Kirkland Lake Gold’s Macassa and Detour Lake complexes continue to deliver massive value for investors

By all accounts, there seems to be no limit to Kirkland Lake Gold’s upward trajectory. Led by 35-year mining veteran Tony Makuch, the three-mine operation has weathered the 2020/2021 Covid pandemic better than most and has out-performed most of its rivals in the gold sector.

        The mid-tier producer operates the Macassa Mine in Kirkland Lake, the Detour Lake Mine north of Cochrane, and the Fosterville Mine on the other side of the world in Victoria, Australia.
    The company has delivered significant cash dividends to shareholders, announced the establishment of a Canadian Operations Centre in Timmins, expanded resources at both Macassa and Detour Lake, and strengthened it’s senior management team – all in the past 12 months.     
         Led by Timmins-born Makuch, Kirkland Lake Gold is producing just under 1.4 million ounces of gold a year. “In terms of all in sustaining costs in our peer group, as an entity we’re about the lowest cost in the industry - about $800 an ounce,” said Makuch at a recent web conference. “In terms of profitability, we have highly profitable mines.
       In 2019, the 100th anniversary of gold mining in Kirkland Lake, the company started the development of the new Number Four shaft. “We feel pretty strongly that there’s a significant life lesson in the Kirkland Lake camp - and that there’s a lot more production. As a matter of fact, we’re on track to grow historical production. Macassa was about 70,000-90,000 ounces a year if we go back to 2016.
   We expect to produce over 240,000 ounces this year, and we’re growing that to over 400,000 ounces a year by 2023 with the completion of the new shaft.”
    The acquisition of the Detour Lake Mine has been a big win for the company, notwithstanding a dip in the company’s share price that triggered a lawsuit by some disgruntled investors.
    We’re investing a lot of capital and a lot of money in exploration at Detour this year (2021) with a goal to demonstrate a potential doubling of the resource and doubling the reserve at Detour.” The company is delivering massive value to northern Ontario and provincial as well as federal coffers.

“We’ve had a lot of success at Detour over the last while in terms of what we see as being a large open pit gold mine with significant growth potential and resources.”

    “If you look at what Kirkland Lake Gold brings to Ontario, we directly employ somewhere around 3,400 people. We spend over $320 million, on an annual basis in labour investment in the region, and over $1.1 billion is spent in procurement, etc in Northeastern Ontario, of which 98% stays in Canada, and over 70% of it stays in Northeastern Ontario.”
  Makuch says Kirkland Lake Gold  employees and management have delivered through the global pandemic and he gives credit where credit is due.
“Fundamentally its people. Our people work very hard, people accepted and understood what needed to be done including good communication of processes. People jumped in and did what they could in terms of focusing on protocols, really trying to recognize what we wanted to accomplish. Nobody questioned or caused uproar in terms of policies and procedure. Our people actually gave a lot of help and insight in terms of where we needed to go.”
  In spite of the company’s roaring success, it was forced to reduce operations partway through the year. “We did cuts on non-essential services, like exploration activities, but then we brought it back as we learned processes, and we learned things. We started rapid testing for Detour back last fall. We’ve been 100% testing people before they go on site to Detour.”
   In early March the company had a minor outbreak of a few people testing positive at Macassa for COVID-19. “We immediately reacted as a company. We brought in 900 test kits, then tested 900 people over two days at site, got the results right away to give everybody comfort to get back to work and show that we’re really working on things to make sure that we provide a very safe and healthy workplace.”
   Makuch says the company has learned valuable lessons while navigating the Covid pandemic.  “A lot of it is good. When you look at health and safety and attention to detail, a lot of the processes around social distancing in workplace, I think there’s been a lot of gains. Definitely, it helps bring a lot of momentum into digitization, and automation.”
   “When we talk about providing improved workplaces about support to go to battery electric, in terms of helping improve the underground environment and the workplace environment for the people, I think it’s helped build that momentum.”
  Makuch says our future has nothing but upside. “You get the sense that if Detour is growing to 680,000-720,000 ounces a year, starting this year, and growing up to 800,000 ounces a year by 2025 which is just a subset before we really can put together a full plan - Detour itself is going to be the biggest gold mine in Canada, probably one of the largest gold mines in North America.”
   He says Detour will definitely be in the top 5 or 10 gold mines in all the world, based in northeastern Ontario.
   “As we go to Macassa, by 2023, if you look between Detour and Macassa, we’re going to be producing 400,000 ounces a year at Macassa, that’s a million ounces a year produced right here in northeastern Ontario. We’re going to be working to extend that mine life. And again, Macassa is probably one of the highest-grade, and one of the most profitable gold mines in Canada, let alone North America.”
   Makuch says these are exciting times for the industry as well as the company. “I think the most important and exciting part of what we’re doing, not only here in northeastern Ontario, but also in Australia, is we’re investing significant money in exploration - over $200 million. We think we have some exceptional and very prospective ground.

Tony Makuch said “we think that the Porcupine (Timmins) still has lots of exploration up there, there’s still a lot of gold to find.”

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