Agnico Eagle Lists Profit For First Quarter; Output Declines
(Kitco News) - Agnico Eagle Mines Ltd. (NYSE, TSX: AEM) late Thursday reported that its profit and gold output eased in thefirst quarter compared to the same period last year.
The company listed net income of $44.9 million, or 19 cents per share, which was down from $76 million, or 33 cents, inthe first quarter of 2017. The January-March results include non-cash foreigncurrency translation gains on deferred tax liabilities of $6.7million, mark-to-marketadjustments and derivative gains on financial instruments of $0.5million, and non-cash foreigncurrency translation gains of $3.5 million.
Excluding the special items, adjusted netincome was $34.2million, or 15 cents pershare.
The company described its mining operations asstable, with gold production of 389,278 ounces. This is down from 418,216ounces, with Agnico Eagle attributing this to reduced throughput at Meadowbankas the mine transitions through the last full year of mining, plus the factthat mill processing did not resume until March at Lapa.
All-in sustaining costs per ounce rose to $889 from $741 in theyear-ago period. This was due to the lower production, strengthening of localcurrencies against the U.S. dollar and higher expenses at some mines,principally Meadowbank.
"Our operations continued to deliverstrong cash flow in the first quarter with unit production costs on the lowerend of full-year guidance and gold production tracking slightly above full-yearguidance. We remain focused on optimizing unit costs and increasing productionas we transition through 2018 and begin to see the positive results of ourgrowth phase in 2019,” said Sean Boyd, chief executive officer.
The board of directors declared a quarterlycash dividend of 11 cents per share, payable on June15 to shareholders of recordas of June 1.
Full-year productionguidance was unchanged at 1.53 million ounces, with AISC projected at between $890and $940 per ounce.
"During the first quarter, we continued tomake very good progress at our Nunavutgrowth projects, with Amaruq permitting activities advancing as expectedand development of the underground exploration ramp proceeding as planned,” Boydsaid. “Construction activities and underground development remain on scheduleand on budget at Meliadine."
The company said it has been assessing the opportunity tomonetize several non-core assets in its portfolio, including the West Pequop jointventure, Summit and PQX properties in Nevada, the cobalt mining propertiesin Ontario, and its equity investment in Belo Sun, which it disposedof this month.
Agnico Eagle said it has entered into an agreement with asubsidiary of Newmont Mining Corp. in which Newmont will purchase AgnicoEagle's 51% interest in the West Pequop joint venture, plus the company's 100%interest in the Summit and PQX properties. Under the deal, Agnico Eagle will receivea cash payment of $35 million and be granted a 0.8% net-smelter-returnroyalty on the Nevada properties held by the West Pequop joint ventureand a 1.6% NSR on the Summit and PQX properties. The sale is expected toclose in the second quarter.
By Allen SykoraFor Kitco News
Follow @AllenSykora
asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.