Agnico Eagle Lists Profit For First Quarter; Output Declines
The company listed net income of $44.9 million, or 19 cents per share, which was down from $76 million, or 33 cents, in the first quarter of 2017. The January-March results include non-cash foreign currency translation gains on deferred tax liabilities of $6.7 million, mark-to-market adjustments and derivative gains on financial instruments of $0.5 million, and non-cash foreign currency translation gains of $3.5 million.
Excluding the special items, adjusted net income was $34.2 million, or 15 cents per share.
The company described its mining operations as stable, with gold production of 389,278 ounces. This is down from 418,216 ounces, with Agnico Eagle attributing this to reduced throughput at Meadowbank as the mine transitions through the last full year of mining, plus the fact that mill processing did not resume until March at Lapa.
All-in sustaining costs per ounce rose to $889 from $741 in the year-ago period. This was due to the lower production, strengthening of local currencies against the U.S. dollar and higher expenses at some mines, principally Meadowbank.
"Our operations continued to deliver strong cash flow in the first quarter with unit production costs on the lower end of full-year guidance and gold production tracking slightly above full-year guidance. We remain focused on optimizing unit costs and increasing production as we transition through 2018 and begin to see the positive results of our growth phase in 2019,” said Sean Boyd, chief executive officer.
The board of directors declared a quarterly cash dividend of 11 cents per share, payable on June 15 to shareholders of record as of June 1.
Full-year production guidance was unchanged at 1.53 million ounces, with AISC projected at between $890 and $940 per ounce.
"During the first quarter, we continued to make very good progress at our Nunavutgrowth projects, with Amaruq permitting activities advancing as expected and development of the underground exploration ramp proceeding as planned,” Boyd said. “Construction activities and underground development remain on schedule and on budget at Meliadine."
The company said it has been assessing the opportunity to monetize several non-core assets in its portfolio, including the West Pequop joint venture, Summit and PQX properties in Nevada, the cobalt mining properties in Ontario, and its equity investment in Belo Sun, which it disposed of this month.
Agnico Eagle said it has entered into an agreement with a subsidiary of Newmont Mining Corp. in which Newmont will purchase Agnico Eagle's 51% interest in the West Pequop joint venture, plus the company's 100% interest in the Summit and PQX properties. Under the deal, Agnico Eagle will receive a cash payment of $35 million and be granted a 0.8% net-smelter-return royalty on the Nevada properties held by the West Pequop joint venture and a 1.6% NSR on the Summit and PQX properties. The sale is expected to close in the second quarter.