Q: Hi Peter…I think AEM has recently reported Q3. How did they do? Do you like their share / warrant purchase of ATX? I believe Lundin has been active nearby. Do you consider Chile to be “investor friendly”? Any comments you have would be appreciated.
Jim
Jim
5i Research Answer:
EPS of $1.59 beat estimates of $1.41 and revenues of $3.0B beat estimates of $2.91B. Sales grew 31.2% year-over-year, and guidance for its total cash costs per ounce, all-in-sustaining costs per ounce, and capex for the year remain unchanged. It achieved record free cash flow in the quarter, is tracking well toward its 2024 guidance, and reduced debt by $375M. We consider these to be good results, and over the long-term we would still be very comfortable with this name. The ATX investment looks fine to us. At $40M, though, it is hardly material to AEM ($60B market cap). It is very common for large producers to take a stake in smaller companies, 'just in case'. We would consider Chile to be friendly overall.