Agnico-Eagle CEO Sean BoydDeborah Baic/The Globe and Mail
Agnico-Eagle Mines Ltd. has room to increase its dividend even after the gold miner more than tripled its payment to shareholders last year, chief executive officer Sean Boyd says.
"Given how our assets are positioned and the growth that we anticipate from those existing assets over the next several years, we believe there's still room to increase the dividend more," Mr. Boyd said Thursday.
Agnico increased its dividend in December to a quarterly payment of 16 cents a share - from an annual payment of 18 cents - for a total of 64 cents a year. The move came as the company ramped up production and benefited from a soaring gold price.
With its coffers quickly filling, Agnico-Eagle is well positioned for growth, Mr. Boyd said, who added the company is on track to boost production 50 per cent over the next few years.
"We're going to continue with the same approach that we have used successfully in the last five years in transforming the company and that's to look for those earlier-stage opportunities, those development-type assets that we can use our exploration and mine-building expertise to move along and create value," Mr. Boyd said.
Agnico-Eagle reported Wednesday a fourth-quarter profit of $88-million (U.S.) or 51 cents a share for the quarter ended Dec. 31. That compared with a profit of $47.9-million or 30 cents booked during the same period in 2009.
Revenue from mining operations surged during the quarter to $439-million from $225.6-million.
Quarterly gold production totalled 256,469 ounces, Agnico-Eagle said, adding full-year production doubled to 987,609 ounces. However, that came in just shy of the company's production guidance and investors sold off shares. The stock closed down 4.8 per cent on the Toronto Stock Exchange Thursday.
Scotia Capital analyst David Christie noted the company missed both his and the average analyst estimate for earnings of 61 cents a share.
"Higher operating costs are mostly to blame for this miss," Mr. Christie wrote in a brief note to clients.
The lower-than-expected production was due to hiccups at the company's Meadowbank mine in Nunavut where commercial production began last March. Mr. Boyd said the company will be able to increase crushing capacity at the mine in the third quarter of this year and that should resolve the issue. "That's not a fatal issue for the mine," he said.
Last October, Agnico-Eagle took a 9-per-cent stake in junior miner Queenston Mining Inc. through a $35-million investment.
Mr. Boyd said in December the company could look to make two or three new investments of between $20-million and $50-million.
Toronto-based Agnico-Eagle has operations in Canada, the United States, Mexico and Finland.