Agnico Eagle Mines Ltd (AEM)

[Sam Dan]

Interesting take on EAM and falling price of oil

Agnico Eagle Mines Inc. (AEM : TSX : C$28.43) - Buy - Target:C$46.00
Re-shuffling the deck; reiterate BUY rating and lower target price to C$46.00 (from C$52.00)
Investment recommendation Agnico's acquisition of Cayden (El Barqueno project) is now closed, continuing AEM's track record of accretive acquisitions. The Amaruq discovery continues to impress as a potential source of high grade feed for operations at Meadowbank, and possibly as a stand-alone asset. A consequence of the emergence of these two development opportunities, and a potential preference for debt repayment in a lower gold price environment, is that Meliadine may see some slippage (one to two years) in the development queue. We have revised our target from C$52 to C$46 (-12%) to reflect a lower gold price assumption partly offset by value accretion at Amaruq and El Barqueno. We reiterate our Buy rating and preference for AEM shares. AEM is becoming a bona fide exploration story again. Investment highlights Over the last few months, we adjusted lower our forward curve for gold by 9% and silver by 19% and revised lower our target prices for the larger gold producers by 1
6%. The $170m Cayden acquisition increased our NAV $385m.