Canada’s Kirkland Lake Gold Corp. has pulled off the near impossible, morphing from an afterthought in the gold sector into a merger partner with Agnico-Eagle Mines Ltd., one of the world’s most respected miners.
To do it, Kirkland defied the odds. It proved miracle deposit discoveries are still possible, and it offered investors something extremely rare in the gold sector: solid cash flows earned from mixing high-grade ore with low-cost operations.
The cherry on top: Kirkland has one of the cleanest balance sheets in the industry, with no debt on its books. Much of Kirkland’s transformation can be traced back to Eric Sprott, who was once a star mining industry money manager, but who had lost his shine when the sector nosedived after the 2012 commodity supercycle crash.
Before Mr. Sprott disclosed his 11-per-cent stake in Kirkland and became board chair in 2015, the company was struggling to survive. It had booted its former management team in 2013 and initiated a strategic review a year later that included investigating a possible sale. Ultimately, the review went nowhere.
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