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|
in $ million
Realized gold price
Cash provided by operating activities
in $ million
EPS - basic
in $ million
Cash and Cash equivalent (including restricted cash and short term investment)
in $ Million
in $ Million
Dividend per share
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:
TB2 - Breakdown of the geographical distribution of the three-year future gold production:
|% gold production||70||10||20|
TB3 - Production and cost/cash cost per segment.
Total production cost per Mine
Production of gold
on a By-product basis
|Canadian Malartic (50%)||2Q'15||42,185||68,441||609|
|TOTAL 4Q'2015||229,819||422,328|| |
|TOTAL 3Q'2015||254,584||441,124 Oz|| |
|TOTAL 2Q'2015||263,612||403,678 Oz|
|TOTAL 1Q'2015||247,280||404,210 Oz|
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.
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.