Kirkland Lake Gold Ltd. T.KGI

RE:RE:RE:RE:RE:RE:RE:RE:stay short

[MandalorianFett]

MandalorianFett wrote:

ftj1408 wrote: You've been in that trade since at least januari last year. Yes it has been profitable now but only because of the detour takeover and high gold prices (better for barrick). It hadnt been profitable for over a year. And all of us who have simply been long kirkland have been profitable as well to the tune of 50. So your timing was off, you got saved by some peculiar circumstances in the last months, and you hardly faced better than any of us with a much simpler setup. Regardless, good for you that you held on till you got vindicated. I dont see why you're still short though. Kirkland is going to keep buying stock back under 40$ till cash runs out. The way I see it they are buying back some of the stock that they issued for the detour takeover. So far they bought back 10 million shares at 34 USD. I bet they're still buying everytime price drops under 40. The way i see it is they are reversing their all-shares detour buy from 77 million shares into 67 million shares plus 340 million. It's brilliant. Detour is no longer valued at 3.9 billion but 3.1 billion at today's price or 2.65 billion at the share buyback price of 34. Great leadership by Makuch to not use the cash position to buy detour in part but to use it later to buy back part of the shares at great discount. Great value for a mine with a 15 year mine life which can produce 700k oz at 850 AISC. So yes the old kirkland lake is gone but the old kirkland had grown larger than it could be and even though i did not manage to see it with gold at 1470 at the time and KL at 48 USD, the share price was ridiculous. Great decision to buy at that time and what a buy it was. The 10.4 billion (cash discounted) valuation of today is very low end. Macassa and Detour produce almost half of agnico eagle's production at a similar AISC in a better jurisdiction, with prospects to drive costs down and production up till 1.1 Moz. Meanwhile the proven and probable reserves at detour and macassa are almost as large as those of AEM. AEM is valued at 17 billion (debt included). Yet Kirkland still has Fosterville. Any upside that might come from there is easily going to catapult the share price 50 higher. Makuch has been excellent in all his choices. The man is a continuous value builder. He is going to make Kirkland into the undisputed number 3 in the world. My advice, start a new pair trade. Short AEM and long KL.

Fyi, the share repurchase has been suspended if I recall. In the same news release as the suspension of guidance.


Boba

In addition, the company also announced today it will terminate the automatic share purchase plan (ASPP) effective March 23, 2020. The suspension reflects the company's commitment to maintaining financial strength during the current period of uncertainty related to the Covid-19 virus. The ASPP was launched on Feb. 20, 2020, in connection with the company's current normal course issuer bid (NCIB) to allow for share purchases that would not be subject to blackout periods and other restrictions. The current NCIB remains in effect on the same terms and conditions as previously disclosed. Under the current NCIB, the company can purchase up to 10.5 million additional common shares between now and its expiry on May 28, 2020. A total of 10.4 million common shares have been repurchased to date through the current NCIB, including 1.9 million shares through the ASPP. Except as set out in this press release, the company is not aware of any material undisclosed information about its business or its securities.