February 16, 2012 / 5:59 AM / in 6 years

UPDATE 1-Agnico-Eagle reports loss on mine writedown

* Co reports qtrly loss on partial writedown of Meadowbank

* Agnico board approves 25 pct increase in qtrly dividend

* Company announces changes in senior management team

TORONTO, Feb 16 (Reuters) - Canadian gold miner Agnico-Eagle reported a quarterly loss late on Wednesday as a partial writedown of the value of its Meadowbank mine in the Canadian Arctic offset gains from a surge in the price of gold.

The company also said its president and chief operating officer, Eberhard Scherkus, will step down, as will Paul-Henri Girard, vice president of its Canadian operations. The company did not provide reasons for the departures, but said the two would continue to serve as advisors to the company.

Yvon Sylvestre has been named as the new head of operations, while Daniel Racine will move into a new role as senior vice president of mining, the company said.

The Toronto-based gold miner said its board approved a 25 percent increase in its quarterly dividend. The move will lift its payout to 20 cents a share.

“While 2011 was a very difficult year for our company, we look forward to 2012 as we expect most of our mines to produce more gold. We also anticipate further growth in gold output in 2013 and 2014 from our existing mines,” chief executive Sean Boyd said in a statement.

In October last year, Agnico was forced to write-off its investment in its Goldex mine in Quebec, after the mine was shut down due to water inflow and ground stability concerns that made operating there unsafe.

Agnico said Meadowbank previously had a property, plant and mine development book value of about $1.7 billion. Due to persistently high operating costs, the latest optimized mine plan for Meadowbank resulted in a shorter mine life and an associated reduction in the carrying value of the operation was necessary.

The new mine plan, while expected to produce a similar return, is a lower risk option as about 36 percent, of the previously budgeted ore and waste tonnes will not be mined under this plan, the company said.

Agnico’s results largely mirror those of its larger rival Kinross, which earlier on Wednesday, also reported a similar writedown on its Tasiast mine in west Africa.

On a net basis, Agnico-Eagle reported a net loss of $601.4 million, or $3.53 a share in the quarter ended Dec. 31. That compared with a year-ago profit of $88 million, or 51 cents a share. Excluding the writedown and other one-time items, the company reported a quarterly profit of $76.2 million, or 45 cents a share.

Agnico said it expects its 2012 gold production to be in the range of 875,000 ounces to 950,000 ounces. Total cash costs per ounce are expected to be in the range of $690 to $750. Output in 2013 is seen rising to about 990,000 ounces, while 2014 output is expected to be about 1.06 million ounces, the company said.

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