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Agnico Eagle Reports Adjusted 4Q Profit, Hikes Dividend

Kitco News

(Kitco News) -

Agnico Eagle Mines Ltd. (NYSE, TSX: AEM) late Thursday reported a fourth-quarter adjusted profit, three-year guidance that points to rising production, an increase in reserves and a hike in the quarterly dividend.

However, Agnico Eagle did record a net loss for the October-December period due to a series of impairment and other special charges.

For the fourth quarter, excluding special items, the company’s adjusted income was $33.8 million, or 14 cents per share. The company declared a dividend of $0.125 per share, up from the previous quarterly dividend of $0.11.

The company listed a quarterly net loss of $393.7 million, or $1.68 per share, for the fourth quarter, compared to net income of $37.5 million, or 16 cents, a year ago. The October-December results includes impairment losses of $389.7 million, including a goodwill impairment on the Canadian Malartic Mine of $250 million, an asset impairment at the El Barqueno project for $100.7 million and a goodwill impairment for the La India Mine of $39 million.

With those impairments and other special items, the company listed a full-year 2018 net loss of $326.7 million, or $1.40 per share, compared to 2017 net income of $240.8 million, or $1.05.

Fourth-quarter gold production was 410,712 ounces, down slightly from 413,212 ounces in the year-ago period. Full-year 2018 production was 1,626,669 ounces, down from 1,713,533 in the prior-year period. Agnico Eagle said the decline was due to reduced throughput at Meadowbank as mining there winds down.

All-in sustaining costs were $852 an ounce in the fourth quarter, down from $905 a year earlier. Full-year AISC are $877 per ounce, up from $804.

"From an operational standpoint, 2018 was another strong year as we exceeded production forecasts at lower-than-expected unit costs for a seventh consecutive year…,” said Sean Boyd, chief executive officer. "With the start of new operations at both Meliadine and Amaruq this year, we anticipate record gold production in 2019 with further production growth in 2020 and beyond.”

The company said the Meliadine project is ahead of schedule and under budget, with commissioning of the mill now occurring. The Amaruq project remains on track the start of production in the third quarter.

Agnico Eagle upped its 2019 production forecast slightly to 1.75 million ounces from 1.7 million previously. The mid-point of gold production guidance for 2020 was left at 2 million ounces, and the mid-point for 2021 is 2.05 million ounces.

All-in sustaining costs are seen at between $875 and $925 an ounce in 2019, then should decline amid expected higher production in 2020, with the company looking for a decline to between $840 and $890, officials said.

Gold mineral reserves at the end of year, net of 2018 gold production, increased by 7% to 22 million ounces, Agnico Eagle said. The gold reserve grade increased by approximately 8%, the company added.

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