Agnico-Eagle reports record fourth quarter 2007 results
Agnico-Eagle reports record fourth quarter 2007 results Wednesday February 20, 4:05 pm ET Stock Symbol: AEM (NYSE and TSX) (All amounts expressed in U.S. dollars unless otherwise noted)
TORONTO, Feb. 20 /PRNewswire-FirstCall/ - Agnico-Eagle Mines Limited ("Agnico-Eagle" or the "Company") today reported record quarterly net income of $65.2 million, or $0.46 per share for the fourth quarter of 2007. This result includes a gain of $29.8 million, or $0.21 per share, on the reduction of income tax rates. In the fourth quarter of 2006, the Company reported net income of $41.9 million, or $0.35 per share. Earnings per share in the fourth quarter of 2007 were diluted by the issuance of approximately 6.9 million common shares on the exercise of the Company's outstanding warrants and the issuance of 13.8 million shares earlier in the year in connection with the acquisition of Cumberland Resources Ltd. Fourth quarter cash provided by operating activities decreased to $43.3 million from $84.5 million in the fourth quarter of 2006, due to lower byproduct metal prices and working capital movements.
"Record financial results were achieved this quarter as we prepare to open the first of our five new gold mines in April," said Sean Boyd, Vice-Chairman and Chief Executive Officer. "In addition, with our Kittila mine in Finland set to open this September, our gold output in 2008 is expected to rise more than 50% from the 2007 level," added Mr. Boyd.
Fourth quarter 2007 highlights include:
- Strong Operating Results - steady metal output and cost control contributed to record operating earnings and strong cash flow - Low Costs - Low total cash costs per ounce(1) at LaRonde of minus $184 - Progress On Gold Production Growth - new gold mines, Goldex and Kittila, on track for 2008 openings - Significant Exploration Upside - continuing to receive ore-grade intersections over mineable widths outside of currently known reserve/resource envelopes at Pinos Altos, Kittila, and Meadowbank - Rewarding Shareholders - 50% increase to annual dividend announced
For the full year 2007, the Company recorded net income of $139.3 million, or $1.05 per share. In 2006, Agnico-Eagle recorded net income of $161.3 million, or $1.40 per share.
Full year 2007 earnings were negatively affected by lower realized prices for zinc and copper, and lower payable production for gold, silver and zinc. The lower production rates were largely the result of the mining of additional tonnes of low-grade zinc ore during the year due to historically high zinc prices. The resulting deferral of ore has resulted in an extension of the mine life by at least two years. Full year 2007 earnings per share were also diluted by the previously mentioned 13.8 million shares issued to acquire Cumberland Resources Ltd. and the 6.9 million shares issued in connection with the warrant exercise.
For 2007, the Company recorded cash provided by operating activities of $229.2 million. This is substantially the same as 2006 when cash provided by operating activities totaled $226.3 million. The small increase in cash provided by operating activities was due to working capital movements, offset partly by lower realized byproduct metal prices.
The Company's financial position remains strong with cash and cash equivalents of $396.0 million at December 31, 2007 and a substantially undrawn, unsecured, $300 million five year credit facility. The Company's cash position decreased $31.6 million in the fourth quarter largely due to the $197.6 million invested in the Company's gold growth projects.