Kirkland Lake to have 12 rigs turning at Detour Lake
Kirkland Lake Gold Ltd. [KL-TSX, NYSE; KLA-ASX] on Monday March 15 released drill results from the Saddle Zone at its Detour Lake mine in northern Ontario and reported that an upcoming technical report will be released to the market by the end of March, showing a path to increase production to 800,000 ounces annually by 2025.
Detour Lake produced 516,757 ounces of gold in the first 11 months of 2020.
Highlighted drill results include 26.7 metres at 16.95 g/t gold and 58 metres at 3.63 g/t gold. Drill results confirm mineralization continuity between the Main and west pits to a depth of 800 metres.
In 2021, Kirkland Lake is planning 270,000 metres in exploration drilling at Detour Lake (with 12 rigs turning). Results from this program will be included in the updated 2022 Detour Lake technical report and new life-of-mine plan.
Kirkland Lake achieved production targets last year by producing 1.36 million oz gold at an AISC of US$80/oz, marking a 41% increase from 974,615 oz in 2019. Gold production in 2021 is targeted between 1.3-1.4 million ounces, led by Detour Lake, which is expected to produce up to 720,000 oz.
Key driver of the year-over-year production growth was the contribution from the Detour Lake Mine, which the company picked up via the $4.9 billion acquisition of Detour Gold Corp. in January, 2020.
However, on Monday, Kirkland Lake shares were largely unchanged, rising 0.32% or 14 cents to $43.19. The shares are currently trading in a 52-week range of $76.43 and $25.67.
The company saw a large increase in its cash position to $848 million last year, enabling it to announce a 50% increase in its quarterly dividend to US$0.1875 per share, effective in the fourth quarter of 2020.
Contributing to the growth in cash during were proceeds of US$109.1 million from the sale of the company’s 32.6 million shares of Osisko Mining Inc. [OSK-TSX] and US$75 million received from a unit of Newmont Corp. [NGT-TSX, NEM-NYSE] through a strategic alliance agreement.
Under the agreement, Newmont has acquired an option on mining and mineral rights related to the Holt Mine property. It includes a commitment by the two companies to work together to identify additional regional exploration opportunities around their respective land positions where they may co-operate and advance projects.