Agnico Eagle Mines (TSX:AEM): Should You Buy It Now?

Agnico Eagle Mines Ltd. (TSX:AEM)(NYSE:AEM) is executing on an exploration program that is expected to drive growth in 2020 and add to the company’s value proposition.

| More on:
stock market

Image source: Getty Images

Agnico Eagle Mines (TSX:AEM)(NYSE:AEM) has earned a reputation as a partner of choice within the mining industry, and recognition as a company that operates with respect for others. While the company could not control the day-to-day turmoil of COVID-19, which included the temporary shutdowns, the evolving health and safety protocols, the stay-at-home work orders, the company did control priorities and focused on the health and wellbeing of the company’s employees, and communities.

The company reached out to governments, infectious disease specialists, and community leaders to help it navigate through the global pandemic while sharing Agnico Eagle’s own expertise and resources to keep the company’s operating communities, employees, and workplaces safe. The company appears to be working hard to maintain the trust of the company’s stakeholders.

Robust business strategy

In addition, Agnico Eagle has the right business strategy, the right culture, and the right mindset to adapt to changing circumstances and to remain resilient in the face of what is unknowable. The company has gained some profound insights from the global COVID-19 pandemic as it continued to work to maximize Agnico Eagle’s full potential.

During the pandemic, Agnico Eagle’s health, safety, and operations teams implemented strict screening and enhanced hygiene protocols, as well as physical distancing, awareness campaigns, and teleworking where possible, while collaborating with all levels of government and partners on public health and safety measures.

Testing for COVID-19 proved key to protecting the company’s workforce and reduced the risk of the pandemic at Agnico Eagle’s remote sites and in the communities where it operates.

Record annual earnings

Despite a rocky beginning, 2020 was a record year for Agnico Eagle. With the excellent support of employees, Agnico Eagle delivered 1.7 million ounces of gold in 2020, and for the first time in the company’s history, it produced over 500,000 ounces in a quarter.

This performance, along with rising gold prices, allowed it to generate record annual earnings and cash flow, deliver the highest share price on record for Agnico Eagle shareholders, and increase the company’s quarterly dividend by a significant 75%.

Additionally, with recent exploration success in several of the company’s long-life mining camps, Agnico Eagle appears on track to produce over 2 million ounces of gold per year for the next 10 years.

Throughout fiscal 2020, Agnico Eagle employees appear to have prioritized safety first. In particular, Agnico Eagle’s Canadian mine posted the company’s best performance in health and safety since the opening of the mine in 2011.

Maximizing Agnico Eagle’s full potential

Furthermore, Agnico Eagle’s exploration program continued to drive growth in 2020 and add to the company’s value proposition. The company’s mineral reserves increased by 12% to a record 24.1 million ounces of gold and Agnico Eagle’s inferred mineral resources rose by 9% to 23.4 million ounces.

Near-term growth opportunities include the Amaruq underground project at the Meadowbank complex and Agnico Eagle’s 50% owned Odyssey project at Canadian Malartic.

Gold production from Amaruq underground is expected to begin in early 2022, while initial production from the Odyssey project, which has an expected 17-year mine life, is anticipated to begin in 2023, positioning the company well for the future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

More on Metals and Mining Stocks

A miner down a mine shaft
Metals and Mining Stocks

1 Canadian Mining Stock to Buy and Hold Forever

Cameco (TSX:CCO) stock is looking way too cheap to ignore after the latest correction off highs.

Read more »

Arrowings ascending on a chalkboard
Metals and Mining Stocks

If This Fast-Rising Stock Isn’t Yet on Your Radar, it Should Be

This stock is up 44% in the last year and climbing, and yet there is even more to come with…

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Metals and Mining Stocks

Is Agnico Eagle Mines a Buy in July 2024?

Although quite a few gold stocks are worth looking into for their dividends, the less-than-modest capital-appreciation potential can be a…

Read more »

Gold bars
Metals and Mining Stocks

The Best Gold Stock to Invest $1,000 in Right Now

Want to invest in precious metals? Here's the best gold stock to buy right now, and it isn't a traditional…

Read more »

A worker wears a hard hat outside a mining operation.
Metals and Mining Stocks

1 Canadian Mining Stock Worth a Long-Term Investment

This mining stock has a huge future ahead of it, especially as copper surges in demand around the world. And…

Read more »

People walk into a dark underground mine.
Metals and Mining Stocks

How to Turn Your TFSA Into a Gold (or Copper) Mine Starting With $10,000  

These two top stocks can turn any TFSA into a gold mine -- or a copper mine, if you really…

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

1 Canadian Mining Stock to Buy and Hold Forever

Canadian investors can consider gaining exposure to quality mining stocks such as Wheaton Precious Metals in June 2024.

Read more »

A stock price graph showing growth over time
Metals and Mining Stocks

Why Cameco Stock Soared 23% This Year

Cameco stock continues to ride high on strong supply/demand fundamentals and growing momentum in the nuclear industry.

Read more »