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« How High Will Gold Gold This Fall? | Main | OptionTrader: Trading Record Update »

Agnico-Eagle Mines Limited: Set to Soar Higher

Agnico-Eagle Mines Chart 21 Sep 2010.JPG

We kick off with a quick look at the chart where we can see that Agnico-Eagle Mines Limited (AEM) has made good progress after a long period of mine construction and development. The technical indicators suggest that Agnico is overbought and could be due for a breather. However, gold prices are going gang busters and should they pop up over the $1300/oz level then this stock will be sky bound and the indicators will have to continue with some sideways consolidation, albeit at a high level.

Agnico-Eagle is a Canadian-based gold producer with operations in Canada, Finland and Mexico, and exploration and development activities in Canada, Finland, Mexico and the U.S. The LaRonde mine is Canada’s largest operating gold mine in terms of reserves. Agnico-Eagle has full exposure to higher gold prices consistent with its policy of no-forward gold sales (un-hedged). It has paid a small cash dividend for 28 consecutive years and just maybe some time in the future the amount paid out to share holders may improve.

The target for 2010 is still 1.0 million – 1.1 million ozs and the total cash costs are running at around $425 to $450 which in our humble opinion is pretty good.

Agnico remains one of our favourite companies and forms a large part of our core holdings with the Silver Wheaton Corporation being the largest single investment that we hold.

Agnico-Eagle has now developed five new mines in three years, increasing gold production by more than 300%. They appear to be well set up to continue to grow output through internal development of current projects and ongoing exploration activities, there is also the potential of acquisitions, joint ventures and partnerships to add a little spice Agnico's progress.

Agnico-Eagle Mines Limited trades on the NYSE under the ticker symbol of AEM and on the Toronto Stock Exchange under the symbol of AEM.TO.

Agnico-Eagle has a market capitalization of $10.75 billion, a 52 week trading range of $49.64 - $74.00, a rather high P/E ratio of 71.36 on volume of 1-2 million shares traded per day.

Over in our options trading den they have updated the chart to show all the closed trades as of today, so you can see exactly how it is going, please click this link.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

On Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09. On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days, with more positions opened yesterday. Drop by and take a look.

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