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Agnico Eagle (AEM) Suspends Mining Operations in Mexico

Agnico Eagle Mines Limited AEM has provided an update on its Mexico operations in response to the coronavirus outbreak.

Pursuant to the government of Mexico's decree, the company is ramping down its mining operations in Mexico, which includes Pinos Altos, Creston Mascota and La India.

Notably, Agnico Eagle is expected to place each of the operations under care and maintenance until Apr 30, 2020. Additionally, the exploration activities will be suspended during the same period in Mexico. Agnico Eagle expects the actions to allow for the timely and safe restart of normal operations once the decree is lifted.

The company’s shares have gained 2.1% in the past year compared with the industry’s 23.6% growth.

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In the last month, Agnico Eagle said that it is withdrawing its 2020 production and costs guidance in view of the lower production activities at the Quebec and Nunavut operations along with future uncertainties, the scope and severity of the coronavirus outbreak. The company expects payable gold production of around 400,000 ounces for the first quarter. However, gold sales may be potentially affected by transport and refining headwinds.

Given the uncertainties surrounding the pandemic, it has also drawn down $1 billion from its $1.2-billion unsecured revolving bank credit facility in March. While Agnico Eagle has expressed no intentions to use the funds, it may use a portion to repay part of the $360 million of 6.67% series B notes due April 2020. Also, the company will review its 2020 sustaining and growth capital budget to lower expenditure.

Agnico Eagle Mines Limited Price and Consensus

 

Agnico Eagle Mines Limited Price and Consensus
Agnico Eagle Mines Limited Price and Consensus

Agnico Eagle Mines Limited price-consensus-chart | Agnico Eagle Mines Limited Quote

Zacks Rank & Stocks to Consider

Agnico Eagle currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Harmony Gold Mining Company Limited HMY, Franco-Nevada Corporation FNV and Barrick Gold Corporation GOLD.

Harmony Gold has a projected earnings growth rate of 185.7% for 2020. The company’s shares have gained 3.9% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada has a projected earnings growth rate of 22% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 42.8% in a year.

Barrick Gold currently has a Zacks Rank #2 and a projected earnings growth rate of 41.2% for 2020. The company’s shares have surged 47.5% in a year.

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