Late last night, Kirkland Lake Gold (TSX: KL) (NYSE: KL) released its three year guidance for production, as well as its financial guidance for fiscal 2021. The highlight of the guidance for the oncoming year is that production guidance is slightly lower than what was provided for 2020 on the low end, with the range of production being 1.30 to 1.40 million ounces of gold, as compared to 1.35 to 1.40 million ounces in 2020.
Production is to largely come from Detour Lake, which accounts for 680k to 720k ounces of 2021 production, as compared to the 520k to 540k production guidance given for 2020 for the mine. Fosterville is then expected to generate 400k to 425k ounces of gold production, with the declining figure at the mine attributed to a lower grade profile of ore. Macassa finally is guided to produce between 220k and 255k ounces of gold, an increase from the current fiscal year.
While overall guidance for 2020 remains unchanged for the company in terms of total produced ounces, the operating cash cost per ounce sold is expected to increase in 2021 as a result of the lower grades produced at Fosterville. Operating cash cost per ounce sold is expected to increase from 2020’s guidance of $410 to $430, to that of $450 to $475 in 2021.
All in sustaining costs, or AISC, per ounce sold is expected to remain flat at $790 to $810, a result of improved costs at Detour Lake and Macassa being offset by increasing costs at Fosterville.
Sustaining capital expenditures will see the largest improvement over all, with this figure expected to fall from $390 to $400 million in 2020 to that of $280 to $310 million in 2021. This however is being offset heavily by planned growth capital expenditures, which will rise from $95 to $105 million in 2020 to $250 to $275 million in 2021. The majority of the growth expenditures are to occur at Detour Lake, where $160 to $170 million of expenses are planned to expand operation, including deferred stripping and a number of improvements in infrastructure, including mill improvements and the completion of an assay lab.
Finally, Kirkland also plans to expand its exploration budget in 2021, which will grow from $130 to $150 million in 2020 to that of $170 to $190 million, with funds to be largely focused at Fosterville, where $85 to $95 million in exploration is to take place to identify new high grade zones.
In terms of its three year production guidance, the following is forecasted:
- 2021: 1.30 million to 1.40 million ounces of gold
- 2022: 1.30 million to 1.44 million ounces of gold
- 2023: 1.41 million go 1.55 million ounce of gold
Kirkland Lake Gold last traded at $51.98 on the TSX.
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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.