Agnico-Eagle Mines Should Be Ready to Fly
Although Agnico-Eagle Mines Limited (AEM) has climbed steadily since August and we still expect to see AEM trading at $100+, it remains a bit of a puzzle to us that the old bird isn’t trading much higher than it is. A number of our peers are expecting the miners to take off as the earnings, turnover and profits, based on much higher gold prices can no longer be ignored. Well, we hope that they are correct as Agnico forms a major part of our portfolio.
However, this is not the 1980’s and there are many other ways to get involved in this market as we all know. Still, back to the chart where we can see that the volume is dropping off a tad, but the crossover on the MACD is a positive sign for AEM, so we will hold and observe for now.
Agnico-Eagle is a Canadian-based gold producer with operations in Canada, Finland and Mexico, and exploration and development activities in Canada, Finland, Mexico and the U.S. [The] LaRonde mine is Canada’s largest operating gold mine in terms of reserves. Agnico-Eagle has full exposure to higher gold prices consistent with its policy of no-forward gold sales. It has paid a cash dividend for 28 consecutive years.
Agnico remains one of our favorite companies and forms a large part of our core holdings with the Silver Wheaton Corporation (SLW) being the largest single investment that we hold.
Agnico-Eagle has now developed five new mines in three years, increased gold production by more than 300%. The company appears to be well set up to continue to grow output through internal development of current projects and ongoing exploration activities. There is also the potential of acquisitions, joint ventures and partnerships to add a little spice to Agnico’s progress. The target for 2010 is still 1.0 million ozs.
Agnico-Eagle Mines Limited trades on the NYSE under the ticker symbol of AEM and on the Toronto Stock Exchange under the symbol of AEM.TO.
Agnico-Eagle has a market capitalization of $13.98 billion, a 52-week trading range of $49.64 - $84.21, a rather high P/E ratio of 46.69 on volume of 1-2 million shares traded per day.
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