AEM vs. KGC: Which Gold Mining Stock Should You Invest in Now?

Anindya Barman

Thu, Apr 24, 2025, 4:34 AM 7 min read

Agnico Eagle Mines Limited AEM and Kinross Gold Corporation KGC are two prominent players in the gold mining space with global operations. With gold prices soaring to unprecedented levels, driven by global economic uncertainties and trade tensions, comparing these two major gold producers is particularly relevant for investors seeking exposure to the precious metals sector.

Gold prices have zoomed roughly 25% this year, largely attributable to aggressive trade policies, including sweeping new import tariffs announced by President Donald Trump, which have intensified global trade tensions and heightened investor anxiety. Also, central banks worldwide have been accumulating gold reserves, led by risks arising from Trump’s policies. Prices of the yellow metal catapulted to a record high of $3,500 per ounce on Tuesday as the U.S. dollar tumbled amid President Trump's criticism of Federal Reserve Chair Jerome Powell and call for an immediate reduction in interest rates.

Let’s dive deep and closely compare the fundamentals of these two Canada-based gold miners to determine which one is a better investment now.

The Case for Agnico Eagle

Agnico Eagle is focused on executing projects that are expected to provide additional growth in production and cash flows. It is advancing its key value drivers and pipeline projects, including the Odyssey project in the Canadian Malartic Complex, Detour Lake, Hope Bay, Upper Beaver and San Nicolas. The Hope Bay Project, with proven and probable mineral reserves of 3.4 million ounces, is expected to play a significant role in generating cash flow in the coming years. The processing plant expansion at Meliadine was completed and commissioned in the second half of 2024, with mill capacity expected to increase to roughly 6,250 tons per day in 2025.

The merger with Kirkland Lake Gold established Agnico Eagle as the industry's highest-quality senior gold producer. The integrated entity now has an extensive pipeline of development and exploration projects to drive sustainable growth. It also has the financial flexibility to fund a strong pipeline of growth projects.

AEM has a strong liquidity position and generates substantial cash flows, which allow it to maintain a strong exploration budget, finance a strong pipeline of growth projects, pay down debt and drive shareholder value. Its operating cash flow jumped roughly 55% year over year to record $1,132 million in the fourth quarter of 2024. AEM also generated solid fourth-quarter free cash flows of $570 million, up around 89% year over year, backed by the strength in gold prices and strong operational results. It remains focused on paying down debt using excess cash, with net debt reducing by $273 million sequentially to $217 million at the end of the fourth quarter. It reduced net debt by $1,287 million in 2024. Its long-term debt-to-capitalization is just around 5.2%.

AEM also returned around $920 million to its shareholders through dividends and repurchases last year. AEM offers a dividend yield of 1.3% at the current stock price. It has a five-year annualized dividend growth rate of 10.3%. AEM has a payout ratio of 38% (a ratio below 60% is a good indicator that the dividend will be sustainable). The company's dividend is perceived to be safe and reliable, backed by strong cash flows and sound financial health.

Despite these positives, Agnico Eagle is plagued by higher production costs. In the fourth quarter of 2024, its total cash costs per ounce of gold were up roughly 4% from the previous year. All-in-sustaining costs (AISC) also rose roughly 7% year over year. AEM forecasts total cash costs per ounce in the range of $915 to $965 and AISC per ounce between $1,250 and $1,300 for 2025, suggesting a year-over-year increase at the midpoint of the respective ranges. While AEM is taking actions to control costs, the inflationary pressure is likely to continue over the near term, weighing on its profit margins and overall financial performance. Higher sustaining capital expenditures and cash costs are expected to contribute to increased AISC.

The Case for Kinross

Kinross has a strong production profile and boasts a promising pipeline of exploration and development projects. Its key development projects and exploration programs, including Great Bear in Ontario and Round Mountain Phase X in Nevada, remain on track. These projects are expected to boost production and cash flow and deliver significant value. KGC also completed the commissioning of its Manh Choh project and commenced production during the third quarter of 2024, leading to a substantial increase in cash flow at the Fort Knox operation.

Tasiast and Paracatu, the company’s two biggest assets, remain the key contributors to cash flow generation and production. Tasiast remains the lowest-cost asset within its portfolio, with consistently strong performance, while Paracatu continues to deliver steady production. Tasiast achieved record annual production and cash flow in 2024.

KGC has a strong liquidity position and generates substantial cash flows, which allows it to finance its development projects, pay down debt and drive shareholder value. The company ended 2024 with solid liquidity of roughly $2.3 billion. Kinross also generated record free cash flows of around $1.3 billion in 2024, driven by the strength in gold prices and strong operating margins. It also repaid $800 million of debt during the year. Its long-term debt-to-capitalization is 15%. KGC offers a dividend yield of 0.8% at the current stock price. It has a payout ratio of 18%, with a five-year annualized dividend growth rate of about -0.2%.

Kinross is hamstrung by higher production costs, which are likely to eat into its margins. It saw a 12.5% year-over-year rise in production costs of sales per ounce to $1,098 in the fourth quarter of 2024. The same also rose roughly 8% year over year to $1,020 in 2024. This upward trend is expected to continue, with the company expecting production costs of sales per ounce to reach $1,120 in 2025 due to lower expected overall production and inflationary impacts. The company also expects AISC per gold equivalent ounce of $1,500 for 2025, up from $1,388 in 2024.

Price Performance and Valuation of AEM & KGC

Year to date, AEM stock has jumped 51.2%, while KGC stock has rallied 54.8% compared with the Zacks Mining – Gold industry’s increase of 51%.