Fake news from Adam Hamilton I just read an article by Adam Hamilton released today. He usually is reliable but I found in trying to prove a point he used the Newmont/Goldcorp merger and the KL/ Detour merger to illustrate that companies doing mergers usually have a decline in production.
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From Adam Hamilton's article March 13 2020
Newmont's production plunged 11.8% YoY while Kirkland Lake's plummeted 28.2%! That highlights yet again how major-gold-stock mergers usually fail to yield overall output increases despite their big dilution to acquiring shareholders. The merged companies' gold produced tends to deteriorate from their earlier separate totals. Mergers also tend to increase per-ounce costs, as evident in Newmont's climbing ones.
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KL
Record full-year operating results
° Productionof 974,615 ounces, 35% increase from 2018 (2019 Guidance: 950,000 – 1,000,000 ounces)
°Production costsin 2019 totaled $281.0 million versus $267.4 million in 2018
°Operating cash cost per ounce sold1of $284/oz, 22% improvement from 2018 (2019 Guidance: 285 – $305/oz)
°AISC per ounce sold1 of $564, 18% better than 2018 (2018 Guidance: $520 – $560).
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KL 2018 production was from Feb 2019 News Release 723,701
Record full-year operating results beat 2018 guidance
Acquisition of Detour Gold Corporation
° Adds 14.8 million ounces in open-pit Mineral Reserves, 3.9 million ounces of open-pit Measured and Indicated Mineral Resources and 1.1 million ounces of open-pit Inferred Mineral Resources
° Produced 601,566 ounces in 2019
° Significant potential for growth in Mineral Reserves, increased production and improved unit costs.
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The Detour Lake presentation of Feb 2019 showed Detour full year productionin 2018 was 610,672 0z oz
so combined the KL/DGC corp produced 723701 + 610,672 = 1,334,379 oz in 2018
in 2019 they produced more with 974615 + 601,566 = 1,576181 oz in 2019
combined there was an increase in production of 18.1 % not a decrease of 28.2% as claimed in the article