May 8, 2008 / 9:20 PM / 9 years ago

UPDATE 1-Soaring gold prices lift Agnico-Eagle profit

(Adds details, in U.S. dollars, unless noted)

TORONTO, May 8 (Reuters) - Agnico-Eagle Mines (AEM.TO) said on Thursday its first-quarter profit rose 16.1 percent, as soaring gold prices more than made up for lower production.

The Canadian gold producer earned $28.9 million, or 20 cents a share, up from $24.9 million, or 20 cents a share, in the year-before period.

The company also said it had begun initial mining at its Goldex site in Quebec, part of its plan to bump up production by 50 percent this year.

Agnico, which currently produces from its La Ronde mine in Quebec, also plans to open the Kittila mine in Finland this year.

Net profit was boosted by an C$8.9 million non-cash foreign currency translation gain, but was hit by a C$12.8 million non-cash stock option expense.

Revenue from mining operations rose to C$119.1 million from C$100.7 million.

Production fell to 50,892 ounces from 58,588 ounces in the year-before period, as the company mined lower grades at La Ronde. But realized gold prices surged to $1,089 an ounce from $669 in the year-before quarter, Agnico said.

Cash costs were minus $399 per ounce when factoring in by-product credits, compared with minus $322 an ounce in the year-before period. ($1=$1.02 Canadian) (Reporting by Cameron French; editing by Rob Wilson)

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