One of the best-quality players in the gold arena is Agnico Eagle Mines (AEM). It is our top pick for 2024 and our favorite mining stock for leveraging what we view as a gold demand boom in the coming years, advises Clif Droke, contributor to Cabot Top Ten Trader.

The company is a senior Canadian producer with a pipeline of high-quality exploration and development projects in the US, Canada, Mexico, and Columbia.

Key to Agnico’s long-term growth plans is the firm’s 100% owned Canadian Malartic mine, which is being transformed from Canada’s second-largest operating gold mine to its largest underground mine, with 15 million ounces of resources being added since 2019.

Another major contributor to Agnico’s expansion efforts is the open-pit Meadowbank complex in Canada. It has seen a 15% year-on-year increase in gold production in the first nine months of this year along with record haulage of underground ore in Q3 – plus efforts to extend the mine’s life by several years.

Agnico has described overall production across its mine portfolio as “robust” in recent quarters, with gold production coming in above the mid-point of annual guidance and cost performance remaining “solid.”

Payable gold production in the latest quarter was over 850,000 ounces at production costs per ounce of $893. All-in sustaining costs (a key metric) were $1,210 per ounce – well under the recent gold price of ~$2,100 and leaving Agnico in a strong position to benefit from additional gold price increases.

The firm is entering the new year in a flexible financial position with $355 million in cash and over $1 billion in available liquidity. That should help Agnico’s expansion plans going forward along with dividend payments (a 2.9% yield in late 2023).

Wall Street sees earnings growth 11% this year, which is likely to prove too conservative given the likelihood of higher gold prices. 

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