Gold is always in demand. It’s one of the world’s most sought-after materials, offering a wealth of different opportunities for use. The team at Kirkland Lake Gold are committed to producing the best quality product, alongside with generating superior value for clients. We look more closely at the firm and how it operates to see just what they have to offer.
Operating in Canada and Australia, the international operation that is Kirkland Lake Gold has achieved success after success in the last few years. Already a large operation, and still growing, the team behind this impressive business are looking for even more ways in which they can excel.
Kirkland Lake Gold is anchored by three different mining operations, namely the Macassa Mine and Detour Lake Mine in Northern Ontario, Canada and the Fosterville Mine in Victoria, Australia. These lynchpin operations generate substantial free cash flow, which ensures that business continues to build financial strength. Each mine has the potential for considerable growth through continued exploration success.
Driven by record results at Fosterville, Kirkland Lake Gold was able produce 974,615 ounces of gold in 2019. Following the acquisition of Detour Lake in January this year, the Company’s target for 2020 has jumped to 1,350,000 – 1,400,000 ounces. The success of the firm is best shown by the team’s determination to achieve even greater results year on year. Of course, expansion means more growth, but the Company’s focus is only on growth that creates value and supports a stronger balance sheet.
The goal is simple – to increase shareholder value by lowering unit costs at the operations level, which is a key driver for growth in earnings and free cash flow. With industry-leading financial strength, the firm is able to aggressively return capital to shareholders at the same time that it invests in its key assets and pursues other value creation opportunities. Such is the success of Kirkland Lake Gold that the company has been able to pay a quarterly dividend since July 2017. The dividend has been increased six times over this period, showing that the effort that has been put into the company is paying off.
This drive for value has proven to be a key factor in the success of Kirkland Lake Gold. In the Company’s view, value creation starts with a commitment to exploration at its existing wholly owned assets. The company’s long experience in exploration has allowed the team unique insight into the process of growing reserves and discovering new areas of high-grade gold mineralization. In addition, the team is always looking for new projects in which to invest, so that they might be able to support the development and operation of new, economically attractive gold mines in its core jurisdictions of Canada and Australia.
The addition of Detour Lake Mine (through the acquisition of Detour Gold Corporation), has provided a new opportunity for value creation through the drill bit. The acquisition has significantly enhanced the mineral reserves that Kirkland Lake Gold has access to, while complementing the assets that the firm already owns and operates. The aim has been to conduct drilling into prospective targets in this new region in order to ascertain precisely what opportunities are available to the company. ISS and Glass Lewis, two of the world’s most prominent proxy advisory services, noted that “The combined company will have complementary assets, incremental financial and operational scale, and various opportunities to realize incremental value for shareholders, including through the further optimization of the Detour Lake mine, exploration activities on highly-prospective targets within Detour’s land position, and the potential realization of meaningful synergies.”
The decision to acquire this property was therefore one that is to the benefit of both companies, allowing for an exciting range of new opportunities to take hold. Underlying these opportunities are the principles of sustainability in all respects. The team at Kirkland Lake Gold works tirelessly to replace and grow reserves in order to ensure that production can continue for years to come. Replacing reserves mined each year, and over time growing the reserve base, is a key measure of success for the Company.
Sustainability does not just apply to material assets, however, and a great deal of effort is put into ensuring that team members can function to the highest possible standards. Safety, environmental management and community consultation and support are all important aspects that play a major part in how Kirkland Lake Gold achieves success.
All stakeholders, at a local, national and international level are involved and encouraged to take an active part to ensure that Kirkland Lake Gold is a welcome member in the community. This means that the Company provides workers with an environment free of discrimination. It also pays particular attention to the needs of indigenous groups and cultural heritage sites. Ensuring a diverse and inclusive approach in every aspect of the Company’s work is paramount.
The team at Kirkland Lake Gold also takes an active approach to the areas of Environment, social and governance practices. The company has identified seven environmental priorities for its global operations, namely environmental management, air quality, energy efficiency and greenhouse gas emissions (GHGs), water stewardship, noise abatement, waste management, biodiversity, land and resource management, with regards to cultural heritage, visual amenity, closure and progressive rehabilitation.
These priorities have not only guided the Company through its recent success, but have ensured that its approach continues to support the prosperity and sustainability of the communities in which it operates. With mining taking place over a broad area, the team is committed to identifying, protecting and preserving indigenous and historical cultural heritage sites. The team at Kirkland Lake Gold operates collaboratively with indigenous communities in local areas, giving them the opportunity to engage and interact with any plans, and working with them, and other groups, to ensure the Company’s activities benefit all key stakeholder groups.
In all, the team at Kirkland Lake Gold should be proud to have achieved such success, drawing on its considerable expertise and experience in mining, exploration and sustainability. While success for shareholders is obviously a key priority, the Company is fully aware that true value creation serves the interests of many groups, in fact, all groups that have a stake in the success of the business. Given Kirkland Lake Gold’s performance in recent years, the quality of its assets and its commitment to responsible mining, it is business poised for continued success going forward.