Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) reported "earnings per share of $0.27" as of Q2/17E exceeded expectations "due to higher revenue and lower taxes," Andrew Kaip of BMO Capital Markets wrote in a July 26 research report. "Adjusted EPS was $0.25, above our estimate for $0.17 and consensus of $0.14."
Production results tracked similarly, Kaip pointed out. "Quarterly production of 428 Koz came in ahead of our estimate of 403 Koz. . .driven primarily by beats at Meadowbank and Malartic due to higher grades," he stated.
Due to "strong first half operational performance," Agnico Eagle raised production guidance for 2017, Kaip noted, "to 1.62 Moz (previously 1.57 Moz gold)." Additionally, the company lowered cash cost guidance with "all-in sustaining cost now expected to be $830–880/oz (from $850–900/oz)," according to BMO Capital's report.
Kaip also commented on cash flow during Q2/17, indicating stronger production results gave it a boost. "Operating cash flow of $184M was in line with our estimate for $185M while free cash flow of ($8M) was above our estimate for ($24M)," he wrote. "Capital expenditures were $17M lower than expected."
The report indicated, too, that the company ended Q2/17 "with net debt of $291M" and "access to $1.2B in available credit lines."
Overall, in Q2/17, Agnico Eagle "posted another strong quarter, building off a beat in Q1/17, as the company delivered higher production, lower costs and EPS above expectations," concluded Kaip. "The company increased production guidance once again."
The metals and mining analyst went on to provide these updates on various Agnico Eagle projects:
Meliadine: It is advancing on time and on budget, but "underground development is ahead of plan with engineering 80% complete."
LaRonde: For zone 5, "permits are expected mid-2018."
Lapa: "Operations are now anticipated to [move] to Q3/17E."
Goldex: Commercial production was declared at the Deep 1 project on July 1.
Meadowbank: Agnico "expects to extend production through year-end 2018."
Amaruq: The final public hearing for phase 1 is scheduled for September 2017.
Agnico Eagle's stock is trading at about $47.38/share. BMO Capital rates it a Market Perform.
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