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Kirkland Lake Gold Ltd. T.KL

Kirkland Lake Gold Ltd is a Canada-based gold mining, development, and exploration company with a diversified portfolio of exploration projects. The production profile of the company includes the Macassa mine complex located in northeastern Ontario and the Fosterville gold mine located in the State of Victoria, Australia. Also, the company owns the Holt mine and the Detour mine. The company's mines and material mineral projects are located in Canada and Australia.


TSX:KL - Post by User

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Comment by westcoast2019on Mar 10, 2020 6:16pm
308 Views
Post# 30790637

RE:RE:RE:RE:RE:Average POG 4Q19 vs 1Q20 (to date)

RE:RE:RE:RE:RE:Average POG 4Q19 vs 1Q20 (to date)
AxleLaRue wrote:
AxleLaRue wrote:
westcoast2019 wrote:
Goldbug52 wrote:
vestor111 wrote: Average POG 4Q19 = $1480
Average POG 1Q29 = $1601 So far per kitco data.

With only 15 trading days left in 1Q, miners are pulling down $121 more per ounce in 1Q over 4Q thus far.  

So one has to ask, how stupid will this get?

IF KL sell about 375000 oz in 1q (1.5M/4) with $121 more per oz, that is more than $45M extra - almost pure profit...or about $0.15 more share over 4Q.  


   That all sounds good but you and Chuck didn't take some important facts into consideration, namely: KL now has about 74 million more shares outstanding (after share buy backs to date) or 284 million shares, whereas last qtr they only had about 210 million, also you forget that Victoria State royalty comes into effect in the first qtr (2/3 of their production came out of Fosterville). That 2.75% royalty is going to be a hit to their bottom line! Also that $45 million is subject to approximately 30% tax, so about $31.5 million extra in profit. I think EPS will be between $.70 and $.75 .
   No chance we beat last qtr's earnings!
 



In defense of vester's calcs $45M divided by the current number of shares comes to 15.7c 
Also you need to add in earningds from Detour during the quarter.

Otherwise your right it may not be totally to the bottom line because of taxes especially the new Victoria State tax. 
Is that 2.75% a tax or a royalty i.e. is it on ounces produced or on profits I don't remember?
 


Top line. They are a royalty company. Smart. 

 

 

The tax rate will be set at 2.75 per cent of the net market value of gold production - Victoria is the only state without a gold mining royalty, however it will kick in on January 1 2020. It's expected to raise $27.8 million each year.Dec 11, 2019


Axle

 


Thats over 35$m from Fosterville alone. They are low balling the revenue. 

 

Axe


Here's my rough guess for an earning increase this quarter.

KL will probably be mining about the same tonnage at Fosterville but possibly at a lower average grade than in q4 2019. Their Feb. 20, 2020 report indicates a higher royalty amount is expected to be paid in 2020 , between 85M-90M up from $58M-$60M . I think the extra amount takes into account the new Victoria State Royalty of 2.75% . So extra royalies of about $28.5M using midpoints for an average.

Midpoint on there production guidance was 1.505M oz so round to 1.5M this only included 11 months of Detour production from the Jan. 31 takeover date so it could be a little higher.

Using vestor's 375k per quarter estimate then

A rough guess as to effect of higher average gold price on KL's earnings, would then be the difference of about $120 /oz times 375k ounces or $45M minus ¼ of the $28.5 million of extra annual royalties ($7.125M).

That would leave $37.875M before taxes on profits of around 30%

 

So we'd be left with an extra post tax earnings of of about $26.5M

 

divide that into 286 million shares 9.26 c

not as good as 15c but still a nice increase amidst probable earnings downturns for most stocks because of Corona- Virus and Oil price headwinds especially given that Q4 2019 earnings were already at record levels.

 

GLTAL



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