Agnico Eagle Mines- All You Need To Know About The Q4 2015 And Full 2015 Results

| About: Agnico Eagle (AEM)

Summary

AEM released its 4Q'15 and full year 2015 results on February 11. Good results overall, despite low metals prices.

AEM managed to reduce long-term debt by $190 million in 2015 and maintained the dividend at the same level or 0.32 per share per year.

AEM is one of my favorite gold miners that offers a stable and constant long term gold production and net debt under $1 billion.

Agnico Eagle Mines Ltd. (NYSE:AEM)

Source: Meadowbank picture taken from company website.

This article is following a preceding article on AEM published on November 1, 2015.

A Quick Q4'15 and full 2015 - Financial Snapshot:

Year 2015 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Year 2014 Q4 2014

Revenues

in $ million

1,985.43

482.932 508.795 510.109 483.596 1,896.77 503.1

Gold Production

in Oz

1,671,340 422,328 441,124 403,678 404,210 1,429,288 387,538

Realized gold price

in $

1,156 1,094 1,119 1,196 1,202 1,261 1,202

Cash provided by operating activities

in $ million

616.24 140.75 143.7 - - 668.32 -

Net income

$ Million

24.583 (15.54) 1.29 10.08 28.7 82.97 (21.3)

EPS - basic

$

0.11 (0.07) 0.01 0.05 0.13 0.43 (0.10)

AISC (by-product)

$/Oz

810 813 759 864 804 954

954

Sustaining CapEx

in $ million

305.1 90.4 72.0 70.8 71.9 - 133.4

Cash and Cash equivalent (including restricted cash and short term investment)

in $ Million

131.6 131.6 208.1 158.3 172.1 - 215.3

Long-term Debt

in $ Million

1,118.19 1,118.19 1,203.3 1,180.3 1,220.1 1,322.46 1,322.46

Dividend per share

In $/share

0.32 0.08 0.08 0.08 0.08 0.32 0.08

Shares outstanding

in million

217.101 217.84 217.2 215.426 214.6 196.202 213.3
Click to enlarge

Available credit facilities:

The outstanding balance on the Company's $1.2 billion credit facility was reduced from $350 million at September 30, 2015 to $265 million at December 31, 2015, resulting in availability under its credit lines of approximately $935 million, not including the $300 million accordion facility.

TB1 - Payable production per quarter and per metal:

Gold

Oz

Silver

K Oz

Zinc

Tonne

Copper

Tonne

Q4 2015 417,149 1,153 949 1,354
Q3 2015 441,124 1,037 650 1,302
Q2 2015 403,672 1,106 733 1,131
Q1 2015 404,210 1,032 936 1,167
Q4 2014 387,538 1,043 2,467 1,399
Q3 2014 349,272 830 2,225 989
Q2 2014 326,058 870 3,788 1,060
Q1 2014 366,420 890 2,060 1,554
Click to enlarge

TB2 - Breakdown of the geographical distribution of the three-year future gold production:

Canada Europe Mexico
% gold production 70 10 20
Click to enlarge

TB3 - Production and cost/cash cost per segment.

Mine

Total production cost per Mine

in $

Production of gold

Oz

Cash cost

on a By-product basis

$/Oz

LaRonde 2Q'15 45,133 64,007 613
3Q'15 49,243 71,860 558
4Q'15 32,041 73,161 510
2015 172,283 267,921 590
Lapa 2Q'15 13,656 19,450 678
3Q'15 12,279 25,668 522
4Q'15 12,652 19,929 620
2015 52,571 90,967 590
Goldex 2Q'15 16,913 26,462 633
3Q'15 16,120 32,068 479
4Q'15 13,378 27,646 513
2015 61,278 115,426 538
MeadowBank 2Q'15 66,888 91,276 688
3Q'15 57,404 99,425 598
4Q'15 49,177 102,580 526
2015 230,564 381,804 613
Canadian Malartic (50%) 2Q'15 42,185 68,441 609
3Q'15 42,008 76,603 544
4Q'15 46,093 72,872 606
2015 171,473 285,809 596
Kittila 2Q'15 30,777 41,986 776
3Q'15 31,116 46,455 639
4Q'15 32,203 44,279 747
2015 126,095 177,374 709
Pinos Altos 2Q'15 29,768 50,647 384
3Q'15 26,845 47,725 392
4Q'15 24,351 44,496 417
2015 105,175 192,974 387
Creston Mascota 2Q'15 7,501 15,606 402
3Q'15 6,101 12,716 436
4Q'15 7,070 13,933 445
2015 26,278 54,703 430
La India 2Q'15 10,791 25,803 410
3Q'15 13,468 28,604 436
4Q'15 12,854 23,432 485
2015 49,578 104,362 436
TOTAL 4Q'2015 229,819 422,328

547

AISC $810

TOTAL 3Q'2015 254,584 441,124 Oz

536

AISC $759

TOTAL 2Q'2015 263,612 403,678 Oz
TOTAL 1Q'2015 247,280 404,210 Oz
Click to enlarge

Commentary:

Agnico-Eagle released its fourth-quarter and full year 2015 results on February 11, 2016. Another solid year with a gold production of 1.671 M Oz up approximately 17% year over year, at a very low AISC of $810/ Oz.

The company gave a solid long-term guidance for the next three years at an AISC under $900/ Oz.

Mr. Sean Boyd, CEO, said in the conference call the following:

As we move forward for the next three years, we are looking at stable production and costs. We're looking to average production over the next three years of 1.5 million ounces, in 2016 between 1.52 and 1.56 at cash costs in the range of $590 to $630, and it's all-in sustaining estimate at $850 to $890.

As far as the reserves are concerned -- proven and probable -- AEM managed to add 1M Oz in reserves in 2015. Another positive, the quarterly dividend is still at $0.08/Quarter or 1% a year.

I was really impressed with the strong results, and the potential future outlook offered by the actual asset base, which is providing some appreciated visibility to the company shareholders.

LaRonde (Bousquet), Meadowbank (Meliadine, Amaruq), Goldex, Kittila (Sisar Zone) and operations in Mexico (the El Barqueño open pit) offer some very good potential for 2018-2019 at a reasonable capital expenditure.

The long-term debt level is totally manageable, as well. AEM has a debt maturity next year of $150 million, and then there is nothing until 2020. A very simple situation that will allow the company to reduce net debt even further in 2016.

This is exactly what we should expect from a well balanced and well managed gold miner. Solid results and a long-term visibility with constant production at a high-level. The only uncertainty is, of course, the future direction of the gold price.

The recent market turmoil triggered by the oil crash gave a needed boost to gold, which is always seen as a refuge when the market start to get agitated. The question is whether or not, this trend is strong enough to push gold prices above $1,300/ Oz? It's really hard to guess what will happen and I will not play the prophet, however, I am confident this new trend may signal a turnaround for gold, and apparently I am not the only one thinking that way.

Conclusion:

AEM represents a large part of my "gold miner" holding with Newmont Mining (NYSE:NEM). However, the stock is now up 66% from its August 2015 low and it is perhaps time to take profits.

I recommend to sell about 1/3 of your holding, if you have a significant profit of course, and keep the cash to buy back the stock on any weakness, that may eventually happen quickly, if the rally we are experiencing now, cannot get enough momentum.

Disclosure: I am/we are long AEM.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.