Record production at Agnico Eagle, warns of cost inflation
Agnico Eagle Mines (NYSE:AEM, TSX:AEM) announced today reported quarterly net income of $114.5 million, or net income of $0.47 per share, for the third quarter of 2021.
During the same quarter a year ago, the company had net income of $222.7 million.
The company said income was down due to lower average realized metal prices and higher production costs, partially offset by higher sales volumes.
Payable production was up 541,663 ounces, 9% higher than the same period a year ago.
All-in sustaining costs were $1,011 ounce.
The company warned of rising costs stating that inflationary pressures have accelerated.
"While difficult to predict, the Company expects that these price pressures will extend into 2022, depending on when inflation conditions and global supply-chains normalize. As a result, the Company currently expects to see an approximate 5% to 7% increase in reagents and consumables prices in 2022, and a related impact on production costs next year," said Agnico Eagle.
The labor market is also tight, noted the company. To counter the company is launching career development plans to promote the current work force. It is also looking to convert certain contractor groups into permanent employees to reduce turnover.
The company also announced today a $163 million exploration program. The company said the spend will be record for the company.
The company also noted that it received approval from the Canadian Competition Act for its proposed merger with Kirkland Lake Gold. The deal is expected to be completed in December 2021 or the first quarter of 2022.