Ontario Gold Mines: 2019 Actual And 2020 Forecast Production

Ontario Gold Mines

Ontario is Canada’s number one gold-producing province as of 2018, just ahead of Quebec. The major gold-producing geological structure in Ontario is the Abitibi Gold Belt. This gold belt is responsible for several major gold-producing camps in Ontario, including the Timmins Camp and the Kirkland Lake area.

It goes without saying that Ontario is home to many of the major gold-producing companies throughout the world. And what company wouldn’t want to own some of the world’s largest gold mines in a safe, mining-friendly jurisdiction such as Ontario? If you don’t own any of the gold mining companies in Ontario, you may want to reconsider. This article on Ontario gold mines will be a good place to start.

To begin, here are the public gold mining companies that have gold-producing mines in Ontario. This article will only focus on companies with producing mines, while a follow-up article will talk about the exploration and development gold prospects in Ontario.

Public Gold Mining Companies in Ontario

  1. Alamos Gold (AGI)
  2. Barrick Gold Corp. (GOLD)
  3. Kirkland Lake Gold (KL)
  4. McEwen Mining (MUX)
  5. Newmont Corp. (NEM)
  6. New Gold Inc. (NGD)
  7. Pan American Silver Corp. (PAAS)
  8. Wesdome Gold Mines (OTCPK:WDOFF)

Ontario Gold Mines 2019 Production and 2020 Forecast

Ontario Gold Mines 2019 Production and 2020 Forecast Chart

Source: Created by the author

Gold Mine – Company

2019 Production

Gold Ounces

2020 Forecast

Gold Ounces

Detour Lake – Kirkland Lake Gold 601,566 530,000
Rainy River – New Gold 257,000 227,000
Macassa – Kirkland Lake Gold 241,297 215,000
Porcupine – Newmont Corp. 223,000 325,000
Hemlo – Barrick Gold Corp. 213,000 210,000
Young-Davidson – Alamos Gold 188,000 140,000
Island Gold – Alamos Gold 150,400 135,000
Timmins – Pan American Silver 143,800 152,000
Holt – Kirkland Lake Gold 113,952 29,000
Eagle River – Wesdome 91,866 95,000
Black Fox – McEwen 35,693 25,000
Musselwhite – Newmont Corp. 3,000 95,000

Ontario Gold Mines 2019 AISC Per Ounce

Ontario Gold Mines 2019 AISC Per Ounce Chart

Source: Created by the author

Gold Mine – Company 2019 AISC Per Ounce
Island Gold – Alamos Gold $656
Macassa – Kirkland Lake Gold $695
Porcupine – Newmont Corp. $935
Eagle River – Wesdome $975
Timmins – Pan American Silver $998
Young-Davidson – Alamos Gold $1,047
Hemlo – Barrick Gold Corp. $1,140
Black Fox – McEwen $1,225
Holt – Kirkland Lake Gold $1,353
Rainy River – New Gold $1,630
Detour Lake – Kirkland Lake Gold NA
Musselwhite – Newmont Corp. NA

Ontario Gold Mines 2020 Reserves and Resources

Ontario Gold Mines 2020 Resources and Reserves Chart

Source: Created by the author

Gold Mine – Company

2020 Reserves & Resources

(millions)

Detour Lake – Kirkland Lake Gold 19.67
Porcupine – Newmont Corp. 12.79
Hemlo – Barrick Gold Corp. 5.4
Rainy River – New Gold 4.5
Young-Davidson – Alamos Gold 4.45
Island Gold – Alamos Gold 3.68
Macassa – Kirkland Lake Gold 3.64
Musselwhite – Newmont Corp. 3.37
Holt – Kirkland Lake Gold 3.04
Timmins – Pan American Silver 2.2
Black Fox – McEwen 1.84
Eagle River – Wesdome 1.03

*Reserves and resources include sum of proven & probable reserves, measured & indicated resources, and inferred resources.

Ontario Gold Mines 2019 Production/AISC/Reserves and Resources

Gold Mines in Ontario Production/AISC/Reserves and Resources Bubble Chart

Source: Created by the author

*The bubble represents the relative size of reserves and resources.

Gold Mine – Company 2019 AISC

2019 Production

Gold Ounces

Reserves & Resources (Millions)
Detour Lake – Kirkland Lake Gold NA 601,566 19.67
Rainy River – New Gold $1,630 257,000 4.5
Macassa – Kirkland Lake Gold $695 241,297 3.64
Porcupine – Newmont Corp. $935 223,000 12.79
Hemlo – Barrick Gold Corp. $1,140 213,000 5.4
Young-Davidson – Alamos Gold $1,047 188,000 4.45
Island Gold – Alamos Gold $656 150,400 3.68
Timmins – Pan American Silver $998 143,800 2.2
Holt – Kirkland Lake Gold $1,353 113,952 3.04
Eagle River – Wesdome $975 91,866 1.03
Black Fox – McEwen $1,225 35,693 1.84
Musselwhite – Newmont Corp. NA 3,000 3.37

*Reserves and resources include sum of proven & probable reserves, measured & indicated resources, and inferred resources.

Full List of Producing Gold Mines in Ontario

Company Gold Mine
Alamos Gold Island
Alamos Gold Young-Davidson
Barrick Gold Corp. Hemlo
Kirkland Lake Gold Detour Lake
Kirkland Lake Gold Holt Complex
Kirkland Lake Gold Macassa
McEwen Mining Black Fox
Newmont Corp. Musselwhite
Newmont Corp. Porcupine
New Gold Rainy River
Pan American Silver Timmins

Let me know if I’ve left any off of the list in the comments section.

Alamos Gold

Alamos Gold is the owner of the Island Gold and Young-Davidson gold mines. These two gold mines are two out of Alamos Gold’s three producing gold mines. The third is the Mulatos gold mine located near Sonora, Mexico. Alamos Gold has several other exploration projects, but it also has some initiatives to increase production at existing gold mines. Alamos Gold currently trades with a market cap of about $4 billion.

Island Gold

The Island Gold Mine is located just to the northeast of Lake Superior and north of Hawk Junction about 45 kilometers. Island Gold is an underground mine whose mill has a processing rate of 1,100 TPD. In July 2020, the company announced it would be making an upgrade to bring the facility’s capacity to 2,000 TPD.

In 2019, the mine produced 150,400 ounces of gold with an AISC of $656 per ounce. In 2020, production will be slightly down at 135,000 ounces, with an estimated AISC of $760 per ounce. But with the COVID-19 crisis and the facility upgrade coming, expect production to rebound and increase in the coming years.

The mine has proven and probable reserves of 1.2 million ounces. It also has .18 of measured and indicated and 2.3 of inferred resources.

The following slide gives a good overview of the performance at Island Gold since 2011. With the grade and the low AISC that this mine creates, continued growth in reserves and resources should mean significant returns for shareholders.

Island Gold Mine Growth in Reserves Chart

Source: Alamos Gold presentation

Young-Davidson

The Young-Davidson gold mine is located in southeast Ontario and north of Sudbury, about 300 kilometers. The mine is an underground mine, which the company claims will “serve as Alamos’ foundation for growth for many years to come.”

In 2019, the Young-Davidson mine produced 188,000 ounces of gold at an AISC of $1,047 per ounce. In 2020, it is expected to produce 140,000 ounces of gold with an AISC of about $1,200 per ounce. A multi-year expansion was completed in July of this year, so look for production guidance to be substantially higher in 2021.

The mine has proven and probable reserves of 3.15 million ounces. It also has measured and indicated resources of 1.2 million ounces and inferred resources of .1 million ounces.

Barrick Gold Corp.

Barrick Gold Corp. is the owner of the Hemlo Gold Mine, located in Ontario, east of Thunder Bay, about 350 km. The Hemlo mine has produced 21 million ounces and has operated continuously for 30 years. The mine is made up of both an underground mine and an open pit.

In 2019, the mine produced 213,000 ounces of gold with an AISC of $1,140 per ounce. In 2020, the mine is expected to produce about 210,000 ounces at an AISC of $1,225 per ounce.

The mine has proven and probable reserves of 1.3 million ounces with measured and indicated resources of 3.1 million ounces and inferred resources of 1 million ounces.

Here’s the latest slide on the Hemlo mine from Barrick Gold Corp.’s Q2 presentation.

Hemlo Gold Mine 2020 Outlook Slide

Source: Barrick Gold Corp. Q2 2020 presentation

Barrick Gold Corp. currently trades with a market cap of $52 billion.

Kirkland Lake Gold

Kirkland Lake Gold is an Ontario success story all its own. The company’s meteoric rise over the past 5-10 years is much in part due to its Ontario operations. Kirkland Lake Gold owns three gold mines in Ontario: Detour Lake, Macassa, and the Holt Complex.

Detour Lake

The Detour Lake mine was acquired from Detour Gold in January of this year. Kirkland Lake Gold purchased the company for $4.9 billion in an all-stock deal. Many investors believe the Detour Lake deal was purchased on sale by Kirkland Lake Gold. Only time will tell, but the Detour Lake mine is a world-class asset.

In 2019, the mine produced 601,566 ounces of gold. The AISC numbers in 2019 were not immediately available, as the Detour Gold company no longer exists. However, in 2020, the mine is expected to produce 530,000 ounces of gold at an AISC of $984 per ounce. Given this mine’s incredible production, it is remarkable that this mine is expected to have a 22-year mine life.

This mine has proven and probable reserves of 14.66 million ounces. It also has measured and indicated resources of 3.88 million ounces and inferred resources of 1.13 million ounces.

Here’s a slide showing Detour Lake’s results through Q2 2020.

Detour Lake Gold Mine Q2 and YTD Summary

Source: Kirkland Lake Gold presentation

Holt Complex

The Holt Complex is located near Matheson, Ontario, and is an underground mine that produced 113,952 ounces of gold in 2019.

In 2020, the mine is expected to produce just 29,000 ounces with an AISC of $1,403 per ounce. The operations at the Holt Complex are currently suspended and, as of Q2 results, are expected to remain so for the foreseeable future. The company is reviewing all operations, and I believe it is likely that the Holt Complex will be put on care and maintenance.

Macassa

The Macassa mine is an underground mine located near Kirkland Lake Gold, Ontario. In 2019, it produced 241,297 ounces of gold with an AISC of $695 per ounce. In 2020, the mine is expected to produce 215,000 ounces at an AISC of $897 per ounce.

The mine has proven and probable reserves of 2.36 million ounces. It also has measured and indicated resources of .72 million ounces and inferred resources of .56 million ounces.

Currently, the company is investing in the #4 shaft project at the Macassa mine, which it hopes will sustain and increase production when completed.

McEwen Mining

McEwen Mining is the owner of the Black Fox Complex near the Timmins mining camp in Ontario. The mine is an underground mine, and production began in 2011. The mine facility has a capacity of 2,000 TPD.

In 2019, the mine produced 35,700 ounces of gold at an AISC of $1,225 per ounce. In 2020, the mine is expected to produce 25,000 ounces with an AISC of $1,800 per ounce. As a disclaimer, McEwen didn’t have solid estimates, so I used its numbers through Q2 2020 and made my best estimate on ounces and AISC for the year 2020.

The company has proven and probable reserves of .064 million ounces. It also has 1.572 million ounces of measured and indicated resources and .2 million inferred ounces.

Although the Black Fox Complex doesn’t appear to be anything special by the above production numbers and reserves, don’t be fooled. McEwen Mining has reason to believe it has something significant for shareholders. The slide below illustrates some of the extremely high-grade deposits the company has found and compares them to other deposits it believes to be similar. It is currently implementing strategies that will bring the mine to 100,000 ounces of production per year. If the company is correct, it may just be scratching the surface.

Black Fox Gold Mine Exploration Upside

Source: McEwen Mining presentation

Newmont Corp.

Newmont Corp. is one of the largest gold mining companies in the world. It would make sense that the company has a couple of gold mines in Ontario. Newmont owns the Musselwhite mine and the Porcupine mine.

Musselwhite

The Musselwhite mine is located 500 km north of Thunder Bay, Canada. Musselwhite is an underground mine located beneath Lake Opapimiskan.

In 2019, the mine produced 3,000 ounces of gold at an AISC of $8,174 per ounce. This, obviously, isn’t considered commercially viable production.

In 2020, Newmont has continued work on a material handling system at the site by installing a shaft that will hoist the ore and reduce haulage distances. The company also installed a conveyor that will improve materials handling. These projects, which have been in progress for quite a while, are near complete and will be commissioned near the end of 2020.

In 2020, the company expects to produce 95,000 ounces at an AISC of $2,020 per ounce. It will be interesting to see what production guidance will be for 2021 with the new materials handling system fully commissioned.

Porcupine

The Porcupine mine is located near the city of Timmins, Ontario. Currently, the mine produces ore from an underground mine as well as an open-pit mine. As of now, the ore is processed at the Dome facility, even though the Dome Underground mine no longer produces ore.

In 2019, the Porcupine mine produced 223,000 ounces of gold at an AISC of $935 per ounce. In 2020, it expects to produce 325,000 ounces of gold at an AISC of $975 per ounce.

The mine has proven and probable reserves of 2.82 million ounces. It also has measured and indicated resources of 7.36 million ounces and inferred resources of 2.61 million ounces. This mine has a long life ahead of it.

New Gold, Inc.

New Gold is the owner of the Rainy River mine located 65 km northwest of Fort Frances, Ontario. Production began in September 2017, and the mine is comprised of a land package of 17,240 hectares.

In 2019, the mine produced 257,000 ounces of gold at an AISC of $1,630 per ounce. In 2020, the mine is expected to produce 227,000 ounces at an AISC of $1,650 per ounce.

The mine has proven and probable reserves of 2.6 million ounces and measured and indicated resources of 1.9 million ounces of gold.

Rainy River was shut down temporarily in 2020 for COVID-19 but restarted on April 3rd. Here’s the outlook for the mine per the company’s presentation.

Rainy River Gold Mine Outlook

Rainy River Gold Mine Operational Estimates

Source: New Gold presentation

Pan American Silver

Pan American Silver is the owner of the Timmins property made up of several mines, including the Bell Creek mine.

In 2019, the mine produced 143,800 ounces of gold at an AISC of $998 per ounce. In 2020, it is expected to produce 152,000 ounces at an AISC of $1,200 per ounce.

The mine has proven and probable reserves of .96 million ounces. It also has measured and indicated resources of .71 million ounces and inferred resources of .53 million ounces.

Pan American Silver currently trades with a market cap of $6.9 billion.

Wesdome Gold Mines

Wesdome Gold Mines is the owner of the Eagle River Complex located 50 kilometers west of Wawa, Ontario. The Eagle River Complex is made up of two mines that feed the same processing facility. This mine has produced 1.3 million ounces of gold from 1995 until today.

In 2019, the mine produced 91,866 ounces of gold at an AISC of $975 per ounce. In 2020, it expects to produce 95,000 ounces of gold at an AISC of $1,110 per ounce.

The mine has proven and probable reserves of .55 million ounces. It also has measured and indicated resources of .11 million ounces and inferred resources of .37 million ounces.

Here’s an overview of Eagle River mine provided by Wesdome.

Eagle River Gold Mine 2020 Overview

Source: Wesdome Gold Mines presentation

Wesdome Gold Mines currently trades with a market cap of $1.5 billion.

Conclusion

Ontario is a prolific gold producing region in the world. In 2019, just the companies mentioned above produced 2.26 million ounces of gold. According to the Ontario Mining Association, the region produced 73,733 kilograms of gold in 2019, which equates to 2.6 million ounces of gold. That means I’m missing some gold production somewhere, but it’s likely from other mines where gold isn’t the primary focus of production.

When looking at some of these companies, it’s hard to evaluate them by looking at the gold mines alone, since most of them are multiple gold mine companies. But out of these mines, the ones that stand out are the two mines from Alamos Gold and the Kirkland Lake Gold Detour Mine.

The reason the two Alamos Gold mines stand out is that they match the company’s Lynn Lake project in Manitoba with nice production numbers at attractive all-in sustaining costs. The Lynn Lake project isn’t producing yet, but its projections are similar to the company’s Ontario gold mines. Alamos Gold also has the Mulatos mine in Mexico, and when you take all that in conjunction, it seems this company may be worth looking into further when it trades with a $4 billion market cap.

Second, I can’t help but be enamored by the Detour Lake mine. This is a 22-year project that is producing over 500,000 ounces per year. The chances are that the life of mine will be much longer than 22 years. I couldn’t say without digging into the numbers, but I tend to agree that Kirkland Lake Gold got a great deal with the Detour Lake acquisition. One has to wonder what gold will be worth in 22 years. The cash flow from one year alone might be able to pay for this mine.

One of the lessons to take away from the Detour Lake mine is that this mine was largely underexploited during its first 16 years before it became just an exploration property. It produced 1.8 million ounces in its first 16 years, and today, it produces that amount in nearly three years. The takeaway should be that when you see a company that is exploring a brownfield project, don’t write it off, because it could be the next Detour Lake mine.

Also, when you consider the Detour Lake mine along with the Macassa mine, it only makes Kirkland Lake Gold that much more attractive. Although more research is needed, as Kirkland Lake Gold trades at a market cap of around $14.6 billion.

Lastly, based on the Detour Lake mine, you can see why some investors are very excited about Wallbridge Mining (WLBMF) and even Probe Metals (PROBF), just across the Ontario border.

That concludes this summary of producing Ontario gold mines. If I’ve left any producing mines off of the list, please let me know about them in the comments section.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The author of this article is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. The author of this article expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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