A solid performance by its key Australian asset, the Fosterville gold mine in Victoria, has made sure Canadian miner Kirkland Gold is in good shape to complete its $13.4 billion all paper merger of equals with rival Agnico Eagle.
In its 4th quarter production and saes update filed in Canada on Monday, Kirkland reported record production of 380,470 ounces (oz) of gold achieved across its three operations, including Fosterville, near Bendigo in Victoria.
The gold miner also posted record production for 2021 of 1.4 million oz. Updated guidance released in November called for between 1.35 million and 1.4 million oz. of gold 2021.
The strong results were driven by record production at Kirkland’s Lake’s Detour Lake gold mine in Ontario and the strong performance at Fosterville
Detour Lake churned out nearly 211,000 oz. gold (up 38% from the last quarter of 2020) as the company mined some of the highest-grade areas in the mine plan and production benefited from mill upgrades completed during the year.
Fosterville contributed 108,160 oz. gold in the quarter; Although down from 2020 production, the operation outperformed against expectations, Kirkland said.
It delivered 509,600 oz. for the year on higher grades (processing 677,899 tonnes at an average grade of 23.7 g/t) compared to guidance of 400,000 to 425,000 oz. gold.
The company’s Macassa mine in Ontario delivered 210,190 oz. gold for the year and 61,340 oz. for the quarter, up 17% from the same period of 2020. Production guidance for the mine was revised downward to 190,000 to 210,000 oz. in November, down from 220,000 to 255,000 oz.
Kirkland Lake president and CEO Tony Makuch, who will also head the combined company post-merger, said that Detour Lake and Fosterville are both positioned to meet the three-year production guidance issued in December 2020.
However, Macassa production is expected to fall short.
“At Macassa, we are reviewing the operation to assess opportunities to incorporate Agnico Eagle’s Amalgamated Kirkland Zone into the mine plan, to address ongoing performance and supply chain issues related to batteries and our battery-powered haul fleet, and to evaluate future plans for the near-surface ramp and mineralized zones,” Makuch said in a release.
“Based on work to date, we expect a reduction in production in 2022 from levels included in our previously-issued three-year guidance.”
Kirkland Lake however said it had success expanding resources at Detour Lake and with exploration at Fosterville last year where grades in some exploration holes were significant upgraded.
The company received shareholder approval for the merger at the end of November, followed by the approval of the Ontario Superior Court of Justice on December 1. It is now waiting for Foreign Investment Review Board approval in Australia.
Based on expected timelines, the company says the merger should close between late January and mid-February, after which it will work out the consolidated 2022 budget for the new Agnico Eagle group and to release consolidated guidance to the market in the second half of February.
