Kirkland Lake Gold (TSX: KL) this morning released its second quarter financial results, demonstrating why M&A activity is about to heat up in the resources space. The company announced total revenues of $581.0 million, more than doubling its Q2 2019 results thanks in part to its acquisition of Detour Lake earlier this year, whom generated $233 million in revenues during the quarter alone. The company generated net earnings of $150.2 million during the second quarter.
Gold sales during the quarter totaled 341,390 ounces, a slight decline from the 344,586 ounces sold in the first quarter. However, the rising spot price of gold enabled the firm to report revenues 5% despite this. The average price obtained for its gold came in at $1,716 per ounce, as compared to $1,586 in the first quarter, and $1,320 received per ounce in the year ago period.
Production totaled 329,770 ounces, a decline from 330,864 ounces in the first quarter. However, production costs were down comparatively, at $141.4 million during the period ended June 30, as compared to $161.6 million in the previous quarter. All in sustaining costs per ounce sold were also down, falling from $776 to $751 on a quarter over quarter basis.
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The company also posted strong cash flow during the quarter, with net cash provided by operating activities totaling out at $222.2 million, while free cash flow came in at $94.1 million, due to a $132.6 million tax payment made during the quarter for the 2019 tax year. The result is the company reported a total cash position of $537.4 million at the end of the second quarter, with no debt on the books.
Kirkland Lake Gold last traded at $50.49 on the NYSE.
Information for this briefing was found via Sedar and Kirkland Lake Gold Ltd. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
