With our extensive land position in the prolific Sierra Madre gold and silver region, we have a strong foothold in northern Mexico offering significant exploration and long-term mining camp potential.         Given its rich geology, low operating costs, political stability and pro-mining regulatory structure, northern Mexico is an ideal place for Agnico-Eagle to grow. We acquired the Pinos Altos property in 2006 upon receiving encouraging results from a drilling campaign we conducted under an option agreement in place at the time. Since initiating exploration, we have significantly increased gold grades and reserves, and expanded gold zones at the property. In August 2007, a favourable feasibility study led to our decision to commence construction of the Pinos Altos mine. Recognizing the potential in northern Mexico, more than 50% of Agnico-Eagle’s exploration budget is focused in the region. In 2007, we drilled more than 52,000 metres. In addition to the main gold zones, we began drilling at the new Creston/Mascota area. We believe that this zone has the potential to support a future, stand-alone mining operation, and are building new roads to allow better access for exploration. At the same time, we are investigating attractive land acquisitions and option agreements similar to our Pinos Altos acquisition. We have also made several strategic investments in junior exploration companies active in Mexico.   PINOS ALTOS     >  Probable reserves of 2.5 million ounces of gold and 73.1 million ounces of silver >  Estimated gold production averaging 190,000 ounces per year over an 11-year mine life >  Expected total cash costs averaging $210 per ounce >  $30 million invested to year-end 2007, estimated $200 million more to completion     Initial production at Pinos Altos is scheduled for mid-2009, beginning with ore from the open pit. Underground mining will be phased in over four years. The gold will be processed by conventional milling although a heap leach option is also being contemplated. In 2007, development work began on the underground production ramp. Agnico-Eagle is quickly establishing itself as an employer of choice in the region with its high-quality facilities, good community relations and local hiring and purchases.       2007 activity resulted in a 21% increase in gold ounces in reserves and an 18% increase in silver $14-million exploration program focused on deeper targets in the main Santo Nino and Cerro Colorado zones inferred Resource outlined at the new creston/Mascota area currently holds 0.4 million ounces of gold from 7.7 million tonnes grading 1.4 grams per tonne