Shares of Agnico-Eagle Mines Limited (NYSE:AEM) rose to a fresh 52-week high of $50.23 on Jun 3.
What Drives Agnico-Eagle?
Agnico-Eagle’s adjusted earnings for the first quarter of 2016 topped the Zacks Consensus Estimate. Its revenues rose modestly year over year in the quarter and beat expectations. The company recorded higher gold production and lower unit costs in the quarter.
Agnico-Eagle’s sufficient cash flow enables it to maintain a strong exploration budget, primarily focused on Kittila. It is also reinvesting in its assets to expand output. The company has also consistently rewarded its shareholders with dividend payments.
The company's move to jointly acquire Osisko will boost its production profile and improve cost structure. The acquisition of Osisko is a strategic fit for Agnico-Eagle as the company has a good operating hold in Quebec. The buyout is expected to be accretive to Agnico-Eagle and will also improve its total cash cost and all-in sustaining cost profiles.
The company has secured access to Canadian Malartic, the largest producing gold mine in Canada which has the potential to produce an average of roughly 600,000 gold ounces per year for 14 years. Further, Agnico-Eagle will optimize the Canadian Malartic mine plan.
The company expects production for 2016 to meet the higher end of its guidance range.
Agnico-Eagle carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked companies in the mining space include B2Gold Corp. (NYSE:BTG) , Pretium Resources Inc. (TO:PVG) and Harmony Gold Mining Company Limited (NYSE:HMY) . While B2Gold and Pretium Resources sport a Zacks Rank #1 (Strong Buy), Harmony Gold carries a Zacks Rank #2 (Buy).
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