Agnico-Eagle is about to report earnings. Here is the Bear Case Scenario
New mines exhibit higher production costs than the original flagship mine LaRonde. Resulting in newer mines coming on line deteriorating the firm’s cost position (on a byproduct basis) closer to the industry average.
Challenges of operating in the extreme remoteness and cold of the Canadian Arctic are leading to lower-than-expected gold production and significant cost inflation at the firm’s Meadowbank mine. Surprise this is the Artic.
Investors can always by-pass the corporate exposure and just buy the commodity.
George Gutowski writes from a caveat emptor perspective.