RE:RE:Kirkland Lake Gold: An Industry Leader At A Deep DiscountKL’s problem is it seems to be rudderless regarding future strategy, which seems to be only to bank cash and continue with long term development of its existing properties.
- If, for example, NFG were to a medium term target ……. Being a Fosterville ++++ project, the drawback is that the KL SP has been deeply discounted since it purchased Detour.
- The share buy-back cap is 26m shares over a year. This equals circa C$1.3b @ C$50.
- If the KL board was committed its entire treasury to an aggressive and accelerated buy-back program, this is bound to have a positive upside trajectory to its SP.
- If, say the SP was then valued close to AEM’s PE metrics, the KL SP could reach the C$70/80 level, from its exiting ~ C$50.
- Using back of envelope calculations, a C$20 increase in SP would be equivalent to C$5.2bn (current cap C$13.2bn x20/50).
- NFG currently has a cap of ~ C$2bn.
- Therefore, by using its depreciating fiat currency, by increasing its valuation halfway to the AEM valuation metrics, KL could generate additional market cap equal or more than the NFG current cap.