Kirkland Lake beats Q1 guidance

KIRKLAND Lake Gold has reported March quarter gold production of 302,847 ounces, which easily beat guidance of 270,000-290,000oz.
Kirkland Lake beats Q1 guidance Kirkland Lake beats Q1 guidance Kirkland Lake beats Q1 guidance Kirkland Lake beats Q1 guidance Kirkland Lake beats Q1 guidance

Fosterville, in Victoria, produced 108,679oz of gold, down from circa 160,000oz for the previous quarter and same period of 2020.

The ultra high-grade Swan Zone accounted for 42% of tonnes milled and 72% of ounces produced in Q1, which compared to 62% and 93%, respectively, a year earlier.

Head grade for the March quarter still averaged 19.8 grams per tonne gold, with mill recoveries of 98.2%.

Production in the March quarter exceeded planned levels, which mainly reflected grade outperformance in the Swan Zone in March.

Detour Lake in Ontario produced 146,731oz, above target levels and compared to 138,051oz in Q1 2020 and 153,143oz in Q4 2020.

Record first-quarter mill throughput of 5.7 million tonnes was achieved during the quarter, with record daily throughput of 80,339t reported on March 24.

Production at Macassa in Ontario was steady at 47,437oz. The Macassa #4 Shaft project remained over a month ahead of schedule with shaft sinking reaching the 5000-foot level at the end of the quarter.

"We are pleased with our production results in Q1 2021, which exceeded target levels largely driven by stronger than expected results at Fosterville and Detour Lake," Kirkland Lake CEO Tony Makuch said.

"Q1 2021 is expected to be the lowest production quarter of the year with all three of our cornerstone assets being in low-grade cycles during this period.

"As we emerge from Q1, we are on track to achieve our full-year 2021 production guidance and are poised to have three strong quarters over the balance of the year, with previously-disclosed guidance of 330,000-360,000oz in Q2 2021 and 700,000-750,000oz expected during the second half of 2021."

Group guidance for the year is 1.3-1.4 million ounces of gold.

While all-in sustaining costs for Q1 will be reported next month, Kirkland Lake expects AISC to average about US$950 an ounce in the current half, before falling to $700/oz in the second half.

"At the same time that our operating and financial results are set to get stronger starting in Q2 2021, we will be continuing our extensive exploration programs at all three cornerstone assets, with encouraging drilling results recently being released for Detour Lake," Makuch said.

"These results provided additional evidence that a much larger deposit exists than is currently included in mineral reserves."

A recently released life of mine plan for Detour Lake outlined production of 680,000-720,000oz from 2021-24, rising to 800,000oz in 2025 and reaching more than 900,000oz in 2032.

"While the new 2021 LOMP is an important milestone, we are confident that the outlook for Detour Lake will get meaningfully better when we incorporate the significant drilling success being achieved in a new mine plan to be released next year," Makuch said.

Kirkland Lake sold 308,029oz of gold during the March quarter at an average realised price of $1788 an ounce.

The company closed March with $792 million in cash and no debt.

Kirkland Lake's Australian CHESS depositary interests opened 3.3% higher at A$47.95.