Can Agnico Eagle's Expanding Reserves Fuel Its Next Growth Phase?

Agnico Eagle Mines Limited AEM is making substantial efforts for the continuation of its mineral reserve replacement, a critical metric, reflecting growth potential. At the end of 2024, AEM boosted its proven and probable gold reserves by 0.9% year over year to 54.3 million ounces. More notably, inferred mineral resources expanded around 9% to 36.2 million ounces, thanks to successful exploration drilling at Detour Lake, East Gouldie, Hope Bay, Meliadine, Fosterville and Macassa.

Year-end expansion set a strong foundation, and the first half of 2025 saw further progress as drilling campaigns advanced key projects. During the second quarter, AEM made further progress as drilling campaigns advanced key projects. AEM continued exploration drilling to extend the East Gouldie deposit at Canadian Malartic to the east. It also advanced the development of the production levels at East Gouldie, with work in progress for the planned start-up in the second half of 2026. 

At Hope Bay, drilling results at Patch 7 also suggest the potential for mineral resource expansion. Moreover, drilling at the Marban deposit, added through the acquisition of O3 Mining, focuses on mineral reserve and mineral resource expansion. AEM also continued to work on a feasibility study at San Nicolas, with completion expected in late 2025. At Detour Lake, AEM started the development of the exploration ramp during the second quarter.

Agnico Eagle’s initiatives in expanding its reserve base and inferred resources position it as a growth-oriented player among its major peers. Maintaining drilling pace and converting potential into formally declared reserves through 2025 will be key, as it constitutes a critical barometer for long-term growth.

Among its peers, Newmont Corporation NEM logged gold reserves of 134.1 million attributable ounces at the end of 2024 (including assets held for sale), a 1.3% decline from 135.9 million attributable ounces a year ago, weighed down by depletion and unfavorable revisions. Newmont’s go-forward Tier 1 portfolio included 125.5 million attributable gold ounces. While Newmont’s overall reserve base remains substantial, the lack of growth raises red flags. 

Barrick Mining Corporation B reported robust growth in reserves, with its proven and probable gold mineral reserves climbing approximately 17.4 million ounces in 2024, a clear sign of strong reserve replacement. Barrick’s attributable proven and probable mineral reserves were 89 million ounces at the end of 2024, up from 77 million ounces a year ago. Barrick demonstrates proactive exploration and conversions, insulating its reserve profile from near-term production drawdowns.

The Zacks Rundown for AEM

Agnico Eagle’s shares have rallied 107.6% year to date against the Zacks Mining – Gold industry’s rise of 117.7%, driven by the record-setting upside in gold prices.

From a valuation standpoint, AEM is currently trading at a forward 12-month earnings multiple of 22.38, a roughly 37.4% premium to the industry average of 16.29X. It carries a Value Score of C.

The Zacks Consensus Estimate for AEM’s 2025 and 2026 earnings implies a year-over-year rise of 67.4% and 3.4%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

AEM stock currently carries a Zacks Rank #3 (Hold). 

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This article originally published on Zacks Investment Research (zacks.com).

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