Agnico-Eagle Mines Shares Plunged: What You Need to Know
Oct 19th 2011 1:52PM
Updated Oct 19th 2011 2:34PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Agnico-Eagle Mines (NYS: AEM) fell 19% today after the company shut down one of its mines.
So what: The Goldex mine in Val d'Or, Quebec, had issues with water inflow and ground instability, causing the company to suspend the project indefinitely. The shutdown will result in a $260 million charge in the third quarter to write off the investment.
Now what: 17% of the company's output was expected to come from the mine, and this was one of Agnico-Eagle's lowest-cost operations so the news couldn't be much worse. Considering the impact on operations, this is a big blow, and I'm not sure we've hit bottom here. At the least we know the shine has worn off shares of Agnico-Eagle; I think buying here would be like throwing money into a wishing well.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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