Agnico Eagle Mines (NYSE:AEM), the world's second-largest gold producer, delivered outstanding third-quarter results. The firm also announced the establishment of a new subsidiary, Avenir Minerals, to consolidate its investments in critical minerals.
Third-quarter net income rose to $1.06 billion, or $2.10 per share. Meanwhile, the miner generated $1.82 billion in operating cash flow and $1.19 billion in free cash flow, benefiting from strong production and higher gold prices.
"We delivered another quarter of strong and consistent operational performance, which translated into record financial results as higher gold prices continue to drive expanded margins," said Ammar Al-Joundi, President and CEO.
"We are well on track to meet our full-year production and cost guidance, supported by disciplined cost management and a focus on productivity," he added.
Low Costs, High Prices, Strong Balance Sheet
Meadowbank and LaRonde mines led the quarterly production, which totaled 866,936 ounces (oz). Cash costs were $994/oz, and all-in sustaining costs were $1,373/oz. The average realized gold price of $3,476/oz far exceeded the $2,500 guidance.
Agnico reaffirmed its 2025 production target of 3.3–3.5 million ounces, with costs expected toward the upper end of the range due to higher royalty-linked expenses. The management expects capital spending for the year to be between $1.75 billion and $1.95 billion, excluding around $290–$310 million in capitalized exploration costs.
The miner strengthened its balance sheet, raising its cash position to $2.36 billion while reducing long-term debt to $196 million, resulting in a net cash position of $ 2.16 billion. Furthermore, the board declared a quarterly dividend of 40 cents and repurchased over one million shares for $150 million, highlighting management's commitment to shareholder returns.
Pipeline Advances And New Subsidiary
Operationally, Agnico continued advancing its growth pipeline. Development progressed at Canadian Malartic, Detour Lake, Upper Beaver, and Hope Bay. The exploration work continues on schedule, with promising results – particularly at Hope Bay, with intercepts as high as 16.9g/t gold over 4.6 meters and 12.7g/t gold over 9.3 meters. Furthermore, engineering work at San Nicolas in Mexico reached nearly 30% completion.
The standout announcement, however, was the creation of Avenir Minerals. This wholly owned subsidiary will house Agnico's non-core investments in critical minerals.
Avenir will consolidate a portfolio currently valued at approximately $80 million, which includes the company's stakes in Canada Nickel Company (OTC:CNIKF) and Perpetua Resources Corp. (NASDAQ:PPTA). It will also receive a seed $50 million in cash.
"For the last three years, we've had a small team looking at opportunities on the critical metals side," Al-Joundi said during the earnings call. "With everything that we have going on and our continued focus on gold, we felt now was the time to let that group have more independence and look at opportunities on their own," he noted.
He clarified that while Agnico will maintain a right of first refusal on new projects, Avenir will be self-sustaining.
"We want to remain a gold company, but our approach—consistent with our philosophy of disciplined capital allocation—is that it should be based on knowledge," he concluded.
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