(All amounts expressed in U.S. dollars unless otherwise noted)

TORONTO, July 29 /CNW/ - Agnico-Eagle Mines Limited ("Agnico- Eagle" or the "Company") today reported quarterly net income of $1.2 million, or $0.01 per share, for the second quarter of 2009. This result includes a non-cash foreign currency translation loss of $16.7 million, or $0.12 per share, as well as a stock option expense of $5.0 million, or $0.03 per share. In the second quarter of 2008, the Company reported net income of $8.3 million, or $0.06 per share. Excluding these non-cash items, net income increased significantly when compared to the second quarter of 2008 due to a large increase in gold revenue.

Cash provided by operating activities in the second quarter of 2009 was $26.4 million, down from cash provided by operating activities of $92.8 million in the second quarter of 2008. The impact of significantly higher gold production, compared to the second quarter of 2008, was more than offset by changes in working capital largely related to a build-up of gold in inventory. Excluding the large changes in working capital movements, cash provided by operating activities increased significantly when compared to the second quarter of 2008 due to the large growth in gold revenue.

"Agnico-Eagle's production growth continues as second quarter gold production increased 76% over the second quarter of 2008. Both the Kittila and Lapa mines achieved commercial production, while heap leach gold production at the Pinos Altos mine has commenced. Furthermore, our Meadowbank project continues to remain on schedule for Q1 2010 start up," said Sean Boyd, Vice-Chairman and Chief Executive Officer. "As we optimize our existing asset base we have approved expansions at the Goldex and Pinos Altos mines. Agnico- Eagle remains one of the most compelling growth stories in the gold business. Additionally, over the next several quarters we expect to release the results of two more expansion studies, at Meadowbank and Kittila, further adding to our production growth beyond 2010," added Mr. Boyd.

Second quarter 2009 highlights include:

- Record Production - record gold production of 119,053 ounces. First

gold poured at Pinos Altos in July

- Good Cost Performance - LaRonde, Goldex and Lapa achieve good

minesite cost performance

- Commercial Production At Lapa And Kittila - commercial production

achieved as of May 1 at both mines

- Remaining Two New Gold Mines On Schedule - Pinos Altos and Meadowbank

remain on schedule for initial production in third quarter 2009 and

first quarter 2010, respectively

- Growth profile bolstered - expected after-tax internal rate of return

("IRR") of 76% at Goldex expansion and 17% at Pinos Altos expansion

at Creston Mascota

Payable gold production(1) in the second quarter of 2009 was a record 119,053 ounces at total cash costs per ounce(2) of $326. This compares with gold production of 67,757 ounces in the second quarter of 2008 at total cash costs per ounce of $113.

The increase in production, relative to the second quarter of 2008, is attributable to payable production from the Goldex, Lapa and Kittila mines, which were not in commercial production in that quarter. The mill recovery rates at the Kittila mine have been increasing, resulting in commercial production being achieved in May.

For the first six months of 2009, Agnico-Eagle recorded net income of $55.6 million, or $0.36 per share, up from the $37.3 million, or $0.26 per share, recorded in the first half of 2008. The increase in net income is primarily due to 78% higher gold production in 2009 due to the opening of new mines, somewhat offset by lower byproduct prices for zinc, silver and copper.

For the first six months of 2009, Agnico-Eagle generated cash provided by operating activities of $75.2 million, down from $146.6 million in the first half of 2008. The decrease was largely due to changes in working capital related to the build-up of gold in inventory. Excluding these working capital changes, cash provided by operating activities increased when compared to the first half of 2008 due to increased gold revenues, offset partly by lower byproduct revenue.

Payable gold production in the first half of 2009 was a record 210,864 ounces, up 78% from 118,649 in the first six months of 2008. The increase was due to the start-up of the new Goldex, Kittila and Lapa mines.

Full year production guidance remains unchanged at 550,000 ounces to 575,000 ounces of gold.

Conference Call Tomorrow

The Company will host its quarterly conference call on Thursday, July 30, 2009 at 11:00 a.m. (E.D.T.). Management will review the Company's financial results for the second quarter 2009 and provide an update of its exploration and development activities.

Via Webcast:

A live audio webcast of the call will be available on the Company's website homepage at www.agnico-eagle.com.

Via Telephone:

For those preferring to listen by telephone, please dial 416-644- 3418 or Toll Free 1-800-731-6941. To ensure your participation, please call approximately five minutes prior to the scheduled start of the call.

Replay archive:

Please dial the toll-free access number 1-877-289-8525, passcode 21294138 followed by the number sign.

The conference call will be replayed from Thursday, July 30, 2009 at 1:00 PM (E.D.T.) to Thursday, August 6, 2009 11:59 PM (E.D.T.).

The webcast along with presentation slides will be archived for 180 days on the website.

Strong Financial Position Maintained

Cash and cash equivalents decreased to $173.9 million at June 30, 2009 from the March 31, 2009 balance of $208.4 million. Long term debt is $485 million at June 30, 2009, up from $415 million at March 31, 2009. During the second quarter, the Company replaced a pre- existing US$300 million credit line, maturing September 2010, with a new non-amortizing US$600 million revolving credit facility, maturing June 2012. As a result, the Company now has US$900 million of credit lines, of which $396 million was available at June 30, 2009. In addition, the Company signed an unsecured C$95 million bonding facility with Export Development Canada, which will be used to provide letters of credit relating to the reclamation of the Meadowbank project.

Capital expenditures in the quarter were $155 million, including $60 million at Meadowbank, $43 million at Pinos Altos, $24 million at Kittila, $19 million at LaRonde, $7 million at Lapa and $2 million at Goldex.

In 2009, full year capital expenditures are expected to total approximately $550 million, up $10 million from previous guidance, reflecting new expansion expenditures at Goldex. An additional $64 million will be invested for the Creston Mascota expansion in 2010.

LaRonde Mine - Continued Cost Control and Production Consistency

The 100% owned LaRonde mine in northwestern Quebec, Canada, began operation in 1988. Overall, proven and probable gold reserves at LaRonde total approximately 5.0 million ounces from 35.8 million tonnes grading 4.3 grams per tonne ("g/t"). Life of mine average gold production is expected to be approximately 320,000 ounces per year through 2022. First production from the new internal shaft of the LaRonde Extension remains on schedule for late 2011.

The LaRonde mill processed an average of 7,212 tonnes of ore per day in the second quarter of 2009, compared with an average of 7,281 tonnes per day in the prior-year period. With a steady-state operation of approximately 7,200 tonnes per day for approximately six years, LaRonde continues to be a consistent, reliable world class mine.

Net of byproduct credits, LaRonde's total cash costs per ounce were $109 in the second quarter on production of 58,034 ounces of gold. This compares with the results of the second quarter of 2008 when total cash costs per ounce were $113 on production of 59,452 ounces of gold.

For the first six months of 2009, LaRonde's total cash costs per ounce were $196 on gold production of 109,372 ounces, as compared to the first half of 2008, when the total cash cost per ounce were minus $123 on production of 110,344 ounces of gold. The year-over- year increase in total cash costs is primarily due to the significantly lower realized prices of byproduct metals. The realized prices for silver, zinc and copper for six months ending June 30, 2009 were 24%, 34% and 46% lower, respectively, compared to the first half of 2008.

Minesite costs per tonne(3) were approximately C$74 in the second quarter, as expected, compared to C$68 in the second quarter of 2008. On a year-to-date basis, 2009 minesite costs per tonne were C$73, which compares to C$66 in the first half of 2008. These costs are higher than the comparable periods in 2008 due to ore stockpile adjustments and the impact of general cost inflation.

LaRonde Extension - Shaft Sinking Nearly Complete

During the second quarter of 2009, approximately 120 metres of shaft sinking was completed on the new internal shaft, leaving approximately 120 metres to the final depth of 2,880 metres. The shaft is expected to be completed during the fourth quarter of 2009 with preproduction development starting thereafter. The project is on schedule to start production in late 2011.

Goldex Mine - Reaches Design Capacity

The 100% owned Goldex mine in northwestern Quebec began operation in 2008. Proven and probable gold reserves total 1.6 million ounces from 23.8 million tonnes grading 2.1 g/t. Life of mine average annual gold production is expected to be approximately 160,000 ounces per year through 2017.

The Goldex mine has successfully reached the design capacity for the plant in the second quarter of 2009, with an average of 6,875 tonnes of ore milled daily. In the first quarter of 2009, the mill processed an average of 6,770 tonnes per day.

Second quarter 2009 gold production at Goldex was 35,645 ounces at total cash costs per ounce of $365. This compares with 35,959 ounces at total cash costs per ounce of $338 in first quarter of 2009. The higher cash cost per ounce was due to an expected decrease in grade during the second quarter.

For the six month period ending June 30, 2009, total cash costs at Goldex were $352 per ounce on gold production of 71,604 ounces. There is no meaningful comparable prior year period, as Goldex achieved commercial production in August 2008.

Cost control was very good at Goldex as minesite costs per tonne were C$24 in the second quarter, compared to C$25 in the first quarter of 2009.

During the second quarter of 2009, approximately 1.1 million tonnes of ore were blasted at Goldex compared with approximately 677,000 tonnes hoisted. This difference is necessary as the mining method used at Goldex requires some of the broken ore to be temporarily left within the mining block as ground support. As a result, minesite costs per tonne are expected to decrease going forward as all production blasting is expected to be completed in 2012, while the anticipated mine life extends into 2017.

Goldex Expansion - Low Capital, High Return Project

The Board of Directors has approved the expansion of Goldex to 8,000 tonnes per day with the ramp-up to this higher rate expected to be achieved by late-2011.

Capital costs are expected to total approximately $10 million, providing an internal rate of return of approximately 76% at $780 per ounce for gold and a C$/US$ exchange rate of 1.10. Annual incremental gold production is expected to be approximately 20,000 ounces per year, over a mine life into 2017. As a result, total gold production at Goldex is expected to be approximately 173,000 ounces per year beginning in 2011.

The large majority of the capital is to be spent on a surface crushing plant, with minor amounts for modifications to ore conveyance. Detailed engineering is underway and construction of the project will begin in the fourth quarter of 2009. A certificate of authorization, and all necessary permits, were received to increase the production rate at Goldex from 6,900 tonnes per day up to 8,500 tonnes per day.

In spite of the increased mining rate, Agnico-Eagle expects to extend the mine life of Goldex. There are several nearby zones underground, on the Goldex property, that are likely to be mined. They are currently in the resource category and not included in reserves. For example, it is expected that the nearby "M" zone will contribute approximately 250,000 ounces of gold to the overall reserves at Goldex by year end 2009, thus increasing the mine life in spite of the higher production rate.

Kittila Mine - Commercial Production Achieved at May 1; Ramping Up

Production To Design Parameters

The 100% owned Kittila mine in northern Finland poured its first gold in January 2009. Proven and probable gold reserves total 3.2 million ounces from 21.4 million tonnes grading 4.7 g/t. Life of mine average gold production is expected to be approximately 150,000 ounces per year through 2023.

During the second quarter of 2009, the Kittila mill achieved commercial production and processed an average of 1,980 tonnes per day, reflecting the start-up phase of the project. In June the mill processed an average of approximately 2,300 tonnes per day. This compares to the expected full production rate of 3,000 tonnes per day. The current performance improvements are in line with the Company's expectations.

Second quarter 2009 gold production at Kittila was 13,771 ounces at total cash costs per ounce of $658. These costs are expected to decline as the mine continues to ramp up towards full production capacity and the mill achieves higher recoveries. Life of mine total cash costs per ounce are expected to be approximately $350 per ounce. Minesite costs per tonne at Kittila were approximately (euro)43 in the second quarter.

During the second quarter, operations at Kittila were focused on improving gold recovery through a metallurgical optimization process aimed to achieve Kittila's design gold recoveries of 83% to 89% in the mill, over the life of the mine. The optimization process has delivered significant results to date, with mill recoveries averaging 49% in the second quarter and 65% in June, both much higher than the average of 28% realized in the first quarter of 2009.

A scoping study is underway examining the possibility of significantly increasing the designed production rate at Kittila. This plan involves sinking a shaft on the property combined with an increase in milling capacity. Results of the study are expected to be released later this year and will incorporate the most recent exploration drilling. Eleven drills, two underground and nine on surface, are currently working on resource to reserve conversion and other exploration around the current reserves. Year to date, over 46,200 metres of diamond drilling has been completed at Kittila while an additional 14,600 metres of drilling has been completed on regional exploration in Finland. Results will be presented in an upcoming exploration update.

Lapa - Commercial Production Achieved at May 1; Production Nearing Design

Parameters

The 100% owned Lapa mine in northwestern Quebec began production in April 2009. Proven and probable gold reserves total 1.1 million ounces from 3.8 million tonnes grading 8.8 g/t. Life of mine average gold production is expected to be approximately 115,000 ounces per year through 2015.

On May 1, Lapa achieved commercial production. Production from the Lapa mine (all of which is processed at the LaRonde mill), has averaged 1,270 tonnes per day in June, which is progressing towards design parameters. The expected production rate over the life of the mine is 1,500 tonnes per day.

Second quarter 2009 gold production at Lapa was 11,603 ounces at total cash costs per ounce of $948, partly reflecting the mine and mill start-up where some low grade development ore was mixed with higher grade stope ore and used to commission the mill. These costs are expected to decline as the mine continues to ramp up towards full production capacity and the drilling, blasting, excavation and filling cycle are optimized for the orebody. Over the life of the mine, total cash costs per ounce are expected to average approximately $315. Minesite costs per tonne at Lapa were approximately C$149 in the second quarter, reflecting the start-up phase of the mine.

To date, nine of the 750 stopes expected to be extracted over the mine life have been removed. Reconciliation with the mill is expected to be completed during the third quarter once more consistent feed is delivered to it. Dilution has initially been higher than plan, however, improvements are expected as the mine and its operations are optimized.

Pinos Altos Construction Progressing On Schedule - Pours First Gold from

Heap Leach

The 100% owned Pinos Altos mine in northern Mexico has begun to pour gold from the heap leach and is expected to begin production from its milling operation in the third quarter of 2009. Proven and probable gold reserves total 3.6 million ounces and 100 million ounces of silver from 41.8 million tonnes grading 2.7 g/t of gold and 74.6 g/t silver. Life of mine average gold production is expected to be approximately 170,000 ounces per year through 2028, including production from Creston Mascota. Over this period, annual silver production is expected to average 2.5 million ounces.

The first ore was placed on the leach pads during May 2009 and the first gold bar was poured in July. Once the project is in full operation, heap leaching of low grade ores is expected to contribute approximately 5-10% of the total planned gold production from Pinos Altos.

Construction of the mill at Pinos Altos is 90% complete and commissioning of the milling circuit is in progress. Open pit stripping continued at better than planned rate with 5.1 million tonnes mined, including stripping at the Oberon de Weber pit.

Underground development productivity remains better than anticipated. Connection of the main production ramp and the exploration ramp is expected sometime during the third quarter, after which time, development of initial mining levels is expected to commence. Project to date development is now nearly seven kilometres in total.

Approximately 37,000 metres of diamond drilling were completed at the Pinos Altos mine site and on property-wide exploration in the first half of 2009. Two surface and two underground diamond drills were testing deep mine exploration targets at Santo Nino and Cerro Colorado and expanding the resource on strike and at depth at San Eligio. Outside the mine-site, three other drills were exploring the main northern Reyna de Plata structure at El Sinter, testing the Cubiro gold showing in the western portion of the property, and exploring for extensions of the Creston Mascota deposit. Results will be presented in an upcoming exploration update.

Creston Mascota Approved for Construction - First gold expected early

2011

The Company is about to begin construction of a stand-alone open pit, heap leach operation on the Creston Mascota deposit, approximately 10 kilometres to the northwest of the main Santo Nino deposit at Pinos Altos.

Probable reserves at Creston Mascota total approximately 6.7 million tonnes grading 1.65 g/t gold and 17.1 g/t silver, or approximately 357,000 ounces of gold and 3.7 million ounces of silver.

The recently reviewed feasibility study contemplates a 4,000 tonne per day operation with first production in early 2011. Gold recoveries of 65% and silver recoveries of 16% are assumed for the heap leach operation planned at Creston Mascota. The waste to ore stripping ratio is expected to be approximately 4:1. Minesite costs per tonne are assumed to be approximately $13. Total cash costs are expected to be $340 per ounce of gold.

Capital costs are expected to total approximately $64 million, providing an internal rate of return of approximately 17% at $780 per ounce for gold and $13.70 per ounce for silver. Annual gold production is expected to be approximately 46,000 ounces per year, over a five year mine life.

Construction on the project will begin in the fourth quarter of 2009 and is expected to take approximately 18 months to complete.

Separately, the Company is studying the possibility of increasing the milled production rate at the main Pinos Altos deposits from 4,000 tonnes per day to 6,000 tonnes per day, reflecting the 125% increase in reserve tonnage since 2007. Results of the scoping study are expected by the third quarter of 2010.

Meadowbank Project Remains on Schedule for Q1, 2010 Start-Up

The 100% owned Meadowbank mine project in Nunavut, northern Canada, is expected to begin production in the first quarter of 2010. Probable gold reserves total 3.6 million ounces from 32.8 million tonnes grading 3.5 g/t. Life of mine average annual gold production is expected to be approximately 350,000 ounces through 2019.

Construction of the new Meadowbank mine project is well advanced. Highlights include the completion of the semi-autogenous ("SAG") and ball mill foundations and the installation of the SAG mill. Two thickeners and the cyanide destruction tank have been completed. The dewatering of Second Portage Lake Phase One has been finished.