AEM - Agnico Eagle plunges to three-month low after warning on higher 2023 costs

Agnico Eagle Mines ( NYSE: AEM ) -8.2% to a three-month low in Friday's trading despite reporting record full-year gold production, after reporting in-line Q4 adjusted earnings that included weaker than expected production guidance and higher costs.

Q4 net income doubled to $205M, or $0.45/share, from $101.4M, or $0.41/share, in the year-ago quarter, primarily due to higher mine operating margins from higher sales volumes following the merger and gains from derivative financial instruments.

Q4 payable gold production surged 59% to 799,438 oz from 501,932 oz in the prior-year period.

Agnico Eagle ( AEM ) guided for FY 2023 payable gold production of 3.24M-3.44M oz from 3.28M oz in 2022, with total cash costs and all-in sustaining costs in 2023 forecast at $840-$890/oz and $1,140-$1,190/oz, respectively.

Previous FY 2023 guidance had pointed to cash costs of $725-$775/oz and AISC of $1,000-$1,050 oz.

The miner said the expected cost increases are due mostly to inflationary pressures on labor, electricity, fuel and consumables; it expects some easing on input costs later in 2023 and, combined with increased gold production, believes unit costs will turn lower in 2024 and 2025.

Agnico Eagle Mines ( AEM ) shares have lost 15% so far this year and 13% during the past year .

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