Agnico Eagle Mines Ltd T.AEM

Alternate Symbol(s): AEM

Metals & Mining Gold

Agnico Eagle Mines Limited is a Canada-based gold mining company engaged in producing precious metals from operations in Canada, Australia, Finland and Mexico. It has a pipeline of exploration and development projects in these countries as well as in the United States. Its operations include Canadian Malartic Complex, Detour Lake, Fosterville, Goldex, Kittila, La India, LaRonde Complex, Macassa, Meadowbank Complex, Meliadine and Pinos Altos. Its exploration site includes Anza, Barsele, Delta, Douay/Joutel, Kirkland Lake Regional, Kuotko, Hope Bay/ Oro, Monument Bay and others. The Canadian Malartic Complex is located over 25 kilometers (km) west of Val-d’Or in northwestern Quebec, Canada. The Detour Lake operation is located in northeastern Ontario, over 300 km northeast of Timmins and 185 km by road northeast of Cochrane, within the northernmost Abitibi Greenstone Belt. The Fosterville mine is a high-grade, low-cost underground gold mine, located 20 km from the city of Bendigo.

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Agnico Eagle Mines Ltd

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Post by retiredcfon Oct 31, 2024 9:23am

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Post# 36290385

RBC

October 30, 2024

Agnico Eagle Mines Limited
3Q24 results; first impressions slightly positive

NYSE: AEM | USD 88.24 | Outperform | Price Target USD 87.00

Sentiment: Positive

Our view: Slightly positive. AEM reported in-line operating results and better financials vs. RBCe / cons. Following heightened investor concerns over the gold mining sector's outlook for cost inflation post-Newmont results, we expect these results will be received positively. 3Q production was 863koz (0% RBCe, +1% cons) at AISC of $1,286/oz (+2% RBCe, +3% cons.). Adj. EPS was $1.14 (RBCe $1.07, cons. $1.01), supported by higher revenues and lower exploration. FCF of $620m (RBCe $517m, cons. $456m) benefited from working capital inflows and lower capital spending. AEM reported the Malartic Odyssey UG project is tracking to plan, and positive exploration updates across Odyssey, Detour, and Hope Bay.

Conference call: Thursday, October 31, 11:00AM ET, Dial in: +1 (888) 699-1199

Details:

• Production: 863koz (0% RBCe 868koz, +1% cons. 857koz), with low output realized at Malartic (planned shut-down and lower grade), largely offset by a higher Fosterville (higher throughput on productivity gains) and Meadowbank (record throughput). At Detour, improved throughput of 77.0ktpd was realized, largely in line with plan.

• Costs: TCC was $921/oz (0% RBCe $919/oz, +1% cons. $909/oz). AISC was $1,286/oz (+2% RBCe $1,256/oz, +3% cons. $1,249/ oz), higher due to slightly elevated sustaining capital spending.

• Adj. EPS: $1.14 (RBCe $1.07, cons. $1.01), supported by higher revenues (slightly higher gold sales and realized pricing), plus lower exploration expenditure.

• FCF: $620m (RBCe $517m, cons. $456m), where working capital inflows were a larger variance vs. RBCe (net +$117m impact). AEM benefited from tax accruals and an increase in payables, offsetting high typical 3Q seasonal inventory restocking outflows. Capex was also slightly lower at $464m (RBCe $502m, cons $493m).
• Financial positioning: 3Q cash increased to $977m (2Q: $922m), and net debt decreased to $0.5b (2Q: $0.8b). AEM Repaid $375m in debt and repurchased $30m shares (362k shares at $82.86) for ytd total purchases of $100m. AEM maintains a $2b undrawn facility with a $1b accordion.
• Guidance reiterated: AEM noted production is tracking to the mid-point of guidance for 3.35–3.55moz (RBCe 3.53moz; cons. 3.50moz). Other guidance is unchanged at TCC (by-product) of $875–925/oz (RBCe $900/oz; cons. $895/oz) at AISC (by-product) of $1,200–1,250/oz (RBCe $1,223/oz; cons. $1,215/oz).

• Project deliverables:
Odyssey: Ramp and shaft development is on track and on budget. Continued positive exploration was reported and AEM reiterated the potential to add significant resources along East Gouldie extensions.
Detour: Underground site preparation advanced and portal excavation is scheduled to commence in 1Q25. Infill drilling at the West Pit zone confirmed higher grade and is amenable to underground mining
Hope Bay: Wide, high grade exploration results were reported at Patch 7 zone at the Madrid deposit. AEM guided to resource increases, and an upgrade in the resource classification at YE.
Meliadine: Phase 2 was completed ahead of schedule and ramp-up to 6ktpd is on track for YE.
San Nicolas: Permitting remains in progress. Detailed engineering for the FS is scheduled to begin in 1H25.