February 17, 2010 / 11:39 PM / 8 years ago

WRAPUP 1-Soaring gold price pumps up Canada miners' profit

* Agnico-Eagle, Iamgold core profits soar

* Average realized gold price jumps in quarter (In U.S. dollars, unless noted)

By Cameron French

TORONTO, Feb 17 (Reuters) - Two Canadian gold miners reported a sharp jump in core profits on Wednesday, kicking off what promises to be a strong reporting period by gold miners on the back of the metal’s run to record levels last year.

Agnico-Eagle Mines (AEM.TO) and Iamgold (IMG.TO) both more than doubled their profit — excluding items — thanks the run up in gold prices from a low below $800 an ounce in late 2008 to a record of $1,226.10 in the final months of 2009.

Iamgold’s adjusted profit was $41.4 million, or 11 cents a share, in the quarter ended Dec. 31, compared with a year-before $16.4 million, or 6 cents a share.

Key to the stronger results were average realized gold prices of $1,096 an ounce during the quarter, up 38 percent from $793.

Cash costs per ounce rose 20 percent to $488 from $408.

“Cash costs were at the low end of the previously provided range,” Steven Butler, an analyst at Canaccord Adams, said in a research note.

On a net basis, which included writedowns in the fourth quarters of both 2009 and 2008, Iamgold lost $47.4 million, compared with a year-before $96.4 million.

Agnico, which has been sharply boosting its production in the past two years, earned $58.3 million, or 26 cents a share, on an adjusted basis, compared with a loss of $1.5 million or 1 cent a share, in the year before period.

Gold production climbed 82 percent to 163,276 ounces, as the company opened three new mines in Quebec, Finland, and Mexico. Average realized gold prices leapt to $1,153 an ounce from $789.

Once a one-mine operation, Agnico has opened four mines in the past two years and expects to soon begin producing at the Meadowbank mine in the Canadian arctic territory of Nunavut.

The company said it expects to pour its first gold at Meadowbank near the end of the month. It also said capital spending during 2010 should total about $478 million.

Agnico’s adjusted profit came in ahead of analysts’ expectations of 26 cents a share, while Iamgold fell just short of expectations of a profit of 16 cents a share.

Kinross Gold (K.TO) is expected to report later on Wednesday, while Barrick Gold (ABX.TO), the world’s top producer, reports early on Thursday.

$1=$1.05 Canadian Reporting by Cameron French; editing by Rob Wilson

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