Agnico-Eagle Mines Limited
) posted net income of $47.3 million or 27 cents per share in
third-quarter 2013, down from net income of $106.3 million or 62
cents per share a year ago. The results were impacted by lower
realized metal prices and extended maintenance outage at the
Kittila mine in Finland during the quarter.
Barring one-time items other than stock-option expenses, the
Canada-based mining company's earnings were 32 cents per share,
comprehensively beating the Zacks Consensus Estimate of 9 cents
Revenues and Operational Highlights
Revenues declined roughly 17% year over year to $444.3 million
in the reported quarter, but surpassed the Zacks Consensus
Estimate of $374 million. Payable gold production in the quarter
increased roughly 10% year over year to 315,828 ounces. Higher
production level was mainly due to record throughput,
better-than-expected gold grades and higher mill recoveries at
the Meadowbank mine.
Total cash costs per ounce for the third quarter rose 6.3%
year over year to $591 per ounce due to lower net byproduct
revenues at LaRonde and Pinos Altos mines. Realized gold price
fell 21.4% to $1,333 an ounce from $1,695 a year ago.
Gold production at Kittila in the reported quarter was a
record 56,177 ounces at total cash costs per ounce of $518
compared with 48,619 ounces produced at total cash costs per
ounce of $478 in the year-ago quarter. The mine's production was
higher on account of increased throughput, higher grades from
mining the pit pillar, and better gold recoveries.
Payable production at the Pinos Altos mine in northern Mexico
decreased 5.2% year over year to 43,736 ounces of gold. Cash cost
per ounce increased 113.7% year over year to $404 due to decline
in realized silver price.
The Creston Mascota heap leach operates as a satellite
operation to the Pinos Altos mine. Payable gold production at
Creston Mascota was 11,307 ounces, a decline of 28.6% year over
year due to decreased tons being stacked at lower grades and the
suspension of operations during the first quarter of 2013. Cash
cost per ounce increased 86.2% year over year to $523 due to
lower production divisor.
Payable gold production at Meadowbank rose 20.3% year over
year to 133,489 ounces in the quarter. The year-over-year
increase in production was due to better tonnage and grade, high
crusher throughput levels, and slightly better mill
Agnico-Eagle's cash and cash equivalents stood at $141.7
million as of Sep 30, 2013, compared with $320.8 million as of
Sep 30, 2012, down 56%. Long-term debt was $950 million as of Sep
30, 2013, compared with $800 million as of Sep 30, 2012, up
Cash provided by operating activities in the second quarter
was $81 million compared with $199.5 million in the prior-year
quarter. Capital expenditures in the quarter were $142.3 million
compared with $113.3 million in the year-ago quarter.
Agnico-Eagle's Board declared a quarterly cash dividend of 22
cents per share, which is payable on Dec 16, 2013, to
stockholders of record as of Dec 2, 2013.
Agnico-Eagle increased its production guidance and expects
payable gold production to be roughly 1,060,000 ounces for 2013,
up from the previous guidance of 970,000 ounces to 1,010,000
ounces. The company expects to achieve the projected gold
production at a total cash costs per ounce of roughly $690, down
from the earlier estimate of $735 to $785.
The increase in the 2013 production forecast with a related
reduction in the total cash cost estimate was attributable to the
strong operational performance from the Meadowbank mine, and
positive contributions from other mines in the third quarter. The
company also lowered all-in sustaining costs' expectation to
roughly $1,025 per ounce from its previous guidance of $1,100 per
Agnico-Eagle further expects production growth in 2014 from
LaRonde, Goldrex and La India. The growth in Goldrex is based on
a planned full year of operations and La India on expected start
of commercial production in 2014. Anticipated improvement in
grades is expected to drive the growth in LaRonde. The
company also expects similar higher-than-expected grades at the
Meadowbank mine to reoccur in 2014.
The company has incorporated cost reduction initiatives in
2014 budget process, which are expected to have an impact on the
year-end financial results and three-year forecast, scheduled to
be released in Feb 2014.
Agnico-Eagle also announced capital and other cost reductions
of roughly $50 million and exploration spending of roughly $20
million for 2013. The company also anticipates 2014 capital
expenditures at existing mines and projects to be roughly $400
million, which is lower than its previous estimate of about $600
Agnico-Eagle currently retains a Zacks Rank #3 (Hold).
Other companies in the gold mining industry worth considering
Pretium Resources Inc.
Allied Nevada Gold Corp.
). While both Pretium Resources and Franco-Nevada carry a Zacks
Rank #1(Strong Buy), Allied Nevada holds a Zacks Rank #2 (Buy).
AGNICO EAGLE (AEM): Free Stock Analysis
ALLIED NEV GOLD (ANV): Free Stock Analysis
FRANCO NV CP (FNV): Free Stock Analysis
PRETIUM RES INC (PVG): Free Stock Analysis
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