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Agnico Eagle reports record gold production cash flow in Q3

Kitco News

(Kitco News) - Agnico Eagle Mines (NYSE: AEM, TSX: AEM) handily beat earnings expectations for the third quarter as it saw higher gold prices and record quarterly production.

Wednesday, after the North American equity close, the major gold producer reported quarterly net income of $76.7 million, or $0.32 per share, for the third quarter of 2019. According to consensus estimates, analysts on average were looking for income of around $0.29 per share.

The company’s earnings from July and September were up considerably compared to the third quarter of 2018, which saw net income of $17.1 million or $0.07 per share.

Looking at its operations, Agnico said that it produced a record 476,937 ounces, including 33,134 ounces at its newest mine Amaruq in Nunavut Canada.

The record production and higher gold prices helped rebuild the company’s war chest with record cash flow of $349.2 million.

"With record performance at several of our operations and the ongoing ramp up of our two new mines in Nunavut, we achieved record quarterly gold production in the third quarter of 2019.  As expected, this strong result, combined with the completion of the extensive construction spending program in Nunavut, resulted in the generation of substantial free cash flow in the quarter," said Sean Boyd, Agnico Eagle's Chief Executive Officer. 

"With the expectation of growing production and strong free cash flow generation, we are in a good position to continue to invest in our project pipeline, improve our financial flexibility and grow our dividend.  We are pleased to announce a 40 percent increase in our quarterly dividend," added Mr. Boyd.

With its two Nunavut mines in full operation, the company has also slightly increased its production guidance for the year; total production is now expected to be 1.77 to 1.78 million ounces of gold.

The company also said that it is increasing its dividend by 40%, offering shareholders a quarterly dividend of $0.175 per share. The previous quarterly dividend was $0.125 per share.
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