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Agnico Eagle Lists 4Q Profit, Increases Output Guidance

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Agnico Eagle Lists 4Q Profit, Increases Output Guidance

(Kitco News) - Agnico Eagle Mines Ltd. (NYSE, TSX: AEM) reported a profitable fourth quarter Wednesday and hiked its output guidance for 2018 and 2019.

The company listed quarterly net income of $35.1 million, 15 cents per share, down from $62.7 million, or 28 cents, in the year-ago period.

The October-December results included mark-to-market adjustments and derivative losses of $1 million, non-recurring losses of $6.8 million and non-cash foreign currency translation losses of $5.5 million. Excluding special items, adjusted net income was $48.4 million, or 21 cents, the company said. Agnico Eagle noted that this figure did not include a non-cash stock option expense of $4.1 million.

Production in the fourth quarter was 413,212 ounces of gold, compared to 426,433 ounces in the prior-year period. All-in sustaining costs were $905 an ounce, compared to $832 in the fourth quarter of 2016, due to higher cash costs and increased sustaining capital spending, the company said.

For the full year 2017, Agnico Eagle reported net income of $243.9 million, or $1.06 per share, up from $158.8 million, or 71 cents, a year earlier. The increase was primarily due to higher revenue helped by higher metal prices and sales volumes, officials said.

Sean Boyd, Agnico Eagle's chief executive officer, said the company exceeded production and cost guidance for the sixth straight year.

"Furthermore, we continue to make excellent progress on our Nunavut development projects, which has allowed us to advance the expected start-up of Meliadine and increase our production guidance for 2018 and 2019,” he said, adding that projected company-wide production is on track to reach some 2 million ounces in 2020.

Production in 2017 was a record 1.71 million ounces of gold, compared to most recent guidance of 1.68 million and 2016 output of 1.66 million. AISC were put at $804, compared to most recent guidance of $845 and AISC during 2016 of $824.

The production forecast for 2018 is now 1.53 million ounces, compared to 1.5 million previously, officials said. The midpoint of production guidance for 2019 is now 1.7 million ounces, compared to 1.6 million previously. First production at Meliadine is now expected in the second quarter of 2019, with the project estimated to be about one quarter ahead of the initial schedule, the company said.

Agnico Eagle said 2017 mineral reserves, after production, increased by 3.1% to 20.6 million ounces, with the reserve grade increasing by approximately 7.7% from the previous year. Measured and indicated mineral resources declined by 2.6% and inferred mineral resources declined by 4.3%; however, grades of these mineral resources increased, Agnico Eagle said.

The board of directors maintained a quarterly cash dividend of 11 cents per share, payable on March 15 to shareholders of record as of March 1. The dividend was increased by a penny after the third quarter.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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