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Kirkland Lake adds 10moz gold to Detour Lake resources

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Kirkland Lake Gold (TSX: KL; NYSE: KL; ASX: KLA) has released a mid-year updated resource estimate for its Detour Lake mine in Ontario, adding another 10.1 million oz. of contained gold. Measured and indicated resources are now 572 million tonnes grading 0.80 g/t gold, totalling 14.7 million contained ounces.

The inferred resource has grown, too. The estimate is now 1.1 million contained oz. in 48.3 million tonnes grading 0.81 g/t gold.

Resources were calculated using a 0.5-g/t gold cut-off grade. Provision was also made to stockpile low-grade material for future processing rather than treat it as waste.

The resource update used data from 365 holes or 185,000 metres of surface diamond drilling completed in the last 18 months. (Kirkland Lake bought out Detour Gold Mines in January 2020.) Another 100,000 metres are planned by the end of the year.

“When we acquired Detour Lake, we saw many opportunities to optimize the operation and generate value,” said president and CEO Tony Makuch. “We now expect Detour Lake to reach 800,000 oz. of production in 2025, and to ultimately grow to over 900,000 oz. per year, with average AISC targeted at $775 per ounce over the next five years.”

Kirkland Lake is also optimizing the 2021 Detour Lake life-of-mine plan. A number of initiatives to improve mill availability and throughput, metallurgical recovery, grade control, automation are being examined.

“We are targeting further operational improvements that, in aggregate, are expected to deliver between C$750 million and C$1 billion of value enhancement benefits over the next two to five years,” Makuch added.

The Detour Lake mine is about 300 km northeast of Timmins, Ont., in the Abitibi greenstone belt. The historic mine produced 1.8 million oz. of gold from 1983 to 1999 from both open pit and underground sources when it was owned by Placer Dome. It went back into production under Detour Gold in 2012. Today it operates solely as an open pit, producing 516,757 oz. of gold in 2020. The 2021 guidance is 680,000 to 720,000 ounces.

Kirkland Lake Gold reported record earnings for the second quarter and of 2021. Net earnings for the period were $224.2 million (C$0.91 per share), a 67% increase from the same period a year earlier and 51% higher than the first quarter this year.

The company also owns and operates the Macassa gold mine at Kirkland Lake, Ont., and the Fosterville gold mine in Victoria, Australia. Detour Lake remains the largest producer with 312,611 oz. in the first six months of 2021. Macassa produced 102,759 oz. and Fosterville 266,672 ounces.

(This article first appeared in the Canadian Mining Journal)

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