News

November 05, 2008

Kirkland Lake’s Plan To Double Gold Production Next Year Is Founded On Clever Thinking, Not Extra Cash

By Charles Wyatt

When Harry Dobson and Brian Hinchcliffe acquired the Kirkland Lake collection of gold mines in 2001 they knew exactly what they were doing. Cynics tried to rubbish the deal by saying that there was little or no gold left, but Brian and Harry are a shrewd team with a string of successes behind them, and in this deal they had acquired not one mine, but five, for C$5 million at a time when Gordon Brown had zapped the gold price with his reckless selling of the UK’s reserves. Kinross, the seller of the Kirkland Lake properties, had conveniently consolidated the Macassa, Lake Shore, Teck-Hughes, Wright Hargreaves and Kirkland Minerals mines into one company. It was on the Macassa mine that Kirkland Lake Gold, which is listed on Aim and Toronto, focussed initially.

At the moment Kirkland Lake is producing gold from the Main Break Zone at Macassa at a rate of around 50,000 ounces per year. It has to be admitted that the results for the quarter to the end of July were a disappointment, with gold production and revenue around 30 per cent below the previous quarter. But mining is rarely consistent. In this case, above normal seismic activity in one area of the mine necessitated a change in the planned production schedule. This, in turn meant lower grades and...