Kirkland Lake Gold (KL)

[NYBob]

rrten thank you, Kirkland Lake Gold Smashes Earnings
May 22, 2019 2:20 PM ET|
About: Kirkland Lake Gold Ltd. (KL)


https://seekingalpha.com/article/4265873-kirkland-lake-gold-smashes-earningshttps://seekingalpha.com/article/4265873-kirkland-lake-gold-smashes-earnings

At the Fosterville mine, the company produced 128,445 ounces of gold at operating cash costs of just $144 per ounce, also below its guidance of $170-$190/oz. Grades were 29.0 g/t and recoveries were very strong at 98.3%.

According to the company's CEO, Tony Makuch, Kirkland Lake increased production from the Swan Zone at Fosterville in Q1 2019, with stope production advancing on multiple levels. However, the company is actually targeting higher levels of production from this zone in the second half of the year, so it's safe to assume higher production from the mine in H2 2019.

(Credit: Kirkland Lake Gold presentation)

Full-year guidance has been lifted following the strong results (see image above). At Macassa, production for full-year 2019 in now targeted at 240,000–250,000 ounces compared to the previous target of 230,000–240,000 ounces. Operating cash cost per ounce sold guidance at Macassa is improved to $400–$420/oz, from $440–$460/oz previously.

Its balance sheet position has strengthened, as the company ended the quarter with $416 million in cash (with virtually no debt), up $83.9 million from last quarter, even after spending $86 million on investing activities.

Since Kirkland Lake was able to produce so much cash flow this quarter and since it is sitting on a ton of cash, it comfortably increased its dividend to C$.06 (US$.04) per share (quarterly), a 34% increase. Since 2017, the company has grown its dividend every year.

The stock now carries a forward dividend yield of .49%, with plenty of room for further dividend increases. It seems like the company's preference going forward will be to increase the dividend rather than buy back shares.

(Credit: Kirkland Lake Gold presentation)
Kirkland Lake Gold final thoughts

https://seekingalpha.com/article/4265873-kirkland-lake-gold-smashes-earnings

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