Proactive Investors - Agnico Eagle Mines Ltd (TSX:TSX:AEM) shares moved lower as the gold miner posted a slight cost miss for the third quarter, which cast a shadow over an otherwise positive report.
Cash costs of $921 per ounce of gold were higher than the $905 per ounce expected by Jefferies analysts, attributed to above-expected costs at most of the company's assets.
All-in sustaining cost (AISC) of $1,286 were also above the Jefferies estimate of $1,258 per ounce.
Production for the quarter of $863,000 ounces was roughly in line with expectations, with higher-than-expected production from Fosterville, Meliadine and Meadowbank offsetting a weaker quarter from Canadian Malartic.
Agnico Eagle also reported its fourth quarter in a row of record free cash flow at $620.4 million.
Net income was $572.6 million or $1.14 per share, topping Street estimates of $0.98 per share.
“Agnico Eagle generated over $1 billion in operating cash flow and over $600 million in free cash flow in Q3, delivering another solid quarter and a reassuringly good result for the gold mining sector,” the Jefferies analysts noted.
“The company is on track to achieve guidance on all metrics and projects are proceeding according to plan.”
Agnico Eagle said it has begun site preparation for the Detour underground project, which includes finishing the pad for surface infrastructure and removing overburden for the portal.
Infill drilling in the West Pit zone is confirming higher grades and a mineralized structure suitable for underground mining, with notable results of 22.5 grams per ton (g/t) over 12.9 meters.
Ramp development and shaft sinking are on schedule, with depths reaching 873 meters (up from 832 meters last quarter) and 839 meters (up from 680 meters last quarter), respectively.
The excavation of the temporary shaft loading station is complete, with commissioning expected in Q2 2025. Surface construction is also progressing as planned.
The analysts repeated their ‘Hold’ rating on Agnico Eagle and $85 price target, which traded down 2.1% at about $86 on Thursday afternoon.