Agnico Eagle CEO Al-Joundi’s advice to his peers: Focus more on making money, returning capital

Being regionally focused is what differentiates Agnico Eagle Mines (TSX:AEM) from some of its more globally minded peers, says President & CEO Ammar Al-Joundi.

In February Al-Joundi spoke to Kitco Mining at the BMO Global Metals, Mining & Critical Minerals Conference 2024 in Hollywood, Florida.

He is the recipient of Kitco Mining’s 2023 CEO of the Year in the production category.

Agnico Eagle ended 2023 with record production, cash flow and reserves. Asked why the company is delivering when others are not, Al-Joundi said:

“I think one of the reasons Agnico has been consistent in delivery is because of our regional approach. While many of our peers who are very good… they are global miners, and they can go into difficult places and that's a tough business. But if you're Agnico and you've been in the Abitibi [greenstone belt] for example for 60-plus years, you know the ground better, you know the people better, you know the suppliers better, you know the contractors better, and that really allows us to have less volatility and more certainty when we're operating our business.”

Agnico Eagle owns and operates Canadian Malartic in Quebec — Canada’s second-largest gold mine — as well as other mines in Canada, Australia, Finland and Mexico. Last year Agnico Eagle bought the 50 percent of Malartic owned by Yamana Gold, consolidating the mine into 100 percent ownership.

Al-Joundi noted the Canadian Malartic Complex is transitioning from a 60,000 tonnes-per-day operation to 20,000 tpd, utilizing higher ore grades. This will free up about 40,000 tonnes per day of milling capacity.

“It's an example of the potential we have to really leverage that investment,” he said, later explaining that one way to do that is to develop the Wasamac deposit — a small, high-grade project — without above-ground infrastructure. Rather than incurring the capital costs of building a mill and tailings facility, and having to arrange permitting, ore from Wasamac could be sent to Canadian Malartic for milling.

“Not only is it a better return on capital, it's also better environmentally,” he said, not missing the chance to offer a sector critique:

“That's one thing this industry needs to do better, is stop talking about more and more [production] and focus more on making money and return on capital.”

Al-Joundi had an interesting answer to the question, what can gold stocks do to get out of their slump? Generalist fund investors told the CEO they are concerned about a market correction and are thinking about positioning themselves for when it happens. The investors said since 1925 there have been 15 market corrections, and in 13 of those corrections, when the general stock market index dropped 35 percent, gold rose an average 45 percent.

“Not only in their view will gold go up, but gold equities as well will much outperform the
general index,” he said.

Coverage of the BMO Global Metals, Mining & Critical Minerals Conference sponsored by First Majestic Silver (NYSE:AG).

0:00: 2023 performance
2:34 Canadian Malartic
3:46 Wasamac deposit
6:01 Buying opportunity?
7:04 Base metals
8:59 Gold premium?
10:17 Gold equities
12:40 Big money and gold stocks
14:03 Too big to succeed?
15:15 2024 Goals and CEO of the Year

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