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Kirkland Lake Gold keeps adding ounces

Updated resource base show Taylor, Macassa Mines remain fertile ground
Kirkland Lake
Kirkland Lake Gold's Macassa Mine

Kirkland Lake Gold finds there are more ounces to be had in northeastern Ontario.

The Taylor and Macassa Mines continue to be proven performers for the Toronto-headquartered mid-tier gold producer.

The company recently released its updated mineral reserve and resource estimate for its operations in Ontario and Australia.

As of last Dec. 31, the company showed consolidated reserves had increased 36 per cent to more than 4.6 million ounces at 11.1 grams per tonne (g/t), up from the 3.4 million ounces at 9.0 g/t recorded in December 2016.

The company’s two mainstay operations are its Macassa Mine at Kirkland Lake and the Fosterville Mine in the state of Victoria, Australia. Kirkland Lake Gold acquired Fosterville and other Australian gold properties in 2016.

The same year, the company picked up the Taylor Mine, near Matheson, in its purchase of some northeastern mines from St. Andrew Goldfield.

Mineral reserves at the Taylor Mine complex jumped 29 per cent to 167,000 ounces at 4.8 g/t, up from 129,000 ounces at an average grade of 5.4 g/t the previous year.

In a Feb. 20 news release, the company said “significant exploration success was achieved” during last year’s exploration program.

Step-out drilling yielded some high-grade results at multiple points up to 1.8 kilometres east of the Shaft Deposit. Underground drilling identified a new gold zone 350 metres below the West Porphyry Deposit.

The company’s plan for this year is to keep exploring to add more ounces to the resource base.

“At Taylor, we increased our mineral reserves and had significant success identifying new areas of mineralization during 2017, which we expect will ultimately lead to significant reserve growth down the road,” said Tony Makuch, Kirkland Lake Gold president-CEO in a statement.

At Macassa, the company said it’s made strides to replace the 190,000 ounces depleted from its resource base. Mineral reserves now total 2,030,000 ounces at an average grade of 21.0 g/t, which compared to the previous year’s totals of 2,010,000 ounces at an average grade of 20.8 g/t.

After identifying a 259-metre eastern extension at its South Mine Complex (SMC) last June, the remainder of the year was spent drilling to expand the mine’s resource base.

The company will stop deep surface drilling since a new shaft is being sunk that will better support its underground work in finding new gold targets.

“Our high level of confidence in the growth potential of the high-grade SMC is a key reason why we are sinking a new shaft at Macassa, and targeting production growth to over 400,000 ounces per year,” said Makuch.

Near Matheson, the reserves at the Holt Mine dropped 15 per cent in 2017, from 486,000 ounces at an average grade of 4.2 g/t, down from 2016 numbers of 570,000 ounces at an average grade of 4.5 g/t.

No extensive drilling was done last year to replace those ounces and no drilling is planned for 2018.

“One area where we did not replace mineral reserves was at Holt,” said Makuch, “where our plan is to mine out the existing reserves given that the current cost structure, particularly related to royalties, significantly constrains the economics of the operation."

In a statement, Makuch said the company strategy is to become a million-ounce-per-year producer in the next five to seven years.

“Achieving, and then maintaining, that level of output requires large deposits with significant growth potential.”

The company appears to have no immediate plans for two former St. Andrew Goldfield mines picked up in 2016.

The Hislop open-pit mine has not been operated since its acquisition. The Holloway Mine was placed on care and maintenance effective December 2016.