Make Kitco Your Homepage

Kirkland Lake sells its gold for $400 oz higher compared to a year ago

Kitco News

Kirkland Lake Gold (NYSE:KL) said today that consolidated Q2 2020 production was 329,770 ounces, a 54% increase from 214,593 ounces produced in Q2 2019.

Kirkland seemed to escape any major falls in output due to the pandemic, which suspended operations in Q1 and Q2 at several miners. Kirkland said its production results were largely unchanged from 330,864 ounces produced in Q1.

Detour Lake Mine produced 131,992 ounces despite facing disruptions, said the company. Production at Fosterville was 155,106 ounces, a 10% increase from 140,701 ounces in Q2 2019.

Production at Macassa seemed to suffer the most with production totaling 41,865 ounces compared to quarterly production of 49,196 ounces in Q2 2019.

Gold sales totaled 341,390 ounces at an average realized price of $1,716 per ounce compared to gold sales of 212,091 ounces ($1,320 per ounce) in Q2 2019 and 344,586 ounces ($1,586 per ounce) the previous quarter.

“We had a very solid second quarter despite the impact of COVID-19 and the extensive measures we took to protect our workers, their families and our communities. In Australia, Fosterville continued to perform well, with tonnes processed increasing in the quarter and grades continuing to average around 40 g/t," said CEO Tony Makuch.

"At Detour Lake, the ramp up of business activities after the mine was placed on reduced operations in March due to COVID-19 commenced in early May and has gone very well. Detour Lake produced over 130,000 ounces in Q2 2020 even with lower average grades during the period of reduced operations due largely to processing stockpiled material. With improving operating performance, strong free cash flow generation and very encouraging exploration results from early drilling, our acquisition of Detour Gold is already emerging as a very successful transaction, with substantial value creation potential.

Lifting the hedge at Detour was a good move, said analyst Luis Reivera in a note about Kirkland's Q2

"The hedges on Detour that they paid roughly $30m to terminate was very well timed, as usual with this team. These hedges were in the $1300-$1490 range and the average realized price was $1714 in second quarter. A rough calculation on this maneuver when all is set and done will likely yield more than 2x their money," writes Rivera in his blog High Grade.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Precious Metal Charts

Follow Kitco News