E Another Heavy News Day

Today is a big one for US politics which we don't normally cover, because of Pres. Biden taking on a host of Bernie Sanders-style measures with his latest budget move. While of course I agree that tackling child poverty and unaffordable education will help the country, using taxes to cover the cost of new measures requires great care, which may not be really achievable with the tiny majority the Democrats have in Congress. The odds are that the Republican populist arm remaining from the Trump years will produce their own tax and spending plans, meaning a messy mish-mash of measures will come. The yield on 10-yr treasuries rose to 1.688% on GNP up 6.4% annualized in Q1.

For whatever it is worth, markets seem keen on the proposed measures, boosted by a nicely lower level of new unemployment insurance claims last week, at 553,000, but one which failed to meet the consensus estimate of 540,000 according to Bloomberg. It is a mixed market day.

Business newspaper article

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Before hitting the news here is a follow-up to my report on crypto-currencies yesterday, on another haven from inflation, gold, which we own two ways, via the SPDR Gold ETF, GLD, and with Kirkland Lake Gold Ltd, a Canadian miner, KL I am going to write about KL, which is holding a proxy vote for its board from which I am extracting this article. Although Canadian, it reports in US$s.

In June 2020 it resumed mining at Detour Lake mine which it bought earlier in the year. It also boosted its shareholder value with buybacks and dividends, for a total of $848.3 mn. 2020 sales hit $2,460 bn, up 78% thanks to the new mine and a higher price for the yellow metal. Its net earnings rose 41% to $787.7 bn, along with the exploration success at its Detour new mine. It expects to get higher reserves and production thanks to the acquisition.

Adding icing to the cake, KL is also a leader in green mining, which is why I jumped on this stock before its bit transformation last year. Its greenhouse gas emission is well below the industry norm of the World Gold Council (WGC). Its Macassa Mine has one of the lowest emission levels of any gold mine. It aims to achieve net-zero by 2050 or earlier with a program of smart mining and sustainability. By 2022 it aims to reach the Responsible Gold Mining principles of the WGC on ESG targets.

Its performance in 2020 was excellent despite the shut in of both Detour and Macassa in Q2 at the peak of the Covid-19 outbreak.

To keep on track, KL uses Mercer, a Canadian company, to tag its performance against 35 other gold mining companies, including the biggies like Gold Fields, Kinross, Yamana, Agnico Eagle, and IAMGold. It ranked 12th ..

KL last year produced 1,369,700 oz of gold, despite the Holt Complex suspending production on April 1, booted by Detour. Without the new site its output was 852,900 oz, about 7.5% down from 2019. Its operating cash costs vs 2019 were only down $20/oz from 2019's $284/oz without Detour, and at $404/oz including it. Holt produced 113,952 oz of the yellow metal in 2019 and under 114,000 oz last year. Net earnings last year topped $3.41/sh up 60% from 2019 levels.

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