Gold’s remarkable year
Gold truly enjoyed a remarkable 2024, relentlessly powering higher to many new records.
Canadian gold companies released record operating and financial results after Wednesday’s market close, showing strong performance and growth prospects.
Agnico-Eagle, Alamos Gold, New Gold, Perseus Mining, and Westgold Resources all reported impressive figures, beating internal and analyst expectations and maintaining positive guidance for the rest of the year.
Agnico-Eagle (TSX: AEM; NYSE: AEM) emerged as a top performer, reporting record quarterly gold production of 873,204 oz., thanks to its 100% ownership of the Canadian Malartic mine in Quebec, which positively impacted its performance. Gold production outdid forecasts by about 2% and cash costs came in 3% lower than expected. Cash costs were $840 per oz., and all-in-sustaining costs (AISC) were C$1,150 per ounce.
The company’s headline earnings were $322.4 million, or 65ยข per share, and its EBITDA was $887 million, both exceeding market expectations and better year-on-year. Agnico’s operations, except for Amaruq in Nunavut, and Fosterville in Australia, reported production largely in line with or better than expected.
Agnico’s 2023 gold production guidance of 3.24 – 3.44 million ounces at cash costs of $840 -$890 per oz. remains intact, with total production for the first half of 2023 reaching 1.7 million oz. gold, tracking to achieve 3.43 million oz. on an annualized basis.
Fellow Canadian mid-tier company Alamos Gold (TSX: AGI; NYSE: AGI) also impressed with record-breaking results. The new La Yaqui Grande mine in the Mulatos district of Mexico played a significant role in beating estimates, with gold output of 136,000 oz., exceeding the quarterly guidance of 120,000-130,000 oz. at consolidated cash costs of $847 per ounce.
Alamos’ consolidated cash costs for the first half of the year were $834 per ounce, at the lower end of the guidance range of $825-$875 per ounce. The company’s financial highlights included improved revenue of $261 million and EBITDA of $139 million.
Building on its strong first-half performance, Alamos maintained its guidance for the year, with full-year output expected to range between 480,000-520,000 oz. at consolidated AISC of $1,112 per ounce. This compares favourably with the year-to-June AISC of $1,144 per oz., which was in line with the guidance range of $1,125-$1,175 per ounce.
New Gold (TSX: NGD; NYSE: NGD) reported results largely in line with estimates, with gold sales of 74,000 oz and revenue of $184 million. The company’s consolidated cash costs were $1,129 per ounce, and consolidated AISC was $1,657 per ounce. Progress continued during the quarter on the Rainy River Underground development in British Columbia, supporting plans to increase production to over 300,000 oz. by 2025. Although cash costs were above the high end of the full-year guidance, New Gold expects unit costs to decline in the second half as production from the Rainy River Underground project ramps up.
From Down Under, Australia-based Perseus Mining (TSX: PRU; ASX: PRU) reported strong production of 137,000 oz. gold at $1,007 per ounce. The Yaoure mine in Ivory Coast contributed significantly to the strong performance, producing 72,000 oz. at $771 per ounce. Edikan in Ghana and Sissingue, also in Ivory Coast, similarly performed well, with slightly higher production. The company’s cash and bullion on hand increased to $542 million.
Due to ongoing security concerns in Sudan, management indefinitely deferred development plans for Meyas Sands. However, Perseus’ strong balance sheet and expected free cash flow growth position it well for potential mergers and acquisitions opportunities and capital returns.
Also reporting from Australia was Westgold Resources (ASX: WGX; US-OTC: WTGRF), which also exceeded production and AISC estimates for the fiscal fourth quarter and full year ended in June. Production reached 68,400 oz. compared with the estimate of 65,000 oz., and AISC was A$1,780 ($1,579) per ounce.
The company achieved its full-year production guidance of 240,000-260,000 oz., with total output reaching 257,000 ounces. Westgold’s exploration spend and growth capex aligned with market expectations and guidance, Canaccord Genuity mining analyst Tim McCormack wrote in a note to clients on Thursday.
Completing the Great Fingall project mining study and significant resource update have set the stage for a final investment decision this quarter. The analyst views the company’s investment in Fingall as justified, given its potential to “deliver significant gold output at an attractive grade.”
The company’s strategy to be unhedged by August remains on track, with only 10,000 oz. at A$2,459 per oz. outstanding and expected to be delivered in July, leaving it fully exposed to current spot prices of A$2,923 ($1,961) per ounce.
