Agnico Eagle Withdraws 2020 View Amid Coronavirus Pandemic
Zacks Investment Research | Mar 26, 2020 08:18AM ET
Agnico Eagle Mines Limited (NYSE:AEM) has provided an update on its Quebec and Nunavut operations in response to the coronavirus outbreak.
Per the company’s discussion with the government of Quebec, Agnico Eagle will ramp down its operations in the Abitibi region of Quebec, which includes the Goldex mine, the LaRonde Complex and the Canadian Malartic mine (50% interest). The company is expected to place each of these operations under care and maintenance until Apr 13, 2020, with minimal work taking place during this period.
Additionally, Agnico Eagle will lower activities at the Meliadine and Meadowbank mining operations in Nunavut. In Canada, exploration activities are also likely to be suspended during the period.
Considering the lower production activities at the Quebec and Nunavut operations along with future uncertainties, the scope and severity of the coronavirus outbreak, the company is withdrawing its 2020 production and costs guidance. Agnico Eagle expects payable gold production to be around 400,000 ounces in the first quarter. However, gold sales may be potentially affected by transport and refining headwinds.
Given the uncertainties surrounding the pandemic, the company has drawn down $1 billion from its $1.2 billion unsecured revolving bank credit facility earlier this month. While Agnico Eagle has expressed no intentions to use the funds, it may use a portion to repay part of the $360 million 6.67% series B notes due April 2020. Also, the company will review its 2020 sustaining and growth capital budget with the objective to lower expenditures.
Agnico Eagle’s shares have lost 6.9% in the past year against the Original post
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