Agnico Eagle profit falls 56 percent, ups production outlook

Wed Oct 23, 2013 7:34pm EDT
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By Nicole Mordant

(Reuters) - Agnico Eagle Mines Ltd (AEM.TO: Quote) reported on Wednesday a 56 percent decline in third-quarter profit due to lower realized metal prices as well as a maintenance shutdown at its Kittila mine in Finland, but it beat analysts' estimates, and raised its full-year production forecast while lowering cost expectations.

The gold miner's net income was $47.3 million, or 27 cents a share, compared with $106.3 million, or 62 cents a share, a year ago.

Excluding a number of non-cash and non-recurring expenses, Agnico reported adjusted net income of $60.5 million or 35 cents a share. Analysts, on average, had expected earnings of 8 cents a share, according to Thomson Reuters I/B/E/S.

Total cash costs per ounce for the third quarter were $591 per ounce, 6 percent higher than in the same quarter last year due to lower net byproduct revenue.

Toronto-based Agnico reported record gold production of 315,828 ounces in the quarter, which it said was driven by a strong contribution from its Meadowbank mine in the Canadian Arctic.

Agnico increased its production outlook for 2013 to 1.06 million ounces from a previous range of 970,000 to 1.01 million ounces. It also reduced its total cash cost estimate to approximately $690 an ounce from a previous range of $735 to $785.

"What we've been trying to do with the drop in the gold price is look at areas where we can not only reduce costs but also help our revenue line with more ounces, and we've been able to do that," President and Chief Executive Sean Boyd said in an interview.

Gold prices have fallen sharply since the beginning of the year, hitting a near 3-year low at about $1,180 an ounce in late June. Gold was at $1,330 on Wednesday, down 20 percent this year.   Continued...