UPDATE 1-Kirkland cuts gold output forecast on project delay; shares slump
* Cuts fiscal-year output forecast to 90,000-110,000 ounces
* Shares fall as much as 34 percent to hit near 4-year lows (Adds details, analysts comments)
Dec 13 (Reuters) - Kirkland Lake Gold Inc slashed its production forecast for the year ending April 30 due to delays in completing the expansion of a mine in Ontario, sending its shares to their lowest level in almost four years.
The expansion at the Macassa mine will not be fully complete before Jan. 31 and ramp up of ore production will not begin until mid-fourth quarter because of software and electronic issues with some equipment used to hoist ore and waste, Kirkland said. [ID:ID:nCCN8q8bba]
Macassa, the company's only operating mine that it bought from Kinross Gold Corp, has been in production since 2005. But the delay in the expansion has hurt Kirkland's plan to rapidly boost output.
The company on Thursday cut its 2013 production forecast to between 90,000 and 110,000 ounces of gold from between 180,000 and 200,000 ounces.
It estimated gold sales of 150,000 to 180,000 ounces for fiscal year 2014. Gold sales were 97,888 ounces in the year ended April 30.
The initial forecast for 2014 indicates that the efforts to get the expansion to full capacity will continue well into fiscal 2014, said Michael Siperco, an analyst at Macquarie Research.
"That probably has a bigger impact on our model and the Street's way of thinking about traction beyond this fiscal year", said Siperco, who rates the stock "outperform". Continued...