John Rubino is a former Wall Street financial analyst and author or co-author of five books, including The Money Bubble: What to Do Before It Pops and Clean Money: Picking Winners in the Green-Tech Boom. He founded the popular financial website DollarCollapse.com in 2004, sold it in 2022, and now publishes John Rubino’s Substack newsletter.
Agnico Eagle, generally seen as the best-run senior gold miner, just reported blow-out earnings:
(Kitco News) – Another quarterly earnings report means another record broken for Canada’s largest gold producer.
On Thursday, after the North American equity close, Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) reported first-quarter net income of $815 million, or $1.62 per share, and record adjusted net income of $770 million, or $1.53 per share.
Agnico significantly beat analyst expectations, as consensus forecasts called for average earnings per share of $1.38.
“We’ve had an excellent start to the year with another quarter of strong operating and financial results. This performance has allowed us to further strengthen our balance sheet and has positioned us well for the remainder of the year,” said Ammar Al-Joundi, Agnico Eagle’s President and Chief Executive Officer. “We remain focused on execution and cost control to continue delivering expanding operating margins in a rising gold price environment. This enables us to reinvest in the business through exploration and the advancement of our five key pipeline projects, while continuing to strengthen our financial position and increase returns to shareholders.”
The company said it generated cash provided by operating activities of $1,044 million, or $2.08 per share, and reported free cash flow of $594 million, or $1.18 per share.
The company’s earnings were driven by significantly higher gold prices, along with stable production and costs. It saw average realized gold prices of $2,891 per ounce, up significantly from last year’s first-quarter average price of $2,062 per ounce.
The Canadian producer has also been able to keep its costs under control. Agnico said its production costs per ounce in the first quarter were $879, with total cash costs per ounce of $903 and all-in sustaining costs (AISC) per ounce of $1,183.
Looking ahead, Agnico said it is well-positioned to achieve its 2025 gold production guidance of approximately 3.3 to 3.5 million ounces. At the same time, the company expects to maintain its cash cost per ounce guidance of $915 to $965 and its 2025 AISC per ounce guidance of $1,250 to $1,300.
With its increased cash position, Agnico declared a quarterly dividend of $0.40 per share. The company also said it plans to increase its share buyback program to $1 billion. It repurchased 488,047 common shares during the quarter at an average share price of $102.44, for an aggregate consideration of $50 million.
Industry-wide, this sudden burst of cash flow is turbo-charging M&A:
(Katusa Research) – The feeding frenzy we predicted just erupted.
Over $1 billion in gold acquisitions announced in a single week. Premium takeovers surging as high as 71% above market price.
Why This MATTERS Now
With gold hovering above $3,300 per ounce, the acquisition math has fundamentally changed.
Projects that struggled at $1,600 gold now generate extraordinary margins.
And gold majors are on a buying spree…
Triple Flag just announced they’re buying Orogen Royalties for C$421 million.
I first wrote about Orogen at C$0.85 per share.
Triple Flag is paying C$2.00 per share – a 38% premium to market and a 135% gain from our original entry point.
Why such a rich premium?
Simple: Orogen’s 1% royalty on AngloGold Ashanti’s Expanded Silicon project in Nevada. With 16+ million ounces (and growing), it’s the largest new gold discovery in the United States in over a decade.
It’s a world-class deposit, but only miners would come up with a name like “Expanded Silicon”. Ugh.
And That’s Not All…
China’s CMOC announced they’re acquiring Lumina Gold for C$581 million.
That deal happened at a 71% premium to Lumina’s 20-day average price.
After 10+ years developing the Cangrejos project from nothing into one of the largest gold projects globally, Lumina’s management team cashed in big. And they’re not alone.
We first discussed the potential of Lumina years ago with our subscribers.
Let me be crystal clear: This is exactly what the beginning of a sector-wide consolidation wave looks like.
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