Corporation of the Town of Kirkland Lake

September

2010

Kirkland Lake Economic

Profile A Synopsis of Recent Economic Developments

Department of Economic Development and Tourism

Kirkland Lake Economic Profile

Overview

Kirkland Lake is a community of approximately 10,000 people located 580 km

(360 miles) north of Toronto. KL began as a gold mining camp in 1911. By the

early 1920’s, the town recorded the second highest level of gold production in

Canada. Throughout the 1940’s to 1960’s, Kirkland Lake was justifiably known

as the “Hub of the North”; being one of the major industrial-commercial

centres in Northern Ontario.

Today, the Town is in the midst of a major economic resurgence. The high price

of gold, coupled with exciting new finds has transformed the area into arguably the most exciting hard rock mining camp

in Ontario.

Kirkland Lake is at the heart of this boom. Kirkland Lake Gold Inc. was one of the first companies to revitalize and expand

historic mining properties. In 2005, they hit a major new find adjacent to their existing properties that, according to The

Northern Miner, rivals the massive finds that rocked Red Lake in northwestern Ontario. And KLG is not alone.

Queenston Mining has a large number of promising properties in and around the community. Northgate Minerals is on

the cusp of a major project to the west of Kirkland Lake with its Young Davidson Mine in Matachewan; Armistice

Resources is busy in nearby McGarry Township, just to the east of KL; and to the north is St. Andrew Goldfields, also

undergoing a major expansion.

Kirkland Lake District Map

Kirkland Lake Economic Profile

Economic Implications

The mines referred to above are serious, long term operations. The conservative

estimate for each mines’ lifetime ranges from 10 -15 years. Profitability is

generally based on gold prices averaging $700 (US) per ounce, not the $1200+

per ounce currently supported in the market.

Population Growth:

Census Canada does not publish up-to-date figures for individual rural

communities. But common sense tells us that KL’s population is rapidly

increasing from the 8,600 people recorded in the 2006 census, and will continue to do so for the immediate future. The

employment needs of the mines support this reasoning:

Kirkland Lake Gold Located in Kirkland Lake, approximately 570 fulltime now, poised to reach 1,000 in the

next few years.....

Armistice Resources –

McGarry Mine

Located in McGarry Township (20 minute drive east of KL), Armistice expects to have

90-100 fulltime upon commencement of production, and a significant increase in the

second year....

Northgate Minerals -

Young Davidson

Located in Matachewan (40 minute drive west of KL), will have 275 – 300 once

operational in 2012…

St Andrew Goldfield Located along 101 Highway about (50 minutes north of KL), in production with 221 full

time jobs now, with a planned increase to 275 by year-end…

Queenston Mining Inc. Queenston’s major operation, located 10 minutes east of KL, will employ 325 fulltime

people...

These figures do not tell the full story as they only represent fulltime production employees. The workforce numbers for

the construction and development phases of each operation equally impressive. For example:

Kirkland Lake Gold will have 500 contractors involved in exploration and development work;

Armistice Resources will have 80 contractors involved in development work;

Northgate Minerals will have 600-800 people for the next two years on construction work;

St. Andrew Goldfields will have 80 contractors working on development projects;

Queenston Mining will have 500-600 people for a two year construction phase.

Kirkland Lake Economic Profile

Income Growth

According to Statistics Canada, workers in the Mining and Quarrying

industry as well as in Support Activities for Mining, Oil and Gas Extraction

earn significantly more in Ontario compared to all other industries. The

table below provides a comparison of average weekly earnings. But what

the table does not show is the extra income miners regularly earn in

bonuses; an experienced underground miner can easily earn an additional

$15,000 + in production bonuses annually.

The table also make reference to the earnings of those involved in the

service and supply sector. Note that the nature of the mining business, with its huge capital expenditures, means that

these jobs are very well paying as well. Equally importantly this is a rapidly growing sector; it is estimated that one job at

a mine creates 3-5 additional spin off jobs. This has certainly been the case in Kirkland Lake where such companies have

reported an increase in their workforces and capacities.

Average Weekly Earnings: Mining and Related Industries

Province of Ontario

Excluding Overtime Including Overtime

2009 Average 2010 (Jan.-

Apr.) Average

2009 Average 2010 (Jan.-Apr.)

Average

Mining + Quarrying $1,269 $1,316 $1,391 $1,403

Support Activities for Mining + Oil & Gas Extraction

$1,394 $1,538 $1,502 $1,743

All Industries $833 $859 $850 $874

Source: Statistics Canada, Labour Force Survey

Commercial and Industrial Expansion

Commercial and industrial activity outside of the mining sector is also growing, albeit at a slower rate. Over the past 3

years, major expansions have taken place or are planned among businesses selling groceries, clothing, electronics

building supplies, and other home and auto products. One of the main challenges facing the commercial sector is the

propensity of local residents to ‘shop abroad’ with weekend trips to Timmins, Rouyn-Noranda and Temiskaming Shores.

This has made some local merchants hesitant to expand. However it does not seem to be a deterrent to new businesses,

as the EDD has entertained a number of enquiries from large retail chains interested in capitalizing on the community’s

growth.

A similar pattern holds true for Kirkland Lake’s secondary industries. Environmental, construction and forestry firms

have increased their capacities, in part to keep pace with the mining industry’s need for remediation services, rough

timber, etc. The other growth stimulus for these sectors is with the general construction boom that has begun in the

Kirkland Lake Economic Profile

community, particularly in the housing market. According to a housing study commissioned by the municipal

government, 100 new homes every year for the next six years will be necessary to meet the needs of incoming workers.

The professional services sector (government, education, health care, etc) represents the second largest economic

sector in Kirkland Lake. Its current capacity is fairly robust, reflecting the fact that KL is the regional service centre for the

north Timiskaming District. However, conversations with representatives of the sector indicate that it too will have to

expand to meet the needs of a growing community. Local schools are already feeling the result of new families moving

to the area, as is the medical profession. One of the largest employers in the sector, Veterans Affairs Canada, will be

moving to a new $12 million facility in 2012. It is anticipated that this move will accommodate an increase in staffing and

responsibilities.

Regional Development

As noted above, Kirkland Lake is the regional service and supply hub for the north Timiskaming district. Within a forty

five minute driving radius of KL’s downtown, there are seven smaller communities, with a combined population of

approximately 15,000. Some of these communities are experiencing a growth pattern similar to that of KL’s. In

particular, McGarry Township, Larder Lake and Matachewan anticipate an increase in population and economic activity

due to the nearby mines. Given their limited infrastructure, services network and commercial sectors, it is anticipated

that the economic consequences of their growth will positively impact on Kirkland Lake.

Contacts

Wilfred Hass Director, Economic Development and Tourism Tel: 705 567 9361, ext. 243; Fax: 705 567 3535; Email: wilfred.hass@tkl.ca www.discoverkl.ca

Attach: Letters of Confirmation

Kirkland Lake Economic Profile

Kirkland Lake Economic Profile

Kirkland Lake Economic Profile

Kirkland Lake Economic Profile

Kirkland Lake Economic Profile