AGNICO EAGLE - Is this top gold miner a BUY or SELL?
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- Опубликовано: 26 окт 2024
- Agnico Eagle Mines (AEM) is widely considered to be the best gold producer on the planet. In this video we do a deep dive to find out if it's a good buy.
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Agnico Eagle is a very well run company that has a long history of intelligent capital deployment. They operate in safe jurisdictions, are a low-cost miner, and the second largest gold miner by market cap.
In this video, we look at the pros and cons of the company as well as diving into how much money the company will likely be making in the future. Based on that, we are able to figure out a company valuation and fair stock price to find out if it's a good buy today.
Never make any investment decisions based on my videos. This sector is very risky and this should not be considered investment advice. Always do a lot of your own research before investing your hard earned money.
#mining #goldstocks #agnicoeagle
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Your report is much cheaper than most others. What's the catch? lol. Just trying to get a customer base? Seems very informative 😅
@@edhettwer7920 I was trying to make it affordable and provide a lot of value so people never want to cancel.
I'm HOLDING AGNICO EAGLE... and I am currently up 50%! not even thinking of selling until I see gold over 2600!
You do a very good job of reviewing the sector. Thank you.
Bang up job. Considering your newsletter.
Thanks for the video! Agree on the hold for Agnico. They have a sense of doing accretive acquisitions using their expensive share price as money to buy other companies with potential like Kirkland. Not a fan of Northern Star nor Barrick. Northern Star is quite expensive with a payout ratio that is too high on top of a generous buy backs policy. Barrick has a strong track record of overpromising but under delivering: under Mark Bristow's term Barrick's production has fallen almost by half while share count has doubled, not mentionning costs and capex blowouts. Mark Bristow owns a lot of shares of Barrick because it merged on an all-stock deal with Randgold whose founder was Mark Bristow. Shareholders are also afraid of the lack of consistency of Barrick: when you mention they grow from 4.7 Moz to 7 Moz, actually their gold production is declining while their copper production is almost doubling, which is a big shift
Barricks track record for shareholders is just horrendous. Wouldn’t touch them with a barge pole.
@@syberspud Agree! I don't own it too
These are all fair points and if I were diving into Barrick in this video instead of AEM, I'd have these criticisms and others. In regards to them overpromising and under delivering, I really don't like how they almost always miss guidance. Bristow says it's because he's optimistic and I think that maybe one needs to be an optimist to run a gold miner but you can be an optimist while still being more conservative in your official guidance. There have certainly been problems under Bristow's tenure at Barrick and you're right to point some of them out. With that said, I think they're turning a corner and the company will start doing better. Only time will tell if that's correct.
Thanks for analysis - very helpful. Of the major producers only Agnico and Kinross have made decent share price gains over the course of this calendar year. I understand the negativity surrounding Newmont despite the Newcrest acquisition. However, I have been surprised by how little Barrick has moved despite the gold price being consistently above 2k. I think Agnico has been the best at courting institutional investors and speaking the language o fund managers, hence their better share price action. I am hoping Barrick can learn from this.
Recently sold Barrack and bought Alamos. Plan on keeping Agnico. Thanks for your commitment!
Bought Alomos myself!
I watch Rick Rule's Symposium interviews with CEOs of mining companies and then jump straight to your channel for a more detailed review of the same companies :)
In that case I better get back to work and dive into more of those companies. Thanks for watching!
So do I.
Rick Rule is quite vague about the CURRENT value of the companies. Furthermore he talks about companies he bought in private placements, which doesn't tell me 💩.
I am long AEM but recently covered my long by selling the JAN25 $60 call.
Price action is warranted as this company has experienced much less macro uncertainty when compared to other gold miners.
Happy to get called with my $4 premium per contract, but also fine with holding shares under $60.
Plus I get the dividend along the way.
Great job sold my AEM two weeks ago. GOLD is still cheaper. Keep up the great work.
Couple of points: 1)don't subtract interest, then you have EV from which you subtract net debt to get equity value 2) have to subtract capex. 3) AEM for me is an alternative to bullion, no other gold or royalty cos fit into that box for me due to duristiction risk (just learning about your Aussie pick which sounds like it might). Thanks for an excellent video, one of the best I've seen on YT
There are other ways to calculate it and I think that’s fair if someone doesn’t want to include interest payments before applying a multiplier. I don’t like these companies to have debt so I punish debt in my calculations.
Sick man. Keep up the good work ✊
Agnico is experts in accretive acquisitions.
I’m not seeing any recent videos where you cover silvercrest metals: SILV ticker symbol and the people want to know why!
Simply sterling work 👏 love your work man
You forgot the part where AEM is one of the few miners that has kept increasing its reserves per share metric. AEM is the best miner to buy. It should be the first choice.
I didn't talk about that specifically but I did talk about its reserves and resources and gave them praise for having such good numbers.
@@MiningStockMonkey btw when you say insiders are selling ? I see Boyd Sean selling and Al-Joundi Ammar buying. Do you know who else is selling ? (Substantial amounts).
Sean Boyd's sales dwarfed all of the others but there were some other insiders selling as well. A couple insiders have bought but they were relatively small buys compared to the sells.
Really digging this channel (nice pun huh?). Love to see more interviews, including the GOAT, Rick Rule. Keep up the great work
Whow! This is a great channel with great content. Realy good background Infos. A ton of helpfull news. Thank you very much.
of my investment portfolio AEM holds about 70% of all shares
Take some profits
Thanks. Another great analysis. Feels like I have my own personal account for $99 bucks a year. Your newsletter is worth much more.
Thank you for bringing in an Aussie miner
Would love a deep dive on GFI!
My price target will be 100$ and it should be reached before the end of year.
Haven't heard of this company, I'm buying MMC.ASX, gold and silver miners in Chile.😊😊
Thanks for the analysis.....You mentioned the "Donlin" mine project, which is in development. if you have time, it would be great to see your analysis of the developer with the best share count relative to their assets in the ground, who has consistently proven over two decades that they are primarily shareholder oriented. Of course, I'm writing about Seabridge Gold, Inc. (SA), traded on the NYSE. Thanks again for the analysis you provide.
Do you look at the metallurgy of the different mines various development companies own
Great video. I'll stick with streaming companies, though for more silver exposure I've recently stepped outside of that.
It's hard to go wrong sticking with royalty and streaming companies.
What about physical metal ETFs?
Thanks
@@micll3229 If you bought physical gold in October 2023, you'd be up 27% right now, so I would compare that to these ETFs. There's also OneGold, with very reasonable fees, especially if you're not holding long term. They do not 1099 you. WPM is up 38% since October, with a 1% dividend. My other Royalty Companies are up the same as Gold, with a similar dividend.
11:11 AEM is moving away from Au ... they are doing joint venture with Teck.
What joint venture? --> Teck and Agnico Eagle are now 50/50 partners ... working together to advance ... the high-quality Copper-Zinc San Nicolás project located in Zacatecas, Mexico.
Who owns Teck? --> Teck's largest shareholder is Chinese; its next largest shareholders are American and British.
For the price, I'd rather buy Barrick and sell covered calls. AEM has already moved 40% in last 3 months-how much upside is left?
GOLD might lend itself well to poor man's covered calls
Have you covered Dolly Varden in any of your videos? Is you haven’t would you do an analysis of them?
My broker portal shows Mark Hill, a Barrick insider, sold 224k shares of Barrick on May 21. I don’t get how you decided that Barrick has all insider buying and AEM has selling.
I was looking back further. Over the past year, Barrick is about 90% insider buying and 10% selling: app.tikr.com/stock/ownership/insiders?cid=249925&tid=2593381&ref=b9zjf6
Keep alot of cash on the sideline now, not all in mining stocks, a big stock crasch might be coming within 6 months. The Fed is maybe not decreasing the interest rate fast enough to avoid a big crasch in all stocks. And typically mining companies are hit extra hard in such an event. Then you can buy them back for pennies on the dollar.
Watch the US housing market. Stocks like LEN are the best leading indicators.
Gold rallies on geopolitical strife. Do you want to own assets in Pakistan when there's geopolitical strife? If not it's AEM or bullion. AEM pays a dividend. It's a core holding for me
There is indeed significant risk investing in Pakistan. I often don’t mind taking on political risk if I feel like I’m getting a sufficient discount for doing so, especially if that political risk is diversified. But I also understand the argument for only investing in safe jurisdictions.
Excelent , make sence for me.
Good analysis, thank you. Look at ABX, AEM, NEM, TXG, DPM and GMIN/RGD (First gold bar pour in July). Prefer TXG of PE 7, DPM PE of 8 with daily buybacks, NEM and AEM are gold index, very concerned about NEM lacking of vision to grab NFG at this moment. AEM as a long story with 31% gain far below GMIN 127%, GMIN gave me the impression "on time and on budget" with FNV 100% support, AISC of $640, then again GDXU will outpace all if gold breaks $2400/oz. ABX problem is consistency, more focus on copper instead of silver, it alerts my taste with PE of 20
I am not selling my AEM shares, but selling AEM covered calls
Does that mean you are shorting the stock?
@@Timothy_Pitt Selling covered calls is different than shorting. I think it can be a good way to get income from shares that you feel are overpriced. You might be forced to sell your shares to the owner of those calls but you also get some income in the process.
@@Timothy_Pitt it's not shorting. I usually sell a bit higher strike price, for example I sell AEM August $ 70 call and receive
right away $ 3.50 plus dividends (2,5 months) If AEM is higher than $ 70, the holder of the call can buy my AEM and
pay me $ 70. I can also buy the call back and sell a higher strike price. In the past I managed to have a total return of
~ 25 % annually
Can you do fortuna silver mines
right now ,agnico gos underground in malartic ,thats a huge grow project
Isn't the underground more of a sustaining capital project rather than a growth project? They depleted the main Malartic pit in 2023 and now they've moved to the Barnat pit. That mill is going to be hungry for ore so they're sinking the shaft to go underground. That's my understanding, but please let me know if I'm wrong.
Anyway, based on the info in their annual report, their production is staying basically flat for the next 3 years, even with any growth projects. They didn't give guidance for 2027 and beyond.
@@MiningStockMonkey Recent Developments
As for recent developments, Agnico Eagle's aggressive exploration continues to pay off. Looking at the Canadian Malartic Complex, Agnico Eagle intersected 30.0 meters at 4.5 grams per tonne of gold at a depth of 1,162 meters roughly ~1.1 kilometers east of its reserves in hole 309. Meanwhile, it hit 32.8 meters at 3.1 grams per tonne of gold at 1,556 meter depths roughly 420 meters east of East Gouldie reserves in hole 310Z. Finally, it intersected 14.6 meters at 3.3 grams per tonne of gold west of East Gouldie in an area where it's continued to see exploration success. These results are highly encouraging, suggesting significant upside potential east of its already significant East Gouldie reserve base of ~5.2 million ounces at 3.42 grams per tonne of gold.
East Gouldie Long Section
East Gouldie Long Section - Company Website
In terms of the bigger picture here, Canadian Malartic may be a ~600,000 ounce per annum operation once it fully transitions to underground, but a second shaft (if approved) would be a game-changer for this asset. This is because the mill has the capacity to easily handle an extra 10,000 tonnes per day of material (in fact there will be 4x that amount of capacity available), and even assuming a grade of 2.60 grams per tonne of gold and 96% recoveries, this would translate to an additional ~290,000 ounces per annum or push Canadian Malartic's production closer to 850,000 ounces. However, this would still leave 30,000 tonnes per of excess capacity at the mill that could be sourced from Wasamac, Camflo or other lower-grade regional sources, suggesting that in an upside case scenario, Canadian Malartic could be a 1.0+ million ounce per annum operation next decade.
Of course, the key to the second shaft potential is continued exploration success, and Agnico is certainly delivering in that department with thick intercepts of mid-grade gold in line with already very attractive East Gouldie reserve grades wherever it drills to the east and west of East Gouldie Main. And with a relatively low cut-off grade of sub 1.50 grams per tonne of gold even using conservative metals price assumptions, I see significant resource/reserve upside at this asset.
@@MiningStockMonkey Fortunately, Agnico Eagle is nowhere near this production level yet where it has to worry about being too big to grow per share metrics, with a production profile of ~3.4 million ounces of gold. Plus, it has the best pipeline it’s ever had to date (San Nicolas [50%], Hope Bay, Upper Beaver, Wasamac, and organic growth from its fill-the-mill strategy at Canadian Malartic and organic growth at Detour Lake with throughput increases, underground potential). Overall, this suggests that Agnico Eagle should remain a leader from a per share growth standpoint. And combined with its superior jurisdictional profile (95% Tier-1 ranked jurisdictions), industry-leading margins and more disciplined capital allocation, this explains why it has been a go-to name in the producer space and largely outperformed its peers.
I was able to buy it at the exact bottom, so i'm up around 50% now.
The problem is that i put only 1,5% of my portofolio 😂
How many shares in your portfolio?
What are your thoughts on Newmont after the Newcrest acquisition.
The company does pretty poorly on most financial metrics right now. However, they’ve indicated that they’re going to be selling off all but their best assets to pay down debt and focus on their tier 1 mines. I’m waiting to see what this new (and hopefully improved) Newmont looks like.
@@MiningStockMonkeycan you look into i-80 gold? They got 4 projects in nevada
How many tier 1 mines in the world?
👍
Hold for a nice dip and buy.
AISC includes deduction for general admin expenses, you say
My understanding is that it does not
My reference is recent interview from Rick Rule. I'll try to find the tape
Comments, please?
AISC is not a legally standardized metric so I can't speak for all companies. Agnico Eagle says that they use the 2018 definition of AISC from the World Gold Council and that does include G&A.
Cash from operations - AISC = free cash flow. No? Cash from Operations doesn’t include capital expenditures.
Well said
FCF often quoted without deduction of capex
This is an error & investors should be wary
AEM looks a little weak for the past 3 weeks. What do others think????
As a NovaGold shareholder, I hope Donlin gets built. I am getting more doubtful.
What is Nova saying about their path forward and timeline for Donlin? Barrick hardly talks about Donlin.
They just keep planning additional studies.
2023
Free Cash Flow : USD 940k
Today's Market Cap: USD 46bn
Certainly seems pricey...?
ARTG.V will be bought by Agnico, Barrick or Newmont within 12 months
compare ARTG.V to AEM chart and you see something's up
Something is wrong here... Enterprise value = market cap + debt - cash. Market cap = cashflow*multiplier. Then, price = market cap / shares outstanding. Not sure why you need the enterprise value for your calculation and why you flipped signs in its definition.
I'm not sure if I understand your question but I was trying to avoid the term "market cap" in this video because the market cap doesn't take into account any net debt or net cash that a company might have. For that reason, I was trying to use the term "Enterprise value" instead. Maybe I messed up and said the wrong word at some point.
@@MiningStockMonkey let me simplify the question: why do you subtract debt at 16:00 instead of adding it?
Thanks for the clarification. I subtracted it because debt lowers the value of a company. If they had net cash rather than net debt, I would have added it to that number.
@@MiningStockMonkey hmm... it looks like youtube removed my comment (probably because I put a link to Investopedia). But anyway, what you are calculating is not enterprise value, because debt should be added, not subtracted (simply check the definition of the enterprise value online). In addition, I'm not sure why you need enterprise value in order to calculate share price - you need the market cap (again, by definition).
But what if gold goes to 8K?
If gold goes to 8k/oz without general inflation doing the same, I’m sure that the stock price of Agnico and every other quality gold producer will go way up
Then we are all really screwed
Why don’t they just buy up O3 mining 12 KMs away from their Marlartic deposit. They need to ore in 2027 anyhow
Whenever people talks about PGM they NEVER mention Sybanie-Stillwater which owns a sizeable, permitted mine in the ole USA.
I believe this mine is currently closed due to low prices.
You wouldn't happen to be willing to give us an insight, would you?🙏
One error in your math, that others seem to be confused about but not exactly picking up on. You are double penalizing the company on its debt. You shouldn't be subtracting the net interest expense *and* subtracting the debt from the EV. To get to an equity value, you need to pick one or the other (subtract interest exp or subtract net debt). You should just get the cash flow figure for the entire enterprise, without adjusting for interest and then subtract net debt. Good job otherwise and congrats on your continued work.
That is intentional because I don't like miners having debt, so I punish them for it in my valuations. In the first case, interest expense directly impacts annual cash flow and if I'm calculating a valuation based on cash flow, I think net interest expense should be subtracted before applying their multiple. And for the second part of that, eventually the principle balance on the debt has to be paid back so I want to adjust the valuation again for that. With all of that said, I understand if someone else wants to calculate it differently and I think that's fair.
@@MiningStockMonkey you're not punishing. You are double counting. It's not a preference or choice. It's mathematically wrong. If you say, I want my companies to have an extra 5% cash of their npv on hand for margin of safety purposes, that might make sense.
Doesn't Barrick make more sense???🤔
If you watch until the end I talk a little about this.
@@MiningStockMonkey I made my comment before I finished watching your video and you pretty much said that at the end.🤭
for me still my first choice is AEM