Friday, October 24th4.2°C
23888
22916

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 TSX14543.82+56.99
S&P CDNX805.45-3.15
DJIA16805.41127.51
Nasdaq4483.715+30.923
S&P 5001964.58+13.76
CDN Dollar0.8901-0.0003
Gold1231.20+2.10
Oil81.02-0.73
Lumber336.40+6.80
Natural Gas3.631+0.009

 
Okanagan Companies
Pacific Safety0.105-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.07+0.015
Anavex Life Sciences0.194-0.004
Metalex Ventures0.045+0.005
Russel Metals33.39+0.23
Copper Mountain Mining2.03-0.05
Colorado Resources0.145+0.005
ReliaBrand Inc0.012-0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.445+0.035

 





FEATURED Property
2068356385 Road 9
3 bedrooms 1 baths
$529,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...


We can get on together

I was in LA this week. I witnessed such crazy and unusual circumstances as I strolled along Hollywood Blvd and Sunset Blvd. A far cry from sleepy Peachland in the Okanagan! The strange thing was, I f...


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...

_








Member of BC Press Council


22771