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What Could AEM Address during Its Q3 2018 Earnings Call?

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Oct. 29 2018, Updated 6:30 a.m. ET

Agnico Eagle Mines’ stock performance

By October 17, Agnico Eagle Mines (AEM) has lost 20.3% of its value YTD (year-to-date), while the VanEck Vectors Gold Miners ETF (GDX) had fallen 14.3%. Among senior and intermediate miners (GDX)(GDXJ), Newmont Mining (NEM), AngloGold Ashanti (AU), Barrick Gold (ABX), and Goldcorp (GG) have performed better than AEM. Agnico Eagle is known to deliver consistent results throughout its cycles.

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Declining production profile

Agnico Eagle Mines’ production profile is expected to decline in the near term as its existing mines approach the end of their useful mine lives while the new projects are still in various phases of construction. These projects should start from 2020 onward.

Project pipeline

Agnico Eagle Mines has a robust project pipeline—probably one of the best in the industry. During its third-quarter release on October 25, Agnico Eagle is expected to provide an update on these projects. Newmont Mining (NEM) also has a strong project pipeline.

Kinross Gold’s (KGC) Tasiast Expansion could provide upside to its medium-term production. However, it is mired in geopolitical turbulence.

Investors looking to invest in gold could also look at leveraged ETFs such as the Direxion Daily Junior Gold Miners Bull 3X ETF (JNUG) and the Direxion Daily Gold Miners Bull 3X ETF (NUGT).

In the next part of this series, we’ll look at Eldorado Gold’s (EGO) third-quarter expectations.

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