Agnico Eagle Earnings: Higher Gold Prices and Cost Control Drive Another Solid Result

No-moat Agnico Eagle’s 2024 second-quarter result was better than we expected. While sales volumes of about 870,000 ounces were a modest 2% higher than a year ago and similar to the prior quarter, elevated gold prices and cost control were highlights. The 1.75 million ounces sold in the first half means it is on track to meet our unchanged forecast for sales volumes of about 3.45 million ounces in 2024, the midpoint of production guidance, which Agnico reiterates. Its average realized gold price rose by 19%. This is a headwind for unit costs, as higher prices increase royalties payable on each ounce of gold sold. However, Agnico’s all-in sustaining costs (including byproduct credits) of about USD 1,170 per ounce for the quarter were a modest 2% higher than last year, helped by a weaker Canadian dollar.