- The 2019 reserve figure of 2.1 million ounces supports just over 3 years of current production levels at Fosterville. The question is, then what? What happens 2023 and onward?
- The resource grade is only about 5-6 g/t. There are plenty of ounces remaining, but if they mine the low-grade M&I/Inferred material, then output will drop to ~150,000 ounces.
- To support 600,000 ounces of 30 g/t production well past 2022, the company needs to find more ultra high-grade ore. At this time, there aren't any signs that this occurring.
- In the near-term, I would be cautious on KL. I believe there will be a continued downtrend in grade and ounces at Fosterville, which would result in further underperformance in the shares.
For further details see:
Kirkland Lake Gold Shareholders: Caution Ahead