TORONTO, Nov. 05, 2020 (GLOBE NEWSWIRE) -- Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or the “Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today announced the Company’s financial and operating results for the third quarter (“Q3 2020”) and first nine months of 2020 (“YTD 2020”). The Q3 2020 results include strong year-over-year growth in production, revenue, net earnings and cash flow. The Company’s full consolidated financial statements and management discussion & analysis are available on SEDAR at www.sedar.com and on the Company’s website at www.kl.gold. All dollar amounts are in U.S. dollars, unless otherwise noted.
Q3 2020 Highlights
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Net earnings of $202.0 million. Adjusted net earnings(1) of $249.3 million or $0.91 per share: Net earnings totalled $202.0 million or $0.73 per share. Adjusted net earnings(1) totalled $249.3 million or $0.91 per share, an increase of 49% from Q3 2019 and 14% from Q2 2020.
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Record free cash flow(1): Net cash provided by operating activities totalled $431.1 million with record free cash flow1 of $275.7 million, a 52% increase from Q3 2019 and 22%2 higher than the previous quarter.
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Increased balance sheet strength: Cash at September 30, 2020 totalled $848.5 million, a $311.1 million or 58% increase from $537.4 million at June 30, 2020.
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Progress with key growth projects: Total growth capital expenditures1 totalled $28.1 million, including $11.5 million related to Macassa ($8.3 million to #4 shaft project); #4 Shaft project ended the quarter approximately one month ahead of schedule and on track for completion in late 2022.
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Continued exploration success: The ramp up of exploration drilling continued during Q3 2020, with total expenditures of $27.4 million; At September 30, 2020, there were five surface and eight underground drills at Fosterville, one surface and eight underground drills at Macassa and five surface drills at Detour Lake; Considerable exploration success achieved, including:
| | º | Detour Lake: Results in Saddle Zone support the Company’s view that a much larger deposit exists around the Main Pit and West Pit locations than is currently included in Mineral Reserves; |
| | º | Fosterville: Infill drilling in the Swan Zone intersected higher than expected grades; Drilling confirmed substantial scale and growth potential of mineralized systems at Cygnet, Robbin’s Hill and Harrier; |
| | º | Macassa: New results included exceptional grades being intersected near contact of South Mine Complex (“SMC”) and high-grade mineralized zones vertically stacked along Amalgamated Break. |
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Over half billion dollars in share repurchases in 2020: During Q3 2020, $107.4 million (C$143.0 million) was used to repurchase 2,139,300 common shares; As at November 4, 2020, 14,029,500 shares had been repurchased year to date for $526.6 million (C$709.5 million).
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Continued dividend growth: Quarterly dividend increased 50%, to US$0.1875 per share, effective Q4 2020; Increase follows doubling of dividend in Q1 2020 to US$0.125 per share from US$0.06 per share (dividend more than tripled during 2020); $34.5 million used in Q3 2020 to pay quarterly dividend on July 13, 2020 to shareholders of record June 30, 2020.
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Solid operating results:
| | º | Production of 339,584 ounces, a 37% increase from 248,400 ounces in Q3 2019 and 3% higher than 329,770 ounces the previous quarter; |
| | º | Production costs of $136.0 million versus $73.7 million in Q3 2019 and $141.4 million in Q2 2020; |
| | º | Operating cash costs per ounce sold(1) averaged $406 compared to $287 in Q3 2019 and $374 in Q2 2020; $245 in Q3 2020 and $241 in Q2 2020 excluding Detour Lake; |
| | º | All-in sustaining costs (“AISC”) per ounce sold(1) averaged $886 ($622 excluding Detour Lake) versus $562 in Q3 2019 and $751 ($526 excluding Detour Lake) in Q2 2020. |
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Detour Lake – The right deal at the right time: Detour Lake continued to make a substantial contribution to the Company’s results in Q3 2020, with production of 140,067 ounces, revenue of $262.5 million and free cash flow(1) totalling $64.0 million; From January 31, 2020 to September 30, 2020, Detour Lake produced 363,614 ounces with revenue of $674.9 million and free cash flow1totalling $231.0(3) million, representing 41% of the Company’s total free cash flow(1),(3) for YTD 2020; The acquisition on January 31, 2020 added 14.8 million ounces to the Company’s Mineral Reserve base with potential for significant growth over the next few years with continued exploration success.
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Solid return from strategic investment: During Q3 2020, $107.7 million (C$143.2 million) was received from the sale of the Company’s 32.6 million shares of Osisko Mining Inc. (“Osisko”), resulting in a realized gain of $60.6 million recognized through other comprehensive income (not included in net earnings).
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Strategic alliance with Newmont Canada FN Holdings ULC (“Newmont”): $75 million (not included in net earnings) was received through a strategic alliance agreement with Newmont with respect to exploration and development opportunities around the Holt Complex and Newmont’s properties in Timmins; Through agreement, Newmont acquired an option on mining and mineral rights related to the Holt Mine property.