Home > News > Kirkland Lake Gold reports...

Kirkland Lake Gold reports solid production in First Quarter 2021

Apr 12, 2021

“We are pleased with our production results in Q1 2021, which exceeded target levels largely driven by stronger than expected results at Fosterville and Detour Lake," said Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold. 

"Q1 2021 is expected to be the lowest production quarter of the year with all three of our cornerstone assets being in low-grade cycles during this period. As we emerge from Q1, we are on track to achieve our full-year 2021 production guidance and are poised to have three strong quarters over the balance of the year, with previously-disclosed guidance of 330,000 – 360,000 ounces in Q2 2021 and 700,000 – 750,000 ounces expected during the second half of 2021. We also previously disclosed guidance on AISC/ounce1 during 2021, with AISC/ounce1 expected to average over $900 in the first half of the year (approximately $1,000 in Q1 and $900 in Q2) improving to approximately $700 in the final six months of the year. At the same time that our operating and financial results are set to get stronger starting in Q2 2021, we will be continuing our extensive exploration programs at all three cornerstone assets, with encouraging drilling results recently being released for Detour Lake. These results provided additional evidence that a much larger deposit exists than is currently included in Mineral Reserves. While the new 2021 LOMP is an important milestone, we are confident that the outlook for Detour Lake will get meaningfully better when we incorporate the significant drilling success being achieved in a new mine plan to be released next year.”

Kirkland Lake Gold Ltd. has announced production results for the first quarter of 2021 of 302,847 ounces, which exceeded guidance for the quarter of 270,000 – 290,000 ounces. The strong results versus guidance largely resulted from higher than expected production at both Fosterville Mine (“Fosterville”) and Detour Lake Mine (“Detour Lake”) in March, with Fosterville benefiting from significant grade outperformance and Detour Lake achieving higher than planned grades and tonnes processed. Also during Q1 2021, the Macassa #4 Shaft project remained ahead of schedule with shaft sinking reaching the 5,000-foot level as at March 31, 2021 and the project remaining on track for completion in late 2022. All dollar amounts are expressed in U.S. dollars, unless otherwise stated.

In a press release dated December 10, 2020, the Company indicated that production in 2021 would be weighted to the second half of the year largely reflecting mine sequencing, with lower grades expected at all three cornerstone assets early in the year, particularly in the first quarter. At that time, production guidance was provided, including 600,000 – 650,000 ounces for the first half of the year and 700,000 – 750,000 ounces for the final six months of 2021. The Company also indicated that all-in sustaining costs per ounce sold (“AISC/ounce”)1 were expected to average over $900 in the first six months of 2021, and be highest in Q1 2021, improving to approximately $700 during the second half of the year. In a press release dated February 25, 2021, the Company reiterated this guidance and provided additional information on expected production in the first half of 2021, indicating that production was expected to total 270,000 – 290,000 ounces in Q1 2021 and 330,000 – 360,000 ounces in the second quarter of the year (“Q2 2021”).

Highlights of Q1 2021 Production Results

  • Production of 302,847 ounces compared to 330,864 ounces in Q1 2020 and 369,434 ounces the previous quarter
  • Gold poured of 303,149 ounces versus 326,933 ounces in Q1 2020 and 373,284 ounces in Q4 2020
  • Gold sales totaling 308,029 ounces at an average realized price of $1,788 per ounce compared to gold sales of 344,586 ounces ($1,586 per ounce) in Q1 2020 and 371,009 ounces ($1,875 per ounce) in Q4 2020
  • Detour Lake Mine (“Detour Lake”): Production totalled 146,731 ounces, above target levels and compared to 91,555 ounces in Q1 2020 for the two months after Detour Lake was acquired on January 31, 2020 (138,051 ounces for the full quarter) and 153,143 ounces in Q4 2020; Record first-quarter mill throughput of 5,701,704 tonnes was achieved in Q1 2021, with record daily throughput of 80,339 tonnes reported on March 24, 2021
  • Fosterville: Production totalled 108,679 ounces compared to 159,864 ounces in Q1 2020 and 164,008 the previous quarter; Production in Q1 2021 exceeded target levels due mainly to grade outperformance in March
  • Macassa Mine (“Macassa”): Production totalled 47,437 ounces versus 50,861 ounces for the same period in 2020 and 52,283 ounces in Q4 2020.

Other Highlights of Q1 2021

  • Published 2021 Sustainability Report during Q1 2021, the first time the Company’s annual sustainability report has been published during the first quarter; The report includes increased disclosures on ESG topics and provides further inclusion of Sustainable Accounting Standards Board (“SASB”) disclosures and metrics for Metals and Mining (to view report: https://s23.q4cdn.com/685814098/files/doc_downloads/sustainability/2021/KLGold_2021-GSR.pdf)
  • Continued exploration success at Detour Lake, including intersections in the Central Saddle Zone containing exceptional grades and widths that confirm the continuity of the mineralized corridor (800 metres along strike and 800 metres to depth) between the Main and West pits, as well as intersections to the west of the West Pit location that extend mineralization 300 metres west of current Mineral Reserves
  • New NI 43-101 report, including 2021 life-of-plan (“2021 LOMP”), filed for Detour Lake
    • Production of 680,000 – 720,000 ounces from 2021 – 2024, growing to 800,000 ounces in 2025 and reaching over 900,000 ounces in 2032
    • Low unit costs – average operating cash costs of $524/ounce and AISC/ounce of $775 from 2021 – 20251
    • Large Mineral Reserve providing 22-year production life
    • Additional value upside with no new drilling reflected in 2021 LOMP; Considerable exploration success achieved to date to be included in new technical report and life-of-mine plan scheduled for 2022.
  • Mineral Reserve estimates released with total Mineral Reserves at operating assets totalling 20,118,000 ounces as at December 31, 2020, after depletion of 1,451,000 ounces, a 3% increase from the previous year
  • Macassa #4 Shaft over a month ahead of schedule reaching a depth of 5,000 feet as at March 31, 2021
  • Continued strong financial position with cash at March 31, 2021 totalling $792 million with no debt; Change in cash from $847.6 million at December 31, 2020 reflects weighting of gold production in 2021 to second half of the year and timing of capital expenditures.


Tags: Northern Ontario / Deals & Financial / Gold / All Articles