Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) suspended mining after rock movement at the wall of the Barnet pit, part of the Canadian Malartic mine, which will cause lower production this year and the next two years by about 4%. Barnet was expected to be mined out by 2029. The impact is relatively small, particularly given that the mine has a stockpile of over 30Mt (million tonnes) of ore, though the stockpiled ore is below the grade of Barnet. More importantly, there is no indication that the rock activity will affect the Odyssey main deposit or the underground expansion currently underway. No one was injured.
Agnico's stock fell on Thursday, underperforming peers by about 5%, which more than discounts the negative development. The Malartic open pit represents about 4% of the company's NAV and 12% of EBITDA. This year's anticipated shortfall of 60K to 80K ounces compared with a full-year production of over 3.3 million ounces. Agnico reiterated its 2026 guidance, though it guided to the lower end of the guidance range. Production for the second quarter, Agnico said, was higher than estimates. Agnico remains a buy.
OR Has Royalty on Agnico's Mine
OR Royalties (OR:TSX; OR:NYSE) holds a royalty on Malartic, which also represents 4% of its NAV but as much as 22% of its EBITDA. The company has not commented, but should still be able to meet its full-year guidance, again at the lower end. The stock underperformed its peers. We would wait to see any further negative news at Malartic, which would affect OR more than AEM. Buy on any weakness from here.
Fortuna Releases Positive Study on Next Mine
Fortuna Mining Corp. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE) released the feasibility study on its likely next mine, Diamba Sud, with both capex and costs slightly higher than expected, though production and the mine life are better, with an average of 116k oz per year over 9.4 years. On balance, it is better than expected, with an NAV now representing about 17% of the company. Construction is expected to commence by the end of the year, with production by mid-2028. The mine will be fully funded by Fortuna's $666 million treasury. Fortuna is trading at a discount to peers and is a buy.
Aggressive Drill Program Underway at Lara
Lara Exploration Ltd. (LRA:TSX.V) reported that a strong drilling campaign was underway at its Planalto copper project in Brazil, with seven drills operating in a planned 14,000-meter program. The drilling is focusing on the main Homestead trend as well as the satellite Silica Cap. The aim of the program, and additional infill drilling, will be to bring most of the resource to the indicated or measured category. The company said it was also finalizing access and preparations to drill on the recently acquired Atlantic Trend, an extension of the main deposit, with indications of higher grades. Lara remains a buy.
Goodbye to a Winner
Fox River Resources Corp. (FOX:CSE) has completed its acquisition by a subsidiary of Agnico, as discussed. We purchased in mid 2024, just over two years ago, at CA$0.37. The acquisition was at CA$1.10 per share; funds should be received in your account in the coming days. In U.S. dollar terms, this equates to a gain of 191%. This brings the average return on all closed positions to 88.7% with an average holding period of 56 months.
TOP BUYS this week, in addition to the above, include Kingsmen Creatives Ltd. (KMEN:SI); Royal Gold Inc. (RGLD:NASDAQ); and Pan American Silver Corp. (PAAS:TSX; PAAS:NYSE).
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