Agnico-Eagle reports first-quarter drop in profits

Agnico-Eagle is reporting a sharp drop in its profits so far this year, compared to last year.

The company posted its first-quarter results Thursday.

Its first-quarter net income this year was $23.9 million, compared to $78.5 million last year.

The company blames low gold prices and higher costs for the drop.

But Nunavut's Meadowbank gold mine near Baker Lake continues to do well for the company.

Agnico-Eagle says production was up, and the costs were down at Meadowbank this year compared to last.

It said Meadowbank processed a record amount of ore in the first three months of this year, for a daily average of 11,320 tonnes.

The company expects production to continue rising this year, as it mines higher grades of ore.

Sean Boyd,the company's Chief Executive Officer,told investors on Fridaythatplans for the Meliadine mine near Rankin Inlet could easily change.

"We want a host of choices to make on how we should allocate the capital available to the company,because we all know Meliadine's a billion dollars plus, and we have to make a decision as a company at some time before the end of next year, what's the best use of a billion dollars plus?"

Boyd said despite the cost, the Meliadine project is still very promising.

He says it's Agnico-Eagle's largest single deposit and could produce up to 400,000 ounces of gold per year. The company hopes to havethe mine in production by 2018.