Agnico Eagle Reports Third Quarter 2018 Results; Production Guidance Increased for 2018 and 2019; Nunavut Development Projects Continue to Advance as Planned; Drilling Extends Amaruq Mineralization at Depth
Press Release
TORONTO, Oct. 24, 2018 – Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM) (“Agnico Eagle” or the “Company”) today reported quarterly net income of $17.1 million, or $0.07 per share, for the third quarter of 2018. This result includes non-cash foreign currency translation gains on deferred tax liabilities and non-recurring tax gains of $11.8 million ($0.05 per share) and non-cash foreign currency translation gains, mark-to-market adjustments and derivative gains on financial instruments of $4.1 million ($0.01 per share). Excluding these items would result in adjusted net income1 of $1.2 million or $0.01 per share for the third quarter of 2018. In the third quarter of 2017, the Company reported net income of $72.5 million or $0.31 per share.
Included in the third quarter of 2018 net income, and not adjusted above, is non-cash stock option expense of $3.8 million ($0.02 per share).
In the first nine months of 2018, the Company reported net income of $67.0 million, or $0.29 per share. This compares with the first nine months of 2017, when net income was $203.3 million, or $0.89 per share.
In the third quarter of 2018, cash provided by operating activities was $137.6 million ($155.0 million before changes in non-cash components of working capital), as compared with the third quarter of 2017 when cash provided by operating activities was $194.1 million ($207.9 million before changes in non-cash components of working capital).
In the first nine months of 2018, cash provided by operating activities was $465.4 million ($495.1 million before changes in non-cash components of working capital), as compared with the first nine months of 2017 when cash provided by operating activities was $600.6 million ($629.9 million before changes in non-cash components of working capital).
The decrease in net income and cash provided by operating activities during the current quarter compared to the prior year period was mainly due to lower gold sales volumes, lower realized gold prices, lower by-product revenue and expected higher costs at several operations, principally at LaRonde, Kittila and the Company’s Mexican operations. Lower gold sales were primarily as a result of the expected lower gold production in the period primarily due to reduced throughput levels at Meadowbank as the mine transitions through the last full year of mining at site.
The decrease in net income and cash provided by operating activities in the first nine months of 2018 compared to the prior year period was mainly due to lower gold sales volumes, lower by-product revenue and expected higher costs at several operations, principally at Meadowbank, Kittila and the Company’s Mexican operations, partially offset by higher realized gold prices. Lower gold sales were primarily as a result of the expected lower gold production in the period primarily due to reduced throughput levels at Meadowbank as described above.
“On the back of another strong operational quarter, we have once again increased our 2018 production guidance. We now expect to produce approximately 1.60 million ounces, up from our previous forecast of 1.58 million ounces that was announced last quarter. Total cash costs and AISC are expected to be at or slightly below the mid-point of our guidance range”, said Sean Boyd, Agnico Eagle’s Chief Executive Officer. “Our Nunavut development projects are progressing well. Drilling continues to generate positive exploration results from the Amaruq underground deposits and we see potential for a slightly earlier startup at Meliadine. As a result, we now expect our 2019 gold production to exceed 1.70 million ounces, which was the mid-point of the previous 2019 guidance”, added Mr. Boyd.
IBF4
