TORONTO (miningweekly.com) – Canadian gold miner Agnico-Eagle Mines on Thursday said profit for the first three months this year had dropped by 70% year-on-year as lower gold prices and production were compounded by reduced operating margins from its mines.

Agnico-Eagle said net earnings fell to $23.9-million or $0.14 a share in the quarter ended March 31, compared with net earnings of $78.5-million or $0.46 a share in the same period a year earlier. Adjusted earnings totalled $53.6-million or $0.31 a share, below analyst expectations of $0.35 a share.

Revenues were 11% lower at $423.2-million in the period, as compared with revenues of $474-million in the same period in 2012.

Cash costs for the first quarter rose to $740/oz, from $594/oz a year earlier, and the company said it expected cash costs to rise further to between $735/oz and $785/oz for the year, which was more than the previous guidance of $700/oz to $750/oz.

The higher cost expected this year was mainly attributable to lower by-product revenue at the company’s flagship LaRonde operation, in Quebec, lower grades at Meadowbank mine, in Canada’s Nunavut Territory, and a lack of production from the lower-cost Creston Mascota mine, near its Pinos Altos mine in the Sierra Madre mountains of northern Mexico.

Payable gold production in the first quarter was 236 975 oz, 7% lower when compared with the 254 955 oz the company produced in the first quarter of 2012. Agnico-Eagle said the reduced production in the first quarter was mainly owing to the Creston Mascota heap leach being suspended during most of the quarter.

Agnico-Eagle still expected to produce between 970 000 oz to one-million ounces, as the expected 15 000 oz production from Goldex, near Val d’Or, Quebec, would offset the expected production decrease at Kittilä, in Finland, as a result of a longer-than-expected maintenance shutdown.

The company added it expected to start commissioning of its La India mine, in Sonora state, Mexico, by the end of the year, instead of in the second quarter of 2014.

The company’s TSX-listed shares closed down 1.32% at C$33.65 apiece on Thursday.