Agnico-Eagle Mines Ltd. (NYSE:AEM) will be challenged over the next several years on higher costs and lower production, although things could be salvaged by higher gold prices.
Barclays (NYSE:BCS) said, "Compared to previously issued guidance for the period 2011-2014 (2015 guidance is new), total expected gold production is down roughly 1% while average costs are higher by over 11%. Lower projected grades and recovery rates at Pinos Altos are to be mostly offset by higher production from Goldex and Kittila, but higher costs will likely be driven by labor, consumables, waste stripping, and other pressures. The largest impact on our earnings model is for the years 2011-2012."
Barclays maintains an "Underweight" on Agnico-Eagle Mines, which last closed at $75.61, gaining $0.44, or 0.59 percent. Barclays raised their price target on them from $45 to $50.
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