Tis rigor and not law

Agnico Eagle’s (AEM) strong 3q19 financials adds weight to house theory about the importance of the 3q19 reporting period for miners

We do love a long title. Anyway, Agnico Eagle (AEM) just announced ts 3q19 financials, here’s the link and here are a couple of charts. This stacks top line revenues against operating earnings:

This is net earnings per share, which excludes the $1.68 loss taken by AEM in 4q18 due to impairments (skews this basic chart out by too much).

Anyway, great quarter from all angles and one that adds weight to this house theory about the increased significance of the 3q19 reporting period for mining companies. Here’s the reminder:
With the uptick in gold ownership
and the way in which we’ve witnessed traded volumes in precious metals stocks
drop sharply in the last couple of weeks, it occurs to me that the whole market
is sitting around waiting to find out if the bets they placed on juniors were
right or wrong and what’s more they are only watching gold price as their
marker and judge. If gold goes to 1600 they will be right, if it goes back
under 1450 they’re going to sell the juniors.

But at some point a new driver will
appear and I think we might have one in our very near future. One thing that
doesn’t seem to be in calculations and with the potential to snap the market
out of this precious metals inertia are strong quarterly operating results from
the tier 1 and tier 2 mining companies and on consideration, I think that is
what Barrick, Newmont, Agnico, Newcrest and all their bigass friends (into
which we must also include the new star-turn Kirkland Lake) are about to
deliver to the market. If the third quarter earnings period turns out to be as
positive for the mining sector as I suspect, the rally is on its way even if
gold stays at 1500 for the rest of 2019 and to gauge that call, I’m marking the
GDX clock at $26.96 this weekend; let’s see where we are at the end of the main
earnings period.

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