Agnico breaks out red ink despite production increase

The recent merger with Dumagami Mines may have boosted Agnico-Eagle Mines’ (TSE) second quarter gold output but the Toronto-based company is still operating in the red. Agnico-Eagle reported a net loss of $3.8 million or 15 cents per share for the three months ended June 30, compared with net income of $5.8 million or 39 cents per share in the second quarter of 1989. Second-quarter revenues increased to $17.7 million from $9.3 million in the equivalent 1989 quarter.

Gold production from Agnico’s Joutel, Que., division and Dumagami mine at Cadillac, Que., rose by 59% during the quarter to 43,043 oz. from 17,258 oz. in the same period last year. The increased output was attributed to the LaRonde operation which Agnico acquired through its recent merger with Dumagami Mines.

LaRonde contributed 25,251 oz. at a cost of US$283 per oz. to Agnico’s second-quarter production compared with 17,792 oz. at US$370 per oz. at Joutel where a cave-in has occurred below level 19. That brought the company’s first-half output to 87,077 oz., representing a 61% increase from last year.

However, Agnico reported a net loss of $2.1 millon or 8 cents per share for the six months ended June 30, compared with net income of $3.9 million or 28 cents per share in the same period last year. Six-month revenues climbed to $38.9 million from $19.1 million in the 1989 period.

Included in Agnico’s first-half financial results is a $3.4-million or 13 cents-per-share amortization charge relating to the cost of acquiring LaRonde, the company says.

Meanwhile, Societe d’Investissement of Montreal (Invesfor) has sold its 2% stake in Agnico, following an unsuccessful attempt by Invesfor President Jacques Forget to oust Agnico President Paul Penna. 0600,0206,0300,0008 Agnico-Eagle Mines (TSE) $000s except per-share items 3 months ended June 30 1990 1989 Revenue $17,676 $9,306 Net earnings (loss) (3,844) 5,820

per share (0.15) 0.39004