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Agnico Eagle reports record gold production in 2022; net income increases to $670 million

Kitco News

(Kitco News) - Agnico Eagle (NYSE: AEM) (TSX: AEM), one of the top global gold miners, today announced record annual gold production and operating cash flow resulting from solid operational performance across the recently integrated asset portfolio.

In a statement, the company said that payable gold production in 2022 was 3,135,007 ounces (2021: 2,086,405 ounces) at production costs per ounce of $843, total cash costs per ounce of $793 and AISC per ounce of $1,109.

“Including the full year of production from the legacy Kirkland Lake Gold mines, which were acquired on February 8, 2022, total payable gold production in 2022 was 3,280,731 ounces at production costs per ounce of $821, total cash costs per ounce of $780 and AISC per ounce of $1,090, in line with the mid-point of 2022 production guidance and slightly above the top end of the cost guidance announced in February 2022,” the company said.

In the full year 2022, the company reported net income of $670.2 million ($1.53 per share). This compares with the full year 2021, when net income was $561.9 million ($2.31 per share).

The company explained that the increase in net income in the full year 2022 compared to the prior-year period is primarily due to higher mine operating margins (from higher sales volumes following the merger with Kirkland Lake Gold).

“The overall increase in net income was partially offset by higher exploration and amortization costs due to the inclusion of the Detour Lake, Fosterville and Macassa mines, higher general and administrative costs, realized losses on foreign exchange hedges and other expenses and care and maintenance costs,” it added.

Importantly, the company reported that its gold mineral reserves increased by 9% to a record level of 48.7 million ounces of gold, primarily due to significant additions at Detour Lake as well as successful conversion of mineral resources at several other operations.

Agnico Eagle said that its annual payable gold production is forecast to grow from 3.28 million ounces in 2022 (full-year basis) to an expected range of approximately 3.40 to 3.60 million ounces in 2025, while payable gold production for 2023 is forecast to be approximately 3.24 to 3.44 million ounces (substantially unchanged from prior three-year guidance issued on February 23, 2022).

Total cash costs per ounce and AISC per ounce in 2023 are forecast to be $840 to $890 and $1,140 to $1,190, respectively. This compares to the previous guidance range of $725 to $775 and $1,000 to $1,050, respectively.

“The expected cost increases in 2023 are mostly related to inflationary pressures on labour, electricity, fuel and consumables. The company expects some easing on input costs to occur later in 2023 and, combined with increased gold production, unit costs are expected to be lower in 2024 and 2025,” the company said.

Agnico Eagle also announced that its Board of Directors has declared a quarterly cash dividend of $0.40 per common share, payable on March 15, 2023 to shareholders of record as of March 1, 2023. Agnico Eagle has declared a cash dividend every year since 1983.

President and CEO Ammar Al-Joundi stated, "It was a transformational year for Agnico Eagle. The merger with Kirkland Lake Gold and the pending acquisition of Yamana's Canadian assets will result in the consolidation of the Abitibi Gold Belt, one of the best gold regions in the world, and positions us well to continue to grow and create value for all our stakeholders for years to come.

“In 2023, our focus will be on optimizing and growing Detour Lake and Canadian Malartic and on establishing a plan to capitalize on existing infrastructure, including our excess mill capacity, in the Abitibi region of Quebec, with the potential to produce up to 500,000 ounces of gold per year by the end of the decade."

Agnico Eagle is a senior Canadian gold mining company, producing precious metals from operations in Canada, Australia, Finland and Mexico. It has a pipeline of high-quality exploration and development projects in these countries as well as in the United States and Colombia. The company was founded in 1957 and has consistently created value for its shareholders, declaring a cash dividend every year since 1983.

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