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« CAT.V: Up 31.25% in a day! | Main | A Bet Against The Banks »

Agnico-Eagle: Reserves at Record Levels

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Superb results were issued this week by one of our favourite gold stocks; Agnico-Eagle Mines Limited. The statement went on to say:

“At December 31, 2007 Agnico-Eagle's proven and probable gold reserves hit a record of 16.7 million ounces, an increase of 33% over the year end 2006 level. The growth in gold reserves of 4.5 million ounces (prior to considering 2007 gold production) was a result of successful definition drilling at our development projects, which converted 1.6 million ounces to reserves, and the acquisition of the Meadowbank project.”

When gold decides to make its play for the magical $1000/oz level this stock will be one of the biggest beneficiaries in our humble opinion. We have traded this stock since the early 1980's and just recently we reduced our exposure to the price of gold by selling some of our holdings in Agnico. If you are a regular follower of our trades in gold stocks you will be aware that this is one favourites and we fully intend to more of this stock as and when the pull back takes place.

"The steady growth in gold reserves, and more importantly, gold reserves per share continues to add value for our shareholders. With gold reserves and resources at record levels, and with several of our large deposits open for further expansion, we anticipate further resource to reserve conversion in 2008" said Sean Boyd, Vice-Chairman and Chief Executive Officer.

All good news, should you want to read the article in full then just follow this link.

However, good investment also requires good timing in terms of choosing your point of entry. Take a quick look at the Agnico's chart below:
The technical indicators suggest that this stock is heading south.
The stock price is still almost $20 above the 200dma and this turns us off buying at this point in time.

Agnico Chart 17 Feb 08

You may disagree and see gold hitting the moon shortly and Agnico hitting a $100 per share, if so then go for it by commenting below.

For now though, we will try and find some patience and wait for a cheaper entry point to present itself.
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Reader Comments (7)

I disagree with your call. I see rising RS, rising wedge formation,rising 21 day MA, rising STO, not yet over 80, rising histograms, on balance at new high,plus peer stocks ie Goldcorp in pennant formation showing initial signs of breaking to the upside. cheers

February 17, 2008 | Unregistered Commenterrick thomas

Aurelian has almost twice the gold reserves as Agnico-Eagle and 8 million fewer shares outstanding. The share price of Aurelian is $7.98 today while Agnico is $63.00. If your looking for upside.....take Aurelian.

February 17, 2008 | Unregistered CommenterDel Funk

I agree with your analysis on the basis that history repeats itself, and that we are in a erratic market where money makes the rules. The big money likes to play around pushing prices up and then down and making money both ways.
Ultimately, the metal will soar and take stocks and futures along with it.

February 17, 2008 | Unregistered CommenterJohn Ell

Rick, A good call, so I guess we will know in a week or so just which way Agnico will jump.

Del, Aurelian is a super discovery but it could be years before be they actually produce any gold and turn it into a profit.

John, Yes ultimately the metal will soar, however it will also be volatile and therefore present trading opportunities for us, if we are fast and nimble enough.

Its really good to get such quality comments from you so please keep them coming!

February 17, 2008 | Unregistered CommenterGold Prices

Your thinking is logical and on target, however this is a gold stock, and it did close above resistance today, and may have legs. But it also would not supprise me to see it test its 30 DMA, and present a good entry point.

February 20, 2008 | Unregistered CommenterDennis Roberson

Technically the breakout above 64 and the subsequent pullback to test 64 with the down grade by a firm, is still showing a bullish hammer.This still must be considered a possitive event.A breakdown below 64 would be very negative.
It bothers me about the SPX. This index could fall.... fall hard. The news out there is bad, very bad. All this is telling me is that gold and gold stocks want to go higher. However the market is very spooked and could bust us all.

February 23, 2008 | Unregistered Commenterrick thomas

P.S. In the short term, we did bounce off the 21 day average which the black boxes key on. Cheers

February 23, 2008 | Unregistered Commenterrick thomas

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