Lower silver prices during first quarter cut Agnico’ income

Despite an improved operating performance at Agnico-Eagle Mines’ (TSE) gold division, depressed silver prices and higher operating costs, put a slight damper on the company’s first quarter results.

While the average cost of production in the company’s silver division was $10.20 per oz during the first three months of 1988, the average price received for the metal lagged at $7.08.

As a result, Agnico-Eagle’s first quarter net income decreased to $400,000 or 3 cents per share, down from $920,000 or 7 cents per share in the first three months of 1987.

However, Agnico says the acquisition of several silver properties near Cobalt, Ont., could improve operating efficiencies and reduce operating costs.

The company’s silver division produced 338,778 oz silver during the first quarter and recovery rates at the new Penn Mill at Cobalt improved to 98.2% by the end of the quarter.

Income from production for the three months ended March 31 increased to $12.9 million from $10 million at the same time last year.

After first quarter production increased to 18,532 oz from 16,495 oz last year, operating profits from Agnico-Eagle’s gold division increased to $4.1 million in the first quarter of 1988 from $2.9 million in 1987.

Agnico-Eagle holds a 32% interest in Dumagami Mines (TSE) which is about to start production at its Donald LaRonde mine in Bousquet and Cadillac twps., Que.