002. The table below summarizes
exploration and corporate development expense (thousands):

|                                                       |  | 2003  |  | 2002 
|------------------------------------------------------ |  | ----- |  | -----
|Lapa property                                          |  | 1,751 |  | 246  
|Other regional properties                              |  | 465   |  | 976  
|Exploration conducted by Sudbury Contact Mines Limited |  | 4,216 |  | 2,271
|Corporate development expense                          |  | 1,169 |  | 273  
|                                                       |  |       |  |      
|                                                       |  | 7,601 |  | 3,766
|                                                       |  |       |  |      

Exploration
is only conducted if warranted by drilling results and project economics. Therefore, the increase in expenses over 2002 reflects the success of our exploration and
development work during 2003. The 2003 gross exploration expenses on the Lapa property were approximately $3.0 million. However, these expenses were reduced by exploration investment tax
credits received from the provincial government of Quebec. In 2003, our 49.9% equity investee, Sudbury Contact Mines Limited ("Sudbury"), conducted more exploration due to the encouraging results on
the Timiskaming diamond project. In 2002, we owned approximately 64% of Sudbury and were fully consolidating its exploration expenses as we were providing full funding for its projects. In 2003,
through a series of equity financings, Sudbury became more financially independent and our ownership interest was diluted to less than 50%. Therefore, as of August 31, 2003, we are no longer
required to consolidate Sudbury's operations with our own. Our 2003 exploration expenses reflect 100% of
Sudbury's exploration expenses up to that time and our 49.9% share of exploration expenses subsequent to de-consolidation.

2004 Outlook:Exploration and corporate development expense, including our share of Sudbury's exploration expenses, are
expected to decrease in 2004 as we have met the criteria for capitalization at the Lapa and Goldex properties and exploration expenditures related to these properties will not be recorded in the
income statement in 2004. We expect to record $3.2 million of exploration on our income statement in 2004 which includes $1.2 million in non-cash expenses representing our
49.9% share of Sudbury's exploration expenses. However, this estimate could increase materially if we have success on our various exploration properties.

General and Administrative Expenses

General and administrative expenses increased to $7.1 million in 2003 from $5.5 million in 2002. Of the $1.6 million increase, 42% is
attributable to the stronger Canadian dollar as general and administrative expenses are almost entirely denominated in Canadian dollars. An additional 30% is attributable to compliance with new

7

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financial
reporting and securities law requirements. The remainder of the increase is attributable to increased corporate activities.

2004 Outlook:Assuming a US$/C$ exchange rate of $1.30, general and administrative expenses are not expected to increase
materially in 2004.

Provincial and Federal Capital Taxes

Provincial capital taxes were $1.2 million in 2003 compared to $0.8 million in 2002. These taxes are assessed on the Company's capitalization
(paid-up capital and debt) less certain allowances. The increase in 2003 was attributable to less exploration expenses being eligible for provincial tax credits that decrease capital taxes
otherwise payable. We estimate 2004 capital taxes to be $1.9 million due to increases in capitalization and less exploration expenses eligible for the provincial tax credits.

Federal
capital taxes are assessed on essentially the same capitalization base as provincial capital taxes. The increase in 2003 to $1.1 million from $0.9 million in 2002
represents increases in capitalization throughout the year. New legislation introduced in 2003 will completely eliminate federal capital taxes by 2008. These changes will be phased in gradually with
rate reductions each year. Based on new legislation, we estimate federal capital taxes to be $0.9 million in 2004.

2004 Outlook:Provincial capital taxes are expected to be $1.7 to $2.0 million in 2004 and, based on new legislation,
we estimate federal capital taxes to be $0.9 million in 2004.

Amortization Expense

Amortization expense was $17.5 million in 2003 compared to $13.0 million in 2002. The Company calculates its amortization on a
unit-of-production basis using proven and probable reserve tonnage as its amortization base. A 25% increase in tons processed coupled with an increased capital base due to the
recently completed LaRonde expansion more than offset the year end increase in reserves.

2004 Outlook:Amortization is expected to increase as milled throughput increases in 2004. On a per ton basis, amortization
is expected to remain unchanged at $8 per ton as the increased capital base was offset by the year end increase in reserves.

Interest Expense

In 2003, interest expense increased 25% to $9.2 million from $7.3 million in 2002 as no interest was capitalized in 2003. In 2002,
$2.3 million in interest on our revolving bank facility was capitalized as the facility was used to fund the expansion at LaRonde. Of the $9.2 million interest expense in 2003,
approximately $6.5 million relates to cash interest on the 2012 convertible subordinated debentures, $1.5 million relates to cash standby fees and other costs associated with the
revolving bank facility, and the remaining $1.2 million represents non-cash amortization of the financing costs associated with the 2012 convertible subordinated debentures and
revolving bank facility.

In
the fourth quarter of 2003, we entered into an interest rate swap whereby we swapped our fixed rate payments on the convertible subordinated debentures for variable rate payments. The
notional amount under the swap exactly matches the $144 million face value of the debentures and the swap agreement terminates on February 15, 2006, which is the earliest date that the
debentures can be called for redemption. Under the terms of the swap agreement, we make interest payments of three-month LIBOR plus a spread of 2.37% and receive fixed interest payments of 4.50% which
completely offsets the interest payments we make on the subordinated convertible debentures. The three-month LIBOR rate was also capped at 3.38% such that total variable interest payments will not
exceed 5.75%. Based on the current three-month LIBOR rate of 1.12%, we estimate that this transaction will save approximately $1.5 million in debenture interest annually.

2004 Outlook:Interest expense is expected to decrease by approximately $1.5 million as we realize the benefits of our
interest rate swap, assuming variable LIBOR rates remain at current levels throughout the year.

8

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Income and Mining Taxes

In 2003, the effective accounting income tax recovery rate was 8.0% compared to an income tax recovery rate of 7.8% in 2002. Although we reported a loss before
income and mining taxes of $18.1 million, we did not record a tax recovery due the uncertainty surrounding the realization of the benefit of these losses. The loss we incurred in 2003 can be
carried forward to reduce taxable income of future years and expires, if not used, within a legislated time period. Normally, the benefits of being able to utilize these losses against future taxable
income would be recorded as a future tax asset. However, due to the uncertainty surrounding the realization of this and other limited life tax assets, we have provided a full valuation allowance
against these tax assets thereby reducing their value in our financial statements to nil. The effect of not recognizing the benefits of these potential future deductions reduces the tax recovery that
we would have otherwise recorded against the current year's loss.

In
2002, we recorded income before income and mining taxes of $4.6 million yet recorded a tax recovery of 7.8%. The recovery was due to the utilization of previously unrecognized
losses carried forward. In prior years, just as in 2003, when the Company incurred losses, the benefit of the future tax deduction was not recorded as a future tax asset. In 2002, when the Company
used these prior losses to reduce taxable income, the tax that would have otherwise been recorded against 2002 income was reduced.

2004 Outlook:We expect our effective income tax rate to be approximately 30% in 2004 (including provincial mining duties).
This effective tax rate could decrease if we are able to realize unrecognized tax assets. Due to uncertainty surrounding the realization of certain tax assets, we have provided a full valuation
allowance against limited life tax assets, and as, such the possible benefit of these future tax deductions is not recorded as an asset in the financial statements. Due to rising metal prices, we
expect to be able to realize some of these assets before they expire thus leading to corresponding tax credits in income representing the decrease in valuation allowance attached to these tax
assets.

Liquidity and Capital Resources

As a result of the operating challenges encountered in 2003, we ended the year with less capital resources than 2002. Including $100 million of undrawn
credit under our revolving bank facility, we ended 2003 with available cash resources of $210 million compared to $253 million at the end of 2002. We expect an additional
$25 million to become available under our revolving bank facility in the fourth quarter of 2004 once we satisfy certain completion tests in connection with the LaRonde Mine expansion. In 2003,
we used $43 million
in cash compared to 2002 when we added $132 million to our cash position. The largest components of the cash used in 2003 were:



These
cash outflows were offset by $4 million in operating cash flow and $6 million of financing cash flows. Despite the production difficulties, we still managed to
generate positive operating cash flow due in large part to the increase in metal prices. The metal price increases were offset somewhat by the strengthening Canadian dollar and our increased
exploration activities driven by our success at Lapa. The $6 million in financing cash flows included $5 million of employee stock purchases under our share purchase and stock option
plans. In 2003, working capital changes had a negligible effect on cash flow.

In
2003, the Company declared its 24th consecutive annual dividend of $0.03 per share, unchanged from 2002. Although the Company expects to continue paying dividends,
future dividends will be at the discretion of the Company's Board of Directors and will be subject to factors such as income, financial condition, and capital requirements.

The
Company's material obligations under firm contractual commitments relate to the convertible subordinated debentures in aggregate principal amount of $143.8 million maturing on
February 15, 2012. The Company may redeem the debentures on or after February 15, 2006 in cash or, at the option of the Company, by delivering freely tradable common shares.

9

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In
2003, the Company was unable to achieve its completion test and was in default of its interest coverage covenants under its revolving bank facility. Given that the facility was
completely undrawn throughout 2003, these were technical violations which were waived by all the banks in the lending syndicate for the third and fourth quarters of 2003. The syndicate also extended
the deadline for achieving the completion test to September 30, 2004.

2004 Outlook:In 2004, we expect to incur approximately $23 million in sustaining and project capital expenditures at
LaRonde and approximately $14 million in expenditures on other projects, including Lapa, Goldex and LaRonde II. At Lapa, we will continue to drill to expand the reserve base and will complete
preliminary
engineering with the intent of accelerating development of the property. At Goldex, we will undertake a bulk sampling program to obtain an increased level of confidence in the gold grade. The bulk
sample will consist of three vertical slot raises through the orebody and we expect to process this material early in 2005. At LaRonde II, we expect a detailed feasibility study to be completed late
in 2004. We expect all these capital expenditures to be completely funded out of operating cash flow. An expected increase in gold and by-product metal production and rising metal prices
will be the key drivers to attaining strong operating cash flows.

The following table provides a summary of our 2004 estimated capital and exploration expenditures (thousands). The grassroots exploration amount is the cash
component of our estimated 2004 exploration expense and does not include the estimated $1.2 million which represents our 49.9% share of Sudbury's exploration expense.

|Project                           |  | Capitalized |        | Expensed |   | Total
|--------------------------------- |  | ----------- | ------ | -------- | - | -----
|LaRonde I projects                |  | $           | 10,300 |          | $ |     
|LaRonde I sustaining              |  |             | 12,600 |          |   |     
|LaRonde II drilling & feasibility |  |             | 3,800  |          |   |     
|Goldex bulk sample & engineering  |  |             | 4,700  |          |   |     
|Lapa drilling & engineering       |  |             | 3,200  |          |   |     
|Bousquet/Ellison drilling         |  |             | 2,300  |          |   |     
|Grassroots exploration            |  |             |        |          |   | 2,000
|                                  |  |             |        |          |   |      
|                                  |  | $           | 36,900 |          | $ | 2,000
|                                  |  |             |        |          |   |      

Risk Profile

Agnico-Eagle is subject to various risks that it encounters in its day-to-day operations. We mitigate the likelihood and potential
severity of these risks through the application of the highest standards in the planning, construction and operation of our facilities. In addition, emphasis is placed on hiring and retaining
competent personnel and developing their skills through training in safety and loss control. Agnico-Eagle's operating and technical personnel have a solid track record of developing and operating
precious metal mines and the LaRonde Mine has been recognized for its excellence in this regard with various safety and development awards. Unfortunately, in spite of our extensive efforts to ensure
the safety of our employees, industrial accidents can occur. In February 2004, an underground explosion claimed the life of a contract miner, and in March 2004, an accident in a storage
area claimed the life of an employee.

We
also mitigate some of the Company's normal business risk through the purchase of insurance coverage. An Insurable Risk Management Policy, approved by the Board of Directors, governs
our purchase of insurance coverage and only permits the purchase of coverage from insurance companies of the highest credit quality. For a more complete list of the risk factors affecting
Agnico-Eagle, please see the Company's Annual Report on Form 20-F filed with the United States Securities and Exchange Commission.

In
March 2004, Staff of the Ontario Securities Commission advised the Company by letter that Commission Staff are contemplating commencing proceedings against the Company in
relation to the timing and content of the Company's disclosure concerning the rock fall that occurred at Agnico's LaRonde mine in Quebec early in 2003. The Company intends to co-operate
fully with the Ontario Securities Commission and will respond as soon as practical to the Commission's letter. The Company is unable to determine whether there will be any material financial impact
resulting from this matter.

10

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Financial Risk

Agnico-Eagle's net income is most sensitive to metal prices and the US$/C$ exchange rate. The following graph shows the estimated impact on budgeted income per
share ("EPS") in 2004 of a 10% change in assumed metal prices and exchange rates.

LOGO

In
order to mitigate the impact of fluctuating precious and base metal prices, Agnico-Eagle enters into hedging transactions under its Metal Price Risk Management Policy, approved by the
Board of Directors. The Company's policy and practice is not to sell forward its gold production. The Policy does allow the Company to review this to use hedging strategies where appropriate to ensure
an adequate return on new projects. In the past, we have bought put options to protect a minimum gold price while maintaining full participation to gold price increases. The Company's policy does not
allow speculative trading. At the end of 2003, the Company's only metal hedges are gold puts with a strike price of $260. These gold puts protect a minimum gold price of $260 for 44% to 64% of
anticipated gold production between 2004 and 2007. Gold puts are exercised at our option therefore they do not limit participation to rising gold prices.

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. This gives rise to significant currency risk
exposure. We have entered into currency hedging transactions under the Company's Foreign Exchange Risk Management Policy, approved by the Board of Directors, to hedge part of our 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 assets and liabilities into US dollars) as these do not
give rise to cash exposure. For 2004, we have hedged approximately 30% of our Canadian dollar operating cost requirement at a US$/C$ exchange rate of $1.59. As shown in the chart above, a 10% increase
in budget exchange rates would increase EPS by $0.11. Due to the 2004 foreign currency hedges, a 10% decrease in exchange rates would decrease EPS by only $0.05.

Fluctuations
in interest rates can also affect income and cash flows. Due to the interest rate swap entered into in 2003, increases in LIBOR rates will increase interest expense. The
maximum interest rate payable under the swap transaction is 5.75% thus, based on this maximum rate, the maximum exposure from rising interest rates is $0.02 per share. The Company has a
Short-Term Investment Risk Management Policy, approved by the Board of Directors, which only permits investment of excess cash balances in short-term money market instruments
of the highest credit quality.

Operational Risk

The business of gold mining is generally subject to certain types of risks and hazards such as environmental hazards, industrial accidents such as
cave-ins, rock bursts, rock falls and flooding, unusual or unexpected rock formations, changes in the regulatory environment and metal losses. Such occurrences could result in damage to,
or destruction of, mineral properties or production facilities, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. As a result, Agnico-
Eagle may be required to incur significant costs that could have a material adverse effect on its financial performance, liquidity and results of operations.

Agnico-Eagle's
LaRonde mine and milling operations account for all of our gold production and will continue to account for all of our gold production in the future unless additional
properties are acquired or brought into production. Any adverse condition affecting mining or milling conditions at LaRonde could have a

11

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material
adverse effect on our financial performance, liquidity and results of operations. At current reserves and mining rates, LaRonde has a mine life of approximately 15 years.

Our
gold production estimates for 2004 and subsequent years may fall below estimated levels as a result of the general mining risks summarized above. Furthermore, production may be
unexpectedly reduced if, during the course of mining, unfavorable ground conditions or seismic activity are encountered or grades are lower than expected. Production estimates may also be affected if
the physical or metallurgical characteristics of ore are less amenable than expected to mining or treatment. Therefore, there can be no assurance that the Company will achieve current or future
production estimates.

Our
reported proven and probable mineral reserves are estimates and there can be no assurance that anticipated tonnage and grade can be achieved. Reserve figures have been determined
based on assumed gold prices and operating costs. We have estimated mineral reserves based on a $325 per ounce gold price. Though the gold price is higher than the $300 per ounce assumption used in
last year's reserve estimate, this impact was essentially negated by the change in the US$/C$ exchange rate assumed from $1.50 to $1.40. While gold prices were generally above $325 for 2003, the
average gold price over the past three years has been below $325 per ounce. If gold prices of $300 and $350 were assumed, our gold reserve position would change by 6%. Substantial prolonged decreases
in the price of gold, silver, copper and zinc and the US$/C$ exchange rate could have a material adverse effect on our financial performance, liquidity and results of
operations. To help maintain or grow production levels over the long term, Agnico-Eagle must continually replace mineral reserves depleted by production by reclassifying mineral resources to reserves,
expanding known orebodies or locating new ones. Success in gold exploration is highly uncertain and there is a risk that future depletion of mineral reserves through normal mining operations will not
be adequately replaced.

Environmental Risk

Agnico-Eagle's activities are subject to extensive federal and local laws and regulations governing environmental protection and employee health and safety.
Agnico-Eagle is required to obtain governmental permits and comply with mine reclamation rules. Although Agnico-Eagle makes provisions for reclamation costs, there can be no assurance that these
provisions will be adequate to discharge the obligations associated with these regulations. Failure to comply with applicable environmental and health and safety laws can result in injunctions,
damages or revocation of permits and imposition of penalties. There can be no assurance that Agnico-Eagle has been or will be at all times in complete compliance with such laws and regulations or that
the costs of complying will not have a material adverse effect on our financial performance, liquidity and results of operations.

Environmental
laws and regulations are complex and have become more stringent over time. Any changes in such laws or environmental conditions could have a material adverse effect on
Agnico-Eagle's financial condition, liquidity or results of operations. Agnico-Eagle is not able to estimate the impact of future changes in laws and regulations due to the uncertainty surrounding the
ultimate form these changes may take. At December 31, 2003, Agnico-Eagle has accrued approximately $6 million for each of its reclamation obligations on its LaRonde and Bousquet
properties.

Derivatives Risk

Management enters into derivative contracts to limit the downside risk associated with fluctuating metal prices. The contracts act as economic hedges of our
underlying exposures to metal price risk and foreign currency exchange risk and are not held for speculative purposes. We do not use complex derivative contracts to hedge our exposures. We use simple
contracts, such as puts and calls, to mitigate downside risk yet maintain full participation to rising metal prices. We also enter into forward contracts to lock in exchange rates based on our
projected Canadian dollar operating and capital needs.

By
using derivative instruments, we have various financial risks. Credit risk is the risk that the counterparties to our derivative contracts will fail to perform on an obligation to us.
We mitigate this risk by dealing with high quality counterparties such as financial institutions. Market liquidity risk is the risk that a derivative position cannot be liquidated quickly. We mitigate
market liquidity risk by spreading out the maturity of derivative contracts over time, usually based on our projected production levels for the specific metal being

12

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hedged,
such that the relevant markets will be able to absorb the contracts. Mark-to-market risk is the risk that an adverse change in market prices for our metals will affect
our financial condition. Since we use derivative contracts as economic hedges, for most of the contracts, changes in the mark-to-market value do no affect income. For a
description of the accounting treatment of our derivative contracts, please see "Critical Accounting Estimates  Financial Instruments."

For
2003, we have recorded a $1.8 million charge against our total revenue to reflect the maturity of our gold put option contracts purchased in 1999. This amount is simply the
original cost for gold puts maturing in the year. Mark-to-market losses on the 2003 gold put option contracts had originally been recorded as part of accumulated other
comprehensive income and these amounts were reclassified to earnings for the current year and are included as part of the $1.8 million charge. Also for 2003, we recorded a $1.9 million
gain on our byproduct metal derivative contracts which was recorded as revenue for the specific metal being hedged and a $0.5 million gain on our foreign currency derivative contracts maturing
in 2003 which was recorded as part of our production costs. Since the Company uses only over-the-counter instruments, the fair value of individual hedging instruments is based
on readily available market values.

Outstanding Securities

The following table presents the maximum number of common shares that would be outstanding if all dilutive instruments outstanding at March 31, 2004 were
exercised:

|Common shares outstanding at March 31, 2004                 |  | 84,956,333 
|----------------------------------------------------------- |  | -----------
|Convertible debentures (based on debenture holders' option) |  | 10,267,919 
|Employee stock options                                      |  | 3,301,400  
|Warrants                                                    |  | 6,900,000  
|                                                            |  |            
|                                                            |  | 105,425,652
|                                                            |  |            

The
convertible debentures are convertible into common shares, at the option of the holder, at any time prior to maturity, at a conversion rate of 71.429 common shares per $1,000
principal amount of debentures. The debentures mature on February 15, 2012 but may be redeemed at the option of the Company on or after February 15, 2006 in cash or, at the option of the
Company, by delivering freely tradable common shares.

Each
warrant entitles the holder to purchase one common share at a price of US$19.00. The warrants expire on November 6, 2007.

Critical Accounting Estimates

The preparation of the financial statements in accordance with US GAAP requires management to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses. The Company evaluates the estimates periodically, including those relating to metals awaiting settlement, inventories, future tax assets and liabilities,
and mining properties. In making judgments about the carrying value of assets and liabilities, the Company uses estimates based on historical experience and various assumptions that are considered
reasonable in the circumstances. Actual results may differ from these estimates.

The
Company believes the following critical accounting policies relate to its more significant judgments and estimates used in the preparation of its financial statements.
Management has discussed the development and selection of the following critical accounting policies with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the
Company's disclosure in this MD&A.

Mining Properties

The Company capitalizes the cost of acquiring land and mineral rights. If a mineable ore body is discovered, such costs are amortized when production begins,
using the unit-of-production method based on proven and probable reserves. If no mineable orebody is discovered, such costs are expensed in the period in which it is determined
the property has no future economic value. Costs for grassroots exploration are charged to income

13

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when
incurred until an orebody is discovered. Further exploration and development to delineate the orebody are capitalized once a feasibility study is successfully completed and proven and probable
reserves established. Construction costs, including interest costs for projects specifically financed by debt, are capitalized at cost and are not depreciated until commercial production begins.
Amortization is based on the unit-of-production method over the estimated proven and probable reserves of the mine.

Subsequent
capital expenditures which benefit future periods, such as the construction of underground infrastructure, are capitalized at cost and depreciated as mentioned above.

The
carrying values of mining properties, plant and equipment and deferred expenditures are periodically reviewed for impairment. Impairment testing is based on the future undiscounted
net cash flows of the operating mine or development property. If it is determined that the estimated net recoverable amount is less than the carrying value, the asset is written down to its fair value
with a charge to income. Estimated future cash flows include estimates of recoverable metals in proven and probable reserves. Metals price assumptions are determined considering current and historical
prices, price trends and other market-related factors. Estimated future cash flows also consider ongoing capital requirements, reclamation costs, and related income and mining taxes, and are based on
detailed engineering life-of-mine plans.

Revenue Recognition

The Company recognizes revenue from concentrates when legal title passes and estimates net realizable value using current metal prices and metal content from
samples of the concentrates. Adjustments to the final settlements occur when the average metal prices are determined over a quotation period. These adjustments are included in revenue when determined
and traditionally have not been material.

Revenue
from gold and silver recovered in the form of doré bars is recorded when the gold and silver are refined and sold.

Reclamation Obligations

Estimated reclamation costs are based on legal, environmental and regulatory requirements. Current accounting standards require us to recognize the present value
of mine reclamation costs as a liability in the period the obligation is incurred and to periodically re-evaluate the liability. At the date a reclamation liability is incurred, an amount
equal to the present value of the final liability is recorded as an increase to the carrying value of the related long-lived asset. Each period, an accretion amount is charged to income to
adjust the liability to the estimated future value. The initial liability, which is included in the carrying value of the asset, is also depreciated each period based on the depreciation method used
for that asset. In order to calculate the present value of mine reclamation costs, we have made estimates of the final reclamation costs based on mine-closure plans approved by
environmental agencies. We periodically review these estimates and update our reclamation cost estimates if assumptions change. Material assumptions that are made in deriving these estimates include
variables such as mine life and inflation rates.

Future Tax Assets and Liabilities

The Company uses the liability method of tax allocation for accounting for income taxes. Under the liability method, future tax assets and liabilities are
determined based on differences between the financial reporting and tax bases of assets and liabilities. Future tax assets are reduced by a valuation allowance if it is more likely than not that some
or all of the future tax asset will not be realized. The Company evaluates the carrying value of its future tax assets quarterly by assessing its valuation allowance and by adjusting the amount of
such allowance, if necessary. The factors used to assess the likelihood of realization are forecasts of future taxable income and available tax planning strategies that could be implemented to realize
future tax assets.

Financial Instruments

We use derivative financial instruments, primarily option contracts, to manage exposure to fluctuations in metal prices and foreign currency exchange rates. Under
the Company's treasury management system which complies with Statement of Financial Accounting Standard ("FAS") 133 requirements for hedge accounting,

14

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unrealized
mark-to-market losses on our gold put option contracts are originally recorded in equity as a component of accumulated other comprehensive loss. On the contracts'
scheduled maturity dates, the realization of losses on these contracts is reflected by removing the accumulated mark-to-market losses from accumulated other comprehensive loss
and recording these losses as part of normal income. The Company's other derivative contracts hedging byproduct silver, copper and zinc production do not qualify for hedge accounting under
FAS 133 and thus changes in the market value of these contracts are recorded in income as part of the hedged transactions. All the Company's hedging contracts on byproduct production were
liquidated in 2003 with a corresponding charge being recorded in income. Effective January 1, 2003, our foreign currency hedges also qualified for hedge accounting and as such are now being
accounted for in the same manner as the gold puts. Unrealized mark-to-market gains and losses on these hedges are recorded in accumulated other comprehensive loss and realized
gains and losses are recorded in income in the same period the hedged transaction affects income, or on the scheduled maturity dates. Prior to 2003, unrealized mark-to-market
gains and losses on our foreign currency hedges were recorded in income.

Stock-Based Compensation

In 2003, the Company prospectively adopted FAS 123, "Accounting for Stock-Based Compensation" as amended by
FAS 148, "Accounting for Stock-Based Compensation  Transition and Disclosure". These accounting standards
recommend the expensing of stock option grants after January 1, 2003. The standards recommend that the fair value of stock options be recognized in income over the applicable vesting period as
a compensation expense.

The
Company's existing stock-based compensation plan provides for the granting of options to directors, officers, employees and service providers to purchase common shares. Share options
have exercise prices equal to market price at the grant date or over the life of the applicable vesting period depending on the terms of the option agreements. The fair value of these stock options is
recorded as an expense on the date of grant. Fair value is determined using the Black-Scholes option valuation model which requires us 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 creates difficulties in
determining a reliable single measure of the fair value of stock option grants. The dilutive impact of stock option grants is currently factored into the Company's reported diluted income (loss) per
share.

Forward-Looking Statements

The information in this report has been prepared as at February 24, 2004. Certain statements contained in this annual report constitute "forward-looking
statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. When used in this document, the words "anticipate", "expect", "estimate," "forecast,"
"planned" and similar expressions are intended to identify forward-looking statements. Such statements reflect the Company's views at the time with respect to future events and are subject to certain
risks, uncertainties and assumptions. Many factors could cause the actual results to be materially different from those expressed or implied by such forward-looking statements, including, among
others, those which are discussed under the heading "Risk Factors" in the Company's Annual Information Form and Annual Report on Form 20-F for the year ended
December 31, 2003. The Company does not intend, and does not assume any obligation, to update these forward-looking statements.

15

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AGNICO-EAGLE MINES LIMITED    SUMMARIZED QUARTERLY DATA    (thousands of United States dollars, except where noted)

|                                                                    |                              | Mar. 31 |         | Jun. 30 |   | Sept. 30 |        | Dec. 31 |         | Total 2003 |  
|------------------------------------------------------------------- | ---------------------------- | ------- | ------- | ------- | - | -------- | ------ | ------- | ------- | ---------- | -
|Consolidated Financial Data                                         |                              |         |         |         |   |          |        |         |         |            |  
|Income and cash flows                                               |                              |         |         |         |   |          |        |         |         |            |  
|LaRonde Division                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Revenues from mining operations                                     |                              | $       | 30,112  |         | $ | 30,014   |        | $       | 24,845  |            | $
|Mine operating costs                                                |                              |         | 24,347  |         |   | 24,581   |        |         | 25,909  |            |  
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Mine operating profit                                               |                              | $       | 5,765   |         | $ | 5,433    |        | $       | (1,064  | )          | $
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Net income (loss) for the period                                    |                              | $       | (6,237  | )       | $ | (3,779   | )      | $       | (11,869 | )          | $
|Net income (loss) per share (basic and fully diluted)               |                              | $       | (0.07   | )       | $ | (0.05    | )      | $       | (0.14   | )          | $
|Operating cash flow*                                                |                              | $       | (577    | )       | $ | 632      |        | $       | (6,580  | )          | $
|Operating cash flow per share                                       |                              | $       | (0.01   | )       | $ | 0.01     |        | $       | (0.08   | )          | $
|Weighted average number of common shares outstanding (in thousands) |                              |         | 83,725  |         |   | 83,836   |        |         | 83,954  |            |  
|Tons of ore milled                                                  |                              |         | 602,633 |         |   | 648,292  |        |         | 570,661 |            |  
|Head grades:                                                        |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Gold (ounces per ton)        |         |         | 0.10    |   |          | 0.10   |         |         | 0.10       |  
|                                                                    | Silver (ounces per ton)      |         |         | 2.44    |   |          | 2.24   |         |         | 1.69       |  
|                                                                    | Zinc                         |         |         | 3.55%   |   |          | 3.14%  |         |         | 2.71%      |  
|                                                                    | Copper                       |         |         | 0.45%   |   |          | 0.52%  |         |         | 0.62%      |  
|Recovery rates:                                                     |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Gold                         |         |         | 91.66%  |   |          | 90.62% |         |         | 91.60%     |  
|                                                                    | Silver                       |         |         | 83.80%  |   |          | 80.80% |         |         | 79.79%     |  
|                                                                    | Zinc                         |         |         | 78.20%  |   |          | 77.80% |         |         | 75.00%     |  
|                                                                    | Copper                       |         |         | 79.10%  |   |          | 79.20% |         |         | 79.90%     |  
|Payable production:                                                 |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Gold (ounces)                |         |         | 55,005  |   |          | 60,157 |         |         | 51,192     |  
|                                                                    | Silver (ounces in thousands) |         |         | 1,036   |   |          | 1,049  |         |         | 648        |  
|                                                                    | Zinc (pounds in thousands)   |         |         | 27,964  |   |          | 27,080 |         |         | 20,561     |  
|                                                                    | Copper (pounds in thousands) |         |         | 3,956   |   |          | 5,015  |         |         | 5,411      |  
|Realized prices (US$):                                              |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Gold (per ounce)             |         | $       | 350     |   | $        | 349    |         | $       | 365        |  
|                                                                    | Silver (per ounce)           |         | $       | 4.70    |   | $        | 4.57   |         | $       | 5.04       |  
|                                                                    | Zinc (per pound)             |         | $       | 0.35    |   | $        | 0.35   |         | $       | 0.37       |  
|                                                                    | Copper (per pound)           |         | $       | 0.76    |   | $        | 0.73   |         | $       | 0.80       |  
|Total production costs per gold ounce produced (US$):               |                              |         |         |         |   |          |        |         |         |            |  
|Onsite operating costs (including reclamation provision)            |                              | $       | 378     |         | $ | 371      |        | $       | 451     |            | $
|Less: Non-cash reclamation provision                                |                              |         | (2      | )       |   | (2       | )      |         | (2      | )          |  
|                                                                    | Net byproduct revenues       |         |         | (207    | ) |          | (161   | )       |         | (140       | )
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Cash operating costs                                                |                              |         | 169     |         |   | 208      |        |         | 309     |            |  
|El Coco royalty                                                     |                              |         | 74      |         |   | 50       |        |         | 59      |            |  
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Total cash operating costs                                          |                              | $       | 243     |         |   | 258      |        | $       | 368     |            | $
|Non-cash costs:                                                     |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Reclamation provision        |         |         | 2       |   |          | 2      |         |         | 2          |  
|                                                                    | Amortization                 |         |         | 82      |   |          | 80     |         |         | 87         |  
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Total production costs                                              |                              | $       | 327     |         | $ | 340      |        | $       | 457     |            | $
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Onsite operating costs per ton milled (Canadian dollars)            |                              | $       | 52      |         | $ | 48       |        | $       | 56      |            | $
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  

*  Before non-cash working capital

16

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AGNICO-EAGLE MINES LIMITED    SUMMARIZED QUARTERLY DATA    (thousands of United States dollars, except where noted)

|                                                                    |                              | Mar. 31 |         | Jun. 30 |   | Sept. 30 |        | Dec. 31 |         | Total 2002 |  
|------------------------------------------------------------------- | ---------------------------- | ------- | ------- | ------- | - | -------- | ------ | ------- | ------- | ---------- | -
|Consolidated Financial Data                                         |                              |         |         |         |   |          |        |         |         |            |  
|Income and cash flows                                               |                              |         |         |         |   |          |        |         |         |            |  
|LaRonde Division                                                    |                              |         |         |         |   |          |        |         |         |            |  
|LaRonde Division                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Revenues from mining operations                                     |                              | $       | 25,547  |         | $ | 30,616   |        | $       | 20,224  |            | $
|Mine operating costs                                                |                              |         | 17,603  |         |   | 19,613   |        |         | 15,460  |            |  
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Mine operating profit                                               |                              | $       | 7,944   |         | $ | 11,003   |        | $       | 4,764   |            | $
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Net income (loss) for the period                                    |                              | $       | 477     |         | $ | 3,360    |        | $       | (630    | )          | $
|Net income (loss) per share (basic and fully diluted)               |                              | $       | 0.01    |         | $ | 0.05     |        | $       | (0.01   | )          | $
|Operating cash flow*                                                |                              | $       | 4,972   |         | $ | 7,633    |        | $       | 2,343   |            | $
|Operating cash flow per share                                       |                              | $       | 0.07    |         | $ | 0.11     |        | $       | 0.03    |            | $
|Weighted average number of common shares outstanding (in thousands) |                              |         | 68,006  |         |   | 69,050   |        |         | 69,549  |            |  
|Tons of ore milled                                                  |                              |         | 477,333 |         |   | 491,083  |        |         | 456,818 |            |  
|Head grades:                                                        |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Gold (ounces per ton)        |         |         | 0.14    |   |          | 0.17   |         |         | 0.13       |  
|                                                                    | Silver (ounces per ton)      |         |         | 2.52    |   |          | 2.28   |         |         | 2.25       |  
|                                                                    | Zinc                         |         |         | 5.24%   |   |          | 3.64%  |         |         | 4.01%      |  
|                                                                    | Copper                       |         |         | 0.22%   |   |          | 0.30%  |         |         | 0.31%      |  
|Recovery rates:                                                     |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Gold                         |         |         | 94.54%  |   |          | 92.92% |         |         | 92.43%     |  
|                                                                    | Silver                       |         |         | 83.70%  |   |          | 80.10% |         |         | 77.60%     |  
|                                                                    | Zinc                         |         |         | 84.90%  |   |          | 81.40% |         |         | 67.20%     |  
|                                                                    | Copper                       |         |         | 60.30%  |   |          | 74.40% |         |         | 63.60%     |  
|Payable production:                                                 |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Gold (ounces)                |         |         | 60,259  |   |          | 74,617 |         |         | 50,073     |  
|                                                                    | Silver (ounces in thousands) |         |         | 724     |   |          | 709    |         |         | 547        |  
|                                                                    | Zinc (pounds in thousands)   |         |         | 35,997  |   |          | 24,740 |         |         | 20,713     |  
|                                                                    | Copper (pounds in thousands) |         |         | 1,131   |   |          | 2,084  |         |         | 1,728      |  
|Realized prices (US$):                                              |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Gold (per ounce)             |         | $       | 300     |   | $        | 310    |         | $       | 314        |  
|                                                                    | Silver (per ounce)           |         | $       | 4.48    |   | $        | 4.67   |         | $       | 4.73       |  
|                                                                    | Zinc (per pound)             |         | $       | 0.36    |   | $        | 0.36   |         | $       | 0.37       |  
|                                                                    | Copper (per pound)           |         | $       | 0.72    |   | $        | 0.78   |         | $       | 0.74       |  
|Total production costs per gold ounce produced (US$):               |                              |         |         |         |   |          |        |         |         |            |  
|Onsite operating costs (including reclamation provision)            |                              | $       | 258     |         | $ | 219      |        | $       | 304     |            | $
|Less: Non-cash reclamation provision                                |                              |         | (5      | )       |   | (5       | )      |         | (5      | )          |  
|                                                                    | Net byproduct revenues       |         |         | (124    | ) |          | (90    | )       |         | (102       | )
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Cash operating costs                                                |                              |         | 129     |         |   | 124      |        |         | 197     |            |  
|El Coco royalty                                                     |                              |         | 32      |         |   | 40       |        |         | 11      |            |  
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Total cash operating costs                                          |                              | $       | 161     |         | $ | 164      |        | $       | 208     |            | $
|Non-cash costs:                                                     |                              |         |         |         |   |          |        |         |         |            |  
|                                                                    | Reclamation provision        |         |         | 5       |   |          | 5      |         |         | 5          |  
|                                                                    | Amortization                 |         |         | 54      |   |          | 49     |         |         | 66         |  
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Total production costs                                              |                              | $       | 220     |         | $ | 218      |        | $       | 279     |            | $
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  
|Onsite operating costs per ton milled (Canadian dollars)            |                              | $       | 52      |         | $ | 52       |        | $       | 51      |            | $
|                                                                    |                              |         |         |         |   |          |        |         |         |            |  

*  Before non-cash working capital

17

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AGNICO-EAGLE MINES LIMITED    FIVE YEAR FINANCIAL AND OPERATING SUMMARY    (thousands of United States dollars, except where noted)

|                                                                    |                                       | 2003 |           | 2002  |   | 2001      |       | 2000 |           | 1999  |  
|------------------------------------------------------------------- | ------------------------------------- | ---- | --------- | ----- | - | --------- | ----- | ---- | --------- | ----- | -
|Financial Data                                                      |                                       |      |           |       |   |           |       |      |           |       |  
|Revenues from mining operations                                     |                                       | $    | 126,820   |       | $ | 108,027   |       | $    | 96,043    |       | $
|Interest and sundry income                                          |                                       |      | 2,775     |       |   | 1,943     |       |      | 5,752     |       |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|                                                                    |                                       |      | 129,595   |       |   | 109,970   |       |      | 101,795   |       |  
|Costs and expenses                                                  |                                       |      | 147,708   |       |   | 105,359   |       |      | 104,651   |       |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Loss before income taxes                                            |                                       |      | (18,113   | )     |   | 4,611     |       |      | (2,856    | )     |  
|Income and mining taxes expense (recovery)                          |                                       |      | (358      | )     |   | (588      | )     |      | 2,862     |       |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Income (loss) before cumulative catch-up adjustment                 |                                       |      | (17,755   | )     |   | 4,023     |       |      | (5,718    | )     |  
|Cumulative catch-up adjustment relating to FAS 143                  |                                       |      | (1,743    | )     |   |          |       |      |          |       |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Net income (loss)                                                   |                                       | $    | (19,498   | )     | $ | 4,023     |       | $    | (5,718    | )     | $
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Net income (loss) per share                                         |                                       | $    | (0.23     | )     | $ | 0.06      |       | $    | (0.09     | )     | $
|Operating cash flow (before non-cash working capital)               |                                       | $    | 3,952     |       | $ | 20,364    |       | $    | 12,424    |       | $
|Operating cash flow per share                                       |                                       | $    | 0.05      |       | $ | 0.28      |       | $    | 0.20      |       | $
|Dividends declared per share                                        |                                       | $    | 0.03      |       | $ | 0.03      |       | $    | 0.02      |       | $
|Capital expenditures                                                |                                       | $    | 42,038    |       | $ | 64,836    |       | $    | 36,278    |       | $
|Average gold price per ounce realized                               |                                       | $    | 368       |       | $ | 312       |       | $    | 273       |       | $
|Average exchange rate  US$ per C$                                  |                                       | $    | 0.7137    |       | $ | 0.6368    |       | $    | 0.6458    |       | $
|Weighted average number of common shares outstanding (in thousands) |                                       |      | 83,889    |       |   | 70,821    |       |      | 61,334    |       |  
|Working capital (including undrawn credit lines)                    |                                       | $    | 240,613   |       | $ | 285,142   |       | $    | 135,908   |       | $
|Total assets                                                        |                                       | $    | 637,101   |       | $ | 593,807   |       | $    | 393,464   |       | $
|Long-term debt                                                      |                                       | $    | 143,750   |       | $ | 143,750   |       | $    | 151,081   |       | $
|Shareholders' equity                                                |                                       | $    | 400,723   |       | $ | 397,693   |       | $    | 198,426   |       | $
|Operating Summary                                                   |                                       |      |           |       |   |           |       |      |           |       |  
|LaRonde Division                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Revenues from mining operations                                     |                                       | $    | 126,820   |       | $ | 108,027   |       | $    | 96,043    |       | $
|Mine operating costs                                                |                                       |      | 104,990   |       |   | 75,969    |       |      | 67,009    |       |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Mine operating profit (loss)                                        |                                       | $    | 21,830    |       | $ | 32,058    |       | $    | 29,034    |       | $
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Tons of ore milled                                                  |                                       |      | 2,448,580 |       |   | 1,963,129 |       |      | 1,805,249 |       |  
|Gold  ounces per ton                                               |                                       |      | 0.11      |       |   | 0.14      |       |      | 0.15      |       |  
|Gold production  ounces                                            |                                       |      | 236,653   |       |   | 260,184   |       |      | 234,860   |       |  
|Silver production  ounces (in thousands)                           |                                       |      | 3,953     |       |   | 3,084     |       |      | 2,524     |       |  
|Zinc production  pounds (in thousands)                             |                                       |      | 100,337   |       |   | 108,060   |       |      | 126,275   |       |  
|Copper production  pounds (in thousands)                           |                                       |      | 20,131    |       |   | 8,927     |       |      | 4,097     |       |  
|Total production costs per gold ounce produced (US$):               |                                       |      |           |       |   |           |       |      |           |       |  
|Onsite operating costs (including reclamation provision)            |                                       | $    | 390       |       | $ | 253       |       | $    | 257       |       | $
|Less:                                                               |                                       |      |           |       |   |           |       |      |           |       |  
|Non-cash reclamation provision                                      |                                       |      | (2        | )     |   | (5        | )     |      | (5        | )     |  
|                                                                    | Net byproduct revenues                |      |           | (173  | ) |           | (107  | )    |           | (120  | )
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Cash operating costs                                                |                                       |      | 215       |       |   | 141       |       |      | 132       |       |  
|El Coco royalty                                                     |                                       |      | 54        |       |   | 41        |       |      | 23        |       |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Total cash operating costs                                          |                                       | $    | 269       |       | $ | 182       |       | $    | 155       |       | $
|Non-cash costs:                                                     |                                       |      |           |       |   |           |       |      |           |       |  
|                                                                    | Reclamation provision                 |      |           | 2     |   |           | 5     |      |           | 5     |  
|                                                                    | Amortization                          |      |           | 74    |   |           | 50    |      |           | 45    |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Total production costs                                              |                                       | $    | 345       |       | $ | 237       |       | $    | 205       |       | $
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Onsite operating costs per ton milled (Canadian dollars)            |                                       | $    | 52        |       | $ | 52        |       | $    | 52        |       | $
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Gold reserves and resources:                                        |                                       |      |           |       |   |           |       |      |           |       |  
|Total Proven and Probable Reserves & Indicated                      |                                       |      |           |       |   |           |       |      |           |       |  
|                                                                    | Resources (thousands, ounces of gold) |      |           | 8,693 |   |           | 5,135 |      |           | 3,399 |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  
|Total Inferred Resources (thousands, ounces of gold)                |                                       |      | 4,251     |       |   | 5,160     |       |      | 5,110     |       |  
|                                                                    |                                       |      |           |       |   |           |       |      |           |       |  

18

---



Agnico-Eagle Mineral Reserve & Mineral Resource Data

|Category and Zone                          |  | Au(oz/t) |  | Ag(oz/t) |  | Cu(%) |  | Zn(%) |  | Au (000's oz.) |  | Tons (000's)
|------------------------------------------ |  | -------- |  | -------- |  | ----- |  | ----- |  | -------------- |  | ------------
|Proven Mineral Reserve                     |  |          |  |          |  |       |  |       |  |                |  |             
|LaRonde                                    |  | 0.09     |  | 2.49     |  | 0.42  |  | 4.24  |  | 638            |  | 6,848       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Bousquet                                   |  | 0.09     |  |          |  |       |  |       |  | 9              |  | 104         
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Subtotal Proven Mineral Reserve            |  | 0.09     |  |          |  |       |  |       |  | 647            |  | 6,952       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Probable Mineral Reserve                   |  |          |  |          |  |       |  |       |  |                |  |             
|LaRonde                                    |  | 0.13     |  | 1.47     |  | 0.31  |  | 2.32  |  | 4,383          |  | 34,754      
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Lapa                                       |  | 0.25     |  |          |  |       |  |       |  | 1,187          |  | 4,661       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Goldex                                     |  | 0.07     |  |          |  |       |  |       |  | 1,647          |  | 23,983      
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Subtotal Probable Mineral Reserve          |  | 0.11     |  |          |  |       |  |       |  | 7,217          |  | 63,938      
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Total Proven and Probable Mineral Reserves |  | 0.11     |  |          |  |       |  |       |  | 7,864          |  | 70,350      
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Measured & Indicated Mineral Resource      |  |          |  |          |  |       |  |       |  |                |  |             
|LaRonde                                    |  | 0.09     |  | 0.70     |  | 0.27  |  | 1.10  |  | 327            |  | 3,716       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Goldex                                     |  | 0.08     |  |          |  |       |  |       |  | 91             |  | 1,174       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Lapa                                       |  | 0.16     |  |          |  |       |  |       |  | 114            |  | 705         
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Bousquet                                   |  | 0.16     |  |          |  |       |  |       |  | 256            |  | 1,608       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Ellison                                    |  | 0.16     |  |          |  |       |  |       |  | 41             |  | 249         
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Total Measured & Indicated Resource        |  | 0.11     |  |          |  |       |  |       |  | 829            |  | 7,452       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Inferred Mineral Resource                  |  |          |  |          |  |       |  |       |  |                |  |             
|LaRonde                                    |  | 0.19     |  | 1.15     |  | 0.35  |  | 0.94  |  | 2,889          |  | 15,294      
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Bousquet                                   |  | 0.27     |  |          |  |       |  |       |  | 648            |  | 2,445       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Goldex                                     |  | 0.06     |  |          |  |       |  |       |  | 173            |  | 2,797       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Lapa                                       |  | 0.18     |  |          |  |       |  |       |  | 58             |  | 324         
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Ellison                                    |  | 0.29     |  |          |  |       |  |       |  | 483            |  | 1,692       
|                                           |  |          |  |          |  |       |  |       |  |                |  |             
|Total Inferred Resource                    |  | 0.19     |  |          |  |       |  |       |  | 4,251          |  | 22,552      
|                                           |  |          |  |          |  |       |  |       |  |                |  |             

A
qualified person, Guy Gosselin, P.Eng., P.Geo., LaRonde Division's Chief Geologist, has verified the LaRonde exploration information disclosed in this report. The verification
procedures, the quality assurance program and quality control procedures used in preparing such data may be found in the 2004 Mineral Resource and Mineral Reserve Report, Agnico-Eagle Mines Limited,
LaRonde Division, dated March 26, 2004, filed on SEDAR.

Agnico-Eagle
Mines Ltd. is reporting mineral resource and reserve estimates in accordance with the CIM guidelines for the estimation, classification and reporting of resources and
reserves. The effective date of each estimate is December 31, 2003. More recent information on exploration, mining, processing, metallurgy and other economic factors have also been used. The
estimates disclosed in this report are based on the following key metal price assumptions and foreign exchange rates: gold, $325/oz; silver, $5.00/oz; copper $0.80/lb; zinc $0.50/lb; US$/C$=1.40.
There are no known relevant issues that would materially affect the estimates. No independent verification of the data has been published.

Tonnage
amounts and contained metal amounts presented in the tables in this report have been rounded to the nearest 1000.

19

---



A
mineral reserve is the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. This study must include adequate
information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes
diluting materials and allows for losses that may occur when the material is mined. A proven mineral reserve is the economically mineable part of a measured resource for which quantity, grade or
quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic
parameters, to support production planning and evaluation of the economic viability of the deposit. A probable mineral reserve is the economically mineable part of an indicated mineral resource for
which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic viability of the deposit.

A
mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth's crust in such form and quantity and of such a grade
or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted
from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape, physical characteristics, can be
estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the
deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning
and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonable assumed. An inferred mineral resource is that part of a
mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade
continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. Mineral
resources which are not mineral reserves do not have demonstrated economic viability.

The
qualified person responsible for the LaRonde II, Lapa and Goldex pre-feasibility studies is Rosaire Émond P.Eng., Regional Division's Senior Mining
Engineer.

The
qualified person responsible for the LaRonde mineral reserve and resource estimate is Guy Gosselin, P.Eng, P.Geo., LaRonde Division's Chief Geologist. A description of the operating
and capital cost assumptions, parameters and methods used to estimate the Penna shaft can be found in the LaRonde Division SEDAR disclosure cited above. Recently disclosed probable reserves, located
between 9,200 ft and 9850 ft depth, are estimated using a grade cut-off equivalent to a minimum net smelter return of $42.90/ton.

The
qualified person responsible for the Lapa and Goldex mineral reserve and resource estimates is Marc H. Legault, P.Eng., Manager, Project Evaluations of Agnico-Eagle.

The
minimum gold grade cut-off used to evaluate drill intercepts at Goldex was 0.04 oz/ton over a minimum true thickness of 50 feet. The reserve was derived by evaluating a
three-dimensional model of the Goldex Extension zone, whose gold grade was estimated using a 95% confidence interval grade calculation method, and then adjusting the model envelope to only include
sectors with a high probability of exceeding the cut-off grade.

In
estimating the Lapa resource and reserve, a minimum gold grade cut-off of 0.15 and 0.19 oz/ton, respectively was used to evaluate drill intercepts that have been adjusted
to respect a minimum mining width of

20

---



9.2
ft. The estimate was derived using a three dimensional block model of the deposit; the grades were interpolated using the inverse distance power squared method.

The
qualified person responsible for the Bousquet and Ellison mineral reserve and resource estimates is Normand Bédard P.Geo., Regional Division's Senior Geologist. In
estimating the Bousquet and Ellison mineral resource and reserve, a minimum gold grade cut-off of 0.09 oz/ton was used to evaluate drill intercepts that have been adjusted to respect a
minimum mining width of 9.8 ft. The estimate was derived using a combination of three dimensional block modeling (grades were interpolated using the inverse distance power squared method) for certain
zones and for other zones, by the polygonal method on longitudinal sections. A portion of the resource estimate is based on estimates reported when the Bousquet I mine closed in 1996. The resource was
reviewed and reclassified using the CIM definition and guidelines. This information is of a good quality and is considered reliable.

21

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MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

AGNICO-EAGLE MINES LIMITED

The accompanying financial statements of Agnico-Eagle Mines Limited and all the information in this annual report are the responsibility of management and have
been approved by the Board of Directors.

The
financial statements have been prepared by management in accordance with United States generally accepted accounting principles. Where alternative accounting methods exist,
management has selected those it considered to be the most appropriate in the circumstances. The financial statements are not precise, since they include amounts based on estimates and judgments.
Management has determined such amounts on a reasonable basis in order to ensure that the financial statements are presented fairly, in all material respects. Management has prepared the financial
information presented elsewhere in the annual report and has ensured that it is consistent with that in the financial statements.

Agnico-Eagle
Mines Limited maintains systems of internal accounting and administrative controls of high quality, consistent with reasonable cost. Such systems are designed to provide
reasonable assurance that the financial information is relevant, reliable and accurate and that the Company's assets are appropriately accounted for and adequately safeguarded.

The
Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the
financial statements. The Board of Directors carries out this responsibility principally through its Audit Committee.

The
Audit Committee is appointed by the Board of Directors and all of its members are independent directors. The Audit Committee meets periodically with management, as well as the
external auditors, to discuss internal controls over the financial reporting process, auditing matters and financial reporting issues, to satisfy itself that each party is properly discharging its
responsibilities, and to review the annual report, the
financial statements and the external auditors' report. The Audit Committee reports its findings to the Board of Directors for consideration when approving the financial statements for issuance to the
shareholders.

The
Audit Committee also considers, for review by the Board of Directors and approval by the shareholders, the engagement or re-appointment of the external auditors.

The
financial statements have been audited by Ernst & Young LLP, the external auditors, in accordance with Canadian generally accepted auditing standards and
United States generally accepted auditing standards on behalf of the shareholders. Ernst & Young LLP has full and free access to the Audit Committee.

|SIGNATURE                             |  | SIGNATURE                                          
|------------------------------------- |  | ---------------------------------------------------
|Sean Boyd, C.A.                       |  | David Garofalo, C.A.                               
|President and
Chief Executive Officer |  | Vice President, Finance and
Chief Financial Officer

Toronto, Canada,
February 24, 2004.

22

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AUDITORS' REPORT

To the Shareholders of Agnico-Eagle Mines Limited:

We have audited the balance sheet of Agnico-Eagle Mines Limited as at December 31, 2003 and 2002 and the statement of income (loss) and comprehensive
income (loss), shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 2003. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with Canadian generally accepted auditing standards and United States generally accepted auditing standards. Those standards require that we
plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation.

In
our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2003 and 2002 and the results of its
operations and its cash flows for each of the years in the three-year period ended December 31, 2003 in accordance with United States generally accepted accounting
principles.

We
also reported separately on February 24, 2004 to the shareholders of Agnico-Eagle Mines Limited, on our audit, conducted in accordance with Canadian generally accepted auditing
standards and United States generally accepted auditing standards, where we expressed an opinion without reservation on the December 31, 2003 and 2002 financial statements, prepared in
accordance with Canadian generally accepted accounting principles.

As
described in the "Summary of Significant Accounting Policies  Reclamation costs and Stock-based compensation", the Company changed its method of
(i) accounting for reclamation costs effective January 1, 2003; and (ii) accounting for stock-based compensation effective January 1, 2003.

SIGNATURE

Ernst & Young LLPChartered Accountants
Toronto, Canada,
February 24, 2004

23

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AGNICO-EAGLE MINES LIMITED
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements of Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") are expressed in thousands of United States dollars ("US dollars"), except where noted,
and have been prepared in accordance with United States generally accepted accounting principles ("US GAAP"). We have also prepared consolidated financial statements in accordance with Canadian
generally accepted accounting principles. Since a precise determination of assets and liabilities depends on future events, the presentation of consolidated financial statements for a period
necessarily involves the use of estimates and approximations. Actual results may differ from such estimates and approximations. The consolidated financial statements have, in management's opinion,
been prepared within reasonable limits of materiality and within the framework of the significant accounting policies referred to below.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and all its subsidiaries. Prior to October 15, 2001, Agnico-Eagle consolidated
its 49.5% direct and indirect ownership interest in Mentor Exploration and Development Co., Limited ("Mentor") on the basis of the Company's ability to determine its strategic operating,
investing and financing policies. Effective October 15, 2001, Mentor was amalgamated with the Company under a court approved plan of arrangement to continue as Agnico-Eagle Mines Limited.

The
cost of the Company's own shares held by Mentor had been presented in the consolidated balance sheets as a reduction of shareholders' equity. Changes in the Company's own shares held
by a subsidiary company resulted from purchases and sales of Agnico-Eagle's shares by Mentor.

Agnico-Eagle
recognizes gains and losses on the effective disposition of interests in associated companies arising when such associated companies issue treasury shares to third parties.
Gains are recognized in income only if there is reasonable assurance of realization, otherwise they are recorded within accumulated other comprehensive loss.

As
a result of issuances of stock by its subsidiary company, Sudbury Contact Mines Limited ("Sudbury"), the Company's interest in Sudbury has been diluted to below 50% during the year.
The Company therefore no longer consolidates the results of Sudbury but accounts for its investment using the equity method of accounting. The Company reports its share of losses in Sudbury as a
separate line item in the financial statements. The Company began using the equity method to account for its interest in Sudbury on September 1, 2003.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and short-term investments in money market instruments with original maturities of three months or less
at the date of purchase. Short-term investments are carried at cost, which approximates market value.

Inventories

Inventories consist of ore stockpiles, in-process concentrates and supplies.

Ore
stockpiles represent coarse ore that has been mined and is available for further processing. Stockpiles are measured by estimating the number of tons, contained ounces (based on
assays) and recovery percentages (based on actual recovery rates achieved for processing similar ore). Specific tonnages are verified and compared to original estimates once the stockpile is milled.
Stockpiles are not intended to be long-term inventory items and therefore are generally processed within twelve months of extraction. Ore stockpiles are valued at the lower of net
realizable value and mining costs incurred up to the point of stockpiling the ore, including amortization relating to the mining operations.

In-process
inventories consist of concentrates for which legal title has not yet passed to custom smelters. In-process inventories are measured based on assays of
the processed concentrates and are valued based on the lower of net realizable value and the mining and milling costs associated with extracting and processing the ore.

24

---



Supplies,
consisting of mine stores inventory, are valued at the lower of average cost and replacement cost.

Deferred financing costs

Deferred financing costs, which are included in other assets on the consolidated balance sheets and relate to the issuance of the senior convertible debentures
and the Company's revolving credit facility, are being amortized to income over the term of the related obligations. If the holders of the Company's convertible debentures exercise their conversion
option, the common shares issued on such conversion will be recorded at an amount equal to the aggregate of the carrying value of the long-term liability, net of the associated financing
costs, with no gain or loss being recognized in income.

Mining properties, plant and equipment and deferred expenditures

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 production begins, using the unit-of-production method, based on estimated proven and probable reserves. If no mineable ore body is
discovered, such costs are expensed in the period in which it is determined the property has no future economic value.

Expenditures
for new facilities and improvements that can extend the useful lives of existing facilities are capitalized as plant and equipment at cost. Interest costs incurred, prior to
the commencement of commercial production for projects specifically financed by debt, are capitalized.

Agnico-Eagle
records depreciation on plant and equipment used in commercial production on a unit-of-production basis based on the estimated proven and probable
ore reserves of the mine, which does not exceed 20 years. Repairs and maintenance expenditures are charged to income as production costs. Assets under construction are not depreciated until the
end of the construction period. Upon commencement of commercial production, the capitalized construction costs are transferred to the various categories of plant and equipment.

Mineral
exploration costs are charged to income in the year in which they are incurred. When it is determined that a mining property can be economically developed as a result of
established proven and probable reserves, the costs of further exploration and development to further delineate the orebody on such property are capitalized. The establishment of proven and probable
reserves is based on results of final feasibility studies, which indicate whether a property is economically feasible. Upon commencement of the commercial production of a development project, these
costs are transferred to the appropriate asset category and are amortized to income using the unit-of-production method mentioned above. Deferred expenditures, net of salvage
values, relating to a property which is abandoned or considered uneconomic for the foreseeable future, are written off.

The
carrying values of mining properties, plant and equipment and deferred expenditures are reviewed periodically, when impairment factors exist, for possible impairment, based on the
future undiscounted net cash flows of the operating mine and development property. If it is determined that the estimated net recoverable amount is less than the carrying value, then a write down to
the estimated fair value amount is made with a charge to income. Estimated future cash flows of an operating mine and development properties include estimates of recoverable ounces of gold based on
the proven and probable reserves of the mine, gold prices (considering current and historical prices, price trends and related factors), production levels, capital and reclamation costs, and related
income and mining taxes, all based on detailed engineering life-of-mine plans. Cash flows are subject to risks and uncertainties and changes in the estimates of the cash flows
could affect the recoverability of long-lived assets.

Financial Instruments

Agnico-Eagle employs derivative financial instruments, primarily option contracts, to manage exposure to fluctuations in metal prices and foreign currency
exchange rates. Agnico-Eagle does not hold financial instruments or derivative financial instruments for trading purposes.

25

---



As
a result of adopting United States Financial Accounting Standards Board ("FASB") Statements No. 133,"Accounting for Derivative Instruments and
Hedging Activities"("FAS 133"), the Company recognizes all derivative financial instruments in the consolidated financial statements at fair value regardless of the
purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are either recognized periodically in income or in shareholders' equity as a component of
other comprehensive loss depending on whether the derivative financial instrument qualifies for hedge accounting. Currently, the Company's gold put option and foreign exchange contracts qualify for
hedge accounting and changes in the fair value of these derivative financial instruments are recognized as a component of accumulated other comprehensive loss. Changes in the fair value of all other
derivative financial instruments are recognized in income.

Revenue recognition

Revenue from concentrates is recognized when legal title passes to the custom smelters and is valued on an estimated net realizable value basis. Periodic
adjustments on the final settlement of concentrates previously sold to smelters are included in revenue as soon as the amount can be reasonably determined. Revenue from gold and silver in the form of
doré bars is recorded when the refined gold and silver are sold and are also included in revenues from mining operations.

Revenues
from mining operations consist of gold and byproduct revenues, net of smelting, refining and other marketing charges.

Foreign currency translation

Monetary assets and liabilities of Agnico-Eagle's operations denominated in a currency other than US dollars are translated into US dollars using
the exchange rate in effect at the year end. Non-monetary assets and liabilities are translated at historical exchange rates while revenues and expenses are translated at the average
exchange rate during the year, with the exception of amortization, which is translated at historical exchange rates. Exchange gains and losses are included in income except for gains and losses on
foreign currency contracts used to hedge specific future commitments in foreign currencies. Gains and losses on these contracts are accounted for as a component of the related hedged transactions.

Reclamation costs

Effective January 1, 2003, the Company adopted the provisions of FASB Statement No. 143 ("FAS 143") related to asset retirement obligations.
FAS 143 applies to legal obligations resulting from the construction, development and operation of long-lived assets, such as mining assets. This standard requires companies to
recognize the present value of reclamation costs as a liability in the period the legal obligation is incurred. The Company estimated the final reclamation provision taking into account current
circumstances such as projected mine life at the end of 2003 and current throughput. Subsequent revisions to the final reclamation estimate could result from legislative changes or changes in the
underlying assumptions  such as life-of-mine.

For
periods prior to January 1, 2003, estimated future reclamation costs were based primarily on legal, environmental and regulatory requirements. Future reclamation costs for the
Company's inactive mines were accrued based on management's best estimate of the costs at the end of each period, comprising costs expected to be incurred at a site, on an undiscounted basis. Such
cost estimates included, where applicable, ongoing care and maintenance and monitoring costs. Changes in estimates were reflected in income in the period an estimate was revised.

26

---



Income and mining taxes

Agnico-Eagle follows the liability method of tax allocation for accounting for income taxes. Under this method of tax allocation, future income and mining tax
bases of assets and liabilities are measured using the substantively enacted tax rates and laws expected to be in effect when the differences are expected to reverse.

From
time to time, the Company issues flow-through shares to finance some of its exploration activities. Common shares of the Company are issued for cash at the market price
in exchange for Agnico-Eagle giving up the tax benefits arising from the exploration activities. Agnico-Eagle records such common share issuances by crediting share capital for the full value of cash
consideration received. The cost of the future income and mining tax benefits arising at the time Agnico-Eagle renounces the income and mining tax deductibility of the eligible expenditures to the
investors are accounted for as a share issue cost.

Stock-based compensation

Agnico-Eagle has two stock-based compensation plans. The Employee Stock Option Plan is described in note 7(a) and the Incentive Share Purchase Plan
is described in note 7(b) to the consolidated financial statements.

In
2003, the Company prospectively adopted Statement of Financial Accounting Standard ("FAS") 123 "Accounting for Stock-Based
Compensation" as amended by FAS 148, "Accounting for Stock-Based Compensation  Transition and
Disclosure". These accounting standards recommend the expensing of stock option grants after January 1, 2003. The standards recommend that the fair value of stock
options be recognized in income over the applicable vesting period as a compensation expense. Any consideration paid by employees on exercise of stock options or purchase of stock is credited to share
capital.

Prior
to 2003, the Company accounted for its stock option grants based on the recognition and measurement principles of Accounting Principles Board Opinion No. 25
and related interpretations. The application of Opinion No. 25 resulted in no compensation expense being recorded, in Agnico-Eagle's circumstances, as all options granted had an exercise
price equal to the market value of the underlying stock on the date of grant (intrinsic value method). Pro forma fair value disclosures assumed that the estimated fair value of options would be
amortized to expense over the options' vesting period.

Pension costs and obligations and post-retirement benefits

Prior to July 1, 1997, Agnico-Eagle had a defined benefit plan for its salaried employees, which was substantially converted to a defined contribution
plan. In addition, Agnico-Eagle provides a non-registered supplementary executive retirement defined benefit plan for its senior officers. The executive retirement plan benefits are
generally based on the employees' years of service and level of compensation. Pension expense related to the defined benefit plan is the net of the cost of benefits provided, the interest cost of
projected benefits, return on plan assets and amortization of experience gains and losses. Pension fund assets are measured at current fair values. Actuarially determined plan surpluses or deficits,
experience gains or losses and the cost of pension plan improvements are amortized on a straight-line basis over the expected average remaining service life of the employee group.

Agnico-Eagle
maintains a defined contribution plan covering all of its employees. The plan is funded by Company contributions based on a percentage of income for services rendered by
employees.

The
Company does not offer any post-retirement benefits to its employees.

Comparative figures

Certain items in the comparative financial statements have been reclassified from statements previously presented to conform to the presentation of the 2003
consolidated financial statements.

27

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AGNICO-EAGLE MINES LIMITED        BALANCE SHEET        (thousands of United States dollars, US GAAP basis)

|                                                        |                                                    | As at December 31,      |         
|------------------------------------------------------- | -------------------------------------------------- | ----------------------- | --------
|
|ASSETS                                                  |                                                    |                         |         
|Current                                                 |                                                    |                         |         
|                                                        | Cash and cash equivalents                          |                         | $       
|                                                        | Metals awaiting settlement (note 1)                |                         |         
|                                                        | Income taxes recoverable                           |                         |         
|                                                        | Inventories:                                       |                         |         
|                                                        |                                                    | Ore stockpiles          |         
|                                                        |                                                    | In-process concentrates |         
|                                                        |                                                    | Supplies                |         
|                                                        | Prepaid expenses and other (note 2(a))             |                         |         
|                                                        |                                                    |                         |         
|Total current assets                                    |                                                    |                         | 177,016 
|Fair value of derivative financial instruments (note 9) |                                                    |                         | 7,573   
|Other assets (note 2(b))                                |                                                    |                         | 11,214  
|Future income and mining tax assets (note 8)            |                                                    |                         | 41,579  
|Mining properties (note 3)                              |                                                    |                         | 399,719 
|                                                        |                                                    |                         |         
|                                                        |                                                    | $                       | 637,101 
|                                                        |                                                    |                         |         
|LIABILITIES AND SHAREHOLDERS' EQUITY                    |                                                    |                         |         
|Current                                                 |                                                    |                         |         
|                                                        | Accounts payable and accrued liabilities (note 10) |                         | $       
|                                                        | Dividends payable                                  |                         |         
|                                                        | Income and mining taxes payable                    |                         |         
|                                                        | Interest payable                                   |                         |         
|                                                        |                                                    |                         |         
|Total current liabilities                               |                                                    |                         | 36,403  
|                                                        |                                                    |                         |         
|Long-term debt (note 4)                                 |                                                    |                         | 143,750 
|                                                        |                                                    |                         |         
|Reclamation provision and other liabilities (note 5)    |                                                    |                         | 15,377  
|                                                        |                                                    |                         |         
|Fair value of derivative financial instruments (note 9) |                                                    |                         |        
|                                                        |                                                    |                         |         
|Future income and mining tax liabilities (note 8)       |                                                    |                         | 40,848  
|                                                        |                                                    |                         |         
|Shareholders' Equity                                    |                                                    |                         |         
|                                                        | Common shares (note 6(a))                          |                         |         
|                                                        | Authorized  unlimited                             |                         |         
|Issued  84,469,804 (2002  83,636,861)                 |                                                    |                         | 601,305 
|Warrants (note 6(c))                                    |                                                    |                         | 15,732  
|Contributed surplus                                     |                                                    |                         | 7,181   
|Deficit                                                 |                                                    |                         | (218,055
|Accumulated other comprehensive loss (note 6(d))        |                                                    |                         | (5,440  
|                                                        |                                                    |                         |         
|Total shareholders' equity                              |                                                    |                         | 400,723 
|                                                        |                                                    |                         |         
|                                                        |                                                    | $                       | 637,101 
|                                                        |                                                    |                         |         

On behalf of the Board:

|SIGNATURE                |  | SIGNATURE                   
|------------------------ |  | ----------------------------
|Sean Boyd C.A., Director |  | Bernard Kraft C.A., Director

See accompanying notes

28

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AGNICO-EAGLE MINES LIMITED        STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)        (thousands of United States dollars, US GAAP basis)

|                                                                                                  |                                                                                                                                             | Years ended December 31, |        
|------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | -------
|
|REVENUES                                                                                          |                                                                                                                                             |                          |        
|Revenues from mining operations                                                                   |                                                                                                                                             | $                        | 126,820
|Interest and sundry income                                                                        |                                                                                                                                             |                          | 2,775  
|                                                                                                  |                                                                                                                                             |                          |        
|                                                                                                  |                                                                                                                                             |                          | 129,595
|COSTS AND EXPENSES                                                                                |                                                                                                                                             |                          |        
|Production (note 3)                                                                               |                                                                                                                                             |                          | 104,990
|Exploration and corporate development (note 3)                                                    |                                                                                                                                             |                          | 5,975  
|Equity loss in junior exploration company                                                         |                                                                                                                                             |                          | 1,626  
|Amortization                                                                                      |                                                                                                                                             |                          | 17,504 
|General and administrative                                                                        |                                                                                                                                             |                          | 7,121  
|Provincial capital tax                                                                            |                                                                                                                                             |                          | 1,240  
|Interest (note 4)                                                                                 |                                                                                                                                             |                          | 9,180  
|Foreign currency loss (gain)                                                                      |                                                                                                                                             |                          | 72     
|                                                                                                  |                                                                                                                                             |                          |        
|Income (loss) before income, mining and federal capital taxes                                     |                                                                                                                                             |                          | (18,113
|Federal capital tax                                                                               |                                                                                                                                             |                          | 1,090  
|Income and mining taxes expense (recovery) (note 8)                                               |                                                                                                                                             |                          | (1,448 
|                                                                                                  |                                                                                                                                             |                          |        
|Net income (loss) before cumulative catch-up adjustment                                           |                                                                                                                                             |                          | (17,755
|Cumulative catch-up adjustment relating to FAS 143                                                |                                                                                                                                             |                          | (1,743 
|                                                                                                  |                                                                                                                                             |                          |        
|Net income (loss) for the year                                                                    |                                                                                                                                             | $                        | (19,498
|                                                                                                  |                                                                                                                                             |                          |        
|Net income (loss) before cumulative catch-up adjustment per share  basic and diluted (note 6(e)) |                                                                                                                                             | $                        | (0.21  
|Cumulative catch-up adjustment per share  basic and diluted                                      |                                                                                                                                             |                          | (0.02  
|                                                                                                  |                                                                                                                                             |                          |        
|Net income (loss) per share  basic and diluted (note 6(e))                                       |                                                                                                                                             | $                        | (0.23  
|                                                                                                  |                                                                                                                                             |                          |        
|Comprehensive income (loss):                                                                      |                                                                                                                                             |                          |        
|Net income (loss) for the year                                                                    |                                                                                                                                             | $                        | (19,498
|                                                                                                  |                                                                                                                                             |                          |        
|Other comprehensive income (loss,) net of tax:                                                    |                                                                                                                                             |                          |        
|                                                                                                  | Unrealized gain (loss) on hedging activities                                                                                                |                          |        
|                                                                                                  | Unrealized gain on available-for-sale securities                                                                                            |                          |        
|Dilution gain on issuance of securities by subsidiary company                                     |                                                                                                                                             |                          | 4,500  
|                                                                                                  | Minimum pension liability                                                                                                                   |                          |        
|                                                                                                  | Cumulative transitional adjustment upon the adoption of FAS 133 related to the accounting for derivative instruments and hedging activities |                          |        
|                                                                                                  | Adjustments for derivative instruments, maturing during the year, included in the cumulative adjustment at January 1, 2001                  |                          |        
|                                                                                                  | Adjustments for realized gains on available-for-sale securities due to dispositions during the year                                         |                          |        
|                                                                                                  |                                                                                                                                             |                          |        
|Other comprehensive income (loss) for the year                                                    |                                                                                                                                             |                          | 15,726 
|                                                                                                  |                                                                                                                                             |                          |        
|Total comprehensive income (loss) for the year                                                    |                                                                                                                                             | $                        | (3,772 
|                                                                                                  |                                                                                                                                             |                          |        

See accompanying notes

29

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AGNICO-EAGLE MINES LIMITED        STATEMENT OF SHAREHOLDERS' EQUITY        (thousands of United States dollars, US GAAP basis)

|                                                                       |  | Years ended December 31, 2003, 2002 and 2001 | 
|---------------------------------------------------------------------- |  | -------------------------------------------- | 
|
|
|
|Balance December 31, 2000                                              |  | 56,139,480                                   | 
|                                                                       |  |                                              | 
|Shares issued under Employee Stock Option Plan (note 7(a))             |  | 426,100                                      | 
|Shares issued under the Share Incentive Plan (note 7(b))               |  | 209,826                                      | 
|Shares issued under flow-through share private placement (note 6(b))   |  | 200,000                                      | 
|Shares issued by public offering, net of share issue costs (note 6(c)) |  | 10,350,000                                   | 
|Shares issued on the conversion of Company's senior convertible notes  |  | 6,691                                        | 
|Shares issued to acquire Mentor                                        |  | 369,348                                      | 
|Shares issued under the Company's dividend reinvestment plan           |  | 21,408                                       | 
|Net loss for the year                                                  |  |                                             | 
|Dividends declared ($0.02 per share)                                   |  |                                             | 
|Other comprehensive loss for the year                                  |  |                                             | 
|                                                                       |  |                                              | 
|Balance December 31, 2001                                              |  | 67,722,853                                   | 
|Shares issued under Employee Stock Option Plan (note 7(a))             |  | 1,927,500                                    | 
|Shares issued under the Share Incentive Plan (note 7(b))               |  | 138,747                                      | 
|Shares issued under flow-through share private placement (note 6(b))   |  | 40,161                                       | 
|Units issued by public offering, net of issue costs (note 6(c))        |  | 13,800,000                                   | 
|Shares issued on the conversion of Company's senior convertible notes  |  | 4,460                                        | 
|Shares issued under the Company's dividend reinvestment plan           |  | 3,140                                        | 
|Net income for the year                                                |  |                                             | 
|Dividends declared ($0.03 per share)                                   |  |                                             | 
|Other comprehensive loss for the year                                  |  |                                             | 
|                                                                       |  |                                              | 
|Balance December 31, 2002                                              |  | 83,636,861                                   | 
|Shares issued under Employee Stock Option Plan (note 7(a))             |  | 229,100                                      | 
|Shares issued under the Share Incentive Plan (note 7(b))               |  | 217,855                                      | 
|Shares issued under flow-through share private placement (note 6(b))   |  | 255,768                                      | 
|Shares issued under the Company's dividend reinvestment plan           |  | 4,608                                        | 
|Shares issued for acquisitions (note 10)                               |  | 125,612                                      | 
|Net loss for the year                                                  |  |                                             | 
|Dividends declared ($0.03 per share)                                   |  |                                             | 
|Other comprehensive income for the year                                |  |                                             | 
|                                                                       |  |                                              | 
|Balance December 31, 2003                                              |  | 84,469,804                                   | 
|                                                                       |  |                                              | 

See accompanying notes

30

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AGNICO-EAGLE MINES LIMITED        STATEMENT OF CASH FLOWS        (thousands of United States dollars, US GAAP basis)

|                                                                     |                                              | Years ended December 31,                 |        
|-------------------------------------------------------------------- | -------------------------------------------- | ---------------------------------------- | -------
|
|Operating activities                                                 |                                              |                                          |        
|Net income (loss) for the year                                       |                                              | $                                        | (19,498
|Add (deduct) items not affecting cash:                               |                                              |                                          |        
|Amortization                                                         |                                              |                                          | 17,504 
|Future income and mining taxes                                       |                                              |                                          | 1,090  
|Unrealized gain on derivative contracts                              |                                              |                                          | (2,265 
|Cumulative catch-up adjustment relating to FAS 143                   |                                              |                                          | 1,743  
|                                                                     | Amortization of deferred costs and other     |                                          |        
|                                                                     | Changes in non-cash working capital balances |                                          |        
|                                                                     |                                              | Metals awaiting settlement               |        
|                                                                     |                                              | Income taxes recoverable                 |        
|                                                                     |                                              | Inventories                              |        
|                                                                     |                                              | Prepaid expenses and other               |        
|                                                                     |                                              | Accounts payable and accrued liabilities |        
|                                                                     |                                              | Interest payable                         |        
|                                                                     |                                              |                                          |        
|Cash provided by (used in) operating activities                      |                                              |                                          | 4,253  
|                                                                     |                                              |                                          |        
|Investing activities                                                 |                                              |                                          |        
|Additions to mining properties                                       |                                              |                                          | (42,038
|Acquisitions and additions to available-for-sale securities          |                                              |                                          | (10,438
|                                                                     |                                              |                                          |        
|Cash used in investing activities                                    |                                              |                                          | (52,476
|                                                                     |                                              |                                          |        
|Financing activities                                                 |                                              |                                          |        
|Dividends paid                                                       |                                              |                                          | (2,431 
|Common shares issued                                                 |                                              |                                          | 8,141  
|Warrants issued                                                      |                                              |                                          |       
|Share and warrant issue costs                                        |                                              |                                          | (271   
|Proceeds from long-term debt (note 4)                                |                                              |                                          |       
|Financing costs                                                      |                                              |                                          |       
|Repayment of the Company's senior convertible debentures (note 4)    |                                              |                                          |       
|Bank debt                                                            |                                              |                                          |       
|Resale of the Company's own shares by a subsidiary company and other |                                              |                                          |       
|                                                                     |                                              |                                          |        
|Cash provided by financing activities                                |                                              |                                          | 5,439  
|                                                                     |                                              |                                          |        
|Effect of exchange rate changes on cash and cash equivalents         |                                              |                                          | 215    
|                                                                     |                                              |                                          |        
|Net increase (decrease) in cash and cash equivalents during the year |                                              |                                          | (42,569
|Cash and cash equivalents, beginning of year                         |                                              |                                          | 152,934
|                                                                     |                                              |                                          |        
|Cash and cash equivalents, end of year                               |                                              | $                                        | 110,365
|                                                                     |                                              |                                          |        

See notes 4, 8, and 10 for supplemental cash flow information

See accompanying notes

31

---





AGNICO-EAGLE MINES LIMITED        NOTES TO FINANCIAL STATEMENTS        (In thousands of United States dollars, unless otherwise indicated)  December 31, 2003

1.     METALS AWAITING SETTLEMENT

2003

2002Precious metals

$
1,327

$
2,856Concentrates awaiting settlement


33,243


26,893$
34,570

$
29,749




2.     OTHER ASSETS

(a)Prepaid expenses and other

2003

2002Available-for-sale securities (at market value)

$
4,426

$
3,886Prepaid expenses


1,269


824Loans receivable


540


465Federal and provincial sales taxes receivable


3,499


3,716Other


629


1,134$
10,363

$
10,025




(b)Other assets

2003

2002Deferred financing costs, less accumulated amortization of $2,321 (2002  $1,313)

$
8,080

$
8,577Loan to Sudbury Contact Mines Limited


2,739


Other


395


218$
11,214

$
8,795


3.     MINING PROPERTIES

2003

2002Cost

Accumulated Amortization

Net Book Value

Cost

Accumulated Amortization

Net Book ValueMining properties

$
60,362

$
10,289

$
50,073

$
45,734

$
8,335

$
37,399Plant and equipment


274,725


72,290


202,435


244,659


63,348


181,311Deferred expenditures


181,761


34,550


147,211


161,167


26,818


134,349$
516,848

$
117,129

$
399,719

$
451,560

$
98,501

$
353,059




32

---





4.     LONG-TERM DEBT

(a)Convertible subordinated debentures



(b)Revolving credit facility



5.     RECLAMATION PROVISION AND OTHER LIABILITIES



2003

2002Reclamation and closure costs (note 5(a))

$
11,629

$
2,066Pension benefits (note 5(b))


3,748


2,977$
15,377

$
5,043


33

---



(a)Reclamation and closure costs



2003

2002(pro-forma)Asset retirement obligations, beginning of year

$
5,520

$
5,282Current year accretion


424


238Reclamation payments relating to non-operating properties


(44
)

Liabilities incurred on the purchase of the Bousquet mine


5,729


Asset retirement obligations, end of year

$
11,629

$
5,520


(b)Pension benefits



2003

2002

2001Service cost  benefits earned during the year

$
263

$
210

$
194Actuarial losses


26





Interest cost on projected benefit obligation


419


348


312Return on plan assets


(127
)

(125
)

(162
)Amortization of net transition asset, past service liability and net experience gains


58


(138
)

52Net pension plan expense

$
639

$
295

$
396




Minimum

Maximum

TargetCash and equivalents

0%

35%

5%Fixed income securities

25%

75%

35%Equity securities

25%

65%

60%Real estate

0%

10%

0%


34

---





2003

2002Employees

Executives

Employees

ExecutivesReconciliation of the market value of plan assetsFair value of plan assets, beginning of year

$
1,576

$
200

$
1,704

$
176Agnico-Eagle's contribution





56





44Actual return on plan assets


321





(31
)

Benefit payments


(132
)

(28
)

(111
)

(22
)Effect of exchange rate changes


367


47


14


2Fair value of plan assets, end of year

$
2,132

$
275

$
1,576

$
200Reconciliation of projected benefit obligationProjected benefit obligation, beginning of year

$
1,468

$
4,081

$
1,439

$
3,241Service costs





263





210Interest costs


101


318


95


253Actuarial losses


35


188


34


377Benefit payments


(132
)

(28
)

(111
)

(22
)Plan amendments


(29
)

92





Effect of exchange rate changes


325


979


11


22Projected benefit obligation, end of year

$
1,768

$
5,893

$
1,468

$
4,081Excess (deficiency) of plan assets over projected benefit obligation

$
364

$
(5,618
)
$
108

$
(3,881
)Comprised of:Unamortized transition asset (liability)

$
839

$
(1,271
)
$
823

$
(1,568
)Unamortized net experience gain (loss)


(166
)

(599
)

(324
)

(242
)Accrued liabilities


(308
)

(3,748
)

(391
)

(2,071
)$
364

$
(5,618
)
$
108

$
(3,881
)Weighted average discount rate(i)


6.50%


6.50%


6.50%


6.50%Weighted average expected long-term rate of return


7.50%
(ii)

n.a


7.50%
(ii)

n.aWeighted average rate of compensation increase


n.a.


3.0%


n.a.


3.0%Estimated average remaining service life for the Employees plan (in years)


5.0


8.0
(iii)

8.0


9.0
(iii)


---



35

---







Employees

Executives

Total2004

$
75

$
92

$
1672005


90


77


1672006


90


77


1672007


90


84


1742008


90


84


1742009  2013


450


435


885


6.     SHAREHOLDERS' EQUITY

(a)Common shares



(b)Flow-through share private placements



(c)Public offering



(d)Accumulated other comprehensive loss



36

---





2003

2002Cumulative translation adjustment from adopting US dollar as principal reporting currency

$
(15,907
)
$
(15,907
)Unrealized gains on available-for-sale securities


2,176


1,559Dilution gains on equity issuances of subsidiary


6,110


1,610Unrealized gains on foreign exchange derivative contracts


9,973


Unrealized losses on gold put option contracts


(6,812
)

(7,448
)Minimum pension liabilities


(980
)

(980
)$
(5,440
)
$
(21,166
)




(e)Net income (loss) per share



2003

2002

2001Weighted average number of common shares outstanding  basic

83,889,115

70,821,081

61,333,630Add: Dilutive impact of employee stock options



810,182

Weighted average number of common shares outstanding  diluted

83,889,115

71,631,263

61,333,630




7.     STOCK-BASED COMPENSATION

(a)Employee Stock Option Plan ("ESOP")



37

---





2003

2002

2001Options

Weighted average exercise price

Options

Weighted average exercise price

Options

Weighted average exercise priceOutstanding, beginning of year

3,060,350

C$14.47

3,660,200

C$12.04

3,895,050

C$11.73Granted

40,000

18.49

1,358,500

17.07

191,250

9.49Exercised

(229,100
)
10.23

(1,927,500
)
11.82

(426,100
)
8.31Cancelled

(26,100
)
16.01

(30,850
)
12.06



Outstanding, end of year

2,845,150

C$14.85

3,060,350

C$14.47

3,660,200

C$12.04Options exercisable at end of year

2,697,950



2,682,500



3,049,300




Options outstanding

Options exercisableRange of exercise prices

Number outstanding

Weighted average remaining contractual life

Weighted average exercise price

Number exercisable

Weighted average exercise priceC$6.55 C$9.30

242,800

5.1 years

C$8.12

236,500

C$8.09C$10.20 C$15.75

801,200

5.9 years

C$10.54

689,300

C$10.57C$15.93 C$19.94

1,545,650

2.1 years

C$16.85

1,543,650

C$16.85C$21.72 C$25.60

255,500

3.2 years

C$22.66

228,500

C$22.75C$6.55 C$25.60

2,845,150

3.5 years

C$14.85

2,697,950

C$14.98




38

---





2003

2002

2001Net income (loss) for the year, as reported

$
(19,498
)
$
4,023

$
(5,718
)Add: Stock-based employee compensation included in reported net income (loss)


95





Deduct: Total stock-based employee compensation determined under fair value based method for all awards


(263
)

(2,621
)

(624
)Pro forma net income (loss)

$
(19,666
)
$
1,402

$
(6,342
)Net income (loss) per share:Basic and diluted, as reported

$
(0.23
)
$
0.06

$
(0.09
)Basic and diluted, pro-forma

$
(0.23
)
$
0.02

$
(0.10
)




2003

2002

2001Risk-free interest rate

2.9%

2.6%

5.5%Expected life of options (in years)

2.5

2.1

7.5Expected volatility of Agnico-Eagle's share price

43.5%

36.9%

46.2%Expected dividend yield

0.25%

0.19%

0.46%




(b)Incentive Share Purchase Plan



39

---





8.     FUTURE INCOME AND MINING TAXES



2003

2002

2001Current provisionProvincial mining duties

$
(2,538
)
$
(2,779
)
$
(2,201
)Future provisionFederal income taxes








1,405Provincial income taxes








332Provincial mining duties


1,090


2,418


2,6031,090


2,418


4,340$
(1,448
)
$
(361
)
$
2,139




2003

2002

2001Amortization

$
(11
)
$
(587
)
$
(265
)Exploration and development


2,910


3,152


2,676Other


(1,809
)

(147
)

1,929$
1,090

$
2,418

$
4,340




2003

2002

2001Combined federal and composite provincial tax rates

(38.3
)%
39.9%

(41.3
)%Increase (decrease) in taxes resulting from:Provincial mining duties

20.1

(7.8
)
14.5Resource allowances

(8.4
)
(101.7
)
(25.2
)Non-deductible expenses

14.0

6.5

24.6Temporary differences for which no benefit was recognized

20.5

78.7

83.0Unrecognized benefit of non-capital losses

22.7

(23.4
)
19.3Effect of changes in Canadian income tax legislation

(38.6
)


Actual rate as a percentage of pre-tax income (loss)

(8.0
)%
(7.8
)%
74.9%




2004

C$  8,1882005

17,4872006

6,0842007

462009

8,7332010

14,883C$55,421




40

---





2003

2002Assets

Liabilities

Assets

LiabilitiesNon-current:Income taxes:Plant and equipment

$
14,655

$


$
8,563

$
Deferred expenditures


19,746





14,200


Net operating and capital loss carryforwards


26,022





11,126


Mining duties


6,992








Other


3,542





4,480


Valuation allowance


(29,378
)




(14,479
)

Total non-current

$
41,579

$


$
23,890

$
Mining duties:Plant and equipment

$
440

$
18,192

$
360

$
6,374Deferred expenditures


344


23,548


3,869


14,897Other





(892
)




(382
)Valuation allowance


(784
)




(4,229
)

Total non-current

$


$
40,848

$


$
20,889Non-current future income and mining tax assets and liabilities

$
41,579

$
40,848

$
23,890

$
20,889




9.     FINANCIAL INSTRUMENTS



41

---





Expected Maturity2004

2005

2006

2007GoldPut options purchasedAmount hedged (ounces)

136,644

190,020

152,340

131,280Average price ($/ounce)

$260

$260

$260

$260




42

---





Expected Maturity2004

2005

2006US$ call options soldAmount (thousands)

$
24,000

$
12,000

$
12,000US$/C$ weighted average exchange rate


1.6390


1.6050


1.6475US$ put options purchasedAmount (thousands)

$
24,000

$
12,000

$
12,000US$/C$ weighted average exchange rate


1.5900


1.5000


1.5600US$ put options soldAmount (thousands)




$
12,000


US$/C$ weighted average exchange rate





1.3700







Metals

Foreign Exchange2003

2002

2003

2002Fair value, beginning of year

(26
)
4,633

(3,477
)
(4,312
)Instruments entered into or settled

1,861

(1,602
)
2,807

(473
)Changes in fair value

(1,166
)
(3,057
)
7,574

1,308Fair value, end of year

669

(26
)
6,904

(3,477
)




10.   ACQUISITIONS



43

---





Cash

$
3,665125,612 Agnico-Eagle shares (valued at $11.67 per share)


1,466Transaction costs


225$
5,356


Allocation of purchase priceBuildings and property

$
843Production equipment


1,499Head-frame and related infrastructure


3,463Mining properties


5,280Liabilities assumed


(5,729
)$
5,356




11.   OTHER FINANCIAL INFORMATION

2003

2002

2001Wages payable

$
1,467

$
775

$
923Accrued liabilities

$
3,818

$
1,335

$
1,889


44

---



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