FOSTERVILLE The Australian mine's mineral reserve now totals 1.7-million ounces at an average grade of 23.1 g/t
JOHANNESBURG (miningweekly.com) – Gold miner Kirkland Lake Gold has released strong financial and operating full year results for 2017, including a 90% increase in production and improved cash flow.
The Toronto-headquartered company produced 596 405 oz in 2017, an increase of 90% from 2016, largely owing to the full-year contribution of the company’s Australian operations, which produced 284 440 oz in 2017 compared with 18 657 oz produced in the final month of 2016.
The production performance exceeded Kirkland’s improved guidance of 580 000 oz to 595 000 oz.
Net earnings surged to $132.4-million, or $0.64 a share, from $42.1-million, or $0.35 a share in 2016. Net earnings includes a loss from discontinued operations of $24.9-million, which relate to care-and-maintenance expenses and the sale of the Stawell mine, in Victoria, Australia.
Adjusted net earnings from continuing operations in 2017 totalled $149.1-million, or $0.72 a share, which is a 120% increase from 2016.
“Operationally, we improved our guidance multiple times and still beat our target range for production and were well within the improved guidance for operating cash cost and all-in sustaining costs (AISC) per ounce sold,” president and CEO Tony Makuch commented.
Makuch added that the company had clearly demonstrated an ability to generate cash flow, with free cash flow for the year totalling $178-million. “In terms of organic growth, we increased production by 90% in 2017, 10% on a pro forma basis, even after placing three mines on care and maintenance.”
Fosterville, in Australia, and Taylor and Holt, in Canada, achieved record quarterly production during the fourth quarter and Macassa, also in Canada, recorded its second-best quarter ever. “Free cash flow for the quarter was $64.5-million, more than double the level of the previous quarter,” Makuch noted.
Production from Kirkland’s Canadian operations totalled 311 965 oz, compared with production of 295 838 oz in 2016. Excluding the impact of the Holloway mine – placed on care and maintenance on December 31, 2016 – production from the Canadian operations increased by 16% from the previous year.
Gold sales totalled 592 674 oz, an 80% increase on 2016, and the primarily factor leading in Kirkland’s 85% increase in revenue for the year, to $747.5-million from $403.3-million in 2016.
AISC averaged $812/oz sold, in line with improved guidance of $800/oz to $825/oz and 13% improvement from 2016.
Resource Update
On Tuesday, the company released mineral reserve and mineral resource updates for the Fosterville and Macassa, mines as well as the Swan Zone exploration site.
“The exploration success we achieved in 2017 was a testament to the growth potential of our existing operations . . . we are able to announce a 36% increase in consolidated mineral reserves from December 31, 2016,” noted Makuch.
The update includes a 247% increase at Fosterville, where the mineral reserve now totals 1.7-million ounces at an average grade of 23.1 g/t, while Macassa’s measured and indicated mineral resources increased by 58% and the mine’s inferred mineral resources grew to 48%. The mineral reserve estimate for the Swan Zone more than doubled from the June 30, 2017 mid-year estimate to 1.16-million ounces at an average grade of 61.2 g/t.