Record year for Agnico Eagle
Al-Joundi says 2025 and beyond will be even better
Agnico Eagle Mines (TSX: AEM) CEO Ammar Al-Joundi says the gold miner’s record 2024 sets the scene for an “exceptional” 2025.
Production for 2024 was a record 3.49 million ounces of gold, just above the mid-point of guidance, while all-in sustaining costs were a “peer-leading” US$1239 an ounce.
Adjusted net income for 2024 was US$2.1 billion, while adjusted EBITDA was US$4.7 billion.
Full-year operating cashflow was US$3.96 billion, while free cashflow was a record US$2.14 billion, or US$2.06 billion before changes in non-cash components of working capital.
The result was driven by a strong fourth quarter in which the company reported record net income of US$509 million, record adjusted net income of US$632 million, record operating cashflow of US$1.13 billion and record free cashflow of US$570 million.
Capital expenditure for 2024 was US$1.8 billion.
Net debt fell from US$1.5 billion at the start of the year to US$217 million at December 31.
Agnico declared a quarterly dividend of US40c per share and repurchased US$20 million of stock during the December quarter.
Al-Joundi said the company had made a promise to investors 12 months ago to focus on controlling costs in a rising gold price environment.
“They expect margin and cashflow expansion and it’s our job to deliver that,” he said on a conference call.
“In 2024, we did deliver the leverage to gold prices we promised we would.”
2025 outlook
Al-Joundi said the 2024 numbers were “great”, but it was 2025 and beyond that excited the company.
The company updated its three-year production guidance, with gold production forecast to remain stable at 3.3-3.5Moz annually from 2025 to 2027.
Guidance for 2025 and 2026 is roughly 3% lower than the previous guidance, the outlook for 2027 has improved as expected contributions from East Gouldie at Canadian Malartic, LaRonde and Macassa are expected to offset lower gold grade sequences at Detour Lake and a decline in production at Meadowbank.
AISC for 2025 is forecast at US$1250-1300/oz, up 3% year-on-year due to lower grade sequence at Fosterville, Canadian Malartic and Meadowbank, along with modest forecast cost increases in labour, spare parts and maintenance.
Cost guidance does not include any potential impact from tariffs on Canada announced by the US.
Al-Joundi promised the company would remain laser-focused on cost control.
Agnico remains “very constructive” on the outlook for the gold price.
“We don’t have a crystal ball, but I would argue all of the elements that have pushed gold up over the last 20 years not only remain in place, but are accelerating,” Al-Joundi said.
Growth accelerating
Capital expenditure in 2025 will rise to US$1.75-1.95 billion due to the advancement of pipeline projects, including Odyssey, the Detour Lake underground project, the Upper Beaver project and Hope Bay.
“We’ve got the best pipeline I’ve ever seen in 25 years in the business,” Al-Joundi said.
Once the Canadian Malartic complex transitions fully to underground, expected in 2029, the mill will have excess capacity of around 40,000t per day.
The company is working on several opportunities to fill the mill, including a second shaft at Odyssey and underground mine at Wasamac.
The takeover of O3 Mining and its Marban project had the potential to contribute 15,000tpd to the mill from 2033.
Al-Joundi spoke of Agnico’s “extraordinary” vision to get Malartic to 1Moz of gold per annum in the 2030s.
“There’s nothing ordinary about a million ounce per year mine,” he said, adding that it would give the company two of the six biggest mines in the world.
“We think that is extraordinary.”
Exploration success
Agnico’s gold reserves increased by 0.9% to 54.3Moz of gold at 1.32 grams per tonne gold, a record for the company.
Innovation and productivity in exploration reduced costs by around 8%.
The company also reported 79.2Moz in resources, including an initial resource of 900,000oz of gold at 6.64g/t gold for Patch 7 at Hope Bay.
The Company believes these results suggest the potential for a larger production scenario and they are being integrated in the internal technical evaluation of the Hope Bay project, which is expected to be completed in the first half of 2026
Agnico expects to spend US$290-310 million on capitalized and expensed exploration in 2025, and US$215-235 million for exploration project expenses, studies and other corporate development expenses.
“All of that spend is justified by some of the best results in the business,” Al-Joundi said.
Room for further share price growth?
Agnico was the best-performing senior gold miner in 2024, with its share price more than doubling.
“Certainly, our share price performed well over the past year, but let's face it, gold prices are up US$1000 an ounce, and as the gold prices went up US$1000 an ounce, we controlled our costs, which means we expanded margins, and we actually delivered substantially increased margins to our owners,” Al-Joundi said.
“So of course, the share price went up – it should have gone up, and it did go up. So, the real question is, is there room for the share price to go up even more?
“Looking forward, frankly, I'm not allowed to talk about future earnings. However, we've given guidance on production, and you all know what the spot price is.
“At current spot prices and given our production guidance, you can do the math. It suggests annual revenue of about US$10 billion, which means that Agnico Eagle is trading at around five times revenue. That's not a crazy multiple. In fact, one could argue that's a low multiple, both in the gold and in other industries.”
Al-Joundi said the mid-point of the company’s total cash cost guidance of US$940/oz and the current gold price implied “pretty good” margins of around US$2000/oz.
“At the same time, we see potential growth in ounces per share. We're buying back stock, we're strengthening the balance sheet,” he said.
“So, have we performed well? Yes. Has the market rewarded us and our owners for that? Yes. Are we priced to perfection? No. I think we're priced for what we've delivered, and we have a lot of room going forward to continue to grow and to add value.”