Agnico-Eagle: Golden Drill Results

Agnico-Eagle Mines Inc. (AEM) got the thumbs up from analysts this week, after drill results at its Meadowbank project in Nunavut uncovered higher than expected reserve estimates. Wellington West analyst Catherine Gignac told clients in a note that the C$8-million drilling program at Meadowbank is returning higher grade intersections, suggesting a possible extension in the mine life of the project and improvement to the project economics.

Ms. Gignac added that as a result of Meadowbank and the company's other ongoing exploration and evaluation programs in Finland, Mexico and Quebec, Agnico-Eagle could triple gold production by 2009 from 240,000 ounces in 2007 to 850,000 ounces in 2009.

She maintained her "buy" rating and C$55 price target on Agnico shares.

Blackmont analyst Richard Gray also maintained his "buy" rating and left his C$60 price target unchanged, after telling investors that Agnico offers one of the sector's best combinations of growth, risk, and gold exposure.

"[Meadowbank drilling] results support our thesis that Agnico will have material resource increases at several of its projects over the next two years, with Meadowbank being one of the primary drivers," he wrote.

AEM 1-yr chart: