Both had glaring misses in the fourth-quarter of 2010 and these mid-sized gold miners must show growth, profits and crisis management when they report. Agnico will report Thursday April 28th and Randgold will follow a week later.
Here's what you have to look for, beginning with Agnico:
ProductionAgnico missed 2010 gold production guidance by 1.2%, delivering only 987,609 ounces of gold. The company had lower-than-expected grade at two of its mines, Lapa and LaRonde. According to CEO Sean Boyd, the low grade was a sequencing issue and eventually both mines will deliver better gold and more of it. LaRonde is estimated to produce 157,000 ounces in 2011 and Lapa should produce 125,000 ounces. Agnico is hoping to produce 1.2 million ounces in 2011, 19% more than 2010. Cash Costs Agnico also reported higher cash costs in 2010 of $451 an ounce, which disappointed the Street. This was mainly due to operational issues at two if its fledgling mines, Kittila and Meadowbank, and the first quarter might be rough.
Kittila had to contend with a planned maintenance shutdown that was longer than expected and the mine took longer to rev up after the fact. According to Boyd, "since December that mine has run above design capacity" and is "running well." Agnico hopes Kittila will produce 150,000 ounces in 2011 for $548 an ounce. The biggest thorn in Agnico's side was capacity constraints at Meadowbank. This was due to the company using portable crushing facilities that didn't do their job. Investors will have to wait until the third quarter for a permanent fix, at which time, supposedly, production will ramp up big time.
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