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company’s stable. However, “We have typically done well with the generalist segment of
both those purchases were the market even when a lot of people in the industry weren’t.
made with grand ambitions in We have always operated the business from the standpoint
mind. that you focus on generating solid profitability – solid cash
“The technical quality of the flow from high quality assets that are low-cost with enough
geology group working at scale to generate significant profitability.”
Fosterville is second to none in Given investor interest is now also following exploration
the world. Exploration success stories, Kirkland Lake could find its popularity further
doesn’t come easy. We’ve put heightened in coming months given it has a string of
the money to work and we exploration programmes in play.
spend a lot of money exploring In addition to the in-mine and district-scale exploration
at Fosterville,” Makuch said. potential being demonstrated at the Swan Zone, Lower
“If you look at 2016, we put Phoenix, Cygnet, Harrier and Robbin’s Hill at the 2.1 moz @
$15 million, $40 million in 21.8 g/t Fosterville gold mine, Detour Lake is also shaping
2017, $50 million in 2018, $70 up nicely for the company.
or $80 million in 2019 and this Drilling in the central portion of the Saddle Zone at Detour
year we are spending over Lake returned a hit of 1.1 g/t gold over 142m, including 9.39
$100 million at Fosterville. g/t over 2m, 2.15 g/t over 16m and 1.23 g/t over 12m, to
Basically between 2016 and confirm continuity of the mineralised structure between Main
2017 we spent more money on and West pits.
exploration drilling in the area
“We have a lot of internal growth that we have to maintain. At
than was spent in the 20 years
Fosterville that is discovering the next Swan or another two
prior.”
or three Swans sitting there and we are really excited about
The Swan Zone – 1.6 moz what we are doing at Detour Lake,” Makuch said.
@ 38.6 g/t in reserve – is
“We have talked about not only growing production to
becoming folklore and is where
700,000 ozpa and then higher than that over the next 3-5
the bulk of production comes from at Fosterville.
years but also the potential to almost double the resource
Recent infill drilling into the Swan reserves intersected and reserves at Detour Lake. We want to grow Macassa
higher than expected grades and included visible gold – 976 from 210-220,000 ozpa this year to 400,000 ozpa by 2023
g/t gold over 7.4m, 933 g/t over 6.4m, 416 g/t over 6.8m once we have the shaft [No. 4] completed.”
and 222 g/t over 8.1m – with the company reporting good
Despite the organic growth opportunities being developed,
potential to increase the reserve base yet again.
Kirkland Lake knows it is in a plum position to expand its
“There has been a lot of holes drilled, a lot of theorising growth profile in other ways without stretching the budget or
and we are trying to take advantage of technology as much horizons too far.
as possible, whether it is the new assay
Makuch said the skillsets, geology and
method like Chrysos or better ways to do
attitudes shared between the Canadian
downhole and log core faster,” Makuch
and Australian mining fraternities were
said.
complementary, hence, the success of
“We have done 3D seismic to really Kirkland Lake down under and the likes of
understand what’s going on and getting a Northern Star, St Barbara Ltd and Evolution
real sense of the structural geology in the Mining Ltd across the Pacific.
region and testing a lot of different ways to
Makuch sees potential for more successful
determine what is going on. Fundamentally,
ventures from Australia’s mid-tier gold
drilling a lot of holes and putting the
companies in North America, however, the
money to work is key. We have joined
“hindrance” of not being able to travel and
with universities in the region like Monash
conduct proper due diligence could stymie
which has some very strong structural Tony Makuch M&A.
geologists working to really get an in-depth
“You have to go kick the tyres, hear the
understanding of it.”
engine; take it for a drive,” Makuch said.
It has been a rapid ascension for Kirkland Lake at Fosterville
“We are in a good spot in many ways. You read a lot in
since 2016, with the company’s performance at the mine
the media that there is not a lot of room left for M&A, we
triggering a response from generalist investors not typically
are pretty disciplined on that and focused on cash but also
interested in gold.
shareholder returns. We don’t want to issue shares and buy
“The kind of results we were getting at Fosterville meant
back shares, we have raised our dividend [$US0.125/share
we did come up on the radars of funds and it has really
quarterly dividend paid in July] and have potential to raise
accelerated now as the whole market is looking for an
our dividend again very shortly. Our share buy back and
attractive place to invest in unusual times,” Utting said.
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