In a Dec. 11 research note, ROTH Capital Partners analyst Jake Sekelsky reported that Kirkland Lake Gold Inc. (KL:TSX; KL:NYSE) hit high grades on recent drilling at its Fosterville and Macassa properties. "While we view the exploration results as positive, we expect the market to remain focused on the recent proposed acquisition of Detour Gold," he added.
Sekelsky provided the findings from both assets, "the key cash flow generators of Kirkland Lake's existing portfolio."
At Fosterville, specifically the Robbins Hills area, 66 holes over 36,428 meters (36,428m) returned "multiple occurrences of visible gold," the analyst noted. Hole RDH334A, for instance, showed 24.5 grams per ton (24.5 g/t) gold over 3.7m. As such, Robbins Hills "appears to be emerging as a potential second source of throughput for the Fosterville mill going forward," commented Sekelsky.
Based on these results, ROTH expects Kirkland Lake to conduct follow-up drilling early next year to eventually incorporate Robbins Hill into the Fosterville mine plan.
At Macassa, Sekelsky relayed, 30 holes totaling 7,792m drilled at the point where the amalgamated break and SMC West merge returned strong intercepts including 32.5 g/t gold over 3.5m. "While Fosterville receives the vast majority of the market's attention towards exploration due to its ultrahigh-grade potential, we believe Macassa has somewhat unrecognized exploration potential," he added.
Going forward, ROTH anticipates that Kirkland Lake will keep working to extend mineralization and grow reserves at Macassa.
ROTH maintained its Neutral rating and US$50 per share price target on Kirkland Lake Gold, whose stock is trading at around US$41.92 per share.
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Disclosures from ROTH Capital Partners, Kirkland Lake Gold, Company Note, December 11, 2019
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Kirkland Lake and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.
