Agnico Eagle Mines (TSX:AEM) is up more than 60% in 2025. Investors who missed the rally are wondering if AEM stock is still undervalued and good to buy for gold exposure inside a self-directed Registered Retirement Savings Plan (RRSP) portfolio.
Agnico Eagle share price
Agnico Eagle trades near $182 per share at the time of writing, compared to $112 at the start of the year and $63 in early 2024.
The rally over the past 18 months has tracked a surge in precious metals prices. Gold trades near US$3,380 per ounce at the time of writing compared to around US$2,000 at the beginning of 2024.
Agnico Eagle operates mines in Canada, Mexico, Australia, and Finland. These are stable mining jurisdictions, which means Agnico Eagle is less likely to run into situations where a government arbitrarily tries to renegotiate terms or simply takes over a mine, regardless of the agreement that is in place with the mining company. The stability is one reason AEM has outperformed some of its large peers, who have higher-risk operations in countries in Africa and Southeast Asia, where disruptive and costly disputes with governments have occurred in recent years.
Earnings
Agnico Eagle reported solid second-quarter (Q2) 2025 results, despite lower year-over-year output. Gold production for the quarter came in at 866,000 ounces compared to 896,000 ounces in the same quarter last year. Production for the first half of 2025 was 1.74 million ounces compared to 1.77 million ounces in the first half of 2024. The drop occurred as a result of lower throughput at the Fosterville and Canadian Malartic mines, along with delays at Meadowbank due to a longer-than-expected Caribou migration. These were partly offset by higher production due to higher grades at the Macassa and LaRonde mines.
All-in sustaining costs (AISCs) per ounce came in at US$1,289 per ounce in the quarter compared to US$1,169 in Q2 2024. Agnico Eagle reported AISCs of US$1,235 per ounce for the first six months of 2025 compared to US$1,179 in the same period last year. Lower production, higher sustaining capital expenditures, and higher royalties due to rising gold prices contributed to the increase in AISC. Agnico Eagle remains a low-cost producer compared to some of its peers.
Adjusted net income for Q2 2025 was US$976 million compared to US$535 million in Q2 2024. For the first six months of 2025, adjusted net income was US$1.75 billion compared to US$913 million last year.
Free cash flow in the first half of the year doubled to US$1.9 billion compared to the first six months of 2024.
Agnico Eagle said it expects to hit its gold production guidance for the year, and its AISC and capital expenditure guidance remain unchanged, so investors shouldn’t expect any surprises through the end of 2025.
Agnico Eagle has a strong balance sheet to ride out any potential turbulence in the market. The company finished Q2 2025 with cash and cash equivalents of US$1.5 billion and long-term debt of just $595 million. This gives the company flexibility to return more cash to shareholders.
The company pays an annualized dividend of US$1.60 per share. Agnico Eagle is also using some excess cash to buy back up to 5% of its outstanding common shares under the current stock-repurchase program.
Growth
Agnico Eagle has a number of development projects on the go that could significantly boost production in the coming years. Its Canadian operations could also benefit from regulatory changes that enable faster approvals for mining projects.
Time to buy?
Agnico Eagle operates low-risk and high-quality mines. The company’s cost structure is much lower than that of some peers, and it enjoys a strong balance sheet. Investors who are of the opinion that the price of gold is going higher and want to get exposure to the market through a quality mining company should keep Agnico Eagle on their radar.
