Kirkland Lake ups Detour gold resource by 216%

Kirkland Lake Gold Ltd. [KL-TSX, NYSE, KLA-ASX] said Thursday it has increased the measured and indicated mineral resources at its Detour Lake mine in northern Ontario by 10 million ounces.

Included in the mid-year 2021 resource estimates are total measure and indicated resources, exclusive of mineral reserves, of 14.7 million ounces (572 million tonnes at an average grade of 0.80 g/t gold). That marks an increase of 10.1 million ounces or 216% compared to the previous estimate of 4.65 million ounces (131.2 million tonnes of average grade 1.10 g/t) that was announced in December, 2020.

The mid-year mineral resource estimates are based on results of 365 holes or 185,000 metres of surface drilling completed since Kirkland Lake acquired the property in January, 2020. The company is targeting approximately 100,000 metres of additional drilling by the end of 2021.

Kirkland Lake shares advanced on the news, rising 2.4% or $1.18 to $50.58. The shares are currently trading in a 52-week range of $72.52 and $40.07.

Of the 14.7 million ounces of measured and indicated resources included in the mid-year 2021 estimates, the majority are located in the Saddle zone, an area between the existing Main Pit and planned West Pit locations. It is an area that had previously been underexplored and had no mineral reserves and only limited mineral resources.

Kirkland Lake Gold is a mid-tier gold producer with operations in Canada and Australia. In Canada, its portfolio includes the Macassa Mine and Holt Complex, which consists of three mines (Holt, Holloway and Taylor). All of its Canadian operations are located near Kirkland Lake, Ontario.

The Australian portfolio includes the Fosterville Mine in Victoria State.

Kirkland Lake achieved its production targets last year by producing 1.36 million ounces of gold at an all-in-sustaining cost of US$800 an ounce, marking a 41% increase from 974,615 ounces in 2019.

Gold production in 2021 is targeted at between 1.3-1.4 million ounces, led by the Detour Lake mine in northern Ontario, which is expected to produce up to 720,000 ounces.

“When we acquired Detour Lake, we say many opportunities to optimize the operation and generate value, including increasing production to 800,000 ounces per year, improving all-in sustaining costs (AISC) to US$800 to US$900 an ounce, and significantly growing the mineral resources and reserves through an extensive exploration program,” said Kirkland Lake President and CEO Tony Makuch.

The company now expects Detour Lake to reach 800,000 ounces of production by 2025, and to ultimately grow to over 900,000 ounces per year, with an average AISC targeted at US$775 per ounce over the next five years.