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Sean Boyd, president and CEO of Agnico-EagleDeborah Baic/The Globe and Mail

The price of gold is erratic, myriad gold miners are in the dumps, and investors keep asking themselves: is this the time to buy?

This is the insane reality of the gold industry. Just look at Barrick Gold Corp. Its stock hasn't seen this price range since 2000, the year U2 released 'Beautiful Day' and the world learned of 'Country Grammar.' There's got to be value in there , investors say.

It turns certain miners are saying the same thing. Some producers have fared better than others, and that has enticed them to scope out some opportunities.

Case in point: Agnico-Eagle. The venerable gold miner has struck three small purchases in just over a month.

The deals aren't massive takeovers, so it's not like management is putting a lot on the line, but they're staying true to the company's roots. In an interview, chief executive Sean Boyd said about three-quarters of Agnico's current reserves came from scooping up small stakes in juniors.

"We think the valuations are very attractive and now is the time to be doing these things," Mr. Boyd said.

The latest deals involved cheques amounting to between $5-million and $24-million. Just last week Agnico acquired a 14 per cent stake in Kootenay Silver Inc. for $5-million. Earlier in April the company bought 16 per cent of Sulliden Gold Corp. for $24-million. And in late March Agnico took a 12 per cent position in ATAC Resources for $13-million. (The size of these stakes all assume that Agnico's warrants in each deal are exercised.)

"This is, despite the volatility, a time of opportunity, and we've been on record saying it's not a time to sit on your hands, because you have to think about this business long-term," he added, noting that Agnico has struck six deals in eight years.

Referring to the three-quarters of reserves that initially came from acquiring small stakes, he said: "We didn't go out and physically buy all of those ounces, we bought projects that we expanded sometimes four and fivefold to give us those ounces. So, it clearly works." The most obvious example: Agnico's Kittila underground mine in Finland, which produced 176,000 ounces of gold in 2012.

To understand just how cheap the latest deals came, Agnico announced its Sulliden stake when the stock traded at 84 cents. In 2011 the shares were worth $2.66 each. And the Kootenary position was announced when the stock traded at 71 cents, about half of it post-crisis peak of $1.35.

This doesn't mean the latest deals will translate into major wins for Agnico. The company also has a history of selling off some of its stakes, such as its decision to unload its stake in Queenston Mining when Osisko Mining bought the entire company.

Mr. Boyd said we could see more of that, noting that there's been a "moderate increase" in the overall size of his portfolio and that "we still have some restructuring to do in the… back end of the portfolio."

(Tim Kiladze is a Globe and Mail Reporter.)

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 13/06/24 3:59pm EDT.

SymbolName% changeLast
ABX-T
Barrick Gold Corp
-1.96%22.06
AEM-T
Agnico Eagle Mines Ltd
-2.35%87.97
KTN-X
Kootenay Silver Inc
-11.11%1.04
OSK-T
Osisko Mining Inc
-1.32%2.99

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