(Recasts, adds CEO comment)
By Jeff Lewis
Feb 20 (Reuters) - Canadian miner Kirkland Lake Gold Ltd said on Thursday it would step up exploration at its newly acquired Detour mine in Ontario after doubling its dividend and beating analysts estimates for quarterly profit.
Toronto-listed Kirkland said it expects capital spend of $500 million this year compared to $245 million previously, with companywide exploration spending rising to $160 million from $130 million led by drilling at Detour.
“We think there is a lot more to be found and proven up here,” Chief Executive Tony Makuch told analysts.
“We plan to invest aggressively, between $25- and $30-million in 2020, and then more the following year in exploration.”
The company’s share price was trading down about 2.6% at 1515 GMT.
Production at the mine, acquired from rival Detour Gold Corp last month, is forecast to reach 700,000 ounces by 2021 at an all-in sustaining cost of $850 per ounce, Kirkland said.
The miner raised its annual dividend to $0.50 a share, joining larger rivals Newmont Corp and Barrick Gold in increasing payouts as gold prices hit a seven-year high above $1,600 per ounce.
Kirkland bumped its full-year forecast for gold production and beat analysts’ estimates for quarterly profit on Thursday, driven by higher production at its Fosterville mine in Victoria, Australia.
The company also increased its forecast for full-year gold production to between 1.4 million ounces and 1.5 million ounces, from prior estimates of a range of 950,000 ounces to 1 million ounces.
The guidance was boosted by the acquisition of rival Detour, which helped ease concerns about the short life of the company’s flagship Fosterville mine.
Kirkland Lake, which has operations in Canada and Australia, said quarterly production jumped 21% to 279,742 ounces in the fourth quarter, while the average realized price for gold fell 9.7% to $512 per ounce sold.
The company said it was considering options for its mines at Holt Complex in Canada and in Northern Territory, Australia and designated the assets as non-core as they did not generate adequate returns.
The Toronto-listed miner also said it plans to repurchase 20 million of its common shares over two years.
On an adjusted basis, the company earned 88 cents per share, beating analysts’ average estimate of 87 cents per share, according to IBES data from Refinitiv.
Kirkland’s net earnings rose to $169.1 million, or 80 cents per share, in the quarter ended Dec. 31, from $106.5 million, or 50 cents per share, a year earlier.
Revenue rose 47% to $412.4 million. (Reporting Jeff Lewis in Toronto; additional reporting by Aakriti Bhalla and Arundhati Sarkar in Bengaluru; Editing by Amy Caren Daniel and Nick Macfie)