TORONTO – The only big gold miner to grow profits through bullion’s price slump says a recovery this year is just getting started.

For investors who missed gold’s climb to a two-year high in early July, it’s not too late to jump in, according to Agnico Eagle Mines Ltd. Chief Executive Officer Sean Boyd. The Toronto-based company is the only major producer to show an increase in gross margin in the past five years, according to data compiled by Bloomberg.

“I think in this cycle, they will ultimately set an all-time high,” Boyd said in an interview Thursday. Spot gold prices touched a record $1 921.17 an ounce in September 2011. Agnico is laying the groundwork for expanded output through exploration, and Boyd said it’s “one of the very few companies that can see its output 30% to 40% higher in five years from now from stuff we already own.”

Gold has climbed 26% this year, with demand for the metal as a store of value rising on global economic-growth concerns and speculation that the Federal Reserve will be slow to raise rates. Purchases of gold as a haven asset have also increased as more than $9-trillion in government debt in developed markets offers yields below zero. Low rates are a boon to non-interest-bearing precious metals.

Negative Yield

“There’s still tremendous amount of debt in the system,” Boyd said. “There’s an inability to create conditions for growth. You’ve got a negative-interest-rate environment, which is a great environment for gold from an opportunity-cost standpoint. And you’ve still got very strong demand coming out of China and India. So all the factors are there that can steadily move gold up.”

The miner raised its quarterly dividend to 10 cents a share, from 8 cents, after earnings beat analyst estimates. Agnico’s gross margin grew 0.6% over the past five years, while the rest of its peers in the BI Global Senior Gold Valuation Peers index shrank.

“Wouldn’t it be interesting if the high-quality gold companies out there can actually work their business model so they can actually pay a bigger dividend so they can actually give investors leverage to gold in very uncertain times and also keep bumping the dividend up?” Boyd said. “That’s what we’d like to do."

The index of 14 major gold producers tracked by Bloomberg Intelligence has advanced 144% this year, a sharp turnaround from five straight annual losses that wiped 76% of its value. Investors poured in money as miners cut costs and lowered debt, allowing the companies to boost earnings just as gold prices surged. Agnico shares have doubled this year.

“People still don’t really have full weighting in their portfolios in the gold space,” Boyd said. “There’s still a large collection of generalist investors that don’t own many gold stocks, and I think their general view is that they may have missed this run and our view is that we’re just getting started."