The shares of this gold miner are now in 33 hedge funds’ portfolio. The shares have a current annual dividend yield of 2.63%, paid quarterly.
Agnico Eagle Mines Limited (AEM)
From Adrian Day’s Global Analyst
Agnico Eagle has long been regarded as one of the better quality of the major gold miners, with consistently solid management, strong balance sheet, and low political risk profile. It is ranked as the eighth-largest gold mining company in the world by production. Once a merger with Kirkland Lake closes-–anticipated during the first quarter–-Agnico will be #3, after Newmont and Barrick. The combined company will see 75% of its production from Canada and most of the rest from Australia and Finland, giving it by far the best political risk profile of the majors.
Agnico has long had a focus on exploration. Kirkland and Agnico are the only two companies to have increased reserves and production (per-share basis) over the last 10 years through investment in exploration.
The combined company will have an appeal to generalist investors because of its quality: cash flow, balance sheet, political risk profile, and track record. It will have the lowest “all-in sustaining costs” of the larger miners, except only for Russia’s Polyus, which is unlikely to appeal to U.S. generalist investors. It is a buy—the major miner with arguably the surest upside and least downside.
Adrian Day, Adrian Day’s Global Analyst, adriandayglobalanalyst.com, 410-224-8885, January 3, 2022