Based on the the 8% increase in Agnico-Eagle Mines Ltd. shares this morning, the market appears to like the gold miners' 2009 production and cost guidance. Blackmont analyst Richard Gray, meanwhile has a slightly different take.

Agnico said Thursday that payable gold production is expected to total approximately 590,000 ounces in 2009, a 100% increase from the 2008 projected level and grow to 1.2 million ounces in 2010. In December 2007, production guidance for 2009 was slated at 687,000 ounces.

Total cash costs per ounce are expected to average approximately $325, down from previous guidance of $174 per ounce. The company also said it was maintaining its yearly 18¢ dividend.

Mr. Gray said the production and cost forecasts were lower than expected and "slightly disappointing" based on his previous estimate of 690,000 ounces of production in 2009 and 1.35 million in 2010.

Based on Agnico's cash cost guidance, but reflecting his own forecasts for exchange rates and metal prices, Mr. Smith now expects cash costs in the $270 to $300 range versus $230 to $260 per ounce previously.

"As a result of the increased operating costs and the lower production guidance, our net asset value decreases to $31.50 from $33 and our cash flow per share and earnings per share estimates are reduced by approximately 20%,"

Mr. Gray lowered his price target from $55 to $50 and maintained his "buy" rating.

David Pett