Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or
the “
Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today
announced record levels of quarterly and annual gold production for
the fourth quarter (“Q4 2018”) and full-year (“2018”) of 2018,
respectively. Production in Q4 2018 totaled 230,993 ounces, 28%
higher than the previous record of 180,155 ounces achieved in the
third quarter of 2018 (“Q3 2018”). Q4 2018 production was
significantly above target levels for the quarter and was driven by
record quarterly production at both Fosterville (124,307 ounces)
and Macassa (69,936 ounces). Production in 2018 totaled 723,477
ounces, a 21% increase from 596,405 ounces for full-year 2017
(“2017”). Three of the Company’s mines achieved record annual
production in 2018, including 356,230 ounces at Fosterville,
240,126 ounces at Macassa and 58,633 ounces at the Taylor Mine,
with the Holt Mine producing 67,770 ounces for the year. The
Company’s cash position at December 31, 2018 totaled approximately
$332 million. All dollar amounts are expressed in U.S. dollars,
unless otherwise noted.
Highlights of Q4 2018 and 2018
production results include:
- Q4 2018 production of 230,993 ounces, 39%
increase from 166,579 ounces in the fourth quarter of 2017 (“Q4
2017”) and 28% higher than 180,155 ounces the previous quarter
- Gold poured in Q4 2018 totaling 224,770
ounces, with total gold sales of 225,692 ounces
- Production at Fosterville totaling 124,307
ounces in Q4 2018, increase of 57% from 79,157 ounces in Q4 2017
and 37% higher than 90,618 ounces in Q3 2018; production growth in
Q4 2018 reflected average grade of 39.7 grams per tonne (“g/t”),
significantly above target levels
- Production at Macassa of 69,936 ounces in Q4
2018, 36% increase from 51,608 ounces in Q4 2017 and 26% higher
than 55,582 ounces in Q3 2018; average grade in Q4 2018 of 25.9
g/t
- Production from Holt Complex in Q4 2018
included record quarterly production of 19,305 ounces at Taylor and
production of 16,774 ounces at the Holt Mine (compared to 16,541
ounces at Taylor and 19,263 ounces at Holt in Q4 2017 and 13,333
ounces at Taylor and record production of 20,609 ounces at Holt in
Q3 2018)
- 2018 consolidated production totaling 723,477
ounces, 21% higher than 596,405 ounces in 2017, with increase
reflecting production growth of 92,385 ounces or 35% at
Fosterville, 45,889 ounces or 24% at Macassa, 7,869 ounces or 16%
at Taylor and 1,093 ounces or 2% at Holt
- 2018 gold poured of 722,894 ounces, with 2018
gold sales of 722,277 ounces.
Other key developments during Q4 2018
include:
- Continued exploration success at Fosterville,
with infill drilling in Swan Zone continuing to return intercepts
containing exceptionally high-grades, substantial widths and
visible gold; Company continues to target significant growth in
Swan Zone Mineral Reserves
- Increased financial strength with cash
position increasing by approximately 29% during Q4 2018, with
year-end 2018 cash totaling approximately $332
million
- Quarterly dividend increased to $0.04 per
share effective Q4 2018 payment on January 11, 2019 to shareholders
of record on December 31, 2018; Company paid Q3 2018 dividend
payment of $0.03 per share on October 12, 2018 to shareholders of
record on September 30, 2018
- Strong share-price performance with Kirkland
Lake Gold commons shares closing on December 31, 2018 at $35.60 per
share on the TSX, representing share-price increase of 85% for full
year 2018.
Tony Makuch, President and Chief Executive
Officer of Kirkland Lake Gold, commented: “2018 was an outstanding
year for Kirkland Lake Gold. We achieved record production of
723,477 ounces and, just as important, embarked on a program of
growth that could see the Company achieve a million ounces of
annual, low-cost gold production as early as 2021. A key part of
our progress has been the continued transformation of Fosterville
into one of the world’s greatest gold mining operations. As clearly
demonstrated in Q4 2018, we continue to see much greater levels of
high-grade quartz-veins with visible gold at Fosterville than had
previously been estimated, which was the main driver of the mine’s
substantial outperformance during the quarter and is a key reason
why we expect a significant increase in Swan Zone Mineral Reserves.
Turning to Macassa, our grade performance in the South Mine Complex
has been excellent, with many stopes outperforming in Q4 2018, and
our operations team continuing to perform very well in moving our
production profile to the deeper, high-grade parts of the mine.
Macassa is a very solid, consistent operation that is poised to
achieve substantial production growth once our new #4 Shaft is
completed, with Phase 1 completion on track for early 2022. In
addition, we had record production at Taylor in Q4 2018, reflecting
both improved tonnage and higher grades, and also turned in a solid
performance at Holt. Entering 2019, we are well positioned for
continued growth, with three-year production guidance including
740,000 – 800,000 ounces in 2019, 850,000 – 910,000 ounces in 2020
and 945,000 – 1,005,000 ounces in 2021.”
Q4 and YTD 2018 Production Results
|
|
|
|
|
|
|
Q4 2018 |
Q4 2017 |
Q3 2018 |
2018 |
2017 |
Fosterville |
|
|
|
|
|
Ore Milled (tonnes) |
98,797 |
118,877 |
113,101 |
456,909 |
547,476 |
Grade (g/t Au) |
39.7 |
21.5 |
25.6 |
24.9 |
15.8 |
Recovery (%) |
98.6 |
96.3 |
97.5 |
97.3 |
95.0 |
Gold Production (ozs) |
124,307 |
79,157 |
90,618 |
356,230 |
263,845 |
Macassa |
|
|
|
|
|
Ore Milled (tonnes) |
85,523 |
119,129 |
92,503 |
354,468 |
409,064 |
Grade (g/t Au) |
25.9 |
13.9 |
19.2 |
21.6 |
15.2 |
Recovery (%) |
98.0 |
96.8 |
97.3 |
97.7 |
97.1 |
Gold Production (ozs) |
69,936 |
51,608 |
55,582 |
240,126 |
194,237 |
Holt |
|
|
|
|
|
Ore Milled (tonnes) |
118,347 |
127,494 |
135,849 |
471,819 |
462,987 |
Grade (g/t Au) |
4.7 |
5.0 |
5.0 |
4.7 |
4.7 |
Recovery (%) |
94.3 |
94.9 |
95.0 |
94.6 |
94.8 |
Gold Production (ozs) |
16,774 |
19,263 |
20,609 |
67,770 |
66,677 |
Taylor |
|
|
|
|
|
Ore Milled (tonnes) |
103,793 |
89,297 |
94,092 |
382,059 |
292,003 |
Grade (g/t Au) |
6.1 |
6.0 |
4.7 |
5.0 |
5.6 |
Recovery (%) |
95.0 |
96.2 |
94.3 |
94.7 |
96.2 |
Gold Production (ozs) |
19,305 |
16,538 |
13,333 |
58,633 |
50,764 |
Operations on Care & Maintenance1 |
|
|
|
|
|
Cosmo – Gold Production (ozs) |
- |
- |
- |
- |
20,595 |
Holloway – Gold Production (ozs) |
671 |
13 |
14 |
718 |
287 |
Gold Production (excluding operations oncare and maintenance or
sold in 2017) |
230,322 |
166,566 |
180,141 |
722,759 |
575,523 |
Total Consolidated Production (ozs)2 |
230,993 |
166,579 |
180,155 |
723,477 |
596,405 |
Total Consolidated Gold Sales (ozs) |
225,692 |
165,715 |
184,517 |
722,277 |
592,674 |
- The Cosmo Mine was placed on care and maintenance effective
June 30, 2017 (see News Release dated May 4/17). The Holloway mine
was placed on care and maintenance effective December 31, 2016 (see
News Release dated Dec. 12/16).
- Production numbers may not add to total due to rounding.
Performance Against Full-Year 2018 Production
Guidance
|
Macassa |
Holt |
Taylor |
Fosterville |
Consolidated |
2018 Guidance (,000 ozs) 1 |
220 – 225 |
65 – 75 |
50 – 55 |
>330 |
+670 |
2018 Production (ozs) |
240,126 |
67,770 |
58,633 |
356,230 |
723,4772 |
- A number of changes were made to the Company’s full-year 2018
production guidance during Q4 2018. On October 30, 2018, the
Company announced that consolidated production guidance for
full-year 2018 had been improved from over 635,000 ounces to
655,000 – 670,000 ounces. In addition. At the same time, the
Company announced that production guidance for the Fosterville was
improved to 300,000 – 310,000 ounces from 275,000 – 300,000 ounces
previously, while production guidance for the Taylor Mine was
revised to 50,000 – 55,000 ounces from 60,000 – 65,000 ounces
previously. On December 11, 2018, the Company announced that
production guidance for full-year 2018 at the Fosterville Mine was
improved to over 330,000 ounces, reflecting higher than targeted
grades in the first two months of Q4 2018 and the advancement of
two additional Swan Zone stopes into the Q4 2018 mine plan. As a
result, consolidated production guidance for the year was improved
to over 670,000 ounces
- Includes 718 ounces related to the Holloway mine
Production in 2018 was a record 723,477 ounces,
an increase of 21% from 596,405 ounces in 2017. Excluding
production from mines currently on care and maintenance, total
consolidated production of 722,759 ounces in 2018 grew 26% from
575,523 ounces for the previous year. The Company exceeded the
670,000-ounce minimum production target included in its current
consolidated production guidance for 2018 by $53.5 million or 8%.
During 2018, the Company improved its consolidated production
guidance three times from the initial consolidated guidance of over
620,000 ounces, announced on January 17, 2018. Improvement in
consolidated production guidance during the year were primarily
driven by Fosterville, where average grades consistently
outperformed target levels during the year.
Review of Operating Mines
Fosterville
The Fosterville Mine produced a record 124,307
ounces in Q4 2018, based on processing 98,797 tonnes at an average
grade of 39.7 g/t and average recoveries of 98.6%. Q4 2018
production increased 57% from 79,157 ounces in Q4 2017, when the
mine processed 118,877 tonnes at an average grade of 21.5 g/t and
average recoveries of 96.3%. Production in Q4 2018 increased 37%
from 90,618 ounces in Q3 2018, based on processing 113,101 tonnes
at an average grade of 25.6 g/t and average mill recoveries of
97.5%. The average grade in Q4 2018 of 39.7 g/t was the highest
ever quarterly average grade at Fosterville by a significant margin
and far exceeded target levels for the quarter. The outperformance
largely relates to increased operating development activity around
the Swan Zone and higher than planned grades from development
tonnes processed. In addition, stope production in Q4 2018 from
both the Swan and Eagle zones achieved substantially higher than
expected grades. Based on the completion of increased operating
development metres, the Company added two Swan Zone stopes to the
mine plan for Q4 2018, which also is contributed to higher levels
of production.
Production at Fosterville in 2018 totaled
356,230 ounces, a 35% increase from 263,845 ounces in 2017. Record
production in 2018 resulted from processing 456,909 tonnes at an
average grade of 24.9 g/t and average recoveries of 97.3%, which
compared to processing 547,476 tonnes at an average grade of 15.8
g/t and average recoveries of 95.0% for YTD 2017. A 58% increase in
the average grade compared to 2017 mainly resulted from the
continued transition to mining deeper, higher-grade stopes in the
Eagle and, as of Q3 2018, the Swan Zone, which include quartz veins
containing significant amounts of visible gold. The reduction in
tonnes milled compared to the prior year reflected the mine’s focus
on extracting high-grade stopes at depth. At current grades, the
Fosterville Mill’s refining capacity is being fully utilized, with
an expansion of the refinery and gold room planned for 2019. The
Company is also working to establish additional mining fronts,
which is expected to contribute to higher throughput by 2021.
Macassa
The Macassa Mine produced a record 69,936 ounces
in Q4 2018, based on processing 85,523 tonnes at and average grade
of 25.9 g/t and average recoveries of 98.0%. Q4 2018 production was
36% higher than 51,608 ounces in Q4 2017, when 119,129 tonnes were
processed at an average grade of 13.9 g/t and average recoveries of
96.8%. The increase in production from the same period in 2017
reflected an 86% increase in the average grade, resulting from
mining higher-grade stopes deeper in the South Mine Complex
(“SMC”), as well as the impact of grade outperformance,
particularly in SMC stopes around the 5700-foot level, where mining
commenced near the end of 2017. The significant increase in grade
more than offset a reduction in tonnes processed. Lower tonnes
processed in Q4 2018 largely reflected increased selectivity in
processing development material for the purpose of maximizing
average grades. Q4 2018 production increased 26% from 55,582 ounces
in Q3 2018, when the mine processed 92,503 tonnes at an average
grade of 19.2 g/t and average mill recoveries of 97.3%. The
increase from the previous quarter resulted from higher average
grades in Q4 2018, mainly reflecting more favourable grade
reconciliations compared to Q3 2018.
Production at Macassa in 2018 totaled 240,126
ounces, an increase of 24% from 194,237 ounces in 2017. Production
in 2018 resulted from processing 354,468 tonnes at an average grade
of 21.6 g/t and average recoveries of 97.7%. All tonnes processed
in 2018 were from mine production. For 2017, a total of 409,064
tonnes were processed at an average grade of 15.2 g/t and average
recoveries of 97.1%. Of tonnes processed in 2017, 387,053 tonnes
related to mine production and averaged 16.0 g/t, with the
remaining 22,011 tonnes being drawn from low-grade stockpiles and
averaging 1.6 g/t. The 35% increase in the average grade from
mine production in 2018 compared to the previous year resulted from
mining higher-grade stopes deeper in the SMC during YTD 2018, as
well as the impact of favourable grade reconciliations and improved
grade control practices.
Holt
During Q4 2018, production at the Holt Mine
totaled 16,774 ounces, based on processing 118,347 tonnes at and
average grade of 4.7 g/t and average recoveries of 94.3%. Q4 2018
production compared to production of 19,263 ounces in Q4 2017,
which resulted from processing 127,494 tonnes at an average grade
of 5.0 g/t and average recoveries of 94.9%, and record quarterly
production of 20,609 ounces in Q3 2018, based on processing 135,849
tonnes at an average grade of 5.0 g/t and average recoveries of
95.0%. Lower average grades compared to both prior periods
reflected mine sequencing, while a reduction in tonnes processed
largely reflected some stockpiling of ore from Holt in favour of
processing high-grade ore from the Taylor Mine during the quarter.
In 2018, Holt produced 67,770 ounces, a 2%
increase from 66,677 ounces in 2017. The small increase in
production resulted from a 2% increase in tonnes processes, with
the average grade of 4.7 g/t unchanged from the comparable 2017
level. Production in 2018 was based on 471,819 tonnes
processed at and average grade of 4.7 g/t and average recoveries of
94.6%, which compared to 462,987 tonnes processed at an average
grade of 4.7 g/t and average recoveries of 94.8% in 2017.
Taylor
In Q4 2018, the Taylor mine achieved record
production of 19,305 ounces, a 17% increase from 16,541 ounces in
Q4 2017 and 4% higher than 13,333 ounces the previous
quarter. Q4 2018 production resulted from 103,793 tonnes at
an average grade of 6.1 g/t and average recoveries of 95.0%, which
compared to 89,297 tonnes processes at an average grade of 6.0 g/t
and average recoveries of 96.2% in Q4 2017 and 94,092 tonnes at an
average grade of 4.7 g/t and average recoveries of 94.3% in Q3
2018. The increase from Q4 2017 was mainly related to a 16%
increase in tonnes processed, while a 30% improvement in the
average grade, reflecting both mine sequencing and grade
outperformance in Q4 2018, was the key driver of the increase
compared to the previous quarter.
For full-year 2018, Taylor produced 58,633
ounces from processing 382,059 tonnes at an average grade of 5.0
g/t and average recoveries of 94.7%. Production in 2018 increased
15% from 50,764 ounces in 2017, when a total of 292,003 tonnes were
processed at an average grade of 5.6 g/t and average recoveries of
96.2%.
Qualified Persons
Pierre Rocque, P.Eng., Vice President, Technical
Services is a “qualified person” as defined in National Instrument
43-101 and has reviewed and approved disclosure of the technical
information and data in this news release.
About Kirkland Lake Gold Ltd.
Kirkland Lake Gold Ltd. is a mid-tier gold
producer operating in Canada and Australia that produced 723,477
ounces in 2018 and is on track to achieve significant production
growth over the next three years, including target production of
740,000 – 800,000 ounces in 2019, 850,000 – 910,000 ounces in 2020
and 945,000 – 1,005,000 ounces in 2021. The production profile of
the Company is anchored by two high-grade, low-cost operations,
including the Macassa Mine located in Northern Ontario and the
Fosterville Mine located in the state of Victoria, Australia.
Kirkland Lake Gold's solid base of quality assets is complemented
by district scale exploration potential, supported by a strong
financial position with extensive management and operational
expertise.
For further information on Kirkland Lake Gold
and to receive news releases by email, visit the website
www.klgold.com.
Cautionary Note Regarding Forward-Looking
Information
This press release contains “forward looking
statements” and "forward-looking information" within the meaning of
applicable securities laws, including statements regarding the
plans, intentions, beliefs and current expectations of Kirkland
Lake Gold with respect to future business activities and operating
performance. Forward-looking information is often identified by the
words "may", "would", "could", "should", "will", "intend", "plan",
"anticipate", "believe", "estimate", "expect" or similar
expressions and include information regarding: (i) the amount of
future production over any period; (ii) assumptions relating to
revenues, operating cash flow and other revenue metrics set out in
the Company's disclosure materials; and (iii) future exploration
plans.
Investors are cautioned that forward-looking
information is not based on historical facts but instead reflect
Kirkland Lake Gold's management's expectations, estimates or
projections concerning future results or events based on the
opinions, assumptions and estimates of management considered
reasonable at the date the statements are made. Although Kirkland
Lake Gold believes that the expectations reflected in such
forward-looking information are reasonable, such information
involves risks and uncertainties, and undue reliance should not be
placed on such information, as unknown or unpredictable factors
could have material adverse effects on future results, performance
or achievements of the combined company. Among the key factors that
could cause actual results to differ materially from those
projected in the forward-looking information are the following: the
future development and growth potential of the Canadian and
Australian operations; the future exploration activities planned at
the Canadian and Australian operations and anticipated effects
thereof; changes in general economic, business and political
conditions, including changes in the financial markets; changes in
applicable laws; and compliance with extensive government
regulation. This forward-looking information may be affected by
risks and uncertainties in the business of Kirkland Lake Gold and
market conditions. This information is qualified in its entirety by
cautionary statements and risk factor disclosure contained in
filings made by Kirkland Lake Gold, including its annual
information form, financial statements and related MD&A for the
financial year ended December 31, 2017, and its interim financial
statements and related MD&A for the period ended September 30,
2018, which are filed with the securities regulatory authorities in
certain provinces of Canada and available at www.sedar.com.
Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking information prove incorrect, actual results may
vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected. Although Kirkland
Lake Gold has attempted to identify important risks, uncertainties
and factors which could cause actual results to differ materially,
there may be others that cause results not to be as anticipated,
estimated or intended. Kirkland Lake Gold does not intend, and do
not assume any obligation, to update this forward-looking
information except as otherwise required by applicable
law.
FOR FURTHER INFORMATION PLEASE CONTACT
Anthony Makuch, President, Chief Executive
Officer & DirectorPhone: +1 416-840-7884E-mail:
tmakuch@klgold.com
Mark Utting, Vice-President, Investor Relations Phone: +1
416-840-7884 E-mail: mutting@klgold.com
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