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Fosterville drives Kirkland production

31st July 2020

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – ASX, TSX and NYSE-listed Kirkland Lake Gold has reported a strong second quarter and half-year on the back of increased gold production and higher gold prices.


Despite the impacts of the Covid-19 pandemic, Kirkland Lake reported a 54% increase in quarterly production which reached 329 770 oz in the three months to June, compared with the 214 593 oz delivered in the previous corresponding period, while gold production in the interim period increased from the 446 472 oz produced in the first half of 2019 to 660 634 oz.

Revenue for the three months to June increased from $281.2-million to $580.9-million, while half-year revenues increased from $586.1-million to $1.13-billion, as the average realised price in the half year increased from $1 313/oz to $1 651/oz.

Earnings before interest, tax, depreciation and amortization increased by 67% in the second quarter, from $185.8-million to $309.7-million, and from the $387.4-million reported in the first half of 2019 to $701.2-million.

“We achieved solid results in the second quarter despite significant disruptions related to Covid-19. Compared to last year’s second quarter, production increased 54%, our adjusted net earnings doubled, and we generated strong free cash flow,” said Kirkland Lake CEO and president Tony Makuch.

He noted that the Fosterville operation, in Victoria, was the key driver of the operational performance, increasing production by 10% year-on-year, and generating all-in sustaining costs of $273/oz.

“With year-to-date production of 314 970 oz, Fosterville entered the second half of the year well positioned to achieve its full year 2020 guidance of 590 000 oz to 610 000 oz.”

Makuch noted that the Detour Lake operation was making a significant contribution to the company’s performance and value creation, generating $89-million in free cash flow in the second quarter, and $167-million in the half year.

“We are expecting even better results from Detour Lake in the second half of the year, with the workforce back to pre-Covid levels and mining rates ramping up, which should lead to improved grades. Detour Lake’s performance has already exceeded our expectations and with the current gold price environment, the timing of the Detour Gold transaction could not have been better.”

Operations at the Macassa mine were also impacted by the pandemic during the quarter under review, however, Makuch noted that similar to Detour Lake, workforce levels at Macassa were now back to normal and the operation was positioned for a stronger second half, both in terms of tonnes processed and average grades.

Group gold production for the full 2020 is expected to reach between 1.35-milion and 1.4-million ounces, with all-in sustaining costs targeted at between $410/oz and $430/oz.

Edited by Creamer Media Reporter

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