Agnico-Eagle Bullish About Prospects With New Mines Coming Onstream
By Romina Maurino
09 May 2008 at 11:41 PM GMT-04:00
TORONTO (CP) -- The chief executive of Agnico-Eagle Mines Ltd. [TSX:AEM; NYSE:AEM] says the mid-tier producer is poised for strong growth this year as more projects come on stream alongside an anticipated return to climbing gold prices.
Sean Boyd told shareholders at the annual meeting Friday that the company is on track with its plan to increase production and reserves as four of its mines begin production.
The company poured its first gold at the Goldex mine in Quebec this week, a mine he says “is going to be a big money-maker for us.”
“We're really building an entire new production base,” Boyd told the meeting in Toronto.
“Those deposits have the ability to continue to grow. We haven't even seen the ultimate size of these deposits; they will continue to grow.”
Agnico-Eagle has operations in Quebec, Finland, the U.S. and Mexico. Its LaRonde Mine in northwestern Quebec holds Canada's largest gold deposit by reserves.
Boyd also said he wasn't worried about gold prices, which have made some investors nervous after falling off from a record of US$ 1,000 to trade around $880.
Echoing other gold company CEOs, he said strong demand for gold, combined with limited supply and global economic uncertainty, are expected to push gold higher again in the future.
“In an era where mining is under attack around the world, in an era where we're not finding big, good-quality deposits, in an era where capital expenditures and operating costs are rising exponentially, the fact is mine supply is not going to go up - it's more likely going to decline,” Boys said.
“All of those arguments are certainty pointing to a bullish market for the gold price.”
Among the company's other projects, the Kittila mine in Finland will begin concentrate production in August, while construction is ongoing at Pinos Altos in Mexico, with production expected to begin in the third quarter of 2009.
Boyd's comments came after Agnico-Eagle posted a first-quarter profit of US$28.9 million, 20 cents per share, up from $24.9 million a year ago, also 20 cents per share, as revenue grew 18%.
The earnings, reported Thursday, included a non-cash foreign currency translation gain of $8.9 million.
Quarterly revenue totalled $119.1 million, up from $100.7 million.
“What hasn't gone in our favour is the foreign exchange rate,” Boyd said.
Payable gold production in the first quarter was 50,892 ounces at total cash costs per ounce of minus $399 compared with 58,588 ounces in the first quarter of 2007 due to lower grade mining in parts of the orebody at Goldex.
The LaRonde mill processed an average of 7,431 tonnes of ore per day in the first quarter of 2008, compared with an average of 7,461 tonnes per day in the first quarter of 2007.
Shares in Agnico-Eagle closed down 71 cents or 1% at $66.74 on the Toronto Stock Exchange.
© The Canadian Press 2008