TORONTO (miningweekly.com) – Agnico-Eagle Mines plans to return more of its growing cash flow to shareholders, and has set a target of becoming the top yielding stock in the North American gold space, CFO David Garofalo said on Tuesday.

He also reiterated that the company is not planning any major acquisitions, but will rather look at “bite-sized” deals, worth around 5% to 15% of Agnico's market capitalisation, and focusing on early-stage projects.

“We won't bet the company on any one acquisition,” he said. “You won't see us making a left turn into a big M&A deal.”

Garofalo said he expects the gold price to reach “at least” $2 300/oz, which is what the 1980 peak of $850/oz would be worth in today's money.

“We're still well below where the cyclical high is for gold, we're not even half-way there," he commented.

Toronto-based Agnico-Eagle is nearing the end of commissioning at its Meadowbank project, in Canada's Nunavut territory, the last of five new mines the company has built in the last two years.

The first gold bar was poured at Meadowbank in late February,and commercial production could be declared as of March 1, Garofalo told Mining Weekly Online.

The company had just one mine in 2007, its LaRonde operation in Quebec, but has since started up the Goldex mine in Quebec, Kittila in Finland, Lapa in Quebec and Pinos Altos in Mexico.

Production is expected to double this year to at least one-million ounces of gold, as the new operations ramp up, and Agnico expects ongoing growth as it approves and implements expansions at its mines.

The company announced a $600-million bond financing this month, which will free up available liquidity under its credit line, and gives it more firepower to pursue organic growth, invest in greenfield projects and return cash to shareholders, especially as revenue increases and long-term debt falls, Garofalo said.

“We've paid a dividend for 28 consecutive years, and we'd like to increase that dividend over time," he said.

“In fact, internally, we've set the objective of becoming the top-yielding gold stock in the North American space.

“That would necessitate us going to about a 1% yield; we think we are in a financial position to do that and continue to grow our production base out as our cash flow increases over the next couple of years."

Agnico-Eagle last increased its annual dividend by 50% in 2007, to $0,18 a share.

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