Agnico Eagle keeps 2026 target despite 370,000-ounce loss

Agnico Eagle Mines (TSX, NYSE: AEM), the world’s second-largest gold producer, kept its 2026 production guidance of 3.3 million to 3.5 million ounces this week despite a pit wall movement at its Canadian Malartic complex in Quebec that permanently removed 370,000 ounces. from its mine plan.

Management said it still expects production to fall within the guidance range, albeit toward the lower end, and reaffirmed plans to grow company-wide output by 20%-30% over the next decade through a pipeline of development projects.

The company produced 856,000 oz. of gold in the second quarter, exceeding budget for a second straight period while keeping cash costs and all-in sustaining costs within guidance. Record free cash flow of more than $1.3 billion supported adjusted net income of about $1.5 billion, or $3.07 per share, and adjusted EBITDA of about $2.7 billion.

Agnico ended the quarter with a record $3.5 billion in cash and a net cash position of about $3.3 billion after returning $625 million to shareholders through dividends and share buybacks.

“My colleagues and I are pleased to report another strong quarter with not only record free cash flow generated by our operations, but also record capital returns to our shareholders,” CEO Ammar Al-Joundi said in a conference call discussing results.

Management said production remains on track for 3.3 million to 3.5 million oz. in 2026, although it now expects results to land near the lower end of that range after a July 1 rock movement at the Barnat pit. The company expects to resume mining in the fourth quarter by processing lower-grade stockpiles in the meantime.

Growth intact

Despite the operational setback, Agnico continued to emphasize its long-term growth strategy. The company approved development of the Hope Bay project, expected to produce 450,000 oz. annually for decades, while completing acquisitions of Rupert Resources, Aurion Resources and the Fingold joint venture to consolidate its Finnish platform.

Management said five key development projects remain the foundation for targeted production growth of 20%-30% over the next decade, noting that guidance does not yet include the benefits of the Finland consolidation.

“We are still able to forecast 2026 production within our original guidance range of 3.3 million to 3.5 million ounces, albeit towards the lower end of that range,” Al-Joundi said.

Analysts focused much of the discussion on the Barnat pit, where management confirmed 370,000 oz. are no longer recoverable, including 60,000 to 80,000 oz. in 2026 and about 150,000 oz. in each of 2027 and 2028.

Questions also centred on inflation, permitting and project execution, with management cautioning it is too early to revise longer-term cost expectations while forecasting labour inflation of 3%-4% and identifying diesel as a potential cost pressure in 2027.

Management also highlighted it is accelerating the implementation of critical safety controls and strengthening supervision across the company while stressing that every fatality is unacceptable.