April 26, 2012 / 10:54 PM / 5 years ago

UPDATE 1-Agnico-Eagle profit lifted by gold price

By Euan Rocha

TORONTO, April 26 (Reuters) - Canadian gold miner Agnico-Eagle Mines Ltd reported a 73 percent increase in its quarterly profit on Thursday, driven largely by gains in the price of bullion.

Toronto-based Agnico, which has come through major operational setbacks at two mines in Canada, reported first-quarter earnings of $78.5 million or 46 cents a share, up from $45.3 million, or 27 cents a share, a year earlier.

Excluding a one-time tax benefit, stock option expenses and other one-time items, profit in the quarter was $101.4 million, or 59 cents a share. An alysts, on average, had forecast earnings of 37 cents a share, according to Thomson Reuters I/B/E/S.

"We're happy because it is a good solid performance across the board from all our operations," said Chief Executive Sean Boyd. "Gold production from all five of our mines rose in the period."

Quarterly revenue rose 15 percent to $472.9 million, on the back of a 20 percent increase in the average realized gold price in the period.

Shares in Agnico, which closed on Thursday up 4.2 percent at $35.84, rose slightly in after-hours trading to $36.10 in the United States.

Shares of Agnico's larger rival Newmont Mining Corp also rose slightly after hours after the miner reported stronger first quarter results.

Boyd said the company was pleased with progress on planned expansions and development projects, and the miner expects to provide an update on Goldex mine around mid-2012.

Last October, Agnico wrote off its investment in Goldex in Quebec after the mine was shut down due to water inflow and ground stability issues that made operating it unsafe. Earlier this year, Agnico booked a partial write-down on the value of its Meadowbank mine in the Canadian Arctic after lower-than-expected ore grades forced it to alter its mine plan there.

In addition to the assessment and remediation work at Goldex since the shutdown, Agnico is exploring the site to see if it can still develop other parts of the deposit.

"We're still waiting for some of the analysis to come in from some outside consultants and once we get that in and pull it all together we'll be in a good position to talk about it," said Boyd.

Agnico-Eagle said it still expects to produce 875,000 to 950,000 ounces of gold in 2012 at total cash costs of $690 to $750 per ounce.

"We are not going to change the forecast. Although we got off to a good start, it's mining, so we'll just sort of allow the numbers to do the talking as we move forward," said Boyd.

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