STOCK-BASED COMPENSATION

9 Months Ended

Sep. 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:

	Nine Months Ended September 30, 2012
	Number of Options			Weighted average exercise price
Outstanding, beginning of period		8,959,051		C$	62.88
Granted		3,257,000			36.99
Exercised		(140,475	)		37.04
Forfeited		(726,500	)		59.80
Expired		(481,650	)		47.49
Outstanding, end of period		10,867,426		C$	56.35
Options exercisable at end of period		6,780,014		C$	59.34

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

	Nine Months Ended September 30,
	2012		2011
Risk-free interest rate		1.25%		1.95%
Expected life of options (in years)		2.8		2.5
Expected volatility of Agnico-Eagle's share price		37.52%		34.63%
Expected dividend yield		2.14%		0.89%