Opinions
Jon Case
Kirkland Lake Gold
KL-T
TOP PICK
Jul 26, 2016
Stock price when the opinion was issued
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A core intermediate gold producer. They own the largest Canadian gold mine and have a reputation for running high-grade mines like Fosterville in Australia. Their Detour acquisition was meant to stabilize their production base. He believes in management. It's about generating strong free cash flow to fund their new shaft, the Macassa Mine, which is on schedule and offsetting production loss from Fosterville through 2023. KL produces 1.4 million ounces per year. It has a solid balance sheet, but is getting over near-term issues from owning the largest Canadian mine. His go-to company in gold.
(A Top Pick Sep 11/20, Down 25%) Has extremely high amounts of gold in Australia. They bought Detour Gold in Canada which added lots of inventory. Price target of $80. Gold has come off its highs.
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A producer in Northern Ontario with 320,000 ounces a year. They just bought St. Andrews Goldfields, a company that was perpetually starved for capital. They are just digesting those assets now, and thinks they are going to come out with greater financial resources and balance sheet. He also likes the main assets in the Macassa mine, which has grade that goes up as they dig deeper. Over the next 2 years you are going to see the head grades go from 15 g a ton to 18 g a ton. As grades go up, all things being equal, the cash flows going to go up. He sees cash flow expanding by about 15%. Have just had a sudden CEO departure. Rumours are that there was a rift between the CEO and the Board as far as M&A and strategic direction. That has worried a lot of investors which has really weighed on the shares.