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« India to Buy IMF Gold | Main | Is Ben Bernanke Smart Enough to Be a CEO? »

Agnico-Eagle Mines Limited: Outperforming SPDR Gold Trust

AEM logo 20 feb 09.JPG
GLD Logo 25 February 2010.JPG

We don't normally watch Mad Money but as this snippet is about Agnico-Eagle Mines Limited (AEM) we found the time as we have an options play open and we expect Agnico to perform better than it has recently.

Over the last five years, Agnico-Eagle Mines Limited (AEM) has jumped 281 percent, beating the SPDR Gold Trust (ETF) GLD’s 148-percent increase. But the stock has been a relatively poor performer more recently, with the third quarter showing problems in everything from maintenance shutdowns and project delays to higher cash costs and weaker-than-expected production.

Then on Feb. 17 Agnico-Eagle reported a better-than-expected fourth quarter, with record production and optimistic guidance. The company also said that it expects gold production to double in 2010 versus last year. And though cash costs will also increase to $399 an ounce from $297, the market price is still at about $1,100 an ounce, leaving AEM a healthy profit.

Does this mean it’s time to recommend Agnico-Eagle Mines again? Watch Cramer’s interview with CEO Sean Boyd to find out.

Options update: We currently hold the AEM $60, May '22, 2010 Call Options which closed today at $2.90 so we are under water at the moment. We will continue to hold and observe for now.

Footnote: Please don't forget to vote on whether you think gold is going to $1000/oz or $1200/oz first as per the Peter Grandich challenge.

All the best.

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Reader Comments (2)

I think the smartest way to invest in our future is to put our money where we want to see advancement, growth, and better economies. Consumers have the same kind of power. Confidence is about knowing what we're doing, not what someone else wants us to hope or fear we're doing. This is a changing market.

February 25, 2010 | Unregistered CommenterJames Hovland

With the rate at which the world population is increasing, food production will be an area to invest,everyone needs to eat, even if it's only one meal a day.

February 25, 2010 | Unregistered CommenterRyszard

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