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Kirkland Lake Gold bottoms out with new shaft sinking

Kirkland Lake Gold's No. 4 shaft finally hits bottom, on track for late 2022 completion
Kirkland Lake No. 4 shaft
Construction of Kirkland Lake Gold's new headframe at the Macassa Mine in Kirkland Lake (Len Gillis photo)

The digging is done on the new shaft at the Macassa Mine in Kirkland Lake.

Kirkland Lake Gold announced this week that the sinking phase of its No. 4 Shaft has been completed, down to a depth of 6,400 feet, as a Jan. 12.

The $240-million shaft project, which broke ground in 2019, will boost production to more than 400,000 ounces of gold annually and tie into new gold reserves in the Kirkland Lake camp.

There's still work to do in building a loading pocket, and other infrastructure, to connect the shaft to the rest of the mining operation. The project is on schedule to wrap up later this year.

Kirkland Lake Gold heralded this development milestone in releasing its fourth-quarter and year-end production numbers from its three mines with Macassa in Kirkland Lake; Detour Lake, north of Cochrane; and Fosterville in Australia.

For the year, the company posted gold production totalling 1,432,616 ounces, which exceeded the company's gold target - known as production guidance - of 1,350,000 to 1,400,000 ounces. It was up 5 per cent from the 1,369,652 ounces recorded in 2020.

During the fourth quarter, 380,472 ounces were produced by all three mines, led by Detour Lake Mine at 210,980 ounces. The open-pit mine near the Quebec border produced 712,824 ounces last year.

Detour Lake was acquired by Kirkland Lake Gold in January 2020. A big exploration program increased the gold resource there by more than 200 per cent.

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Gold production at Macassa reached the top peg of production guidance at 210,192 ounces for the year, up 15 per cent from 2020, and totalled 61,336 ounces during the fourth quarter, up 17 per cent increase from the same time the previous year.

One other positive thing happened in the fourth quarter.

Shareholders of both Kirkland Lake Gold and Agnico Eagle approved the so-called "merger of equals" on Nov. 26. The $13.4-billion deal is expected to close sometime later this month or by mid-February. The Ontario Superior Court of Justice approved the deal Dec. 1.

When that's done, a 2022 production guidance for the combined company in the second half of February.

On the COVID-19 front, the company said it's facing reduced workforce levels due to the spread of the Omicron variant and expects some disruption to operations at all three mines. But it's too soon to determine the impact on production this year.

With a year of transition ahead, Kirkland Lake president-CEO Tony Makuch mentioned in a news release that they are reviewing the Macassa operation to find ways to incorporate Agnico's nearby Amalgamated Kirkland Zone into the mine plan.

There are also performance and supply chain issues related to the battery-powered haul fleet at Macassa and evaluations to do on future plans for a near-surface ramp and mineralized zones.

While Detour Lake and Fosterville in Australia are positioned to do great things in production, Macassa will be work in progress.

"Based on work to date, we expect a reduction in production in 2022 from levels included in our previously-issued three-year guidance (issued in December 2020)," Makuch said.