Kirkland Lake Gold (KL) – Solid Q3 Production + 50% Dividend Bump

Kirkland Lake Focused on Capital Return to Shareholders

Kirkland Lake (TSX:KL) announced strong Q3 production results today at 339K ounces, an increase of 39% year-on-year.

Kirkland Lake remains focused on shareholder return, increasing the quarterly dividend by 50% to US$0.1875/share.  This increase follows a doubling of the dividend in Q1 2020, see KL’s quarterly dividend history in the chart below. The current bump in the dividend takes the dividend yield from 0.9% to 1.3%.

The company stated in Q3 a total of $142 million was returned to shareholders through share buybacks and dividends.

The Company’s cash position increased 58% during Q3 2020 to $848 million, driven by the robust gold price environment. Additionally the company received $109 million from the sale of Osisko Mining shares, and $75 million from Newmont through a strategic alliance agreement.

Detour Lake

Production from Detour Lake Mine totaling 140k ounces, a 6% increase quarter-over-quarter.  Strong production growth from the asset is critical as it validates Kirkland Lake’s 2019 acquisition.

The company stated they are achieving encouraging exploration results early in their drill programs at Detour Lake, this would increase mineral reserves, production and ultimately lower costs.

Outlook – On Track to Meet 2020 Production Target

In the release, CEO Tony Makuch stated the following:

“We continued to generate solid results in Q3 2020 and have entered the final quarter of year well positioned to achieve our full-year 2020 production guidance of 1,350,000 – 1,400,000 ounces”

 

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The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

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