Agnico Eagle Mines (TSX: AEM) posted third quarter net income of US$1.35 billion, or US$2.67 per share. Free cash flow fell to US$852 million, down 36% from the record US$1.34 billion it generated three months earlier, as lower output, heavier capital spending and a seasonal inventory build all weighed on the quarter.
Second quarter net income had come in at US$1.60 billion, or US$3.19 per share. Adjusted net income declined to US$1.32 billion, or US$2.62 per share, from US$1.54 billion, or US$3.07 per share in the prior quarter.
Adjusted EBITDA slipped to US$2.47 billion from US$2.74 billion, with the realized gold price easing to US$4,264 per ounce from US$4,483.
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Operating cash flow totalled US$1.76 billion, compared with US$2.14 billion in the prior quarter. About US$205 million of that gap came from working capital, largely diesel and supplies stockpiled during the annual Nunavut sealift. Capital expenditures rose to US$921 million from US$801 million as construction at Hope Bay picked up pace.
The balance sheet barely moved. Cash rose by US$149 million to US$3.61 billion, total debt held at US$197 million, and net cash climbed to US$3.42 billion. After quarter end, the miner expanded its revolving credit facility to US$3 billion from US$2 billion.
Shareholder returns totalled US$478 million during the quarter, including US$250 million in buybacks, down from US$625 million in the second quarter. The company now expects to return more than 50% of 2026 free cash flow to shareholders, up from the roughly 40% target it laid out in July.
Payable gold production came to 814,012 ounces, down 5% from 855,816 ounces in the second quarter. The company said the result was in line with its adjusted mine plan following the July rock mass movement at the Barnat open pit at Canadian Malartic.
Unit costs moved higher. Total cash costs rose to US$1,133 per ounce from US$1,054, while all in sustaining costs climbed to US$1,648 per ounce from US$1,459. That puts the quarter’s AISC above the top of the full year range. Diesel was the main pressure point, with Nunavut sealift fuel bought at prices 45% above budget. At the realized gold price, the quarter still produced a margin of more than US$2,600 per ounce.
Year to date production stands at 2.49 million ounces. To reach the bottom of its 3.3 million to 3.5 million ounce guidance range, the company needs roughly 805,000 ounces in the fourth quarter, roughly what it produced in the third quarter. Agnico continues to expect output near the low end of that range.
The cost outlook has shifted since July, when guidance was simply reiterated. Total cash costs and AISC are now expected near the upper end of their ranges of US$1,020 to US$1,120 and US$1,400 to US$1,550 per ounce, respectively.
Chief Executive Officer Ammar Al-Joundi said the company remains “on track to achieve our full year guidance” despite inflationary pressures.
Agnico Eagle last traded at $256.08 on the TSX.
