Thursday, November 27th3.7°C
23286

Kirkland Lake Gold announces strategic review and board resignation

KIRKLAND LAKE, Ont. - Kirkland Lake Gold Inc. (TSX:KGI) said Monday it has launched a strategic review, which it may include the potential sale of assets or an offering of shares.

The sweeping review follows the appointment late last year of George Ogilvie as chief executive and a plan to cut spending and preserve cash.

"The strategic review will encompass a careful evaluation of the company's business plan, development strategy, market valuation and capital structure and will consider various alternatives for the company," Ogilvie said in statement.

The company said the board has appointed a special committee of independent directors to review and evaluate proposals and to make recommendations to the full board.

Kirkland Lake Gold also announced Monday that Brian Hinchcliffe has resigned as deputy chairman and as a member of the board, but will work on the strategic review as a consultant.

Shares in the company tumbled 40 cents or 13.33 per cent to close at $2.60 Monday on the Toronto Stock Exchange.

Kirkland Lake owns several gold projects in the southern Abitibi area of northern Ontario including the Macassa mine.

Gold producers were hard hit in 2013 as the price of gold plunged. The price of gold fell 28 per cent last year after hitting a peak of $1,900 in August 2011.

February gold bullion was up $1.90 at US$1,240.50 an ounce on Monday.

Desjardins analyst Adam Melnyk said the company has made a series of announcements in recent months that have "created substantial uncertainty surrounding its near- to medium-term operational outlook."

"With regard to an asset sale, we see the likelihood that a potential acquirer can be found for Macassa to be low, given the asset's history of underperformance and high capital intensity," Melnyk said.

In its outlook, the company has said that production for its current year is likely to be at the lower end of its previously announced guidance for 150,000 to 180,000 ounces of gold.

However, Melnyk suggested the company will struggle to meet its guidance and forecast 132,000 ounces at total cash costs of $1,076 per ounce.

Last month, Kirkland Lake reported a net loss of $3.9 million, or six cents per share, in its second quarter, compared to a loss of $1.8 million, or three cents a share, in the same period the previous year.

The company said it planned to slash spending by implementing a hiring freeze, terminating some staff employment contracts and reduce some drilling.

Kirkland Lake reported an operating cash cost of $1,105 per ounce of gold or $328 per tone of ore for the quarter ended Oct. 31. It has set a goal to cut costs to less than $250 per ton of ore.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX15008.41-30.00
S&P CDNX765.38-5.68
DJIA17827.7512.81
Nasdaq4787.317+29.065
S&P 5002072.83+5.80
CDN Dollar0.8851-0.0038
Gold1193.50-3.10
Oil72.56-1.13
Lumber327.90-1.60
Natural Gas4.295+0.144

 
Okanagan Companies
Pacific Safety0.160.00
Knighthawk0.01-0.005
QHR Technologies Inc1.32-0.02
Cantex0.04-0.005
Anavex Life Sciences0.171-0.004
Metalex Ventures0.03-0.005
Russel Metals31.37-0.13
Copper Mountain Mining2.17+0.01
Colorado Resources0.12-0.01
ReliaBrand Inc0.0134-0.0001
Sunrise Resources Ltd0.045-0.005
Mission Ready Services0.34+0.015

 
23744


23457

FEATURED Property
2128997612 Birch Ave
1 bedrooms 1 baths
$296,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Second marriage issues

It is not unusual that one or both of the parties planning to marry are approaching marriage for the second time. There are pluses and minuses to this new situation. On the plus side, individuals ente...


The last great Canadian tax shelter

A guide to how flow-through fund limited partnerships can mightily aid your tax planning!The end of the year will raise concerns among many professionals, self-employed persons, business owners and ev...


What I learned in China: Part 2

As per my previous article on my visit to China, we have much to learn about and from their people. It is potentially the largest market on earth with 1.3 billion people in one country but much will d...

_



24160

24156


Member of BC Press Council


22842