Kirkland Lake Gold Ltd (NYSE: KL) reported strong production results for the fourth quarter of 2021 and full-year 2021, exceeding prior guidance. The robust results were driven by record production at Detour Lake as well as Macassa.
Founded in 2015 and headquartered in Toronto, Canada, Kirkland Lake Gold Ltd. is a low-cost senior gold producer with operations in Canada and Australia.
However, given the current situation, the company stated that it is too early to determine a potential impact of the current COVID-19 situation on production at Detour Lake, Macassa, and Fosterville in the first quarter and full-year of 2022.
Q4 Production Results
For Q4, the company reported total production of 380,472 ounces, a 3% year-over-year growth. The increase in production reflected a record production of 210,980 ounces at Detour Lake Mine, a 38% year-over-year gain, coupled with a 17% increase in production at the Macassa Mine.
The fourth quarter saw gold poured of 385,702 ounces compared to 373,095 ounces for the year-ago period. Furthermore, gold sales increased to 385,850 ounces compared to 371,009 ounces for the prior-year quarter, with an average realized price of $1,795 per ounce.
FY 2021 Production Beats Outlook
For FY 2021, the company achieved consolidated production of 1,432,616 ounces, a 5% year-over-year gain. The number outpaced the company’s original guidance (1,300,000 – 1,400,000 ounces) issued last year, as well as the raised guidance of 1,350,000 – 1,400,000 ounces issued on November 3, 2021.
Annual gold poured increased 5% year-over-year to 1,430,602 ounces. Gold sales increased to 1,430,554 ounces compared to 1,388,944 ounces for the prior-year quarter, with an average realized price of $1,772 per ounce.
Update on Merger with Agnico Eagle
The company updated that it had received shareholder approval for its merger with Agnico Eagle around November-end, followed by the approval of the Ontario Superior Court of Justice on December 1. The company is now waiting for the Foreign Investment Review Board approval in Australia.
The acquisition is expected to close between late January and mid-February, subject to certain regulatory approvals.
Upon completion, the company will finalize the consolidated 2022 budget for the new Agnico Eagle and issue consolidated guidance for the combined company in the second half of February.
CEO of Kirkland Lake Gold, Tony Makuch, commented, “we generated record operating results and continued to build our financial strength, we also made significant progress towards completing the Merger with Agnico Eagle, through which we will create a new industry leader with low unit costs, the best risk profile, excellent financial strength, an extensive growth pipeline and leadership in key areas of environmental, social and governance.”
Cautioning on the ongoing performance and supply chain issues related to batteries and battery-powered haul fleet at Macassa, he further added, “Based on work to date, we expect a reduction in production in 2022 from levels included in our previously-issued three-year guidance.”
Overall, the stock has a Strong Buy consensus rating based on 3 Buys and 1 Hold. The average Kirkland Lake Gold stock price projection of $48.01 implies 18.8% upside potential from current levels.
Bloggers Weigh In
TipRanks data shows that financial blogger opinions are 100% Bullish on KL stock, compared to a sector average of 69%.
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