Agnico Beats Again With Costs Under Control

Source: Adrian Day 08/17/2026

Global Analyst Adrian Day reviews more earnings reports from a top gold company and one of his favorite high-yield companies.

Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) saw a small production beat when it reported its second-quarter results, which, together with lower-than-expected operating costs, saw record Free Cash Flow and a record capital return (dividend and share buybacks), despite an 8% drop in the average gold price for the quarter and oil over $100/bbl. Several mines had record quarterly output, including Detour, Kittila, and Meliadine. All-in Sustaining Costs (AISC) at $1,459/oz were helped by the high U.S. dollar (reducing costs outside the U.S.) as well as strong by-product prices.

The company reiterated its full-year production guidance, albeit at the lower end, despite the suspension of mining at the Barnat pit. Some 40% of the $3.5 billion of operating cash flow in the first half was allocated to ongoing capital investments (including acquisitions), while 30% was returned in the form of dividends and share buybacks.

Looking ahead, five development projects are advancing, including the shaft sinking at Odyssey (underground Malartic), Upper Beaver, and Hope Bay, ensuring a steady pipeline in the years ahead.

Agnico is best in class among major gold producers, and a Buy.

Fortuna To Go Ahead With Next Stage of Growth

Fortuna Mining Corp. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE) approved a 30% capacity increase at its Séguéla mine in Côte d’Ivoire.

The expansion, which will also see improved recoveries to nearly 95%, will be funded by current liquidity and cash flow, with construction expected to begin later this year. The Sunbird underground deposit at the mine was also approved, with mining expected to commence in the second quarter of 2027.

The expansion approval had been expected.

Among the mid-tier producers, Fortuna is a strong buy.

Ares Reports Slightly Down Quarter, but Metrics Still Strong

Ares Capital Corp. (ARCC:NASDAQ) reported a slightly down quarter, though still strong, with an optimistic outlook. Earnings remained just below the dividend, though spillover income supports the payment, while management is confident that modest leverage and long-term earnings power support the dividend over time. Widening spreads and new investments suggest the potential for earnings, once again, to exceed the dividend in the period ahead.

The company has spillover income equivalent to almost three-quarters of dividend payments. The quarter was poor for closings on new loans, but activity picked up towards the end of the quarter, with an improved pipeline of opportunities, with higher fees and stronger terms, particularly in the “upper-middle market” where there is less competition.

Credit Ranking Better Than History, Better Than Sector

Credit remains solid overall, despite nonaccruals edging higher, though at 2.4% at cost, they are still well below Ares’ post-GFC historical levels (3%) and the BDC sector’s average (approximately 4%). Companies rated in the lowest two of four grades are again below Ares’ longer-term average level and also “meaningfully lower” than those rated 4, which indicates companies outperforming original expectations. Declining marks on some loans in the quarter led to a small decline in net asset value, down 1.2% on the prior quarter.

Ares is in a strong position, with $6 billion in available liquidity. It repaid $1 billion on unsecured notes, though it also raised additional debt of almost $1.2 billion, lowering borrowing costs, extending maturities, and diversifying funding sources. Leverage at moderately over 1x is low, and in the middle of Ares’s own conservative range. The largest and highest-rated BDC, it is well diversified (619 portfolio companies, with no single investment over 1.3% of the portfolio). Trading slightly below NAV, and yielding over 10% (close to the high, other than during the depths of COVID, back to GFC).

For long-term income-oriented investors, Ares is a Buy.

TOP PICKS this week, in addition to the above OR Royalties (OR:TSX; OR:NYSE), Royal Gold Inc. (RGLD:NASDAQ), Pan American Silver Corp. (PAAS:TSX; PAAS:NYSE), and Lara Exploration Ltd. (LRA:TSX.V).

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Adrian Day’s Global Analyst is distributed for $990 per year by Investment Consultants International, Ltd., P.O. Box 6644, Annapolis, MD 21401. (410) 224-8885. www.AdrianDayGlobalAnalyst.com. Publisher: Adrian Day. Owner: Investment Consultants International, Ltd. Staff may have positions in securities discussed herein. Adrian Day is also President of Global Strategic Management (GSM), a registered investment advisor, and a separate company from this service. In his capacity as GSM president, Adrian Day may be buying or selling for clients securities recommended herein concurrently, before or after recommendations herein, and may be acting for clients in a manner contrary to recommendations herein. This is not a solicitation for GSM. Views herein are the editor’s opinion and not fact. All information is believed to be correct, but its accuracy cannot be guaranteed. The owner and editor are not responsible for errors and omissions. © 2023. Adrian Day’s Global Analyst. Information and advice herein are intended purely for the subscriber’s own account. Under no circumstances may any part of a Global Analyst e-mail be copied or distributed without prior written permission of the editor. Given the nature of this service, we will pursue any violations aggressively.

( Companies Mentioned: AEM:TSX; AEM:NYSE, ARCC:NASDAQ, FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE, )

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