This gold miner was just selected one of J.P. Morgan’s Top 53 Stocks for 2016, based on its growth, low-risk, and hopefully, rising gold prices.
Agnico Eagle (AEM)
From Internet Wealth Builder
Agnico Eagle delivered an excellent set of results for the third quarter. The company reported record gold production of 441,124 oz., up 26% from 349,273 oz. last year. The all-in sustaining cost was $759 per oz., down substantially from $1,059 per oz. in 2014 (currency figures in U.S. dollars). Revenue was up only 10% due to the lower gold price but cash flow doubled to $144 million from $71million. Agnico reported net earnings of $1.3 million ($0.01 per share) against a loss of $15 million (-$0.07 per share) in the same period of 2014. Adjusted earnings after foreign exchange and non-cash charges on the value of reserves were $37.2 million ($0.18 per share).
For the nine months to the end of September, Agnico had earnings of $40.1 million ($0.19 per share), down from $104.3 million ($0.55 per share) on production of 1.249 million ounces. Revenue was $1.5 billion, up from $1.39 billion a year ago. Cash flow was essentially flat at $475 million versus $504 million in 2014. The lower earnings were due to increased depreciation at the Malartic mine and higher production costs.
The company raised forecasts for 2015 to total production of 1.65 million oz. from 1.6 million at all-in sustaining cost of $840 to $860 per oz., reduced from previous guidance of $870-890 per oz.
Most of the increase in production comes from the Malartic mine in Quebec, which Agnico bought in concert with Yamana Gold (AUY) last year. Also, doubled exploration has increased inferred reserves at the Amaruq deposit in Nunavut and extended a parallel zone at the Kittila mine in Finland.
Agnico Eagle remains a buy for its strong growth in production, low cost base, excellent pipeline of projects in politically stable countries, and sustainable dividend.
Gavin Graham in Gordon Pape’s Internet Wealth Builder, www.buildingwealth.ca, 1-888-287-8229, December 6, 2015