STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2012

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

6.     STOCK-BASED COMPENSATION

• The following summary sets out the activity with respect to the Company's outstanding stock options:

	Three Months Ended March 31, 2012
	Number of Options		Weighted Average Exercise Price
Outstanding, beginning of period		8,959,051		C$62.88
Granted		3,228,000		36.96
Forfeited		90,000		60.30
Expired		449,150		48.09
Outstanding, end of period		11,647,901		C$56.29
Options exercisable at end of period		7,246,739		C$59.09

• For the three months ended March 31, 2012 and 2011, the Company estimated the fair value of options under the Black-Scholes option pricing model using the following weighted average assumptions:

	Three Months Ended March 31,
	2012		2011
Risk-free interest rate		1.23%		1.96%
Expected life of options (in years)		2.7		2.5
Expected volatility of Agnico-Eagle's share price		37.5%		34.6%
Expected dividend yield		2.17%		0.88%