67 WALL STREET, New York - December 13, 2013 - The Wall Street Transcript has just published its Gold and Precious Metals Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Precious Metals - Lower Gold Price Environment - Precious Metals Exploration and Production - Increasing Capital Expenditures - Emerging Markets Silver Consumption - Mining Safety and Environmental Concerns - Gold Production Cost Structures - Gold Price Stabilization
Companies include: Agnico-Eagle Mines Ltd. (AEM) and many more.
In the following excerpt from the Gold and Precious Metals Report, the President, CEO and Director of Agnico Eagle Mines Limited (AEM) discusses company strategy and the outlook for this vital industry:
TWST: I know that Agnico Eagle has been unusually generous with its dividend payouts to shareholders. How is it that the company been able to keep up with that in the face of falling gold prices, and what can shareholders expect going forward?
Mr. Boyd: It's been priority for us, and so we have paid a cash dividend for 31 consecutive years, which is quite unusual in the gold business. So in order to do that in a volatile industry, it's clearly been a priority for us for a number of years. Our ability to pay a dividend is essentially based on the price of gold, so the price of gold will determine what we can afford to pay. However, as we've grown the business and the production base over the last several years, we've able to see an increase in that dividend. So you can't really comment on the future direction of the dividend, except that the gold price is the key determinant for what we're able to pay.
TWST: What do you see as the most significant headwinds or challenges that the company might face going forward, and where might you find support?
Mr. Boyd: I think the gold price for the entire industry. The gold price peaked in 2011, so a couple years ago it was at over $1,900. Recently it's trading a little over $1,200, that's a significant drop in the price of gold. At the same time, the industry's costs have risen over the last few years with the exception of the last couple of quarters, where the industry cash costs to produce an ounce of gold appeared to have peaked and are now starting to come down a bit.
So really the uncertainty around the industry relates to the future direction of the gold price, and as far as Agnico Eagle's position in the industry, we have mines that are currently producing gold that will drive production up over the 1.2 million ounce mark on an annual basis, so that's about 20% growth rate from where we were last year. And that's a good position to be in - in a tough gold price environment and still be able to grow your gold production. And we've seen a significant drop in our cash costs to produce an ounce of gold in the last quarter based on the record production.
TWST: What are your growth plans, and what is your strategic focus for the company going forward? Do you see any M&A activity ahead?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
- Basic Materials Industry
- Commodity Markets
- Agnico Eagle Mines Limited