(Kitco News) – Agnico Eagle (TSX: AEM) announced yesterday that its payable gold production in Q1 2022 was 661 koz, up 28% compared to Q1 2021 (517 koz).
The company said that gold production in Q1 2022, when compared to the prior-year period, was higher primarily due to the inclusion of the production from the Detour Lake, Macassa and Fosterville mines.
This was partially offset by lower production at the Meadowbank Complex and the Meliadine mine, largely due to the reduction of activities at the beginning of the quarter due to the impacts of COVID-19, the company added.
Production costs per ounce in Q1 2022 were $1,002, compared to $821 in the prior-year period, while total cash costs per ounce in Q1 2022 were $811, compared to $734 in the prior-year period.
The company explained that production costs per ounce and total cash costs per ounce increased when compared to the prior-year period primarily due to higher minesite costs per tonne and lower production at various operations including the Meadowbank Complex and the Meliadine, Kittila and Pinos Altos mines.
Agnico Eagle added that its expected payable gold production in 2022 remains unchanged at approximately 3.2 to 3.4 million ounces with total cash costs per ounce expected to be between $725 and $775 and AISC per ounce expected to be between $1,000 and $1,050.
Importantly, the company said that in Q1 2022, its net income was $109.8 million ($0.29 per share), which is a decline compared to a net income of $145.2 million a year ago ($0.6 per share).
The company noted that the decrease in net income in Q1 2022 compared to the prior-year period is primarily due to merger costs recognized in the quarter, including a fair value adjustment on inventory sold during the quarter (included in production costs) and transaction and severance costs.
In addition, higher exploration and development costs, higher amortization due to the inclusion of the Detour, Macassa and Fosterville mines and higher general and administrative costs contributed to the decrease in net income in Q1 2022 compared to the prior-year period.
In Q1 2022, cash provided by operating activities was $507.4 million ($366.0 million before changes in non-cash components of working capital), compared to the first quarter of 2021 when cash provided by operating activities was $366.6 million ($425.5 million before changes in non-cash components of working capital).
“I am pleased to report that our newly consolidated operations have performed very well in the first quarter of 2022 despite challenges related to COVID-19. Supported by strong metal prices, the first quarter generated solid operating cash flow which allowed the Company to continue to deliver on shareholder returns while paying down debt, and investing in our operations and pipeline projects,” said President and CEO Ammar Al-Joundi.
He added that while most of the company’s operations are keeping costs in line with forecast, Agnico Eagle remains cautious as inflation and the global political and economic context has increased pressure on costs and supply chains.
Agnico Eagle is a senior Canadian gold mining company, producing precious metals from operations in Canada, Australia, Finland and Mexico. It has a pipeline of exploration and development projects in these countries as well as in the United States and Colombia.