Agnico Eagle Mines LtdAEM

Morningstar Rating

Stock Research and Analysis

by Morningstar Equity Analysts

Agnico-Eagle has fallen on hard times after enjoying several years at the head of the gold-mining class as the firm brought five new gold mines on line between 2008 and 2010. Despite its near-term setbacks, though, we have confidence that management Read more

Bulls Say

The company has achieved rapid growth during the last few years, increasing its gold output from roughly 230,000 ounces in 2007 to more than 1 million ounces in 2012.

All of Agnico's producing assets are in the relatively stable and mining-friendly countries of Canada, Finland, and Mexico.

Gold companies tend to be countercyclical. They also provide an excellent hedge to inflation risk. Read more

Bears Say

Agnico's newer mines on average exhibit higher production costs than original flagship mine LaRonde. As a result, bringing the newer mines on line has deteriorated the firm's cost position (on a byproduct basis) closer to the industry average.

The challenges of operating in the extreme remoteness and cold of the Canadian Arctic are leading to lower-than-expected gold production and significant cost inflation at the firm's Meadowbank mine.

Investors looking for gold exposure can skirt company-specific risk by investing in gold-backed exchange-traded funds. Read more

Management

We believe that Agnico's management team has done a good job for the most part in operating the company and taking care of shareholders. CEO Sean Boyd has been with the firm for more than 15 years and has served in his current position since 2005. Under Read more

Profile

Agnico-Eagle Mines is a midtier gold miner operating five mines in Canada, Mexico, and Finland. The company operated just one mine, LaRonde, as recently as 2008 before bringing Read more