Agnico Eagle (AEM) Q3 2026: Unit Costs Top Full-Year Guidance Range

Agnico Eagle (AEM) reported third-quarter 2026 results in which production met guidance but unit costs moved above the top of its full-year range. The company filed its MD&A and interim financial statements for the quarter ended September 30, 2026 on a 6-K on October 28, 2026 [1]. The Canadian Malartic production loss stayed within the company's estimate, output tracked the low end of annual guidance, and free cash flow fell while net cash increased [1]. Operations and the balance sheet remain solid; the change is a higher cost base.

Agnico Eagle is the world's second-largest gold producer, with mines in Canada, Australia, Finland and Mexico [2]. It does not sell gold forward, so revenue is roughly production multiplied by the gold price, and profit depends on each mine's unit costs [1]. Gold sales revenue was $11.72 billion in 2025 [3].

Q3 2026 unit costs rose above the full-year guidance range

Both total cash costs and all-in sustaining costs (AISC, which adds sustaining capital and similar items to cash costs) came in above the top of full-year guidance. They were $1,133 and $1,648 per ounce, compared with $952 and $1,331 a year earlier [1] and $1,054 and $1,459 in the second quarter [4]. The full-year ranges are $1,020-1,120 and $1,400-1,550; the company now expects to finish near the upper end, and nine-month cumulative costs remain inside the ranges [1].

Three factors drove the increase: lower volume, input inflation and an accounting item. Q3 production costs were $972 million, up 15.9% year over year, while production fell 6.1% [1]. The CFO said diesel prices above budget added more than $30 per ounce to cash costs, and diesel is about 11% of operating costs [5]. Consumables are beginning to show about 6% inflation, tariffs are expected to add about $5 per ounce, and the company had no diesel hedges outstanding at September 30 [1]. Within AISC, non-cash reclamation and leases rose from $19 to $69 per ounce [1].

The CFO also said the diesel impact could widen to $50-60 per ounce in the fourth quarter and reach as much as about $80 per ounce for 2027 [5]. Based on nine-month cumulative figures, fourth-quarter total cash costs would need to stay at or below about $1,207 per ounce for the full year to remain within the upper limit. At a realized gold price of $4,264 per ounce, the margin after AISC is still about $2,600 per ounce, so the cost increase compresses the profit margin [1].

On volume, Q3 payable production was 814,012 ounces, versus 866,936 ounces a year earlier [1]; management said this was at the midpoint of quarterly guidance [5]. Management said Detour Lake has moved into a lower-grade mining sequence for the fourth quarter [5]. Holding the 3.3 million ounce low end for the year requires at least about 805,000 ounces in the fourth quarter [1].

Free cash flow fell, but shareholder returns rose as a share of cash

Q3 free cash flow declined, mainly because of working capital and higher capital spending. Free cash flow was $852 million, compared with $1.19 billion a year earlier [1] and $1.335 billion in the second quarter [6]. Before working capital changes it was $1.057 billion, close to the prior-year level [1]. Inventories and other current assets together increased by about $410 million; capital expenditures were $921 million versus $644 million a year earlier, including $183 million at Hope Bay, and full-year capital guidance was unchanged [1].

Shareholder returns did not shrink. Management said Q3 returns were about $478 million, about 56% of free cash flow, and the full-year target rose from about 40% to more than 50% [5]. Net cash was $3.416 billion at September 30 [1], up from $3.267 billion at June 30 [7].

Canadian Malartic production loss within the company's estimate

Canadian Malartic produced 111,202 ounces in Q3, down 29.1% year over year, mainly because the mill switched to lower-grade stockpiles [1]. Remediation at the Barnat pit was completed in the quarter and mining resumed on September 27; the company reiterated a reduction of 60,000-80,000 ounces in the second half of 2026 and up to 150,000 ounces in each of 2027 and 2028 [1]. Management said it has no concrete way yet to recover the 2027 loss, and first production from the Odyssey shaft is still scheduled for Q2 2027 [5].

Conclusion

The quarter confirmed that production and projects are on plan, while the unit-cost base moved up. The pressure comes from diesel, consumables and tariffs across the company, narrowing the profit margin; cash generation before working capital matched the prior year, and both net cash and the payout ratio increased. Diesel inflation will carry into 2027, and management said it cannot predict the path of oil prices [5]. The key fourth-quarter evidence is whether production reaches about 805,000 ounces, whether costs stay within the full-year upper limit, and whether working capital reverses; the Barnat impact on 2027-2028 will be updated with guidance in February 2027.

Sources

[1] AEM 6-K filed 2026-10-28 · Q3 2026 MD&A and interim financial statements (Exhibit 99.1) (2026-10-28, Agnico Eagle 6-K Exhibit 99.1, https://www.sec.gov/Archives/edgar/data/2809/000110465926119671/tm2628160d2_ex99-1.htm) [2] AEM 6-K filed 2026-09-29 · About Agnico Eagle (2026-09-29, Agnico Eagle 6-K) [3] AEM 40-F filed 2026-03-19 · FY2025 consolidated financial statements (XBRL) (2026-03-19, Agnico Eagle 40-F annual report) [4] AEM 6-K filed 2026-07-30 · Q2 2026 results highlights (2026-07-30, Agnico Eagle 6-K Q2 results release) [5] AEM Q3 2026 earnings call 2026-10-29 (2026-10-29, Agnico Eagle Q3 earnings call, machine transcript) [6] AEM 6-K filed 2026-07-30 · Q2 2026 financial results summary table (2026-07-30, Agnico Eagle 6-K Q2 results release) [7] AEM 6-K filed 2026-07-30 · Q2 2026 balance sheet, 2026 guidance and shareholder returns (2026-07-30, Agnico Eagle 6-K Q2 results release)