Gold mining investors usually find it best to focus on expanding companies with solid reserves. There is a Toronto-based outfit that fits the profile nicely. It has solid production at home, development programs abroad and controls reserves amounting to three times its total production of the past 35 years.

Agnico-Eagle Mines (NYSE: AEM) is a long-established Canadian gold producer, with operations in Quebec and exploration and development activities in Canada, Finland, Mexico and the United States. Agnico-Eagle's LaRonde Mine is Canada's largest gold deposit, in terms of reserves. It also produces copper, zinc, and silver. The mine generates strong earnings and cash flows, providing the foundation for the company's international expansion. Competitors include Barrick Gold (NYSE: ABX), Kinross Gold (NYSE: KGC) and Newmont Mining (NYSE: NEM).

The stock popped earlier in the month, moving higher with the gold mining group, when the price of the precious metal rose above $700 per ounce. Shares subsequently moved into a bullish "flag" consolidation pattern, but began a positive breakout on word earlier this week that drilling had extended the gold zones at the firm's Meadowbank mine project in the Nunavut territory of Canada.

The AEM Price to Book ratio (3.68), Operating Margin (47.19%), Net Profit Margin (29.97%) and Net Income per Employee ($161.06k) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 54% of the outstanding shares. Over the past 52 weeks, the stock has traded between $27.24 and $50.92. A stop-loss of $44.50 looks good here. Note that the firm is expected to report third quarter results in late October.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.