Agnico Eagle Mines (NYSE:AEM) reported record free cash flow and shareholder returns in the second quarter of 2026, while maintaining its full-year production outlook despite a rock movement at the Barnat Pit at Canadian Malartic.
President and CEO Ammar Al-Joundi said the company produced 856,000 ounces of gold during the quarter, exceeding budget for the second consecutive quarter. Cash costs and all-in sustaining costs remained within guidance, despite higher energy prices during the period.
Total cash costs were $1,054 per ounce and all-in sustaining costs were $1,459 per ounce, both lower than in the first quarter and below the midpoint of the company’s guidance ranges, Porter said.
Capital Returns and Balance Sheet
Agnico Eagle returned $625 million to shareholders during the second quarter through dividends and $400 million in share repurchases. During the first half, the company returned about 48% of free cash flow to shareholders, exceeding its original target of approximately 40%.
The company generated about $3.5 billion of operating cash flow in the first half. It allocated nearly 40% of that amount to sustaining capital and growth investments, including more than $800 million in capital expenditures and capitalized exploration during the second quarter. Another 15% supported acquisitions in Finland, while the remaining 15% was used to strengthen the balance sheet, according to Porter.
Cash on hand reached a record $3.5 billion, and the company’s net cash position increased to approximately $3.3 billion at quarter-end. Fitch Ratings upgraded Agnico Eagle’s long-term issuer default rating to A- from BBB+ in April.
Porter said the company monetized part of its equity investment portfolio during the quarter, providing additional flexibility for buybacks. He added that Agnico Eagle sees capacity to continue repurchasing shares while funding growth projects and maintaining its balance sheet.
Barnat Pit Event and Production Outlook
On July 1, a rock movement occurred in the wall of the Barnat Pit at Canadian Malartic. Al-Joundi said monitoring systems allowed the company to act quickly to protect personnel and equipment. No change was made to the company’s 2026 production guidance of 3.3 million to 3.5 million ounces, although production is now expected toward the lower end of that range.
Dominique Girard, executive vice president and chief operating officer for Nunavut, Quebec and Europe, said approximately 1 million tons of material that moved from the wall will remain in place. The company plans to build safety berms ranging from 15 meters to 25 meters high and establish additional access to resume mining in the pit. Mitigation work is expected to occur in the third quarter, with mining expected to resume in the fourth quarter.
During the question-and-answer session, Executive Vice President of Exploration Guy Gosselin said approximately 370,000 ounces are no longer expected to be accessible, including about 60,000 ounces in 2026 and 115,000 ounces in each of 2027 and 2028. Al-Joundi said the company will process low-grade stockpiles and continue seeking opportunities elsewhere in its portfolio.
Management said the Barnat event does not affect the company’s longer-term plan to grow Canadian Malartic toward annual production of 1 million ounces in the early 2030s.
Operational Records and Growth Projects
Management highlighted records across several operations. Macassa recorded skipped tons and mill throughput records, while Detour Lake set records for total mine tons and daily mill throughput. Meliadine and Kittilä also posted record mill throughput.
At Detour, the company is advancing an underground project intended to support the operation’s path toward 1 million ounces of annual production. The exploration ramp has advanced more than 1,000 meters and reached a depth of 180 meters. Management said potential underground production could begin as early as 2028, with an estimated 20,000 to 30,000 ounces in both 2028 and 2029.
At Canadian Malartic’s Odyssey underground operation, the first phase of shaft sinking was completed about three months ahead of schedule, reaching roughly 1.6 kilometers underground. Commissioning of the production shaft remains planned for the second quarter of 2027. The company also extracted its first two stopes and expects to mine four additional stopes by the end of 2026.
At Hope Bay, Agnico Eagle approved construction in May after completing detailed engineering. Girard said engineering is more than 70% complete, logistics are ahead of schedule and the first vessel carrying materials was expected to depart for the site shortly after the call. The company has said Hope Bay is expected to produce 400,000 to 450,000 ounces annually over decades.
The company also received approvals for change of land use and an environmental impact assessment at the San Nicolás joint venture in Mexico. Natasha Vaz, executive vice president and chief operating officer for Ontario, Australia and Mexico, said the project is at about 45% engineering and the joint venture is reviewing the terms of the approvals before pursuing supplementary permits.
Finland Consolidation and Exploration
Agnico Eagle completed acquisitions involving Rupert Resources, Aurion Resources and the Fingold joint venture, creating a land package of about 2,500 square kilometers in Finland’s Lapland Greenstone Belt. Jani Lösönen, vice president of Europe, said the company aims to build a Finnish platform capable of producing more than 500,000 ounces annually by optimizing Kittilä, advancing the Ikkari Project and expanding exploration.
The company expects optimization work at Ikkari, including an unconstrained open-pit scenario, to be completed by the end of 2027. Exploration drilling near Ikkari is scheduled to increase to five rigs by year-end.
Across the portfolio, Agnico Eagle completed nearly 400 kilometers of diamond drilling during the second quarter and 760,000 meters year-to-date. Gosselin said the company remains on track toward its 1.4 million-meter drilling budget for 2026.
Safety Focus
Al-Joundi also addressed the death of Daniel Giroux, who died in a workplace incident on May 1. He said the company has recorded 23 fatalities since beginning operations in 1957, including three in the past year.
Carol Plummer, executive vice president of sustainability, said the three recent fatal incidents occurred under different circumstances at separate sites. The company is accelerating work to identify and reinforce critical controls for major hazards, strengthening supervision and reinforcing safety-focused operating behaviors.
“Any fatality is unacceptable,” Al-Joundi said, adding that worker and community safety remains the company’s top responsibility.
About Agnico Eagle Mines (NYSE:AEM)
Agnico Eagle Mines Limited (NYSE: AEM) is a Canadian-based senior gold producer headquartered in Toronto, Ontario. The company is principally engaged in the exploration, development, production and reclamation of gold-bearing properties. Agnico Eagle pursues both greenfield and brownfield exploration to expand its resource base and operates a portfolio of producing mines and development projects to generate long-life gold production.
Its core business activities span the full mining lifecycle: grassroots and advanced-stage exploration, prefeasibility and feasibility studies, mine construction, underground and open-pit mining, ore processing and metal recovery, and post-mining reclamation and closure.
