Agnico Eagle Mines Limited - CEO, Sean Boyd
CEO, Sean Boyd
Sourced: Twitter (@AgnicoEagle)
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  • Agnico Eagle Mines (TSX:AEM) has re-issued its 2020 production and expenditure guidance after original estimates were withdrawn due to COVID-19
  • Gold production is expected to drop from 1.875 million ounces to between 1.63 and 1.73 million ounces
  • Capital expenditures for the year have also been dropped from C$1.04 billion to approximately $972 million
  • The cutbacks are largely due to government mandated restrictions designed to curb the spread of COVID-19
  • Agnico Eagle Mines (AEM) is currently up 4.65 per cent to $85.11 per share, with a market cap of $20.48 billion

Agnico Eagle Mines (TSX:AEM) has re-issued its 2020 production and expenditure guidance after original estimates were withdrawn due to COVID-19.

In its financial results for the quarter ending March 31, 2020, the company reported a marginal increase in revenue to C$947 million, up from $750 million in the first quarter of 2019.

Agnico Eagle also posted an increase in payable gold production, from 398,217 ounces last year to 411,366 ounces this quarter.

However, production costs per ounce were reported at a similar increase, up from $1,024 per ounce to $1,228 per ounce this year. As such, Agnico Eagle posted an overall loss for the quarter of $30.44 million, a stark contrast to a profit of $52 million the year before.

The company attributes these dramatic changes to the impact of COVID-19 on its operations.

Most of its projects in Canada and Mexico were hit by government-mandated operational suspensions during March and early April. Subsequently, overall production was markedly lower, depleting reserves and increasing unit costs.

Taking into account these effects, Agnico Eagle is currently expecting overall gold production for the year to drop from 1.875 million ounces to between 1.63 and 1.73 million ounces.

Capital expenditures for the year have also been reduced from $1.04 billion to approximately $972 million.

Sean Boyd, CEO of Agnico Eagle Mines, acknowledged that the COVID-19 pandemic had brought extensive difficulties.

“The first quarter of 2020 was challenging given the global COVID-19 pandemic and its impact on our gold production and unit costs in March as operations were reduced to minimum activities at all five of our Canadian mines,” he said.

However, he also noted that, given improving gold prices and a much weaker local currency environment than had been budgeted for, the company is expecting to generate significant free cash flow during the second half of the year.

Sean also added that the company’s quarterly dividends remain unchanged and will be distributed at a price of $0.20 per share.

Agnico Eagle Mines (AEM) is currently up 4.65 per cent to $85.11 per share at 12:49pm EDT.

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