27 October 2021
(All amounts expressed in U.S. dollars unless otherwise noted)
Stock Symbol: AEM (NYSE and TSX)
TORONTO, Oct. 27, 2021 /CNW/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") today reported quarterly net income of $114.5 million, or net income of $0.47 per share, for the third quarter of 2021. This result includes non-cash mark-to-market losses on warrants of $15.6 million ($0.06 per share), derivative losses on financial instruments of $10.7 million ($0.05 per share), foreign currency translation losses on deferred tax liabilities and non-recurring tax adjustments of $8.8 million ($0.04 per share), non-cash foreign currency translation gains of $6.5 million ($0.03 per share) and various other adjustment losses of $2.3 million ($0.01 per share). Excluding these items would result in adjusted net income1 of $145.4 million or $0.60 per share for the third quarter of 2021. For the third quarter of 2020, the Company reported net income of $222.7 million or net income of $0.92 per share.
Included in the third quarter of 2021 net income, and not adjusted above, is a non-cash stock option expense of $3.9 million ($0.02 per share).
In the first nine months of 2021, the Company reported net income of $440.2 million, or net income of $1.81 per share. This compares with the first nine months of 2020, when net income was $306.4 million, or net income of $1.27 per share.
The decrease in net income in the third quarter of 2021, compared to the prior-year period, is primarily due to lower operating margins2 (lower average realized metal prices and higher production costs, partially offset by higher sales volumes), unrealized losses for non-cash items related to mark-to-market adjustments on financial instruments, higher amortization of property, plant and mine development from higher production volumes and the contribution of the Hope Bay mine and higher exploration expenses, partially offset by foreign exchange gains.
The increase in net income in the first nine months of 2021, compared to the prior-year period, is primarily due to higher operating margins (from higher sales volumes and higher average realized metal prices), partially offset by unrealized losses for non-cash items related to mark-to-market adjustments on financial instruments owned by the Company, higher amortization of property, plant and mine development from higher production volumes and the contribution of the Hope Bay mine, higher exploration expenses and higher income and mining taxes driven by higher operating margins.
In the third quarter of 2021, cash provided by operating activities was $291.0 million ($413.6 million before changes in non-cash components of working capital), compared to the third quarter of 2020 when cash provided by operating activities was $462.5 million ($434.4 million before changes in non-cash components of working capital).
In the first nine months of 2021, cash provided by operating activities was $1,054.3 million ($1,261.0 million before changes in non-cash components of working capital), compared to the first nine months of 2020 when cash provided by operating activities was $788.5 million ($824.3 million before changes in non-cash components of working capital).
The decrease in cash provided by operating activities (before changes in non-cash components of working capital) in the third quarter of 2021, compared to the prior-year period, is primarily due to a decrease in mine operating margins that resulted from the reasons described above.
The increase in cash provided by operating activities in the first nine months of 2021, compared to the prior-year period, is primarily due to an increase in operating margins that resulted from the reasons described above, partially offset by higher cash taxes related to the higher mine operating margins and payments for taxes related to the 2020 tax year in the first quarter of 2021.
"Another strong quarterly operating performance, including record gold production, continues to demonstrate our ability to optimize our assets and steadily grow output over the next several years. During the quarter, the Abitibi and Meliadine mines continued to be key drivers to the Company's ongoing operational success," said Sean Boyd, Agnico Eagle's Chief Executive Officer. "These strong production platforms will be integral components in the proposed merger of equals with Kirkland Lake Gold, which was announced late in the quarter. The combination is expected to unlock additional value through the realization of significant operational synergies while creating a low risk global gold mining leader with growing production and gold reserves, increased operating cash flow and the financial resources and long-life assets to maintain a high-quality sustainable business while increasing capital distributions to shareholders," added Mr. Boyd.
(Read the lengthy and comprehensive release through link below.)