Canadian gold miner Agnico-Eagle is forecasting a strong second half, with gold production averaging 480 000 oz to 500 000 oz a quarter, as the company has successfully ramped up operations following the temporary Covid-19 shutdown.

Seven of Agnico’s eight mines were on care and maintenance at one point during the second quarter, in which the company produced 331 064 oz at an all-in sustaining cost (AISC) of $1 142/oz. The production was about 20% below that of the corresponding period in 2019, while the AISC was 20% higher.

Only the Kittila mine, in northern Finland, operated continuously during the second quarter.

“We finished the quarter strong as our employees responded quickly and effectively with a plan to manage the mine shut downs and subsequent restart and ramp-up of operations while protecting the health, safety and wellbeing of our employees and the communities in which we operate,” said CEO Sean Boyd.

The temporary suspension cost in the second quarter amounted to $22.1-million, while the direct and incremental cost related to Covid-19 was $2.3-million.

Agnico, which has mines in Canada, Finland and Mexico, is forecasting a strong second half. It has increased its gold production guidance slightly to between 1.68-million and 1.73-million ounces, compared with the previous guidance of 1.63-million to 1.73-million ounces, at a total cash cost and AISC of $740/oz to $790/oz and $1 025/oz and $1 075/oz, respectively.

The 2021 and 2022 gold forecasts of 2.05-million and 20.1-million, respectively, remained unchanged.

With operations largely back to normal and record-high gold prices, Boyd said Agnico was set to generate strong net free cash flow during the second half of the year.  

The miner reported a quarterly net income of $105.3-million, or net income of $0.44 a share. Adjusted net income was $44.3-million, or $0.18 a share, for the second quarter of 2020.  For the second quarter of 2019, the company reported net income of $27.8-million, or $0.12 a share.

In the first six months of 2020, Agnico’s reported net income of $83.7-million, or $0.35 a share.  This compares with the first six months of 2019, when net income was $64.8-million, or $0.28 a share.

The company declared a dividend of $0.20 a share.