Kirkland Lake Gold Reports Record Earnings and Cash Flow in Q4 and Full-Year 2018
“2018 was a year when Kirkland Lake Gold clearly established itself as one of the most profitable companies in our industry, driven by strong production growth and very low unit operating costs," said Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold.
Over 4th Quarter 2018, KLG experienced strong net earnings of $106.5 million and an increase of $0.51 per basic share. That marks a 160% from Q4 2017 and a 91% growth from Q3 2018. The adjusted net earnings of $109.6 million ($0.52/share), 73% growth from Q4 2017 and 79% increase from Q3 2018.
Operating cash flow more than doubles: Net cash provided by operating activities of $204.1 million, 113% growth from Q4 2017 and 59% higher than $128.4 million in Q3 2018. Free cash flow increased 69%: Free cash flow of $86.4 million, 69% increase from Q4 2017 and 66% higher than previous quarter.
Revenue growth driven by record gold sales: Revenue of $280.3 million, 32% increase from Q4 2017 and 26% higher than Q3 2018; record gold sales of 225,692 ounces, 36% higher than Q4 2017 and 22% increase from previous quarter.
Production of 231,217 ounces, 39% increase from Q4 2017 and 28% higher than previous quarterly record of 180,155 ounces in Q3 2018.
AISC per ounce sold averaged $567, 31% better than Q4 2017 and 12% improvement from Q3 2018
Cash at December 31, 2018 of $332.2 million, 43% increase from $231.6 million at December 31, 2017, and 29% higher than $257.2 million at September 30, 2018.
Highlights of Full Year 2018
Over the entire 2018 KLG experienced a 107% increase to $273.9 million ($1.30 per share) from $132.4 million ($0.64 per share) in 2017.
Adjusted net earnings of $287.2 million ($1.36/share), 93% higher than $149.1 million ($0.72/share) in 2017
Revenue of $915.9 million in 2018, increased 23% from $747.5 million in 2017.
Operating results exceed 2018 guidance
Record full-year operating results beat 2018 guidance production of 723,701 ounces, 21% increase 2018 Guidance which planned for over 670,000 ounces.
The All In Sustaining Costs (AISC) per ounce sold in 2018 $685 showed a 16% improvement from the guidance level of $735 – $760.
Revised 2019 Guidance
Earlier this week, KLG revised its production guidance for 2019 :
2019: Improved to 920,000 – 1,000,000 ounces from 740,000 – 800,000 ounces
2020: Improved to 930,000 –1,010,000 ounces from 850,000 – 910,000 ounces
2021: Improved to 995,000 – 1,055,000 ounces from 970,000 – 1,005,000 ounces.
Tony Makuch added the following comments:
"We also demonstrated an ability to generate substantial amounts of operating and free cash flow, which resulted in a rapid buildup in our cash position. Very importantly, we can see that the best is yet come. Based on recent revisions to our business plan, we expect to reach around one million ounces of annual gold production starting this year, with the value of each ounce increasing as unit costs show further improvement and margins increase. It is important to emphasize that we remain well positioned to achieve additional growth beyond our three-year outlook through the completion of the Macassa #4 shaft and through other opportunities, such as the potential to resume operations in the Northern Territory and to increase output from our Holt Complex. We have previously talked about reaching one billion dollars of cash by the end of 2021. We now believe that, at current gold prices and assuming existing business plans, we could reach that milestone sooner."
For more information: https://www.klgold.com