Yahoo Finance Why This Top Gold Stock Crashed 17.6% in August
What happened
Shares of Agnico Eagle Mines (NYSE: AEM) slumped 17.6% in August, according to data provided by S&P Global Market Intelligence. That brings the gold mining stock's year-to-date losses to nearly 28.5%.
There were no updates from the company last month, but concerns over its second-quarter results that were declared in the last week of July spilled over to August. Declining gold prices further fueled the market's fears.
So what
Here are the key highlights from Agnico Eagle's second-quarter report:
Gold production dropped 5%, thanks primarily to lower grades from one of its eight mines, Meadowbank.
Revenue improved 1% to $303.7 million.
All-in sustaining cost (AISC) surged to $921 per gold ounce compared to $785 per ounce in the year-ago quarter.
Net income dropped to only $5 million from $54.9 million in the year-ago period.
Image source: Getty Images.
Given those numbers, it isn't surprising that Agnico Eagle shares lost ground last month. Management, however, is optimistic for the rest of year. It increased full-year production guidance to 1.58 million ounces from 1.53 million ounces white reiterating its AISC forecast of $890 to $940 per ounce of gold.
Now what
In its August corporate presentation, Agnico Eagle highlighted how it expects cash flow to grow substantially in the coming years, backed by 30% growth in production by 2020. The miner has several projects under development, especially in the Nunavut region in northern Canada.
While costs are a major concern, especially in a weak gold-price environment, Agnico Eagle remains one of the few gold mining companies with strong financials to back its visible production growth.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
