Agnico cuts 2020 production forecast on slower Nunavut ramp up

(Reuters) - Gold miner Agnico Eagle Mines Ltd AEM.TOAEM.N lowered its full-year 2020 production outlook, citing slower-than-expected ramp up of production at its Nunavut operations in Canada.

The company developed its Amaruq mine as a satellite deposit to supply a new source of ore to the Meadowbank mine in the Kivalliq district of Nunavut.

Agnico said it now expects full-year production of 1.87 million ounces compared with its previous outlook of 1.9 million to 2.0 million ounces. The outlook is lower than analysts’ average estimate of 1.99 million ounces.

Production would also be impacted by a more conservative mining plan in the West mine area at LaRonde, the company said.

“What we’ve decided to do in Q1 is take an opportunity to upgrade all of the ground support in the major tunnels,” Chief Executive Officer, Sean Boyd said on LaRonde.

Shares of the company were down 1.5% in extended trade.

However, Agnico reported a fourth-quarter profit compared with a year-ago loss, as sales and realized gold prices rose.

Earlier in the week, Agnico announced its near 10% stake in Rupert Resources RUP.V that has a property in Finland close to Agnico's Kittila mine in northern Finland. It is the largest primary gold producer in Europe, and hosts Agnico's largest mineral reserves.

“Our team is intrigued with the potential there...certainly have the opportunity to increase our direct ownership (in Rupert) at some point, if we so choose, by exercising the warrants,” Boyd said.

The company is currently working to expand its footprint in Finland, Boyd added.

Agnico posted net income of $331.7 million, or $1.38 per share, in the fourth quarter ended Dec. 31, compared with a loss of $393.7 million, or $1.68 per share, a year earlier.

Payable gold production rose to 494,678 ounces compared with 410,712 ounces last year.

On an adjusted basis, the company reported a profit of 37 cents per share, in-line with analysts’ average estimate, according to Refinitiv IBES.

Reporting by Arunima Kumar in Bengaluru; Editing by Shailesh Kuber and Vinay Dwivedi