Agnico Eagle reported a net income of US$35.1 million in 4Q17, a 44 percent drop from the US$62.7 million it reported in 4Q16. According to the company, this was caused by non-cash foreign currency translation losses of US$5.5 million, “mark-to-market adjustments” and derivative losses of US$1 million and non-recurring losses of US$6.8 million. On the other hand, its annual net income is 53.5 percent higher than 2016 results, reaching US$243.9 million from US$158.8 million thanks to higher mineral prices and higher metal sales volumes.
The Canadian gold producer also managed to exceed its 2017 total cash guidance for the sixth consecutive year in a row and surpass the production guidance it set for the year. Its payable production for 2017 reached 1.7 million silver ounces while the company had set guidance of 1.68 million ounces. In 2017 the company had also set a cash cost guidance per ounce of US$570-600 and was able to go as low as US$558. In 2016, the company had a total cash cost per ounce of US$573.
Due to production starting in its Canadian project, Meliadine, in 2Q19 and extended production at Meadowbank, the company has set a high benchmark for production rates in the medium term. The company forecasts production of between 1.63-1.77 million ounces and will eventually reach 1.95-2.05 million ounces in 2020.
“We set a new annual production record while recording the fewest number of lost time accidents and we also increased our gold reserves,” said Sean Boyd, CEO of Agnico Eagle in an official statement. “With projected production on track to reach approximately 2 million ounces with lower unit costs in 2020, the company will be focusing on increasing its reserve base and advancing its development pipeline to enhance the production profile and grow free cash flow.”
The company has two producing assets in Mexico: La India and Pinos Altos. After acquiring La India in Sonora in 2011, Agnico Eagle achieved commercial production on Feb. 1, 2014. The project has a mine life of approximately six more years and reserves of 1 million ounces. Pinos Altos is in Chihuahua and has reserves of 1.4 million ounces. It started production in 2011 and has an expected mine life of seven years as of 2018.