Pure speculation about 9.85% partner
Agnico Eagle Mines* (AEM : TSX : $37.11)
Net Change: 0.34, % Change: 0.92%, Volume: 1,336,536
Keeping the good times rollin'. AEM continued to deliver with another record quarter, Q4 earnings beat, improved guidance (again) and a positive year-end reserve outcome, which is particularly evident when compared to a number of AEM's larger peers. The only material disappointment of late was the unanticipated reduction in the quarterly dividend ($0.22 to $0.08). Forward guidance appears very achievable with costs now trending below the larger producer average. The LaRonde extension has turned the corner and the other organic growth and development projects are all on track. Canaccord Genuity Precious Metals Analyst Tony Lesiak notes that a key unknown remains the way forward at Meliadine (representing 25% of his NAV estimate), although the YE grade increase could provide the necessary IRR boost. Lesiak also sees strong potential for AEM to pursue an accretive small- to mid-sized acquisition. AEM has been one of the best performing senior miners and is up 31% YTD. AEM is currently
trading at a 17% premium to its larger gold producer peers on NAV (1.0x vs. 0.86x) and a 25% premium on 2015E CF, and Lesiak believes is approaching fair value. However, he acknowledges that AEM should remain a core holding for gold exposure.