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Detour Lake has represented more than 40% of Kirkland’s total free cash flow for the year-to-date

Nov 7, 2020

Kirkland Lake Gold’s Detour Lake Mine has the potential to be transformed into something more valuable than expected

In September of this year Kirkland Lake Gold had released assay results for eight drillholes, as well as one wedge hole, completed within the underexplored Saddle zone, between the Main and West pits at the Detour Lake mine site in Ontario. According to the company, the results from this area to date suggest “a broad and continuous corridor of mineralization extending between the West and Main pits and to a depth of up to 820 metres below surface.”

The drill results included intercepts from the west, central and east portions of Saddle. Highlight intercepts from the western part of Saddle included 58.5 metres of 1.8 g/t gold starting at 532.5 metres; 29 metres of 2.39 g/t gold from 619 metres; as well as 39 metres of 1.47 g/t gold starting at 886 metres. The drilling in this area targeted the Detour Mine Trend (DMT) east of the West pit, at depths between 400 metres and 600 metres.

Exploration work at the mine site is ongoing – these latest results were the second batch of data from a 250,000-metre exploration program.

The central portion of Saddle returned assays that included 142 metres of 1.1 g/t gold starting at 739 metres – this hit is from the very first hole targeting this area, and returned mineralization similar in style and grade to the West and Main pits. These results indicated an 800-metre corridor of mineralization, which would follow the DMT and extend from the Main through to the West pit and then to the west, beneath the West pit. Results from the east section of Saddle included 78 metres of 1.42 g/t gold from 564 metres; 43 metres of 1.21 g/t gold starting at 342 metres; as well as 73 metres of 1.38 g/t gold from 923 metres. This drilling was aimed at the DMT to the west of the mineral reserves within the Main pit, at depths of 380 metres to 820 metres.

In the press release, Tony Makuch, Kirkland Lake’s president and CEO, noted the potential for a larger deposit at the Saddle zone, with underground mining possibilities.

“Results from drilling in the Saddle zone have included numerous intersections containing attractive grades over substantial widths, which highlight the potential for significant growth in open-pit mineral resources and are also supportive of a potential underground mining concept, which could add higher-grade mill feed to our production profile.”

Fast forward to a November 5th news release.

The acquisition of the Detour Lake mine at the start of the year continues to add to Kirkland Lake’s results, contributing substantially to the miner’s free cash flow.

In the eight months since the transaction, Detour Lake has represented more than 40% of Kirkland’s total free cash flow for the year-to-date, CEO Tony Makuch reported on Thursday.

Tony Makuch stated, “we are extremely pleased with the contribution already being made by Detour Lake mine, which generated $231-million of free cash flow in the first eight months since the transaction. Even more important, the exploration results we are achieving early in our $50-million drilling program are very encouraging and support our view that Detour Lake, like Fosterville and even Macassa with the new shaft, has the potential to be transformed into something much more valuable than the mine we acquired.”

Kirkland Lake Gold reported record free cash flow of $275.1-million in the third quarter – a 52% increase from a year earlier and also 22% higher than the previous quarter. Year-to-date, free cash flow is up 52% to $500.6-million.

Third-quarter net earnings of $202-million and adjusted net earnings of $249.3-million, or $0.91 a share is an increase of 49% from the same quarter a year earlier. Production was 339 584 oz, a 37% increase from 248 400 oz in the third quarter of 2019 and 3% higher than 329 770 oz the previous quarter.

The future looks bright for Kirkland Lake Gold and it's Detour Lake mine.

Tags: Northern Ontario / Operational Updates / Gold / All Articles