Is AEM a good stock to buy? We came across a bullish thesis on Agnico Eagle Mines Limited on X.com by @MoneyShow. In this article, we will summarize the bulls’ thesis on AEM. Agnico Eagle Mines Limited’s share was trading at $162.11 as of June 8th. AEM’s trailing and forward P/E were 15.41 and 12.24 respectively according to Yahoo Finance.
Photo from Hycroft Mining website
Agnico Eagle Mines Limited, a gold mining company, engages in the exploration, development, and production of precious metals. It explores for gold, silver, copper, and zinc. AEM remains high-quality gold producer whose earnings resilience is being underestimated due to near-term concerns around rising diesel costs.
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While diesel is the largest operating cost input in mining, the impact on gold miners is generally less severe than in bulk commodities such as copper or iron ore, higher oil prices still pressure operating expenses across the sector.
A BMO study estimates that gold miner costs increase by approximately 2% for every $10 move in oil prices, implying roughly an 8% cost headwind given recent oil price moves from $60 to $100. However, Agnico Eagle has actively managed this exposure, hedging over half of its 2026 estimated diesel requirements at approximately $0.69 per litre, significantly below current spot levels above $1 per litre. Diesel prices have also surged roughly 70% since late February, further highlighting cost volatility in input markets, though Agnico’s hedge position provides meaningful downside protection.
Importantly, the company’s all-in sustaining costs of $1,339 per ounce remain well supported relative to a gold price near $5,100, allowing substantial margin expansion even under elevated cost conditions. This cost buffer ensures that even with higher diesel expenses, Agnico can sustain industry-leading profitability and strong free cash flow generation.
As a result, the market’s focus on near-term input inflation appears overstated relative to the company’s gold price leverage and operational strength. Agnico Eagle Mines therefore remains compelling long-term investment opportunity with resilient margins and asymmetric upside driven by sustained gold price strength and disciplined cost management.
Previously, we covered a bullish thesis on Harmony Gold Mining Company Limited (HMY) by Intelligent_Okra5374 in April 2025, highlighting gold price tailwinds, strong free cash flow, and diversification into copper and uranium. HMY’s stock price has appreciated by 18.36% since our coverage. @MoneyShow shares similar view but emphasizes AEM diesel hedging and cost resilience against rising oil prices
Agnico Eagle Mines Limited is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held AEM at the end of the first quarter which was 56 in the previous quarter. While we acknowledge the risk and potential of AEM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AEM and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
