(Kitco News) - The gold mining sector continues to show its value potential as Canada’s largest producer reported record cash margins in the first quarter.
In its earnings report published Thursday after the North American trading session, Agnico Eagles Mines Ltd. announced solid earnings on robust production, lower costs, and higher gold prices.
The company reported adjusted earnings of $377.5 million or $0.76 per share in the first three months of 2024. The earnings significant beat expectations, as analysts were looking for an EPS of $0.60. The company said its free cash flow was $0.79 per share, $0.78 per share before changes in non-cash working capital balances.
Looking at production, the company said payable gold production in the first quarter of 2024 was 878,652 ounces. It added that gold production in the first quarter was led by record quarterly production at Canadian Malartic and strong production from Macassa and the Company's Nunavut operations.
"Building on a very strong close to 2023, we are reporting our second consecutive quarter of record operating margins and record free cash flow on the back of solid operational and cost performance. With this strong start to the year, we are well positioned to achieve our production and cost guidance for 2024," said Ammar Al-Joundi, Agnico Eagle's President and Chief Executive Officer, in a prepared statement. "During the quarter, we continued to advance our key value drivers and project pipeline, and our exploration program yielded significant results at Hope Bay, Canadian Malartic, and Detour Lake. We strengthened our balance sheet in the quarter, and our focus remains on capital discipline and cost control while investing in our projects pipeline and providing returns to shareholders.”
Looking at costs, the company said production costs per ounce came in at $892, total cash costs per ounce were $901, and all-in sustaining costs ("AISC") per ounce3 of $1,190. At the same time, the company saw an average gold price of $2,062 an ounce in the first quarter.
Looking ahead, the company said that it is well-positioned to achieve its 2024 gold production guidance of approximately 3.35 to 3.55 million ounces. At the same time the company sees cash costs per ounce between $875 to $925; AISC per ounce is expected to be between $1,200 to $1,250.
