Kirkland Lake sets 1Moz target in 2019 as Fosterville booms

Victorian minerals

The high-grade Fosterville gold mine in Victoria. Image: Kirkland Lake Gold.

Kirkland Lake Gold will potentially complete its rapid rise towards becoming a one million ounce a year gold producer sooner than the company previously expected.

The Canadian company, which operates the high-grade Fosterville mine in Victoria, has upgraded its 2019 gold guidance to between 920,000 and one million ounces.

Kirkland Lake had previously forecast that it would reach the million ounce milestone in 2021, and only previously anticipated between 740,000 and 800,000 ounces of production in 2019.

Its guidance for 2021 has also been increased to up to 1.055 million ounces with yesterday’s revision.

At Fosterville, Kirkland Lake expects to produce up to 610,000 ounces each year until 2021, an increase on the previous forecasts of 430,000 ounces this year and 570,000 ounces by 2021.

The production growth is supported by a 60 per cent increase in reserves at Fosterville to 2.72 million ounces at 31 grams a tonne to the end of 2018. Fosterville’s grades have climbed 34 per cent with the new estimate.

Kirkland Lake president and chief executive officer Tony Makuch said Fosterville had transformed into one of the world’s highest-grade, most profitable gold mines since November 2016.

“The completion of Fosterville’s December 31 2018 mineral reserve and mineral resource estimate, with the related revisions to its life of mine plan and production profile, have taken that transformation to an even higher level, with the potential for much more to come,” Makuch said.

“Largely driven by the 34 per cent increase in the Fosterville mineral reserve grade we are now on track to achieve significantly higher levels of production at Fosterville in 2019 than previously expected and could reach one million ounces of annual gold production as early as this year.”

Kirkland Lake has also improved the expected cost profile at Fosterville, lowering its per ounce forecast to $170–$190 from the previous $200–$220.

“Just as encouraging as the growth in ounces, is the fact that with a higher average grade at Fosterville, as well as Macassa (in Canada), our mineral reserve ounces are more valuable, which means improved unit costs and increased cash flow per ounce going forward based on current gold prices,” Makuch said.

Kirkland Lake increased its reserves at Macassa by 11 per cent to 2.25 million ounces at 21.9 grams a tonne. Overall, the company’s multi-site reserve inventory has now reached 5.75 million ounces at 15.8 grams a tonne.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.