TORONTO – Agnico Eagle Mines, the biggest Canada-focused gold miner, reported an 18% decline in first-quarter profit on Thursday on lower gold production as its Meadowbank mine in Canada's Nunavut territory nears the end of its life.
Even so, the Toronto-based company's net income of $37-million, or 16c a share, in the three months ended March 31, beat analyst estimates of 7c a share.
Lower realized gold prices also contributed to the decline, the company said. The fall in gold sales and prices was partially offset by lower costs at its Goldex mine in Canada, Kittila in Finland, and Pinos Altos and Creston Mascota in Mexico, Agnico said in a regulatory filing.
Agnico Eagle this year begins operating two new mines in Nunavut, transitioning from Meadowbank to the Amaruk satellite deposit, and opening the new Meliadine mine.
As a result, "we anticipate higher gold production to result in increased earnings and cash flow in the second half of the year," CEO Sean Boyd said in the statement. "This should allow the company to continue to advance its development pipeline, increase financial flexibility and potentially raise dividends."
Agnico reported total gold production of 398 217 ounces in the first quarter, including pre-commercial production of 17 582 oz at Meliadine, at an all-in sustaining cost of $836/oz. That compared with production of 389 278 oz/y ago at a cost of $889/oz.
Cash from operating activities fell to $148.7-million from $207.7-million a year earlier, the company said.