Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or
the “
Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today
announced solid quarterly production for the first quarter of 2018
(“Q1 2018”). A total of 147,644 ounces was produced in Q1 2018, an
increase of 13% from the first quarter of 2017 (“Q1 2017”). Q1 2018
production exceeded target levels for the quarter, driven by record
monthly production in March of 71,615 ounces, which largely
reflected positive grade performance at both Fosterville and
Macassa. The Company remains on track to achieve its full-year 2018
production guidance of over 620,000 ounces, with production volumes
to increase in the second half of the year, including at
Fosterville with the commencement of stope production from the Swan
Zone. All dollar amounts are expressed in U.S. dollars, unless
otherwise noted.
During Q1 2018, the Company continued to build
financial strength with cash and cash equivalents increasing $43.8
million or 19%, to $275.4 million at March 31, 2018 compared to
$231.6 million at December 31, 2017.
Highlights of Q1 2018 production
results:
- Consolidated Q1 2018 production of 147,644
ounces, which compared to 130,426 ounces of production in Q1 2017
and record quarterly production of 166,579 ounces in the fourth
quarter of 2017 (“Q4 2017”)
- Record quarterly production at Macassa
totaling 54,038 ounces in Q1 2018, an increase of 11% from 48,723
ounces in Q1 2017 and 5% from 51,608 ounces produced in Q4 2017
(record monthly production in March 2018 of 30,319 ounces at an
average grade of 27.6 g/t)
- Solid results at Fosterville in Q1 2018 with
production totaling 63,843 ounces, 39% higher than 46,083 ounces in
Q1 2017 and compared to record quarterly production of 79,157
ounces in Q4 2017 (March 2018 production of 29,463 ounces at an
average grade of 20.4 g/t, Fosterville’s second best monthly
production performance)
- Production at Holt of 16,675 ounces in Q1
2018, a 9% increase from 15,318 ounces in Q1 2017 and compared to
record production of 19,263 ounces the previous quarter
- Production at Taylor of 13,055 ounces compared
to 10,942 ounces in Q1 2017 and record production of 16,541 ounces
in Q4 2017.
Other key developments during Q1 2018,
include:
- December 31, 2017 Mineral Reserve and Mineral Resource
estimates released • Consolidated Mineral Reserves
increased 36% to 4,640,000 ounces @ 11.1 grams per tonne (“g/t”)•
Fosterville Mineral Reserves increased 247% year over year, to
1,700,000 ounces @ 23.1 g/t, with a Swan Zone Mineral Reserve of
1,160,000 ounces @ 61.2 g/t• Macassa Mineral Reserves at
December 31, 2017 totaled 2,030,000 ounces @ 21.0 g/t, with
Measured and Indicated Mineral Resources increasing 58% to
2,090,000 ounces @ 17.1 g/t and Inferred Mineral Resources
increasing 48% to 1,370,000 ounces @ 22.2 g/t
- Strong growth in earnings and cash flow for
full-year 2017 reported • Earnings from continuing
operations in 2017 totaled $157.3 million ($0.76 per basic share),
a 95% increase from 2016• Cash flow from operating activities
of continuing operations totaled $309.8 million, a 66% increase
from 2016, while free cash flow increased 56%, to $178.0 million in
2017
- Continued focus on shareholder returns
• Quarterly dividend payment of $0.02/share paid on January
15, 2018.
Tony Makuch, President and Chief Executive
Officer of Kirkland Lake Gold, commented: “We had a solid start to
2018 and finished the first quarter with record monthly production
in March of 71,615 ounces. In Canada, all our mines performed well
in Q1 2018, with Macassa achieving record quarterly production and
both Holt and Taylor exceeding target production levels for the
quarter. In Australia, Fosterville finished the quarter ahead of
plan, reflecting positive grade reconciliations, with production
increasing 39% from Q1 2017. Entering the second quarter, we are
very much on track to achieve our consolidated production guidance
for 2018 of more than 620,000 ounces. Based on our strong
performance in Q1 2018, we continued to build financial strength,
with our cash position increasing 19% during the quarter to $275.4
million at March 31, 2018.
“Among other key catalysts in Q1 2018 was the
release of our December 31, 2017 Mineral Reserve and Mineral
Resource estimates. The fact that we more than tripled Mineral
Reserves at Fosterville and grew Measured and Indicated and
Inferred Mineral Resources at Macassa by 58% and 48%, respectively,
in 2017 provides a powerful demonstration of the growth potential
of our assets. Attractive organic growth is one of our key
pillars of value creation. With our current business portfolio, we
are poised for solid year-over-year production growth to a million
ounces of annual production over the next five to seven years.”
First Quarter 2018 Production Results
|
Q1 2018 |
Q1 2017 |
Q4 2017 |
Fosterville |
|
|
|
Ore Milled (tonnes) |
123,669 |
137,788 |
118,877 |
Grade (g/t Au) |
16.8 |
11.1 |
21.5 |
Recovery (%) |
95.7 |
93.7 |
96.3 |
Gold Production (ozs) |
63,843 |
46,083 |
79,157 |
Macassa |
|
|
|
Ore Milled (tonnes) |
86,661 |
91,460 |
119,129 |
Grade (g/t Au) |
19.9 |
17.1 |
13.9 |
Recovery (%) |
97.6 |
97.1 |
96.8 |
Gold Production (ozs) |
54,038 |
48,723 |
51,608 |
Holt |
|
|
|
Ore Milled (tonnes) |
122,280 |
105,629 |
127,494 |
Grade (g/t Au) |
4.5 |
4.8 |
5.0 |
Recovery (%) |
94.8 |
94.9 |
94.9 |
Gold Production (ozs) |
16,675 |
15,319 |
19,263 |
Taylor |
|
|
|
Ore Milled (tonnes) |
84,464 |
63,289 |
89,297 |
Grade (g/t Au) |
5.0 |
5.6 |
6.0 |
Recovery (%) |
95.5 |
96.7 |
96.2 |
Gold Production (ozs) |
13,055 |
10,942 |
16,541 |
Operations on Care & Maintenance1 |
|
|
|
Cosmo – Gold Production (ozs) |
n/a |
9,092 |
n/a |
Holloway – Gold Production (ozs) |
33 |
267 |
13 |
Gold Production (excluding operations on care and maintenance or
sold in 2017) |
147,611 |
121,067 |
166,566 |
Total Consolidated Production (ozs)2 |
147,644 |
130,426 |
166,579 |
1) The Company’s Cosmo mine in Australia was placed on care and
maintenance effective June 30, 2017 (see News Release dated May 4,
2017). The Company’s Holloway mine in Canada was transitioned to
care and maintenance effective December 31, 2016 (see News Release
dated December 12, 2016).2) Production numbers may not add to
total due to rounding.
Performance Against Full-Year 2018 Production
Guidance
|
Macassa |
Holt |
Taylor |
Fosterville |
Consolidated |
2017 Guidance (,000 ozs) |
215 – 225 |
65 – 75 |
60 – 70 |
260 – 300 |
+620 |
Q1 2018 Production (ozs) |
54,038 |
16,675 |
13,055 |
63,843 |
147,6441 |
1) Includes 33 ounces related to the Holloway mine
Q1 2018
production totaled 147,644 ounces, an increase of 13% from 130,426
ounces in Q1 2017. Excluding production from mines currently on
care and maintenance, total consolidated production for Q1 2018
grew by 22% from 121,067 ounces in Q1 2017. Production in Q1 2018
compared to record quarterly production of 166,579 ounces in Q4
2017. The main contributor to the change in production from Q4 2017
was the impact of a greater proportion of high-grade stopes mined
at the Fosterville mine during Q4 2017, consistent with the mine
plan.
Review of Operating Mines
Fosterville
The Fosterville Mine produced 63,843 ounces,
based on processing 123,669 tonnes at an average grade of 16.8 g/t
and average mill recoveries of 95.7%. Q1 2018 production increased
39% from 46,083 ounces in Q1 2017, based on processing 137,788
tonnes at an average grade of 11.1 g/t and average recoveries of
93.7%. The increase in production compared to the same period in
2017 resulted from higher average grades, consistent with the trend
at Fosterville towards improving grades at depth. Production in the
Lower Phoenix system in Q1 2018 was approximately 80 metres lower
than mining fronts for the same period in 2017. Q1 2018 production
compared to record quarterly production of 79,157 ounces the
previous quarter when a total of 118,877 tonnes were processed at
an average grade of 21.5 g/t and at average recoveries of 96.3%.
The quarter-over-quarter change in production mainly reflected a
greater proportion of high-grade stopes in the mine plan during Q4
2017, with both quarters benefiting from positive grade
reconciliations.
Macassa
The Macassa Mine achieved record quarter
production in Q1 2018 of 54,038 ounces based on 86,661 tonnes
milled at an average grade of 19.9 g/t and average mill recoveries
of 97.6%. Q1 2018 production was 11% higher than the 48,723 ounces
produced in Q1 2017, when a total of 91,460 tonnes were processed
at an average grade of 17.1 g/t. The increase from Q1 2017
was primarily related to an improvement in the average grade,
reflecting mining higher-grade stopes as well as the impact of
favourable grade reconciliations in Q1 2018. A significant increase
in the average grade more than offset reduced tonnes processed in
accounting for a 5% increase in production compared to the previous
quarter when Macassa produced 51,608 ounces of gold from processing
119,129 tonnes at an average grade of 13.9 g/t and with average
recoveries of 96.8%.
Holt
During Q1 2018, the Holt mine produced 16,675
ounces, representing an increase of 9% from 15,319 ounces in Q1
2017, as higher mill throughput more than offset the impact of a
slight reduction in the average grade year over year. Q1 2018
production compared to record quarterly production of 19,263 ounces
in Q4 2017 with the change reflecting reduced tonnes processed and
a lower average grade compared to the previous quarter. A total of
122,280 tonnes were processed in Q1 2018 at an average grade of 4.5
g/t and with average recoveries of 94.8%, which compared to 105,629
tonnes at an average grade of 4.8 g/t and average recoveries of
94.9% in Q1 2017 and 127,494 tonnes at an average grade of 5.0 g/t
and average recoveries of 94.9% the previous quarter.
Taylor
Gold production from the Taylor Mine during Q1
2018 totaled 13,055 ounces, based on 84,464 tonnes processed at an
average grade of 5.0 g/t and average recoveries of 95.5%. Q1 2018
production was 19% higher than the 10,942 ounces produced in Q1
2017, when a total of 63,289 tonnes were processed at an average
grade of 5.6 g/t and average recoveries of 96.7%, and compared to
record quarterly production of 16,541 ounces in Q4 2017, which
resulted from processing 89,297 tonnes at an average grade of 6.0
g/t and average recoveries of 96.2%.
Qualified Persons
Pierre Rocque, P.Eng., Vice President, Canadian
Operations and Ian Holland, FAusIMM, Vice President Australian
Operations are “qualified persons” as defined in National
Instrument 43-101 and have 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 with 2018 production targeted at over 620,000 ounces of
gold from mines in Canada and Australia. The production profile of
the Company is anchored by two high-grade, low-cost operations,
including the Macassa Mine located in Northeastern 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, 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 RelationsPhone: +1
416-840-7884E-mail: mutting@klgold.com
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