Agnico-Eagle has reported record quarterly revenue, net income and gold production in its second quarter 2010 results, thanks to higher prices for gold, zinc, silver and copper and the impact of four new gold mines commencing operations in the past 14 months.
Record quarterly net income of $100.4 million, or $0.64 per share, includes a non-cash foreign currency translation gain of $17.4 million, as well as a one-time tax recovery of $21.2 million. The result also includes non-cash stock-based compensation expense of $8.1 million.
In the comparable quarter of 2009, the company reported net income of $1.2 million, or $0.01 per share. A 116 percent increase in gold production and a 151 percent increase in gross mine profit over the second quarter of 2009 contributed to the record financial and operating quarter.
"Our record quarterly financial results were driven by record gold production as all six of our mines operated throughout the quarter for the first time,” said Sean Boyd, vice-chairman and chief executive officer. “Four of the mines are now operating at steady state with the other two in the late stages of optimization.
“Further increases in gold production and lower cash operating costs are expected in the second half of 2010 as we continue to optimize all our mines and focus on driving down the unit costs at our Kittila and Meadowbank mines," he added.
Capital expenditures in the second quarter of 2010 were declared as $117.0 million, including $33.9 million at Meadowbank, $28.2 million at Pinos Altos, $22.8 million at LaRonde, $16.6 million at Kittila, $10.6 million at Lapa and $4.7 million at Goldex.
For 2010, capital expenditures are estimated at $500 million, up from a previous estimate of $478 million. The additional capital is being spent at Meadowbank and Kittila to make improvements to the process plants and accelerate the purchase of mining equipment.
Agnico-Eagle’s six mines are all 100 percent owned.
LaRonde gold mine in northwestern Quebec, Canada, began operation in 1988.
The Goldex mine in northwestern Quebec began operation in 2008. Life of mine average annual gold production is expected to be approximately 168,000 ounces per year through 2017.
The Lapa mine in northwestern Quebec achieved commercial production in May 2009. Life of mine production is expected to be approximately 115,000 ounces of gold through 2015.
The Kittila mine in northern Finland achieved commercial production in May 2009. Life of mine average gold production is expected to be approximately 150,000 ounces per year through 2032. A study is underway examining the possibility of increasing the production rate at Kittila reflecting the continued growth of the reserve base.
The Pinos Altos mine in northern Mexico achieved commercial production in November 2009. Proven and probable reserves total 3.4 million ounces of gold and 94 million ounces of silver. Life of mine average gold production is expected to be approximately 170,000 ounces per year through 2028, with annual silver production expected to average 2.5 million ounces.
The Meadowbank mine project in Nunavut, Canada, achieved commercial production in March 2010. Gold production in 2010 is expected to be approximately 300,000 ounces. Life of mine average annual gold production is expected to be approximately 350,000 ounces through 2019.
