Agnico Eagle: My Contrarian Gold Play
With gold consolidating and correcting roughly 25% from its $5,500 all-time high to around $4,000 today, I believe it’s time to become anticyclical. That’s why I’ve started dollar-cost averaging into $AEM. Here’s why I think the stock is one of the best ways to play a long-term bull market in gold:
Agnico Eagle is one of the highest-quality ways to invest in a long-term bull market for gold. Producing around 3.4 million ounces annually at an AISC of about $1,475/oz, a $4,000 gold price implies operating margins of roughly $2,500/oz before taxes and corporate costs.
At current prices, Agnico is already a cash-generation powerhouse, delivering a record $4.4 billion of free cash flow in 2025 while maintaining a net cash balance sheet. With gold near $4,000/oz, annual free cash flow should remain around $4–5 billion, allowing the company to continue returning roughly 40% of free cash flow through dividends and buybacks while funding future growth.
Just as important, Agnico’s mines are concentrated in Canada, Finland and Australia, three of the world’s safest mining jurisdictions. Combined with disciplined capital allocation, long-life assets and low geopolitical risk, Agnico Eagle offers one of the best risk-adjusted ways to gain leveraged exposure to structurally higher gold prices.
My Investment Case
$AEM is down roughly 40% from its all-time high earlier this year, which is exactly why I’m starting to build a position. My investment thesis is simple: I believe gold can recover to $6,000–8,000 over the next five years. Given the strong operating leverage of gold miners, I think Agnico Eagle has the potential to deliver a 2–3x return over that same period. I want to be positioned for that scenario.
What is your plan about Gold?
