Established Covered Calls in Agnico Eagle Mines Ltd.

During the first half-hour of trading today, a Covered Calls position was established in Agnico Eagle Mines Ltd. (ticker symbol AEM) when 200 shares were purchased at $132.71 and 2 September 5th, 2025 Call options were sold at $6.79 per share at the $128.00 strike price.  The buy/write net debit limit order at $125.92 was executed, so the potential time value profit was $2.08 per share [$6.79 Call options premium - ($132.71 stock purchase price - $128.00 strike price)]. There is also an upcoming quarterly ex-dividend of $.40 per share on September 2nd (a current annual dividend yield of 1.2%), so two potential return-on-investment results for this position, as detailed below, include the possibility of early assignment because the ex-dividend is 3 days prior to the September 2nd, 2025 options expiration date.  An in-the-money Covered Calls position was established when the probability of the stock closing in-the-money (and therefore being assigned) on the 9/2/2025 options expiration date was 68.1%. 

Agnico Eagle Mines Ltd., headquartered in Vancouver, Canada is the world's third largest gold mining company, engaged in the exploration, development, and production of precious metals. Their explorations for gold, silver, zinc, and copper in their mines in Canada, Australia, Finland, and Mexico demonstrate their focus on low-risk jurisdictions.  Their four cornerstone assets each produce approximately 350,000-700,000 ounces of gold annually; and they have about 15 years of reserves that includes various opportunities to increase gold production in future years.

The 15 Wall Street analysts that cover Agnico Eagle have an average target price of $149.56 which is +12.7% above today's stock purchase price.  LSEG's analysis provides AEM with their highest ranking of 10 (on a scale of 1 to 10) for both their average score and optimized score.  In addition, Agnico Eagle passed all 15 criteria in my own "Key Metrics for Comparing Companies" stock screener.  

As detailed below, two potential return-on-investment results are: 

•  +1.6% absolute return (equivalent to +40.1% annualized return-on-investment for the next 15 days) if the stock is assigned early (on the last business day prior to the September 2nd, 2025 ex-dividend date); OR 

• +2.0% absolute return (equivalent to +39.8% annualized return-on-investment over the next 18 days) if the stock is assigned on the September 5th, 2025 options expiration date.

Agnico Eagle Mines Ltd. (AEM) -- New Covered Calls Position
The buy/write transaction was:

8/18/2025 Bought 200 Agnico Eagle shares @ $132.71
8/18/2025 Sold 2 Agnico Eagle 9/2/2025 $128.00 Call options @ $6.79
Note: the Implied Volatility of the Call options was 32.8 when this buy/write transaction was executed.
9/2/2025 Upcoming quarterly ex-dividend of $.40 per share

Two possible overall performance results (including commissions) for this Agnico Eagle Mines Covered Calls position are as follows:
Covered Calls Cost Basis: $25,185.34
= ($132.71 - $6.79) * 200 shares + $1.34 commission

Net Profit Components:
(a) Options Income: +$1,356.66
= ($6.79 * 200 shares) - $1.34 commission
(b) Dividend Income (If option exercised early on September 1st, the last business day prior to the September 2nd ex-dividend date): +$0.00; or
(b) Dividend Income (If Agnico Eagle stock assigned at the September 5th, 2025 expiration): +$80.00         

= ($.40 dividend per share x 200 shares)

(c) Capital Appreciation (If Agnico Eagle Call options assigned early on Sept. 2nd): -$942.00

+($128.00 strike price - $132.71 stock purchase price) * 200 shares; or
(c) Capital Appreciation (If shares assigned at $128.00 strike price at the 9/5/2025 options expiration): -$942.00
+($128.00 - $132.71) * 200 shares

1. Total Net Profit [If option exercised early on the last business day prior to the Sept. 2nd ex-dividend date)]: +$414.66

= (+$1,356.66 options income + $0.00 dividend income - $942.00 capital appreciation); or

2. Total Net Profit (If Agnico Eagle shares assigned at $128.00 strike price at the September 5th, 2025 expiration): +$494.66

= (+$1,356.66 + $80.00 - $942.00)

1. Potential Absolute Return-on-Investment (If option exercised early on Sept. 2nd): +1.6%

= +$414.66/$25,185.34

Potential Annualized Return-on-Investment: +40.1%

= (+$414.66/$25,185.34) * (365/15 days); or

2. Potential Absolute Return-on-Investment (If Agnico Eagle shares assigned at $128.00 at the September 5th, 2025 options expiration): +2.0%

= +$494.66/$25,185.34

Potential Annualized Return-on-Investment (If Agnico Eagle shares assigned at the Sept. 5th, 2025 options expiration date): +39.8%

= (+$494.66/$25,185.34) * (365/18 days)

Either outcome would provide an attractive return-on-investment result for this Agnico Eagle investment.  These returns will be achieved as long as the stock is above the $128.00 strike price at assignment.  If the stock declines below the strike price, the breakeven price of $125.52 ($132.71 - $6.79 - $.40) provides 5.4% downside protection below today's stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet must be 'YES' prior to establishing a position.  As shown below with this Agnico Eagle position, all nine criteria were met.