Canada mining firm strikes gold as oil price falls – by Martin Flanagan (The Scotsman – February 6, 2016)

http://www.scotsman.com/

THE slump in oil prices has boosted a Canadian gold mining company whose fortunes have been transformed since a Scottish industry veteran took over as chief executive two and a half years ago.

Motherwell-born George Ogilvie, president and chief executive of Kirkland Lake Gold, which last week poured its one millionth ounce of gold from its Macassa mine complex in Ontario since operations started in 2003, said: “The collapse of the oil price has definitely helped us. The industry is seen as a safe haven, a last resort. Other things have also helped gold’s popularity for investors, such as the collapse of Asian stock markets, which have seen a dep¬reciation of about 50 per cent since last year and created jitters.”

Ogilvie said weak oil prices, which led to energy major Shell revealing last week that its profits fell 80 per cent in 2015, has boosted the company by putting pressure on the Canadian dollar, as the country is a big energy producer.

“The Canadian gold miners have 80 to 90 per cent of their costs in Canadian dollars, so a weak oil price putting pressure on the currency is always going to be a positive,” he said.

Ogilvie said the positive implications for gold of the oil slump were also likely to continue for another 12 to 18 months, according to strategists, as Opec was showing no signs of easing production, and Iran, with sanctions lifted, was entering the market.

“I’m very confident about our prospects,” the Scot said. In January, Kirkland Lake Gold announced the acquisition of Canadian gold miner St Andrew Goldfields, beefing up its presence in Ontario with three new working mines.

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