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Kirkland Lake’s results boosted by Detour mine

  • Monday, November 9, 2020
  • Source:ferro-alloys.com

  • Keywords:Kirkland Lake
[Fellow]Kirkland Lake’s results boosted by Detour mine

[ferro-alloys.com]Canada’s Kirkland Lake Gold (TSX, NYSE:KL) (ASX:KLA) is happy with its acquisition of Detour Gold early this year, as it gained control of the Detour Lake mine in Ontario, which now accounts for more than 40% of the company’s 2020 free cash flow.

“We are extremely pleased with the contribution already being made by Detour Lake mine, which generated $231 million of free cash flow in the first eight months since the transaction,” chief executive Tony Makuch said in the statement.

The C$4.4 billion ($3.4 billion) acquisition of Detour added 14.8 million ounces to Kirkland’s reserves, easing concerns about the short mine-life of the company’s flagship underground Fosterville operations in Australia.

Kirkland Lake saw production jump by 37% in the three months to September 30 from the same quarter last year to 339,584 ounces, at an all-in sustaining cost (AISC) of $886 an ounce ($622 per ounce without Detour Lake).

The company’s Macassa mine in Ontario produced 38,028 ounces at $1,081 per ounce in the quarter, notably below the June quarter and year-earlier period due to a combination of lower grades, heating issues, and the impact of covid-19 protocols.

Makuch said the number four shaft project at Macassa was advancing ahead of plan, on track for commissioning in late 2022. Once completed, it would improve operating efficiencies and help lift production towards the 400,000 ounces-of-gold-per-year target, he noted.

The high-grade Fosterville mine in Victoria, Australia, produced 161,489 ounces at an average head grade of 30.3g/t and average mill recoveries of 99%. AISC rose 28% from last year’s third quarter to $349 per ounce due to a 2.7% royalty introduced by the Victoria government in January.

Solid finances

The Toronto-based miner reported record free cash flow of $275.1 million in the three months to September 30. That is a 52% increase from a year earlier and a 22% surge from the previous quarter.

Year-to-date free cash flow, the company said, is up 52% to $500.6 million.

Revenues jumped 66% to $632.8 million from the same quarter in 2019, which helped drive headline earnings 49% higher to $249.3 million, or 91c per share.

Kirkland Lake kept its already revised 2020 production guidance at between 1.35 and 1.4 million ounces, about 90% of the pre-covid-19 outlook, at AISC of $790-$810 per ounce.

The company’s shares in Toronto have surged about 9% over the past 12 months, trading at C$63.72 on Friday morning and leaving the miner with a C$17. 6 billion market capitalization ($13.5 billion).

(Mining.com)

  • [Editor:王可]

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