The Macassa mine, in Ontario.
Dual-listed Kirkland Lake Gold has raised the lower end of its production guidance for the year, on the back of strong first-quarter results at the Macassa mine, in Canada, and Fosterville mine, in Australia.
The miner now expects to produce at least 950 000 oz, Kirkland president and CEO Tony Makuch said on Tuesday.
The previous guidance was for 920 000 oz to one-million ounces of gold.
Kirkland also improved its operating cash cost guidance, which it is now targeting at $285/oz to $305/oz.
Production increased by 57% from 147 644 oz in the first quarter of 2018 to 231 897 oz, while the operating cash costs improved by 35% from the first quarter of last year, to $290/oz.
“Looking ahead, with production and sales levels expected to increase in the second half of the year, we are well positioned for increased levels of profitability and cash flow going forward, assuming existing business plans and gold prices,” said Makuch.
Cash totalled $416.1-million at March 31, an increase of $83.9-million, or 25%, during the period.
The company recorded free cash flow of $93.1-million, an 85% increase from the first quarter of 2018 and 8% higher than the fourth quarter of 2018.
Net earnings jumped by 120% to $110.1-million, while adjusted net earnings doubled to $112.1-million. Net earnings also beat the previous record in the fourth quarter of 2018 even though the company had unfavourable foreign exchange movements this quarter and a higher effective tax rate, noted Makuch.
“We are off to a strong start in 2019, with record gold production and sales and very low unit costs in the first quarter of 2019,” highlighted Makuch.
Macassa, in Ontario, experienced a particularly strong quarter, achieving record production, operating cash costs per ounce and all-in sustaining costs an ounce. The mine’s strong results were mainly attributed to continued grade outperformance from stopes around the 5 700 Level of the South Mine Complex.
“Given that we will be mining in this general area for the balance of the year, we are optimistic that we will continue to see very strong results from Macassa,” enthused Makuch.
At Fosterville, in Victoria, it continued to develop, and increase production from, the Swan zone in the first quarter 2019, with stope production advancing on multiple levels.
“As we develop deeper into the zone, we are targeting higher levels of production from Swan, particularly in the second half of the year, which is expected to drive higher levels of consolidated production in the third and fourth quarters.”
NEW CHAIRPERSON
Further, Kirkland announced the appointment of Jeff Parr as the chairperson of the board of directors.
Parr has been a director of the company since November 2016 and was previously a director of Kirkland Lake Gold from October 2014.
The company also announced a second-quarter dividend payment of $0.04 in US funds (formerly $0.04 in Canadian funds). The change in the quarterly dividend to US funds represents an increase in value of about 34% based on current exchange rates.