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Kirkland Lake Gold's Q4, FY'17 profit jumps YOY on higher sales, prices

Kirkland Lake Gold Ltd. on Feb. 21 reported fourth-quarter 2017 net income of US$41.0 million, or 20 U.S. cents per share, jumping from US$3.1 million, or 2 cents per share, reported a year ago.

The quarterly results were driven by higher earnings from continuing operations, reflecting increased revenue and improved unit costs thanks to a full quarter of production from the Fosterville mine in Victoria, Australia, compared to just one month in the same period of 2016.

Also contributing to the increase was a US$24.9 million deferred tax recovery and US$14.4 million in transaction costs booked in the year-ago quarter related to the acquisition of Newmarket Gold Inc.

Thanks to a 48% year-over-year increase in gold sales to 165,715 ounces, together with a 7% improvement in the company's average realized gold price to US$1,282/oz, the company booked a 63% increase in revenue, which came in at US$212.4 million.

For the full year, Kirkland Lake booked net income of US$132.4 million, or 63 cents per share, jumping from US$42.1 million, or 34 cents per share in 2016.

Annual revenue surged to US$747.5 million, from US$403.3 million a year ago, driven by an 80% increase in gold sales to 592,674 ounces and 3% higher average realized prices.

In 2018, Kirkland Lake is aiming to grow gold production to over 620,000 ounces at its mines in Canada and Australia, compared to 596,405 ounces produced in 2017, which was up 90% from 2016 levels.

All-in sustaining costs this year are forecast to improve to between US$750/oz and US$800/oz, compared to full-year 2017 guidance of between US$800/oz and US$825/oz.

The improvement will be driven mainly by higher grades at the Macassa mine in Ontario.