Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Gold Prices
Gold Price
[Most Recent Quotes from www.kitco.com]
Our RSS Feed

Gold Updates by Mail

Enter your email address:

Follow Us on Twitter
« US Gold Corp | Main | Dow Jones Gold Ratio »
Sunday
Jun252006

Agnico-Eagle Mines Ltd

Agnico-Eagle Logo


You should never fall in love with a stock but this is one of our favourites. We first bought this stock in 1982, and have traded it ever since then. Despite a twenty-year bear market in gold they not only survived but also managed to pay a dividend every year, which is a remarkable achievement.

Agnico-Eagle's
LaRonde Mine in Quebec is Canada's largest gold deposit and forms the basis of their cash flow; they also have advanced-stage projects in Mexico, Finland, and the USA.

Agnico does not forward sell any of gold thus investors are exposed to the prevailing spot price at the time of production. In general unhedged mining companies offer greater potential for growth. This company fits our investment criteria in that it has a large land bank, which provides the opportunity for growth, international diversification, low cost operations and most importantly, an experienced mining and management team. Agnico-Eagle also has the finance in place to fund its investment strategy.

Agnico-Eagle Mines Limited recently reported first quarter earnings of $37.2 million, or $0.35 per share. This compares extremely well to net earnings of $10.4 million, or $0.12 per share, in the first quarter of 2005.

The recent run up in the gold price helped push Agnico’s stock price to a high of $42, before correcting to around $22 per share. When we look at the charts this stock would appear to have bottomed with the downside risk being minimal and the upside being potentially explosive.

Between now and the end of August, seasonally a slow time for gold prices, could present us with an opportunity to acquire this stock for sub $30. If so then buy and hang on for the ride.

Agnico-Eagle Chart

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>