It looks like Agnico Eagle Mines [stock_market_widget type="inline" template="generic" color="default" assets="AEM.TO" markup="(TSX: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] stock won’t be stopping its rally anytime soon. After a brief pause, Agnico Eagle stock is back to its winning ways thanks to a terrific set of third-quarter results that blew past estimates.
Agnico delivered nearly $683 million in revenue during the quarter, an increase of almost 32% from the year-ago period. The company’s adjusted earnings per share of $0.37 were ahead of the Wall Street estimate by $0.10.
Record Production Is Helping Agnico Stay on Top
Agnico Eagle Mines hit a quarterly record gold production in the third quarter. The company delivered nearly 477,000 ounces of gold during the quarter, a nice jump from the year-ago period’s output of nearly 422,000 ounces. According to the company’s press release:
Agnico Eagle also increased its guidance for the fiscal year. The company anticipates 1.77 million to 1.78 million ounces of gold in 2019 as compared to its prior forecast of 1.75 million. Agnico Eagle also pointed out that its total cash costs per ounce will remain between $620 and $670 an ounce, while all-in sustaining costs are expected between $875 and $925 an ounce.
The good news is that Agnico is on track to achieve its cost guidance as its third-quarter all-in sustaining costs came in at $903 an ounce. More importantly, the company anticipates that the gold pricing scenario can improve further. Agnico Eagle’s revenue increased by nearly 32% year over year last quarter. The bottom line increased over four-fold to clock $76.7 million.
Gold Prices Will Be a Tailwind
Agnico Eagle can sustain this terrific momentum in the future as well, according to CEO Sean Boyd’s latest forecast. He believes that the yellow metal is headed to $2,000 an ounce in the next two to three years. According to a Bloomberg report:
Given that gold is currently trading near $1,500 an ounce, Boyd’s forecast means that the price could rise by a third going forward. If that’s indeed the case, then don’t be surprised to see Agnico Eagle stock soar much higher because it is on the right track to increase its production and keep costs under check at the same time.
