Prouditalian thinks the AISC of KL will rise in the coming years because of Fosterville (see SSRM forum). He is VERY wrong.
Answer to PI
I will explain in detail why you are wrong about the AISC for Kirkland lake gold.
1/Last year the Detour Lake mine of Kirkland lake gold produced 516.757 ounces of gold with an AISC of 1.161 usd/oz. This year Detour xill produce 700.000 ounces with an AISC of 844 usd (see technical report Detour 2021)
Based on the new 2022 mine plan they will reach as early as possible (2023) 900.000 ounces with an AISC of 700 - 750 usd per ounce. This is just fantastic!!!!!!!!!! The Detour mine is located in Canada.
2/ The Macassa mine produced in 2020 a total of 183.038 ounces with an AISC of 922 usd. At the end of 2022 when shaft 4 is ready they want to increase production to 425.000 ounces with an AISC of 575 usd!!!!!!!!! The Macassa mine is located in Canada.
3/ The Fosterville mine in Australia created a lot of value for KL. Thx to the Fosterville mine KL was financial strongh enough to buy Detour lake. In 2020 the Fosterville mine produced 619.366 ouces with an AISC of 312 usd. This number will go down to 400.000 ouces with an AISC of +- 500 usd per ounce. In this quarter a big exploration program starts. A very important platform in the mine is ready since the end of june. This platform is needed to start the real drilling in the Fosterville mine and Robin's Hill. Our CEO indicates that there is a big chance the company finds a new swan or swan like zone. In the worst case scenario they don't find a new swan or swan like zone they will feed the mill with a much higher tonnage from Fosterville and Robbin's Hill. They can increase tthe mill input ftom now 1754 tonnes a day to the maximum of 2275 tpd. (30% increase) By lowering the production from 600.000 ounces to 400.000 ounces the company can easily replace produced ounces by reserves. Between now and the end of the year the company will give very important drilling updates.
I expect also a new acquisition in 2022.
2016 : acquisition of Newmarket Gold
2019 : acquisition of Detour Gold
2022 : new acquisition????
Every 3 year???
Production KL in 2021 1300.000 - 1400.000 ouces
In 2023 it will be 1.725.000 ounces. A new acquisition can lift us above 2.000.000 ounces a year.
The AISC will go down from 800 usd/oz in 2021 to
625 usd per ounce in 2023 even with the worst case scenario with an higher AISC for Fosterville.
The valuation of KL is with a P/E of 11 extremely cheap. At some moment in time the price of gold will go much higher. Then an undervaluation can change in a mania.
Good luck with SSRM PI!!!!
Grasspriet