Kirkland Lake Gold -- stock of the year(2017)

Yes,Kirkland Lake Gold has had a very successful year.But it all started with Crocodile Gold.Crocodile Gold bought for  small compensation two (supposedly almost depleted) Australian mines,

namely Stawell and Fosterville to accompany their existing Cosmo mine.And then Crocodile Gold bought Newmarket Gold and  the new company became Newmarket Gold.Kirkland Lake bought Newmarket and that was when Kirkland Lake discovered that the Fosterville mine was much bigger and had a richer grade of ore than originally thought.
                Financial Results for Q4 and 2017 
   KL acquired St. Andrew's Gold and Newmarket Gold in 2016 and the stock increased in value by174% in 2017.Total consolidated production in 2017 increased from 543,000 ounces to 597,000 ounces.As well  KL beat their own production guidance but revenue figures are not yet available.And Q4 production also increased by 10% over 2016 production.This enabled KL to pay down convertible debentures in June and December of 2017.The debentures were converted into 4.5 million common shares at a lower share price.In addition, they doubled the size of their dividend to $.02 per share.
                 The Fosterville mine
     It is highly unusual that the stock price moved up 174% simply because of a 10% increase in total production.So this blog believes that most investors realize the gold reserves at Fosterville are larger than recorded.Their annual production statement shows the Fosterville reserves at 1.03 million ounces but an earlier statement in 2017 by KL stated the Australian reserves at about 3.7 million ounces.With .7 million ounces at Cosmo and almost no reserves at the Stawell mine that means that they estimated in 2017 there were 3 million ounces at Fosterville.This blog believes that this is a low estimate. As Crocodile Gold way back in 2013 said that the Fosterville ore deposit was bigger than 2.5 million ounces.My blog in Workathon dated October21,2016 shows that,Newmarket Gold,  before selling the company discovered 2 new faults called the Lower Phoenix fault system and the Eagle fault system.And the ore grade is richer than in the existing Phoenix fault.This blog calculated that  the total reserves at Fosterville were now about 4 to 5 million ounces.But Fosterville has extensions at each of their major faults.So it is possible that the size of the ore body (with extensions) can be as big as 5 to 6 million ounces.This cannot be said with certainty but it is certain that it is not 1.03 million ounces.
                             The best Estimate             

         Kirkland Lake Gold's share price had a good year in 2017 but it will likely do well in 2018 also.It has ,for example, moved up $2 in the last month.But it is not moving on the increase in production alone.This blog believes that most investors understand that the ore body at the Fosterville mine is much  bigger than reported.In their annual production report KL claims that Fosterville has a reserve of 1.03 million ounces and earlier they estimated the mine size to be 3 million ounces.This blog believes that 6 million ounces may be high but 4 to 5 million ounces is a reasonable estimate and at current prices of gold that is worth about $6-$7 billion.My earlier blog in Econothon II dated  December2,2017 states "the fair market value of the Fosterville mine has not yet been realized".And this is still true, so 2018 should be a good year for Kirkland Lake Gold.
                               use Workathon.blogger.com for analysis of resources