Agnico Eagle Mines Ltd (AEM.TO) reported on Wednesday a 56 percent decline in third-quarter profit due to lower realized metal prices as well as a maintenance shutdown at its Kittila mine in Finland, but it beat analysts' estimates, and raised its full-year production forecast while lowering cost expectations.
The gold miner's net income was $47.3 million, or 27 cents a share, compared with $106.3 million, or 62 cents a share, a year ago.
Excluding a number of non-cash and non-recurring expenses, Agnico reported adjusted net income of $60.5 million or 35 cents a share. Analysts, on average, had expected earnings of 8 cents a share, according to Thomson Reuters I/B/E/S.
Total cash costs per ounce for the third quarter were $591 per ounce, 6 percent higher than in the same quarter last year due to lower net byproduct revenue.
Toronto-based Agnico reported record gold production of 315,828 ounces in the quarter, which it said was driven by a strong contribution from its Meadowbank mine in the Canadian Arctic.
Agnico increased its production outlook for 2013 to 1.06 million ounces from a previous range of 970,000 to 1.01 million ounces. It also reduced its total cash cost estimate to approximately $690 an ounce from a previous range of $735 to $785.
"What we've been trying to do with the drop in the gold price is look at areas where we can not only reduce costs but also help our revenue line with more ounces, and we've been able to do that," President and Chief Executive Sean Boyd said in an interview.
Gold prices have fallen sharply since the beginning of the year, hitting a near 3-year low at about $1,180 an ounce in late June. Gold was at $1,330 on Wednesday, down 20 percent this year.
For 2013, expected all-in sustaining costs, a recent measure adopted by producers to reflect the true cost of producing an ounce of gold, are now forecast to be approximately $1,025 per ounce, down from previous guidance of $1,100 per ounce.
Agnico said it was continuing to review its business activities to find more cost-savings, a mantra of many gold mining companies as they grapple with soaring costs and weak gold prices.
Boyd said no assets had been earmarked for sale and Agnico would take another 3 months to 6 months to review its 2014 budget and life-of-mine plans for all its assets.
Gold mining stocks have fallen by even more than gold, raising the possibility that miners could pick up cheap assets.
"Our history suggests that just because prices are down doesn't necessarily mean that there is good value out there. Prices are down in some cases for good reason," Boyd said. But, he added, Agnico would "continue to look".
Agnico's stock closed at $26.85 on the Toronto Stock Exchange on Wednesday. The stock is down 47 percent so far this year.
(Reporting by Nicole Mordant in Vancouver; Editing by Bernard Orr and James Dalgleish)