Background
The recent breakout in the precious metals sector with gold leading the way has to some extent re-focused the attention of the investors onto the producers. Kirkland Lake Gold Limited (KL) is one such company which has been under the spot light lately and for good reason, as it is a good quality stock.
Any acquisition such as this should remain under constant surveillance as a company’s circumstances can change in a blink of an eye. This is not so much the case with Kirkland Lake Gold but its recent rise is close to meteoric and deserves our attention, so we will take a quick look.
The Company
Kirkland Lake Gold is a mid-tier gold producer targeting 570,000 – 590,000 ounces of gold production in 2017 from mines in Canada and Australia.
The news flow from this company is good and includes the following:
They have entered into a term sheet agreement with Novo Resources Corp to acquire 14,000,000 units at a price of CAD$4.00 per Unit for a total cost of CAD$56,000,000, which shows their thirst for expansion
It has recently been listed on the NYSE under the symbol of KL which saw its volume of shares traded more than double, such was the interest.
The second quarter results demonstrated a robust balance sheet with an increase in free cash flow, revenue more than doubles from Q2 2016 and an impressive AISC of $729 per ounce.
Financials
Kirkland Lake Gold Limited trades on the New York Stock Exchange and the under the symbol (KL) and the Toronto Stock Exchange under the symbol (KL) and has a market capitalization of US$2.761B. The shares have a 52-week trading range of $6.33 to $13.71 with an average volume approaching one million shares traded. The company has an EPS of $0.39 and a PE ratio of 34.85 which is respectable when compared with others in this sector.
The Chart of Kirkland’s progress
A quick look at the chart shows us that this stock has almost tripled in price this year.
Good results, a NYSE listing and the underlying strength in gold and silver have helped make this stock flavor of the month.
