PERTH (miningweekly.com) – Dual listed gold miner Kirkland Lake Gold has reported record free cash flows for the third quarter, while gold production increased by 37% on the previous corresponding period as the Detour Lake acquisition continued to pay dividends.

The ASX- and TSX-listed miner reported gold production of 339 584 oz during the quarter, up from the 248 400 oz produced in the third quarter of 2019, and 3% higher than the 329 770 oz produced in the previous quarter.

Operating costs for the period increased from the $287/oz reported in the third quarter of last year, to $406/oz, while all-in sustaining costs increased from $562/oz to $886/oz in the same period, and to $622/oz when excluding Detour Lake.

Free cash flow for the third quarter reached a record $431.1-million in the quarter, up 52% on the previous corresponding period, and 22% higher than the second quarter.

Revenue for the third quarter reached $632.8-million, an increase of 66% on the third quarter of 2019, with Detour Lake contributing $262.5-million to revenues during the quarter under review.

“During the third quarter, we continued to achieve solid operating results and ended the quarter well positioned to achieve our consolidated 2020 guidance,” said Kirkland Lake president and CEO Tony Makuch.

“We also continued to generate industry-leading earnings and cash flow. With increased financial strength, we have made further progress with our key strategic priorities. First and foremost, we are investing in our three cornerstone assets, Detour Lake, Macassa and Fosterville, all of which are high quality operations which have substantial growth potential.

“We are on track to invest around $130-million in exploration this year and, based on work to date, we have reported very encouraging drill results at all three assets.

“We are also making excellent progress with key growth projects,” Makuch said, pointing to the Number 4 shaft at the Macassa operation, which was due for completion in late 2022, which will result in production at the mine ramping up to 400 000 oz/y at lower unit costs.

Kirkland Lake’s focus is also on returning capital to shareholders and investing in companies and projects that could potentially add significant value, Makuch said.

“We are extremely pleased with the contribution already being made by Detour Lake, which generated $231-million of free cash flow in the first eight months since the transaction, representing over 40% of our total free cash flow for the year to date.

“Even more important, the exploration results we are achieving early in our $50-million drilling programme are very encouraging and support our view that Detour Lake, like Fosterville and even Macassa with the new shaft, has the potential to be transformed into something much more valuable than the mine we acquired.”