Investors and analysts punished Agnico Eagle Mines Ltd. after the big Canadian gold miner shocked the market with a host of unforeseen operational problems across multiple mines.
Last year, Toronto-based Agnico put two new mines into production in the Arctic, but the ramp-up isn’t going to plan, with the company dealing with various challenges such as unanticipated equipment shortages.
At La Ronde, the company’s flagship mine in Quebec, Agnico is grappling with ground stability issues three kilometres underground, and reinforcements are needed. Also in Quebec, at its Canadian Malartic open pit mine, which it co-owns with Yamana Gold Inc., the company is processing lower grade ore than expected.
All of these complications forced Agnico to cut its 2020 production forecast by 4 per cent to 1.87 million ounces and increase its all-in sustaining cost projections by 16 per cent to roughly US$1,000 an ounce.
“We should have done better in anticipating some of these issues and reacting better,” chief executive officer Sean Boyd said in an interview, after the release of the company’s fourth-quarter financial results.