The Globe and Mail reports in its Friday, March 20, edition that CIBC World Markets analyst Cosmos Chiu raised Kirkland Lake Gold ($39.32) to "outperformer" from "neutral." The Globe's David Leeder writes that Mr. Chiu reiterated his $62 share target. Analysts on average target the shares at $58.50. Mr. Chiu says in a note: "Kirkland Lake Gold was once the darling of the gold industry, but that status was somewhat disrupted first by the acquisition of Detour Gold, followed by a disappointing update of its Swan reserves at Fosterville. We downgraded Kirkland Lake Gold in November, 2019, with the announcement of the Detour acquisition, but now believe the protracted weakness in Kirkland Lake Gold's share price has created an attractive entry point. ... We expect Kirkland Lake Gold to generate more than $700-million in free cash flow in 2020, representing an 8-per-cent free cash flow yield. Kirkland Lake Gold is also in a strong position to benefit from a weakening Canadian dollar and weakening fuel prices, and our model shows that a 5-per-cent move in the USD/CAD exchange rate equates to a 10-per-cent move in the NAV, while a 25-per-cent move in fuel prices equates to a $25 per oz decrease in AISC at Detour Lake."
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