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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

Bullboard Posts
Post by 420CPACFAon May 17, 2020 10:47am
188 Views
Post# 31039561

Grant's Interest Rate Observer

Grant's Interest Rate ObserverCheck this out.  Just posted on Sprott's website on Friday May 15th.

https://www.sprott.com/insights/changing-monetary-places/

I don't consider myself to be a gold bug but I have been pouring over financial statements for at least a dozen gold mining companies.  At these gold prices, there is going to be massive free cash flow in the majors and intermediates.  Its funny, historically, gold miners are considered to be high risk investments and I guess thats been true.  If gold prices don't collapse, the miners are still the cheapest area of the stock market.

Consider now, in this coronavirus world, a lot of these miners are considered to be essential services.  Now not in all jusidictions but certainly in Ontario and now Quebec.  So, it looks like there is a high probability of a second wave of this thing in the fall.  A possible second shutdown, but if the gold miners you own operate in jurisdictions like Canada and Australia, they will continue to produce.

Kirkland Lake isn't the only miner I own but I have been trying to buy miners with operations in Ontario, Quebec, Australia and to a lesser extent USA adn Mexico.  It seems like a no brainer to me.  Revenue in a strengthening USD, expenses in a declining CAD and AUS.  Lower fuel costs etc.

I know there has been some criticism of the Detour acquisition but the company is very well run with a large cash balance and no long term debt.  $530 million cash as of March 31, 2020, current ratio 1.51, so the balance sheet is rock solid.  Cash flow from operations for the quarter of $270 million.  This company is on pace for more than a billion dollars in operating cash flow this fiscal year.  We are going to see some larger dividends and likely some more acquisitions.
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