February 20, 2008 / 9:51 PM / 10 years ago

UPDATE 1-Agnico-Eagle profit up on tax gain, revenue falls

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

TORONTO, Feb 20 (Reuters) - Agnico-Eagle Mines’ (AEM.TO) fourth-quarter profit rose thanks to a tax gain, but core earnings fell due to lower production, weaker zinc prices and rising costs, the company said on Wednesday.

A $29.8 million gain from lower income tax rates allowed the Canadian gold producer to record a net profit of $65.2 million, or 46 cents a share, in the quarter, up from a year-before $41.9 million, or 34 cents a share.

However, revenues from mining operations fell to $108.7 million, down from $138.4 million, as gold production slid to 60,183 ounces from 66,022 ounces.

Realized gold prices in the quarter rose to $895 an ounce from $594, while production costs climbed to $701 an ounce from $584. Offsetting the production costs were byproduct revenues, but these fell to $850 an ounce from $1,475 due to lower zinc prices and production.

Costs were boosted by the stronger Canadian dollar and higher mine site expenses.

The company currently produces gold from the La Ronde mine in Quebec, but it plans to open the Goldex mine in Quebec and Kittila mine in Finland this year, which should boost production by 50 percent from the 230,992 ounces produced in 2007, the company said.

Cash flow in the quarter dropped to $43.3 million from $84.5 million. (Reporting by Cameron French; Editing by Rob Wilson)

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