Agnico Eagle expects its Nunavut diesel purchases to affect fourth-quarter 2026 production costs by about $21 million, while the miner has not finalized its budget or issued updated 2027 cost guidance.
The company said it completed purchases of about 185 million liters for the balance of 2026 and the period through the 2027 sealift. After hedges, the net cost was about 45% above its 2026 budget, although the fuel was bought below prevailing spot prices. Agnico said securing the supply would reduce its exposure to price swings and delivery disruptions for the rest of 2026 and into 2027.
Diesel represents about 11% of operating costs, according to Agnico. Mobile equipment and on-site power account for 8%, while freight makes up the remaining 3%. For the fourth quarter, the company estimates a 10% move in diesel prices would shift total cash costs by about $3 per ounce through direct fuel use and $1 per ounce through freight. Those sensitivities apply to the quarter, not to a 2027 cost forecast.
President and CEO Ammar Al-Joundi told analysts on the Oct. 29 call, “We don’t have any more insight into long-term diesel prices in 2027, I think, than anyone else.” CFO Jamie Porter said budgets were unfinished and declined to estimate the year-over-year cost change. While discussing labor and other consumables, Porter described 5% to 6% as a reasonable assumption and said diesel remained difficult to model.
Agnico's 2025 results release had projected unit costs and all-in sustaining costs would rise in line with 3% to 5% inflation through 2027 and 2028. That earlier projection was not updated guidance for 2027; the company had not completed its current budget on the call.
Agnico expects 2026 total cash costs of $1,020 to $1,120 per ounce and all-in sustaining costs of $1,400 to $1,550 per ounce to finish near the top of both ranges. The company said a stronger U.S. dollar and higher by-product prices, particularly for silver and copper, helped mitigate diesel pressure compared with its 2026 cost guidance. Agnico had not issued updated 2027 guidance.
