AGNICO-EAGLE (AEM) - Update!
Peter Degraaf
Six month's ago I wrote about AEM (Agnico-Eagle …A Blue Chip Miner), and I indicated in my article, that AEM was a 'good buy' for future appreciation. The date was July 5, 2007, and the price was just below $40.
I'm happy to say that those of you who took my advice, indeed made a healthy profit, and today I'm ready to report to you that 'the best is yet to come'.
By way of review, Agnico-Eagle (AEM) is a low-cost gold producer focusing on exploring and acquiring gold properties in 'safe' parts of the world.
Current gold projects include:
The LaRonde extension in Canada
Goldex in Canada
Lapa in Canada
Meadowbank in Canada
Kittila in Finland
Pinos Altos in Mexico
These projects are in addition to the production that is taking place at LaRonde in Quebec, Canada's largest gold deposit, and one of the lowest cost producers in Canada.
Production costs for 2008 are estimated at $200 per ounce, thanks in part to the sale of bi-products, such as silver and zinc. This low cost of mining makes Agnico-Eagle almost immune to lower gold prices, and increases its attraction each time the gold price is rising (as now).
Approximately 70% of AEM's total revenues come from gold mining; the other 30% from silver production.
The recent news releases from AEM have been very positive: Profit is increasing; and the dividend was increased by 50%. MOREOVER, the company has paid a dividend for the past 26 years!
Exploration is ongoing at the Meadowbrook property in NWT, and the result is an increase in gold reserves there. The production date for Meadowbrook has been moved forward (another positive sign) to the year 2010.
AEM expects to bring a total of 5 new mines into production during the next two years, while steadily increasing reserves.
The technical picture is also quite positive.
Chart courtesy www.stockcharts.com
The chart pattern is positive. Ever since our last article, when AEM was in the process of breaking out (in July), the trend has been rising. The blue lines indicate the current path. The circled area shows volume is increasing, as more and more people become interested in the stock. The green pennant formation is bullish, and a breakout above the blue arrow sets up a target at the green arrow, at about $75.
Great relative strength vis-à-vis HUI:
For more information visit www.agnico-eagle.com
Please do your own due diligence. I am NOT responsible for your trading decisions.
Peter Degraaf, PM
February 11, 2008
DISCLAIMER:
Please do your own diligence, I am not responsible for your trading decisions.
Peter Degraaf is an online stock trader, with over 50 years of investing experience. He sends out a weekly Email alert to his many subscribers. For a 60 day free trial, send him an Email, or visit his website: itiswell@cogeco.net www.pdegraaf.com
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