Kirkland Lake Gold (KL.TO) Buy, Sell or Hold

Kirkland Lake Gold (KL.TO)

49.71

+1.01 (2.07%)

as of Feb 9, 2022, 9:00:00 pm Market Open.

318 watching

BUY

He thinks gold will likely go higher. NMC is one of the largest miners in Canada. He has been favoring KL for his clients as well.

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PAST TOP PICK

(A Top Pick Apr 29/19, Up 40%) Their production of 40-60 grams per tonne in Australia, is multiples higher than most. They are seeing improving results in their Northern Ontario mining operations as well. He is very bullish on gold going forward.

PAST TOP PICK

(A Top Pick Mar 15/19, Down 1%) He was taking profit on the way up. They recently merged with another producer and has since shut that mine due to COVID-19. He still has it as a buy with a $53 target.

HOLD

They closed on an acquisition in November. The open pit, above ground operation they bought is not being well received and they have also had to take a reserve write-down on their existing mines. If you own it, keep holding it. She is not a buyer or gold stocks -- she prefers to own a royalty company instead.

COMMENT

Gold? He likes gold as a safe haven. He thinks it could head to $2000 per oz, especially if interest rates continue to fall. He prefers owning the GLD ETF -- why take unforseen operational risk? He also holds Kirkland Lake.

HOLD

Did problems with their Fosterville mine prompt Kl to buy Detour Gold? Yes, there's speculation about those reserves. Detour shareholders complain they didn't get paid enough while KL shareholders object to the low quality of Detour mines. He believes bigger companies are better--they're more liquid with lower cost of capital in a capital-intense business. KL will go through some rocky times until the market adjusts to the new reality of KI. !2-18 months from now, will be forgiven and KL will be a darling again.

HOLD

It's sold off recently and they lowered their target to hold. However, he's held it for a long time. He likes it for the leverage to earnings. Financially, the leverage is good going forward. Price appreciation and the price of gold has created opportunity. It is a core position. They also pay a dividend. Every time they sell-off, management has done a good job to bring back value. (Analysts’ price target is $55.00)

DON'T BUY

We just finished seasonality on Gold. We had a rising trend line that broke in 2019. He is not sure that this is the opportunity even though we are in the period of seasonal strength.

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BUY

Does the deal with Detour Gold make this attractive now? It was the top performing gold stock in recent years, but investors are disappointed with this deal. The deal makes sense, though. This initial sell-off creates an opportunity. KL is more reasonably valued now. Gold will continue to rise, but the stronger USD needs to weaken for gold and commodities to take off.

PAST TOP PICK

(A Top Pick Mar 15/19, Up 26%) Merger with Detour Gold is creating a better entity. Longer streamed production, better leverage on the balance sheet. It will be 10% of his portfolio.

PAST TOP PICK

(A Top Pick Jan 21/19, Up 61%) They dropped 17% in November on the announcement of DGC-T. He will continue to hold them.

PAST TOP PICK

(A Top Pick Dec 28/18, Up 66%) Sold it. KL is hugely profitable with two Australian mines, producing high-yield gold. Meanwhile the price of gold has been leaping this year. They bought Detour Gold, which has much less profitable mine. Also look hard at Teranga Gold.

COMMENT

Gold? He is likes gold as commodity prices are generally rising with a falling US dollar. The problem is that mining companies have a history of being self-destructive. He thinks the latest Kirkland Lake acquisition is a bad decision. He prefers Franco-Nevada that plays more as a royalty play.

SELL ON STRENGTH

Likes it. He has trimmed his holding given the recent run-up. Good to hold, but can take a bit of money off the table.

BUY

A stellar performer, a great company, a more conservative holding for him.

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Kirkland Lake Gold (KL.TO)