Cash balance of KL Many investors want KL to buy back more than the 5 million shares. But I also understand Tony. KL don't want to lower their cash balance to much.
Why was it possible to buy back 18,9 million shares in 2020 and why is it more difficult in 2021.
There are 2 reasons.
First the company received in 2020 more then 400 million usd by selling shares of Novo Resources, De Grey Mining, Osisko and the Newmont alliance.
The second reason is the much higher costs of growth capital expenditures in 2021. 270 million usd in 2021 versus 95 million usd in 2020. These are the costs to built the new Detour Lake mine into one of the biggest mines in the world and to finish the # 4 shaft in the Macassa mine. KL pays everything with their own money.
VERY IMPORTANT IS THAT THESE COSTS WILL GO DOWN DRAMATICALLY FROM 2023.
When the mines are completed these costs will become much lower. For example for the Fosterville mine this cost is only 2,1 million usd for the quarter. From 2023 this will have a big positive effect on the cash balance of the company by more then 200 million usd a year.
My estimation for the cash balance at the first of October :
858,4 million USD Q2 2021
+ 255,25 usd (net profit) (1)
-53 million usd growth capital expenditures Detour
-27 million usd growth cap exp Macassa
-2,1 million usd growth cap exp Fosterville
-38,7 million exploration costs
-126 million buy back program (2)
-49,3 million dividends Q3
This gives a cash total of 817,65 million. Q3 2021
(sustaining capital expenditures are already included in the production costs)
In Q4 the buy back cost will go down from 126 million usd to 71,4 million usd (3) Maybe because of this KL will wait till Q4 to increase the dividend.
(1) The net profit is calculated based on 365.000 ounces of gold at an AISC of 725 usd.
(2) +- 3 million shares at a prize of 42 usd.
(3) In Q4 the company has to buy 1,7 million shares to reach the 5 million.
The future of KL is just brilliant.