Agnico-Eagle Sees Higher 2012 Output, Q2 Profit Falls

The Canadian gold miner, which has had to battle operational issues over the last year, however, boosted its 2012 production outlook.

"We're generating record amounts of cash flow for the first half of 2012 and our production has gone so well, we've actually increased our guidance for the year," said Chief Executive Sean Boyd.

The Toronto-based miner raised its full-year outlook to 975,000 ounces of gold from a previous estimate of 875,000 to 950,000 ounces.

The miner earned $43.3 million, or 25 cents a share in the quarter ended June 30. That compared with $68.8 million, or 40 cents, a year earlier.

Excluding one-time items like a non-recurring tax loss and an impairment on certain securities, earnings came in at 40 cents a share. That was down from 47 cents a share in the year-ago period.

Revenue rose to $459.6 million from $433.7 million.

Overall gold output rose to 265,350 ounces in the quarter, from 239,328 in the year earlier period, as new production at Meadowbank outweighed the loss of output from its Goldex mine in the province of Quebec.

In October, Agnico was forced to write-off its investment in its Goldex mine in Quebec, after the mine was shut down due to water inflow and ground stability concerns that made operating there unsafe.

The company said it will develop satellite projects around Goldex, with production expected in 2014.

Both its Meadowbank mine in the Canadian Arctic and its Pinos Altos mine in Mexico achieved record production in the most recent quarter, the company said.

Realized gold prices rose to $1,602 an ounce in the second-quarter, up from $1,530 an ounce in the year-earlier period. Weighted average cash costs rose to $660 an ounce, compared with $565 an ounce in the same period of 2011.

The LaRonde gold mine in Quebec, which is transitioning into a deeper pit, dragged on overall cash costs, as did the loss of the relatively low cost Goldex mine.