Agnico Eagle 2Q Profit Narrows; Output Guidance Lifted
Net income fell to $5 million, or 2 cents per share, from $54.9 million, or 24 cents, in the second quarter of 2017.
The company listed a slew of special items, including a realized gain on asset disposals of $25 million, non-cash foreign currency translation losses on deferred tax liabilities of $15.9 million, non-cash foreign currency translation losses of $3.9 million and mark-to-market adjustments and derivative losses on financial instruments of $2.8 million. Excluding special items, adjusted net income was $2.6, or a penny per share.
The company said its results were hurt by lower gold sales volumes and higher costs, partially offset by higher gold prices. Output was expected to be lower due to reduced throughput levels at Meadowbank as the mine transitions through the last full year of mining at site, Agnico Eagle said. Higher costs were mainly due to stronger local currencies against the U.S. dollar and higher costs at several operations, principally at Meadowbank and Kittila.
April-June gold production was 404,961 ounces at all-in sustaining costs of $921 per ounce, Agnico Eagle said. Year-ago output was 427,743 ounces at AISC of $785.
"Our mines continued to deliver strong operational performance during the quarter, which has allowed us to increase 2018 production guidance to 1.58 million ounces of gold from 1.53 million ounces,” said Sean Boyd, chief executive officer.
The company maintained a quarterly dividend of 11 cents a share.
During the second quarter, Boyd said, the company made “good progress” on development projects in Nunavut. Agnico Eagle recently received the Type A water license for the Whale Tail pit at Amaruq, which allows construction to begin in late July. Meanwhile, the shipping season has begun for Meliadine, which should facilitate completion for the expected start of production in the second quarter of 2019, Boyd added.