The Macassa mine in Canada.
Dual-listed Kirkland Lake has begun recalling its workers who were off as part of its Covid-19 protocols at the Detour Lake and Macassa mines, in Canada’s Ontario, while the Holt Complex remains suspended with no timeline being contemplated for reopening.
The company transitioned the Detour Lake and Macassa mines to reduced operations in March in response to the Covid-19 pandemic.
While the gold miner, which also owns the Fosterville mine in Australia, reported a strong performance in the first quarter, it cautioned on Wednesday that the impact of Covid-19 would be felt for the rest of the year.
Kirkland said that it did not anticipate achieving full production levels during the second quarter of 2020 and that it expected “some impact” on production and costs during most of the year.
“At the current time, it is not possible to estimate the extent to which the Covid-19 pandemic will impact the company’s business performance in 2020,” it said in its first-quarter results announcement.
The company withdrew its 2020 guidance of between 1.47-million and 1.54-million ounces and stated that it would issue new guidance for 2020 once Detour Lake and Macassa had returned to more predictable levels of production. Included in the new guidance would be only revised production and cost targets for Detour Lake, Macassa and Fosterville.
Kirkland produced 330 864 oz during first quarter, a 43% increase from the 231 879 oz mined in the prior-year period. Production costs totalled $161.6-million, compared with $70-million a year earlier. Operating cash costs per ounce are $440, compared with $290, and all-in sustaining costs increased to $776/oz, from $560/oz.
The miner reported net earnings of $202.9-million during the first quarter of the year, a growth of 84% from $110.1-million made in the prior-year period and 20% higher than the $169.1-million made in the fourth quarter of 2019.
The acquisition of Detour Gold on January 31 also contributed significant free cash flow in the first two months that the Detour Lake mine formed part of the group.
Kirkland reported revenue growth of 82% compared to the first quarter of 2019, with revenue totalling $554.7-million. Gold sales totalled 344 586 oz in the first quarter, which is 48% higher than the 232 929 oz sold a year earlier.
Cash available as of March 31 totalled $530.9-million, with no debt being incurred.
The quarterly dividend also doubled to $1.25 apiece paid on April 13.