Agnico Eagle (AEM) Q4 FY25 earnings call: guidance and Q&A

Will Agnico Eagle tender its shares to the current offer on Foran?

Ammar Al-Joundi stated that M&A decisions are up to various shareholders and he would not be comfortable discussing the company's specific intentions regarding Foran.

“That's not really something I would be comfortable discussing.”

asked by Lawson Winder · answered by Ammar Al-Joundi

What is Agnico Eagle's current view on M&A, particularly regarding jurisdiction and urgency, given recent activity in the gold space?

Ammar Al-Joundi emphasized that M&A is a capital allocation decision focused on creating value per share, not merely increasing size. He highlighted Agnico's knowledge advantage in identifying opportunities and its willingness to pursue M&A that offers exploration upside, which has historically driven real returns.

“We're not interested in just getting bigger. The hard part is actually creating value per share.”

asked by Lawson Winder · answered by Ammar Al-Joundi

Are the mentioned cost productivity initiatives already incorporated into the 2026 ASIC guidance, or do they represent further potential improvement?

Dominique Girard clarified that the initiatives are partially included in the guidance, but not entirely, indicating that there is still some flexibility and potential for further improvement beyond the current guidance.

“I would say it's partially included, but not all. We all -- it's Natasha and myself role to put the bar at the right place for budget and guidance, but we keep some flexibility in that.”

asked by Fahad Tariq · answered by Dominique Girard

Could you provide more detail on the 4% underlying cost inflation, specifically regarding consumables versus labor, and any upcoming labor agreements?

Jamie Porter stated that labor, which constitutes 45% of the cost structure, is experiencing about 4% inflation. Other consumables are seeing 5.5% to 6% inflation. Ammar Al-Joundi added that Agnico's low employee turnover and strong relationships help mitigate labor-related cost pressures, which are often more impactful than the percentage increase itself.

“Our biggest cost apart from taxes now is labor. It's about 45% of our overall cost structure. And we've seen labor inflation running in around 4%.”

asked by Fahad Tariq · answered by James Porter

Should we expect CapEx to increase in future years, or will the current run rate plateau, considering the project portfolio?

Jamie Porter estimated total capital expenditure for 2026 at approximately $2.4 billion to $2.5 billion (including potential Hope Bay capital) plus $400 million in capitalized exploration. He expects capital to remain at this elevated level for a few years, then decrease once production ramps up in the 2030s. Ammar Al-Joundi noted these are voluntary accelerations due to high-return projects.

“I think that's an appropriate range over the course of the next few years. We will see capital kind of stay at that elevated level.”

asked by Joshua Wolfson · answered by James Porter

How would Agnico Eagle allocate potentially excess cash (over $5 billion by H2 2026) if gold prices remain high, beyond the new dividend and $2 billion NCIB?

Jamie Porter stated that the company aims for financial flexibility to support further growth and capital spending. He considers a cash balance of 3% to 5% of market capitalization to be a healthy position, providing the financial foundation for future investments. He also mentioned that special dividends are not ruled out if the $2 billion NCIB limit is reached and excess cash continues to accumulate.

“If we end up between 3% to 5% of our market cap in cash on the balance sheet, I don't think that's a bad place to be.”

asked by Joshua Wolfson · answered by James Porter

Can you provide an approximate cost estimate for the ounces coming from the life extension at Meadowbank out to 2030?

Ammar Al-Joundi and Dominique Girard confirmed that the All-in Sustaining Costs (AISC) for these additional ounces at Meadowbank are estimated to be around $2,200 to $2,300 per ounce. They clarified that these are additional ounces leveraging existing infrastructure, making them profitable at current spot prices.

“I think the last number I saw was sort of in the $2,200 to $2,300.”

asked by Daniel Major · answered by Ammar Al-Joundi

Could you provide a teaser on the CapEx and numbers for the updated Hope Bay study expected in May?

Dominique Girard indicated that the total CapEx for Hope Bay is expected to be around $2 billion. He highlighted that the project is well-prepared, with over 50% engineering completion and significant site preparation, aiming for efficient execution similar to past projects like Meliadine.

“Yes, CapEx is going to be around this $2 billion. Again, we're still working on it, but that's where we're looking for.”

asked by Anita Soni · answered by Dominique Girard

What is the expected pace of adding underground resources at Malartic, and is it more efficient to convert inferred to reserves from underground?

Guy Gosselin explained that this year's focus was on converting outskirt mineral inventory to inferred resources, resulting in 7.5 million ounces added. He confirmed that converting inferred to reserves is more cost-efficient from underground, and the company aims to convert about 0.5 million ounces from resources to reserves annually, leveraging current and future underground access.

“This year, for example, we've added 470,000 ounces and our pace is about that to convert about 0.5 million ounces from resources to reserves moving forward.”

asked by John Tumazos · answered by Guy Gosselin