Canadian gold miner Agnico Eagle posted record third-quarter gold production of 476 937 oz, including pre-commercial production of 33 134 oz at the new Amaruq mine, in Nunavut, where commercial production has now been declared.

The strong performance during the September quarter has resulted in the mining company slightly increasing its production guidance for the year, from 1.75-million ounces of gold to a range of 1.77-million to 1.78-million, at an all-in sustaining cost of between $875/oz and $925/oz.

However, production in 2020 would be lower than previously guided at 1.90-million to two-million ounces (previous guidance was 1.96-million to 2.04-million ounces), owing to the slower-than-expected ramp-up of production at Amaruq. The ramp-up was affected by adverse weather conditions in the second and third quarters, the gold miner reported on Wednesday.

Agnico Eagle declared commercial production at the Amaruq mine on September 30, but the timing of commercial production also affected the project’s capital cost. Its total development bill came to $397-million, which was between $27-million and $47-million more than previously thought.

The openpit mine is a satellite mining operation to the Meadowbank mine, with the complex forecast to produce about 200 000 oz this year. The Amaruq mine and the Meliadine project, also in Nunavut, represented the largest capital spending programme in Agnico Eagle’s history, with $1.23-billion having been invested.

"With record performance at several of our operations and the ongoing ramp-up of our two new mines in Nunavut, we achieved record quarterly gold production in the third quarter of 2019.  As expected, this strong result, combined with the completion of the extensive construction spending programme in Nunavut, resulted in the generation of substantial free cash flow in the quarter," said CEO Sean Boyd.

The group’s cash and cash-equivalents increased to $265.2-million at September 30, from $125.6-million in June, as it returned to free cashflow generation.

In the third quarter of 2019, cash provided by operating activities was a record $349.2-million, compared with the third quarter of 2018 when cash provided by operating activities was $137.6-million.

Agnico Eagle reported quarterly net income of $76.7-million, or $0.32 a share, for the third quarter, compared with $17.1-million, or $0.07 a share, a year earlier. Adjusted net income came to $87.5-million, or $0.37 a share.

As it returned to free cashflow generation, the miner increased its dividend by 40%, declaring a quarterly dividend of $0.175 a share.

Stock in the gold miner climbed 1.67% on Wednesday to C$70.62 a share in Toronto, giving the company a market capitalisation of C$16.73-billion.