STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2012

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

6.     STOCK-BASED COMPENSATION

• The following continuity summarizes activity with respect to the Company's outstanding stock options:

	Six Months Ended June 30, 2012
	Number of Options			Weighted average exercise price
Outstanding, beginning of period		8,959,051		C$	62.88
Granted		3,251,000			36.98
Exercised		(15,250	)		37.05
Forfeited		(120,750	)		60.37
Expired		(481,650	)		47.49
Outstanding, end of period		11,592,401		C$	56.32
Options exercisable at end of period		7,209,989		C$	59.20

• For the six months ended June 30, 2012 and June 30, 2011, the Company estimated the fair value of options under the Black-Scholes option pricing model using the following weighted average assumptions:

	Six Months Ended June 30,
	2012		2011
Risk-free interest rate		1.25%		1.96%
Expected life of options (in years)		2.8		2.5
Expected volatility of Agnico-Eagle's share price		37.5%		34.6%
Expected dividend yield		2.17%		0.88%