Agnico Eagle Mines Limited AEM reported net income of $28.7 million (or 13 cents per share) in the first quarter of 2015, down 70.4% from $97.1 million (or 56 cents a share) recorded in the year-ago quarter.

Gold production at the LaRonde mine in northwestern Quebec, Canada, was 58,893 ounces in the reported quarter, compared with 59,352 ounces in the year-ago quarter. Total cash costs per ounce were $703 on a by-product basis, up 22.5% year over year. Cash costs and production in quarter were unfavorably impacted by higher minesite costs per ton, lower gold grades and lower by-product revenues as a consequence of stope re-sequencing in the upper mine.

Production at the Canadian Malartic mine (in which Agnico Eagle has a 50% ownership) in the reported quarter was 67,893 ounces of gold at a total cash cost per ounce of $632 on a by-product basis. Production was mainly supported by higher grade ore from the North Zone.

Payable production in the first quarter at the 100%-owned Lapa mine in northwestern Quebec was 25,920 ounces of gold, up 10.7% year over year. Total cash costs per ounce were $568 on a by-product basis compared with $662 in the year-ago quarter.

The Goldex mine in northwestern Quebec produced 29,250 ounces of gold in the quarter at a total cash cost per ounce of $541 on a by-product basis. The decrease in total cash costs in the reported quarter was due to higher production and favorable foreign exchange rates, partly offset by higher consumable costs compared with the year-ago period.

Payable production of 88,523 ounces of gold at the 100%-owned Meadowbank mine in Nunavut, Canada was down 43.4% year over year. Total cash costs per ounce were $655 on a by-product basis in the quarter, up 50.9% year over year. Lower production and higher costs in the quarter were due to the processing of lower grade ore and lower recoveries.  

Gold production at Kittila in the reported quarter was up nearly 15.8% from the year-ago quarter to 44,654 ounces with a total cash cost per ounce of $681, down 14.3% from the year-ago quarter on a by-product basis. Production increased in the quarter due increased mill capacity while costs decreased because of lower expenses for consumables, energy and favorable foreign exchange rate.

Southern Business

Payable production at the Pinos Altos mine in northern Mexico in the reported quarter was 50,106 ounces of gold, up 10.8% year over year. Production increased due to higher grades processed. Total cash cost per ounce was $357 on a by-product basis, down 25.6% from $480 in the year-ago quarter. The year-over-year decrease in total cash costs per ounce is primarily due to higher silver production and favorable foreign exchange rates.

Payable gold production at Creston Mascota was 12,448 ounces, up about 20.7% year over year due to stacked tons due to stacked tons. Total cash cost per ounce was $444 on a by-product basis, down 25.8% year over year. Cash costs declined due to lower minesite costs per ton, higher production and a favorable foreign exchange rate.

The La India mine in Mexico started commercial production in Feb 2014. Payable gold production in the first quarter was 26,523 ounces at a total cash cost per ounce of $418 on a by-product basis.

Financial Condition

Agnico Eagle’s cash and cash equivalents totaled $138 million as of Mar 31, 2015, down from $181.8 million as of Mar 31, 2014. Long-term debt increased to $1.22 billion as of Mar 31, 2015, from $0.92 billion as of Mar 31, 2014.

Agnico Eagle had drawn down $400 million on its $1.2 billion credit facility at the end of the quarter, resulting in available lines of roughly $800 million, excluding another $300 million available in an accordion feature.

Cash provided by operating activities in the first quarter of 2015 was $143.5 million ($176.8 million before changes in non-cash components of working capital), compared with $250.4 million a year ago.

Developments

Drilling resumed in late March at the Amaruq project, located northwest of the Meadowbank mine in Nunavut, and holes drilled from the ice on Whale Lake have yielded promising results.

Drilling at Kittila yielded deepest Suuri Trend intersection to date and indicated a new parallel zone.

Outlook

Agnico Eagle reaffirmed its production guidance for 2015 at about 1.6 million ounces with total cash costs on a by-product basis of $610 to $630 per ounce and all-in sustaining costs (AISC) of roughly $880 to $900 per ounce.

Agnico Eagle currently carries a Zacks Rank #3 (Hold).

Better-ranked companies in the gold mining industry include Gold Fields Ltd. GFI, Pretium Resources Inc. PVG and AngloGold Ashanti Ltd. AU. While Gold Fields and Pretium Resources carry a Zacks Rank #1 (Strong Buy), AngloGold Ashanti sports a Zacks Rank #2 (Buy).