CIBC NotesSeptember 19, 2023 Industry Update Denver Nuggets
Highlights From The Gold Forum Americas 2023 – Day 2: NEM,
GOLD, AEM, KGC And EDV
Our Conclusion
The CEOs of the senior gold companies in our coverage universe presented
or participated in a fireside chat at the 2023 Denver Gold Forum. Below, we
have summarized the key themes and takeaways from today’s presentations
and have also presented notable new and/or interesting tidbits from each
presentation.
Agnico Eagle Focuses On Its Regional Strategy, Expanding Operations At Canadian Malartic And Detour: Ammar Al-Joundi, President and CEO, reiterated AEM’s focus on its regional strategy through which it is able to select regions that enhance its portfolio, and then work hard to become the regional leader. Canada and specifically the Abitibi and Nunavut are a prime example where the company leverages its knowledge advantage gained from years of operating in the region. This advantage is what allowed the company to advance with the OSK acquisition in 2014 as it had a better understanding of the underground potential. Since the acquisition, over 16Moz have been added at Canadian Malartic, and over 20Moz have been added at Detour during the same time frame. The successful reserve and resource additions should help the company support its production profile over the longer term.
While AEM acknowledges a potential dip in production in 2026-2027, this is mainly due to the 40ktpd of spare mill capacity at Malartic from 2027. The company has plenty of opportunities to fill this mill with Upper Beaver and Wasamac ore potentially accounting for 5ktpd each for ~400koz a year in production with no extra mill or tailings capacity needed. The dip can further be alleviated by Detour where AEM is considering expanding production from 700koz to 1Moz. On the topic of potential divestitures, AEM remains pleased with the performance of Fosterville, which generates ~$1M a day, and believes it generates more value from Pinos Altos and La India than would be realized via a sale. The company also applauded many of the recent changes in the Mexican mining code such as eliminating 300-year mining rights, the automatic granting of water rights with mining rights, and the restricting of access to mining rights without having invested any money. AEM stated that its goal is to reinvest shareholder money in the best projects and evaluate both acquisitions and divestiture opportunities that will enhance its portfolio