Canadian miner Agnico Eagle boosts production outlook as gold prices surge

(Reuters) - Canada's Agnico Eagle Mines AEM.TOAME.E raised the low-end of its production outlook for the year, benefiting from a surge in gold prices and a ramp up in operations after coronavirus-led shutdowns.

Massive stimulus packages to aid economies reeling from pandemic-driven woes and a low interest rate environment have helped drive up gold prices nearly 30% so far this year.

The miner now expects full-year gold output in the range of 1.68 million to 1.73 million ounces, compared with its previous forecast of 1.63 to 1.73 million ounces.

Agnico said average realized price for gold jumped 31% to $1,726 per ounce from a year earlier.

Seven of the company’s eight mines experienced temporary shutdowns or reduced activity due to restrictions imposed to curb the spread of the pandemic.

The company said on Wednesday all operations were subsequently restarted in a timely manner during the quarter, with production progressively ramping up to more “steady state” levels in June.

“With July production expected to exceed 160,000 ounces of gold, the company is well positioned to have a strong second half with gold production expected to average 480,000 to 500,000 ounces per quarter with declining unit costs,” Chief Executive Officer Sean Boyd said.

Net income rose nearly four-fold to $105.3 million, or 43 cents per share, in the second quarter ended June 30, primarily due to unrealized gains on warrants as well as on financial instruments held by the miner.

Excluding items, it earned 18 cents per share, missing analysts’ estimate of 20 cents, according to Refinitiv IBES.

The company’s gold production fell about 20% to 331,064 ounces in the quarter, as the pandemic battered mining activity.

Reporting by Arundhati Sarkar in Bengaluru; Editing by Anil D’Silva and Maju Samuel