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Kirkland Lake Gold boss calls 2020 performance 'best year ever'

Northeastern Ontario exploration results has gold miner hyped for the coming year
Kirkland Lake Gold Detour pit (haul trucks)
Detour Lake Mine (Kirkland Lake Gold photo)

Pandemic-related challenges faced by the Kirkland Lake Gold team in 2020 have left the big boss suitably impressed.

In reflecting on the past year, president-CEO Tony Makuch was pleased with the "solid results" in gold production in releasing the company's fourth-quarter and full-year results.

The Toronto-headquartered gold miner reported all three of its cornerstone mines at Macassa and Detour Lake in northeastern Ontario, and Fosterville in Australia, achieved their highest production rates in the last quarter of 2020.

"Looking at our operating performance, in many respects our team had its best year ever in 2020," said Makuch in a Jan. 12 news release.

For the year, Kirkland Lake Gold produced 1,369,652 ounces, up 41 per cent from last year. The addition of the Detour Lake Mine, northeast of Cochrane, at the beginning of last year helped boost the final tally.

Both Detour and Macassa were significantly impacted by COVID-19, including being placed on reduced operations at the end of the first quarter. But the company said both operations rebounded later in the year.

Fourth-quarter gold production at all three mines amounted to 369,434 ounces, up 32 per cent the same time in 2019.

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Production from Detour Lake in the fourth quarter was 153,143 ounces, up 9 per cent increase from the 140,067 ounces production in the third quarter. The open-pit was acquired by Kirkland Lake Gold in late January. The production totals from Jan. 31 to Dec. 31 reached 516,757 ounces.

Fourth-quarter production at Macassa in Kirkland Lake totalled 52,283 ounces for the fourth quarter in 2020, better than 38,028 ounces during the third quarter. For the year, Macassa generated 183,038 ounces versus 241,297 ounces during 2019, But there were problems associated with COVID-19 that cut into production and workforce numbers, combined with excessive heat issues during the third quarter.

Makuch believes the Detour pit has "substantial upside" with opportunities to fine-tune costs and add to the gold base.

Exploration drilling is finding broad, high-grade zones showing up a depth in an area between the Main and West Pits, suggesting there could be some underground mine possibilities.

With extensive mineral reserves in the bank, the company contends Detour is poised to post stronger results in 2021 with production targeted to grow to 680,000 to 720,000 ounces.

Drilling at Macassa's South Mine Complex is producing "exceptional grades," especially with the discovery of a high-grade corridor near where the company is sinking a new production shaft.

Makuch said encouraging exploration results from the Ontario operations, plus Australia, represents "three of the most exciting exploration stories in the industry."

On the infrastructure side, the company reports the sinking of the No. 4 Shaft at Macassa remains ahead of schedule with a target completion date of late 2022.

Gold production at Macassa is pegged to grow from 400,000 to 425,000 ounces by 2023.

At Detour, several key projects got underway with mill enhancements, expansion in tailing capacity, construction of an assay lab, and improvements made to various site infrastructure.

On the down side, the Holt Complex, near Matheson, was closed indefinitely. The company announced in July that high cost structures, low grades, and diminishing reserves factored into the decision to suspend operations.

There's hope of renewal there with a $75-million option agreement and a "strategic alliance" struck with Newmont last August to identify exploration opportunities around Holt and Newmont's properties in Timmins.

On the environmental front, the company is putting a Tom Peters Memorial Mine Reclamation Award in the trophy case for the ongoing land rehabilitation work at Detour Lake, while efforts continue at Macassa to deliver lowest greenhouse gas emissions in the industry.

The company takes possession of its first 50-tonne battery-powered underground haul truck during the first quarter of this year.