Kirkland Lake cuts back activities

KIRKLAND Lake Gold is implementing measures to protect employees and the community from COVID-19.
Kirkland Lake cuts back activities Kirkland Lake cuts back activities Kirkland Lake cuts back activities Kirkland Lake cuts back activities Kirkland Lake cuts back activities

Detour Lake is Canada's second-largest gold producer

MiningNews.net is making some of its most important coverage of the
COVID-19 pandemic freely available to readers. For more coverage, please see our COVID-19 hub. To subscribe to MiningNews.net, click here.

The Canadian-Australian producer has had no confirmed cases of coronavirus at its offices or operations, but has implemented tighter health and safety protocols, including medical screening, enhanced cleaning and hygiene practices, social distancing, virtual meetings and working from home, and the suspension of all non-essential travel and work.

Kirkland Lake will temporarily reduce operations at its newly acquired Detour Lake mine in Ontario, Canada's second-largest gold mine.

The company said the remote operation's camp accommodated about 1100 workers at any given time and it would send home personnel not essential to operations, as well as those from First Nations communities and employees requiring air transport to get to and from site.

Those workers will remain offsite until at least April 30. The company will provide 14 working days of paid leave for those affected, equivalent to a month of normal pay.

About 300 workers will remain onsite to perform essential activities including processing of reduced feed from the open pit and stockpiles, management of water levels during the spring run-off and environmental management activities.

Kirkland Lake CEO Tony Makuch said COVID-19 represented an unprecedented challenge for people, governments and businesses worldwide.

"While none of our employees have tested positive for COVID-19, the actions we are taking represent our best judgement, based on what we know today, on how to responsibly protect our people from the pandemic," he said.

"In the case of Detour, the increased risk represented by the remoteness of the mine and the camp environment requires a more extensive response.

"It is not possible at this time to estimate the impact of reduced operations on Detour Lake's 2020 production."

Detour Lake was expected to produce 520,000-540,000 ounces of gold at operating costs of US$720-740 per ounce.

Kirkland Lake has also suspended all exploration activities across the company.

It had a group exploration budget of $150-170 million for 2020, including $70-80 million on exploration at Fosterville in Victoria.

That decision comes only a month after Makuch told analysts Kirkland Lake was "more of an exploration company at Fosterville".

Kirkland Lake will also suspend its automatic share purchase plan, which was launched last month.

The company paid $360 million only last week to repurchase 10.1 million shares as part of a plan to repurchase 20 million shares over 12-24 months.

"Given current global events, we believe it is prudent to maintain as much financial flexibility as possible," Makuch said.

"We continue to have a very strong balance sheet with close to $500 million of cash and no debt."

Kirkland Lake declared a quarterly dividend last week of 12.5c per share, double the previous dividend.

Kirkland Lake CDIs dipped as low as A$39 last week and closed today 4.1% lower at $46.50.

The stock briefly dropped below $32 last week in Canada, down from over $67 in September, and closed at $36.75 on Friday, valuing it at $10.5 billion.