Kirkland Lake mounts a comeback on higher grades

VANCOUVER — The past two years have been a story of redemption for producer Kirkland Lake Gold (TSX: KGI; US-OTC: KGILF) at its Macassa and South Mine complex in the prolific the Southern Abitibi gold belt 46 km due southeast of Timmins, ON. The company just wrapped up its third consecutive quarter of positive earnings and free cash flow, and looks poised to hit the upper end of its annual production guidance.

On March 11 Kirkland reported that it sold 39,700 oz of gold last quarter at an average realized price of US$1,371 per oz, which resulted in cash flow from operations of $23.7 million. Over the past nine months the company has produced around 162,000 oz of gold at all-in sustaining cash costs of US$1,289 per oz, which marks a material improvement over the 131,000 oz it produced in 2014 at all-in costs of US$2,054 per oz.

The main driver for Kirkland has been higher grades encountered at the South Mine complex (SMC), which has also resulted in improved throughput rates at the Macassa mill.

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