The Fosterville Mine achieved average ore grade of 39.5 g/t Au and average mill recoveries of 99.0%.
Kirkland Lake Gold Ltd. (TSX:KL) (NYSE:KL) (ASX:KLA), that became the Top Tier gold mining company in Q1 2020, today announced production results for the second quarter (“Q2 2020”) and first half (“YTD 2020”) of 2020. Q2 2020 production totaled 329,770 ounces, an increase of 115,177 ounces or 54% from 214,593 ounces for the second quarter of 2019 (“Q2 2019”). For YTD 2020, the Company produced 660,634 ounces, 214,162 ounces or 48% higher than the first half of 2019 (“YTD 2019”). All dollar amounts are expressed in U.S. dollars, unless otherwise noted.
Highlights of Q2 2020 production results:
- Consolidated Q2 2020 production of 329,770 ounces, a 54% increase from 214,593 ounces in Q2 2019 and largely unchanged from 330,864 ounces the previous quarter (660,634 ounces in YTD 2020 versus 446,472 ounces in YTD 2019)
- Gold poured in Q2 2020 totaling 338,573 ounces versus 216,166 ounces in Q2 2019 and 326,933 ounces in Q1 2020 (YTD 2020 gold poured of 665,506 ounces compared to 446,417 ounces for YTD 2019)
- Q2 2020 gold sales totaling 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 (YTD 2020 gold sales of 685,976 ounces ($1,650 per ounce) versus gold sales of 445,020 ounces ($1,313 per ounce) for YTD 2019)
- Production from Detour Lake Mine totaling 131,992 ounces despite disruptions caused by COVID-19 (Production from the closing of the Detour Gold Corporation (“Detour Gold”) acquisition on January 31, 2020 to June 30, 2020 totaled 223,547 ounces)
- Strong production at Fosterville of 155,106 ounces, a 10% increase from 140,701 ounces in Q2 2019 mainly reflecting higher tonnes processed; Q2 2020 production was similar to production of 159,864 ounces the previous quarter (YTD 2020 production of 314,970 ounces, 17% higher than 269,145 ounces in YTD 2019)
- Production at Macassa totaling 41,865 ounces compared to quarterly production of 49,196 ounces in Q2 2019 with the reduction largely related to a lower average grade; Q2 2020 production compared to 50,861 ounces the previous quarter reflecting a greater impact on tonnes processed from COVID-19 protocols as well as a lower average grade (YTD 2020 production of 92,726 ounces compared to YTD 2019 production of 121,972 ounces)
- Operations at Holt Complex were placed on temporary suspension effective April 2, 2020 with production for Q2 2020 totaling 807 ounces; Production in Q2 2019 totaled 24,696 ounces, while production in Q1 2020 totaled 28,584 ounces (YTD 2020 production totaled 29,390 ounces versus 55,355 ounces for YTD 2019).
|Production Results||Q2 2020||Q2 2019||Q1 2020||YTD 2020||YTD 2019|
|Ore Milled (tonnes)||123,473||111,280||118,701||242,175||251,464|
|Grade (g/t Au)||39.5||39.9||42.4||40.9||33.8|
|Gold Production (ozs)||155,106||140,701||159,864||314,970||269,145|
|Ore Milled (tonnes)||77,624||72,681||82,256||159,879||150,671|
|Grade (g/t Au)||17.2||21.5||19.7||18.5||25.7|
|Gold Production (ozs)||41,865||49,196||50,861||92,726||121,972|
|Detour Lake 1|
|Ore Milled (tonnes)||5,655,992||3,708,022||9,364,014|
|Grade (g/t Au)||0.79||0.84||0.81|
|Gold Production (ozs)||131.992||91,555||223,547|
|Holt Complex 2|
|Ore Milled (tonnes)||6,192||185,398||209,126||215,318||386,184|
|Grade (g/t Au)||4.0||4.4||4.6||4.5||4.7|
|Gold Production (ozs)||807||24,696||28,584||29,390||55,355|
|Total Consolidated Production (ozs)3||329,770||214,593||330,864||660,634||446,472|
|Total Consolidated Gold Sales (ozs)||341,390||232,929||344,586||685,976||445,020|
- Encouraging exploration results at Macassa Mine including the identification of a new, large corridor of high-grade mineralization in close proximity to the #4 shaft, currently under development, and also the continued expansion of the South Mine Complex (“SMC”)
- Exploration success at Detour Lake Mine with initial drilling intersecting broad zones of mineralization in the Saddle Zone between the Main and West pits at attractive open-pit grades with higher-grade intervals supporting the possibility for underground Mineral Resources at depth; Drilling at 58 North Zone intersects high grades 175.0 m west of the current underground Mineral Resource
- Ramp up of reduced operations and suspended non-essential activities commenced in May; COVID-19 health and safety protocols remain in place: Workers at Detour Lake and Macassa began to be recalled starting in early May after both mines transitioned to reduced operations due to COVID-19 around the end of March; Exploration drilling and work on key projects resumed early in Q2 2020 after being suspended in late Q1 2020 (exploration drilling to ramp up over the next few months); Extensive health and safety protocols introduced in March remain in place, with many protocols relating to medical screening and social distancing expected to remain for the foreseeable future
- Cash position of $537 million with no debt at June 30, 2020; $133 million paid in Australia during Q2 2020 representing the final tax instalment for the 2019 tax year; $50 million used in Q2 2020 to repurchase 1,345,600 common shares through the Company’s normal course issuer bid (total YTD 2020 share repurchases of 11,059,100 common shares for $380 million).
Review of Operations
The Fosterville Mine produced 155,106 ounces in Q2 2020 based on processing 123,473 tonnes at an average grade of 39.5 g/t and average mill recoveries of 99.0%. Q2 2020 production increased 10% from 140,701 ounces in Q2 2019, when the mine processed 111,280 tonnes at an average grade of 39.9 g/t and average recoveries of 98.7%. Q2 2020 production compared to production of 159,864 ounces the previous quarter when the mine recorded an average quarterly grade of 42.4 g/t at average recoveries of 98.8%. The higher average grade in Q1 2020 reflected mine sequencing in the lower Phoenix system.
Production at Fosterville for YTD 2020 totaled 314,970 ounces, a 17% increase from 269,145 ounces for YTD 2019. YTD 2020 production resulted from processing 242,175 tonnes at an average grade of 40.9 g/t and average recoveries of 98.9%. The increase from YTD 2019 was mainly due to a 21% improvement in the average grade, to 40.9 g/t for YTD 2020. Mill throughput in YTD 2020 averaged 1,331 tonnes per day compared to 1,390 tonnes per day for YTD 2019.
Production at Macassa in Q1 2020 totaled 41,865 ounces compared to production of 49,196 ounces in Q2 2019. Production in Q2 2020 resulted from processing 77,624 tonnes at an average grade of 17.2 g/t and average recoveries of 97.6%, which compared to 72,681 tonnes processed in Q2 2019 at an average grade of 21.5 g/t and average recoveries of 97.9%. The change in production from Q2 2019 largely reflected a lower average grade and the impact of reduced operations due to COVID-19, which resulted in lower than planned tonnes processed in Q2 2020. Production in Q2 2020 compared to production of 50,861 ounces the previous quarter when the mine processed 82,256 tonnes at an average grade of 19.7 g/t and average recoveries of 97.7%. The reduction in tonnes processed compared to Q1 2020 largely reflected a greater impact from the transition to reduced operations due to COVID-19 in Q2 2020 compared to the previous quarter.
Production at Macassa in YTD 2020 totaled 92,726 ounces, which resulted from processing 159,879 tonnes at an average grade of 18.5 g/t and at average recoveries of 97.6%. YTD 2020 production compared to production of 121,972 ounces for YTD 2019, which resulted from processing 150,671 tonnes at an average grade of 25.7 g/t and at average recoveries of 98.1%. YTD 2020 production was below expected levels largely reflecting lower than planned tonnes processed as a result of the transition to reduced operations due to COVID-19, as well as lower than expected grades. Both tonnes processed and average grades are expected to increase in the second half of 2020.
Production at Detour Lake in Q2 2020 totaled 131,992 ounces, which involved processing 5,655,992 tonnes at an average grade of 0.79 g/t at average recoveries of 91.7%. Production in Q2 2020 compared to production for the two months from January 31, 2020, the date the acquisition of Detour Gold was completed, to March 31, 2020 of 91,555 ounces, which resulted from processing 3,708,022 tonnes at an average grade of 0.84 g/t and at average recoveries of 90.9%. Tonnes processed in Q2 2020 averaged 62,154 tonnes per day, largely unchanged from the average in February and March. The lower average grade in Q2 2020 compared to the two months ended March 31, 2020, was mainly due to feeding lower grade stockpiled material to the mill during reduced operations. Production at Detour Lake for the five months ended June 30, 2020 totaled 223,547 ounces, which resulted from processing 9,364,014 tonnes at an average grade of 0.81 g/t and at average recoveries of 91.4%.
The assets included in the Holt Complex (Holt, Holloway and Taylor mines and Holt Mill) were designated as non-core on February 19, 2020 with the Company planning to assess options for maximizing the value of these assets. In March 2020, the Holloway Mine was transitioned to care and maintenance with no plans for a future resumption of operations. Effective April 2, 2020, the remainder of the Holt Complex was placed on temporary suspension effective April 2, 2020 as part of the Company’s COVID-19 response. As a result, there was almost no production from Holt Complex in Q2 2020 (807 ounces produced). Production in Q2 2019 totaled 24,696 ounces, which resulted from processing 185,398 tonnes at an average grade of 4.4 g/t and average recoveries of 95.0%. Production from the Holt Complex in Q1 2020 totaled 28,584 ounces, which resulted from processing 209,126 tonnes at an average grade of 4.6 g/t and at average recoveries of 93.4%. For YTD 2020, the Holt Complex produced 29,390 ounces from processing 215,318 tonnes at an average grade of 4.5 g/t and average recoveries of 93.6%.
At June 30, 2020, the Holt Complex remained on temporary suspension while the Company continued to assess options for the future of the Holt Complex assets. YTD production of 29,390 ounces from Holt Complex is included in the Company’s re-issued 2020 production guidance, with no production assumed in the second half of the year.
About Kirkland Lake Gold Ltd.
Kirkland Lake Gold Ltd. is a growing gold producer operating in Canada and Australia that produced 974,615 ounces in 2019. The production profile of the Company is anchored by three high-quality operations, including the Macassa Mine and Detour Lake Mine, both located in Northern Ontario, and the Fosterville Mine located in the state of Victoria, Australia. Kirkland Lake Gold’s solid base of quality assets is complemented by district scale exploration potential, supported by a strong financial position with extensive management expertise.