Agnico Eagle (NYSE:AEM, TSX:AEM) reported on Thursday a quarterly net loss of $21.6 million or $0.09 per share for Q1 2020, compared to a net income of $37 million in Q1 2019.
The miner said gold production for 2020 is expected to be 1.63 to 1.73 million ounces, compared to withdrawn guidance of 1.875 million ounces.
Gold production in the first quarter was 411,366 ounces at production costs per ounce of $872, affected by a nine-day shutdown of the company’s Quebec operations and significantly reduced mining activities in Nunavut since March 19, related to covid-19 precautionary measures.
Agnico expects production to gradually ramp up in Quebec, Mexico and Nunavut in the second quarter of 2020 and average approximately 480,000 to 500,000 ounces per quarter in the second half of 2020.
“The first quarter of 2020 was challenging given the global covid-19 pandemic and its impact on our gold production and unit costs in March as operations were reduced to minimum activities at all five of our Canadian mines,” said CEO Sean Boyd in the media release.
The previous gold production guidance for 2021 and 2022 remains unchanged with a mid-point of 2.05 million and 2.10 million ounces, respectively.
“We expect to have a strong second half this year with quarterly gold production expected to return to levels similar to the fourth quarter of 2019,” said Boyd.
“Despite the temporary shutdowns required, substantial progress was made in the first quarter at our LaRonde, Meliadine and Amaruq operations. As a result, we expect to have a strong second half this year with quarterly gold production expected to return to levels similar to the fourth quarter of 2019.”
“Given the strong gold price and much weaker local currency environment than budgeted, we anticipate generating significant free cash flow in the second half of 2020. Our dividend has remained unchanged and we declared a quarterly dividend of $0.20 per share,” added Boyd.
Agnico said costs relating to the temporary suspension of operations were $2.3 million.
At midday Tuesday, Agnico’s stock was up 2.78% on the NYSE. The company has a $14.5 billion market capitalization.