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KL Gold share sales to bolster existing operations - Makuch

Aug 14, 2020


By Kevin Vincent. A flurry of in and out share sales by Kirkland Lake Gold over the past few weeks spells good news for the company's existing operations. The company announced early this week that it had divested itself of shares in two companies, Osisko and Novo. In making the announcement, Kirkland Lake Gold President Tony Makuch said the company plans to reinvest in its three gold mines.

“The sale of Osisko and Novo shares further enhances our already industry-leading financial strength, which will support our efforts as we pursue our key strategic priorities, including investing in our three cornerstone assets and returning capital to shareholders," said Makuch.

"Macassa, Detour Lake and Fosterville are three highly-profitable, cash-flow generating operations, each of which has outstanding exploration upside. There remains significant value creation potential at all three of these assets and unlocking that value is our overriding priority," he added. 

"Also important to us is rewarding shareholders which, in addition to share price performance, also involves buying back stock and paying dividends. So far in 2020, we have repurchased 11.9 million shares for US$388.4 million, which represents approximately $1.40 per share based on our current shares outstanding, and also doubled our quarterly dividend to US$0.125 per share. If we combine the amount of cash used for share repurchases and dividend payments in the first half of 2020, it represents approximately $645 per ounce of gold produced during the period. We announced earlier in the year a goal of repurchasing 20 million shares over a 12 to 24-month period and we are making excellent progress towards achieving that target.”   

Between August 7, 2020 and August 12, 2020, the Company disposed of 538,700 common shares of Novo (the “NVO Shares”) through the facilities of the Toronto Stock Exchange at an average price of $3.52 per NVO Share for a total consideration of $1,894,786. In June 2020, the Company disposed of 210,000 NVO Shares at an average price of $3.28 for a total consideration of $689,024. Prior to the dispositions, the Company held 29,830,268 NVO Shares and 14,000,000 warrants of Novo (the “NVO Warrants”) representing approximately 15.81% of the issued and outstanding NVO Shares on a non-diluted basis and 21.62% on a partially diluted basis, assuming the exercise of the Novo Warrants. The completion of these dispositions has resulted in a 0.4% decrease in the Company’s holdings in Novo. Immediately following this disposition, the Company now holds 29,081,568 NVO Shares representing 15.41% of the issued and outstanding NVO Shares on a non-diluted basis and 21.25% on a partially diluted basis, assuming the exercise of the Novo Warrants.  



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