After a period of heavy capital expenditure at Meliadine and Amaruq in Nunavut, which is expected to drive gold production from 1.75 million ounces this year to 2Moz and higher from 2020, Agnico Eagle is moving into "harvest mode", according to UK-based Edison, which could produce higher dividend payouts even as the company moves to reduce its US$1.7 billion net debt.

Meliadine is expected to contribute about 230,000oz to this year's production total, and Amaruq circa 130,000oz.

Agnico Eagle is guiding for AISC of US$875-925/oz for its 1.75Moz 2019 production, with gold currently around $1,500/oz.

Its capex this year is up from earlier estimates at US$750 million due to lower pre-commercial production gold sales credited against capital at Meliadine, faster underground development at Amaruq, and changes to the Meliadine saline water treatment system. But capex is expected to dip as production rises and Edison says a return to free cash-flow generation from the current half-year onwards is now in prospect.

"Moderate growth to an annualised production rate of 2.2-2.3Moz is expected, bringing with it the potential for increases in the dividend from the current level of US12.5c per quarter," Edison said.

"Even with an increased dividend, we would expect AEM to repay its US$1.7 billion in net debt, equating to 26.6% gearing or 36.3% leverage, at end-June 2019 by FY22."