Gold producer Agnico-Eagle Mines
The numbers were all over the place. Agnico-Eagle's net income rose more than 50% to $65.2 million for the fourth quarter vs. Q4 2006 because of a favorable tax-rate adjustment. Revenue from mining operations, however, was actually down 21% for the quarter, and nearly 7% for the year, in large part because of weakness in copper and zinc prices. Agnico-Eagle's shares were diluted by 13% in 2007, but the dividend grew by 50%. Gold production was down 6% in 2007, narrowly missing targets. These numbers may have Fools wondering if Agnico-Eagle has hit its stride.
Digging deeper, we see that Agnico-Eagle was just pausing to build itself up.
The company purchased Cumberland Resources in 2007, adding another 3.5 million ounces of gold to reserves. It's projecting a 55% increase in 2008 to 358,000 ounces, and a five-fold increase to more than 1.3 million ounces by just 2010. That's a whole lot of shiny yellow stuff.
At today's gold prices, and with large-scale miners like Newmont Mining
In this Fool's opinion, the intermediate and junior gold and silver producers will outperform the industry giants over the coming months and years. Many Fools have done well in recent years with the Goldcorps and Newmonts of the world, but while they will be pressured to sustain growth by purchasing new assets and gobbling up smaller companies at a premium, companies like Agnico-Eagle, Yamana Gold
For related Foolishness:
Fool contributor Christopher Barker captains yachts and writes about stocks. He can also be found in the Motley Fool CAPS community under the username Sinchiruna. He owns shares in Agnico-Eagle Mines, Yamana Gold, and Kinross Gold. The Motley Fool has a disclosure policy.