Kirkland Lake Gold pauses amid dropping gold prices
Kirkland Lake Gold is the latest northern Ontario mining company to slow things down after reporting some multi-million-dollar losses in recent months.
It announced a hiring freeze and a strategic review of its operations this week.
But in a town that’s accustomed to the ups and downs of the gold business, no one seems to be panicking yet, said David Gorman, president of the Kirkland Lake Chamber of Commerce.
I'm not so sure there's a large sum of money being poured into the local economy from the transient workers.- David Gorman, president of the Kirkland Lake Chamber of Commerce.
"There's a buzz going around about it, but most members of the community I've spoken with are just waiting to see what happens and aren't thinking the worst just yet.”
The company posted a $3.9 million loss in the last quarter — twice as much as the company lost in the quarter before that.
“The mine plan that we had in place over a year ago, today, with this $1,250 an ounce gold, is really no longer relevant when compared to a gold price of some $1,600 an ounce less than a year ago,” said George Ogilvie, president and CEO of Kirkland Lake Gold.
Ogilvie said it's still too early to say if there will be any layoffs once the company figures out the next steps. There are about 1,200 people currently on the payroll of Kirkland Lake Gold.
After totally closing in the late 1990s, the gold mines have become Kirkland Lake's top employer again with hundreds of workers on the payroll.
Nevertheless, Gorman said he doesn't think layoffs would hurt Kirkland Lake too much, because so many of the miners live out of town.
"Our permanent residents are using the retailers that we have and the restaurants we have,” he said. “I'm not so sure there's a large sum of money being poured into the local economy from the transient workers."
Last year, Lakeshore Gold in Timmins and Richmont Mines near Wawa both cut staff at their gold mining operations.
The price decline also comes as two major new gold mines have come on line after years of planning.
Detour Gold north of Cochrane and the Young-Davidson Mine in Matachewan went into production late in 2013.