Kirkland Lake: An underrated gold stock
One of the lesser-known gold mining companies with four producing mines in Canada and Australia, Kirkland Gold is growing at an astounding pace.
After ending fiscal 2017 with record gold production of 596,405 ounces, thanks to a 74% jump in production from its Fosterville mine in Australia and higher production from all mines, Kirkland has even bigger plans for 2019 and beyond.
Kirkland is targeting 10% to 15% annual growth in production over the next three years and hopes to hit 1 million ounces by 2021, with half of it coming from Fosterville. Its AISC, meanwhile, is expected to drop from $930 per ounce of gold sold in 2016 to $735-$760 an ounce in FY 2018 and only $630-$680 per ounce in FY 2019.
Rising production and declining costs make for a formidable combination for any mining company.
Also, I expect Kirkland's capital expenditures to peak in 2019 and taper from there as it wraps up major expansion programs. That should mean greater free cash flows, part of which will likely go to shareholders in the form of higher dividends. Kirkland has already increased its dividends twice since it started paying out a quarterly dividend from mid-2017. Overall, Kirkland appears to be on solid footing, which is why I expect the stock to continue commanding a premium over mid-tier mining peers in the near term.
SSR Mining: A small gold miner with huge potential
SSR Mining stock finally seems to be breaking out after trading within a narrow range for nearly two and a half years. There are solid reasons why the market is getting increasingly bullish about the Canada-based mining company with three operating mines, one each in Nevada, Saskatchewan, and Argentina: its future plans.
In recent years, SSR Mining's gold equivalent production has decelerated but is on the verge of a turnaround, with the miner projecting its gold equivalent production to grow 41% by 2021 thanks primarily to its flagship mine, Marigold in Nevada.