Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or
the “
Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today
announced record quarterly gold production of 180,155 ounces for
the third quarter of 2018 (“Q3 2018”). Production in Q3 2018
exceeded target levels for the quarter driven by record quarterly
production from Fosterville of 90,618 ounces as well as from the
Company’s Canadian operations, with Macassa, Holt and Taylor
collectively producing 89,537 ounces. Production for the first nine
months of 2018 (“YTD 2018”) totaled 492,484 ounces, with the
Company completing the third quarter well positioned to achieve the
improved full-year 2018 consolidated production guidance of over
635,000 ounces. All dollar amounts are expressed in U.S. dollars,
unless otherwise noted.
Highlights of Q3 2018 and YTD 2018
production results include:
- Q3 2018 production of 180,155 ounces, a 30%
increase from 139,091 ounces in the third quarter of 2017 (“Q3
2017”) and a 9% increase from 164,685 ounces in the second quarter
of 2018 (“Q2 2018”)
- Gold poured in Q3 2018 totaling 187,331
ounces, with total gold sales of 184,509 ounces
- Quarterly production at Fosterville totaling
90,618 ounces in Q3 2018, an increase of 47% from 61,535 ounces in
Q3 2017 and 17% higher than 77,462 ounces in Q2 2018
- Production from Canadian operations in Q3
2018 of 89,537 ounces, lead by Macassa, which
produced 55,582 ounces, in line with target levels, production at
Holt of 20,609 ounces and production at Taylor of 13,333
ounces
- YTD 2018 consolidated production totaling
492,484 ounces, an increase of 15% from 429,822 ounces in the first
nine months of 2017 (“YTD 2017”), with year-over-year production
growth of 26% at Fosterville, to 231,923 ounces, 19% at Macassa, to
170,190 ounces, 8% at Holt, to 50,996 ounces, and 15% at Taylor, to
39,328 ounces
- YTD 2018 gold poured of 498,124 ounces, with
YTD 2018 gold sales of 496,577 ounces.
Other key developments during Q3 2018
include:
- Significant exploration success
• Fosterville:
In-fill drilling in the Swan Zone intersects exceptionally high
grades over solid widths up to 200 metres down plunge of current
Mineral Resources; significant growth in Swan Zone Mineral Reserve
expected as part of year-end 2018 Mineral Reserve and Mineral
Resource estimates •
Macassa: High-grade intersections outside current
Mineral Resources in South Mine Complex (“SMC”) support continued
resource growth; high-potential area identified within SMC with
grades in excess of 30 g/t and true widths greater than 3.0
metres.
- Strong cash and cash flow
• Cash and cash equivalents
totaling approximately $275 million at September 30, 2018. During
Q3 2018, the Company used $47.8 (CAD$62.5) million to acquire 32.6
million common shares of Osisko Mining Inc., representing
approximately 13.6% of currently issued and outstanding common
shares. In addition, the Company repurchased 1,570,600 common
shares during Q3 2018 through its normal course issuer bid at an
average price of $24.77 per share and a total cost of $30.0 (CAD
$38.9) million. • On August 1,
2018, the Company reported Q2 2018 net earnings of $61.5 million
($0.29/share), cash flow from operating activities of $120.9
million and free cash flow of $60.7 million.
- Continued focus on shareholder value
• Q2 2018 quarterly dividend of C$0.03/share
was paid on July 13, 2018, with Q3 2018 quarterly dividend payment
of C$0.03/share to be paid on October 12, 2018 to shareholders of
record as of September 28, 2018.
Tony Makuch, President and Chief Executive
Officer of Kirkland Lake Gold, commented: “Q3 2018 was a record
quarter for both Fosterville in Australia and our Canadian
operations as a whole. At Fosterville, we commissioned a second
gravity circuit during Q3 2018 and saw an immediate spike in
production, with the Fosterville Mill processing over 18,000 ounces
in the first week of the circuit’s operation. This spike can
largely be attributed to the gravity circuit’s effectiveness in
recovering gold previously contained in the recirculating load of
the grinding circuit. We also mined and processed our first Swan
Zone stope during the quarter, which contributed over 7,500 ounces
of production at an average grade of close to 40 g/t, in line with
target levels. Turning to our Canadian operations, record
production across our three mines reflected strong results at
Macassa, where Q3 2018 production was very much in line with target
levels, our best quarter of production to date at Holt and a better
production performance from Taylor Mine compared to the previous
quarter. Heading into the final quarter of the year, we are very
well positioned to achieve our improved 2018 consolidated
production guidance of over 635,000 ounces.”
Q3 and YTD 2018 Production Results
|
Q3 2018 |
Q3 2017 |
Q2 2018 |
YTD 2018 |
YTD 2017 |
Fosterville |
|
|
|
|
|
Ore Milled (tonnes) |
113,101 |
143,326 |
121,342 |
358,112 |
428,599 |
Grade (g/t Au) |
25.6 |
14.1 |
20.6 |
20.9 |
14.2 |
Recovery (%) |
97.5 |
94.7 |
96.2 |
96.6 |
94.4 |
Gold Production (ozs) |
90,618 |
61,535 |
77,462 |
231,923 |
184,688 |
Macassa |
|
|
|
|
|
Ore Milled (tonnes) |
92,503 |
93,391 |
89,781 |
268,945 |
289,935 |
Grade (g/t Au) |
19.2 |
16.5 |
21.5 |
20.2 |
15.7 |
Recovery (%) |
97.3 |
97.4 |
97.7 |
97.5 |
97.2 |
Gold Production (ozs) |
55,582 |
48,206 |
60,571 |
170,190 |
142,628 |
Holt |
|
|
|
|
|
Ore Milled (tonnes) |
135,849 |
124,394 |
95,343 |
353,472 |
335,493 |
Grade (g/t Au) |
5.0 |
4.5 |
4.8 |
4.7 |
4.6 |
Recovery (%) |
95.0 |
94.5 |
94.2 |
94.7 |
94.7 |
Gold Production (ozs) |
20,609 |
16,995 |
13,712 |
50,996 |
47,414 |
Taylor |
|
|
|
|
|
Ore Milled (tonnes) |
94,092 |
71,897 |
99,711 |
278,266 |
202,706 |
Grade (g/t Au) |
4.7 |
5.0 |
4.3 |
4.7 |
5.5 |
Recovery (%) |
94.3 |
95.5 |
94.1 |
94.6 |
96.2 |
Gold Production (ozs) |
13,333 |
11,066 |
12,940 |
39,328 |
34,223 |
Operations on Care &
Maintenance1 |
|
|
|
|
|
Cosmo – Gold Production (ozs) |
- |
1,290 |
n/a |
- |
20,595 |
Holloway – Gold Production (ozs) |
13 |
- |
n/a |
47 |
274 |
Gold Production (excluding operations on
care and maintenance or sold in 2017) |
180,142 |
137,801 |
164,685 |
492,437 |
408,953 |
Total Consolidated Production
(ozs)2 |
180,155 |
139,091 |
164,685 |
492,484 |
429,822 |
Total Consolidated Gold Sales
(ozs) |
184,509 |
137,908 |
164,305 |
496,577 |
427,017 |
1) 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).2) 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) |
220 – 2251 |
65 – 75 |
60 – 70 |
275 – 3001 |
+6351 |
YTD 2018 Production
(ozs) |
170,190 |
50,996 |
39,328 |
231,923 |
492,4842 |
1) On August 1, 2018, the Company announced the following
improvements to full-year 2018 production guidance: Consolidated
production guidance was increased to more than 635,000 ounces from
more than 620,000 ounces; Macassa’s production guidance was revised
to 220,000 – 225,000 ounces from 215,000 – 225,000 ounces;
Fosterville’s production guidance was revised to 275,000 – 300,000
ounces from 260,000 – 300,000 ounces.2) Includes 47 ounces related
to the Holloway mine
YTD 2018 production totaled 492,484 ounces, an
increase of 15% from 429,822 ounces for YTD 2017. Excluding
production from mines currently on care and maintenance, total
consolidated production of 492,437 ounces for YTD 2018 grew 20%
from 408,953 ounces for YTD 2017. Based on year-to-date results as
at September 30, 2018, the Company entered the fourth quarter of
the year well positioned to achieve its improved full-year 2018
consolidated production guidance of more than 635,000 ounces, which
was increased from more than 620,000 ounces on August 1, 2018 with
the release of the Company’s Q2 2018 financial results.
Review of Operating Mines
Fosterville
The Fosterville Mine produced a record 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%. Q3 2018
production increased 47% from 61,535 ounces in Q3 2017, when the
mine processed 143,326 tonnes at an average grade of 14.1 g/t and
average recoveries of 94.7%. Production in Q3 2018 increased 17%
from 77,462 ounces in Q2 2018, reflecting a 24% increase in the
average grade. During Q2 2018, a total of 121,342 tonnes was
processed at an average grade of 20.6 g/t and average recoveries of
96.2%. During Q3 2018, the Company commissioned a second gravity
circuit at Fosterville, which resulted in a spike in production as
gold previously contained in the recirculating load of the grinding
circuit was recovered through the new gravity circuit. In addition,
the first Swan Zone stope was mined and processed during the
quarter, which contributed over 7,500 ounces of production at an
average grade of close to 40 g/t, in line with target levels.
Production at Fosterville for YTD 2018 totaled
231,923 ounces, a 26% increase from 184,688 ounces for YTD
2017. YTD 2018 production resulted from processing 358,112
tonnes at an average grade of 20.9 g/t and average recoveries of
96.6%, which compared to processing 428,599 tonnes at an average
grade of 14.2 g/t and average recoveries of 94.4% for YTD 2017. A
47% increase in the average grade compared to YTD 2017 mainly
resulted from the continued transition to mining deeper,
higher-grade stopes, 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 within the Lower Phoenix System. Mined
and processed tonnes are expected to increase in the latter half of
2019 as major capital projects are completed, including new
ventilation, a paste-fill plant and capital and exploration
development.
Macassa
The Macassa Mine produced 55,582 ounces in Q3
2018 based on processing 92,503 tonnes at an average grade of 19.2
g/t and average mill recoveries of 97.3%. Q3 2018 production was
15% higher than the 48,206 ounces produced in Q3 2017, when 93,391
tonnes were processed at an average grade of 16.5 g/t and average
mill recoveries of 97.4%. The increase from the same quarter
in 2017 resulted from a 16% improvement in the average grade,
largely reflecting mining higher-grade stopes due to mine
sequencing and the impact of improvements in grade control
practices. The strong grade performance related mainly to stope
production on or around the 5700-foot level, where mining commenced
at the end of last year and which represents the deepest production
recorded to date in the SMC. Q3 2018 production at Macassa compared
to record quarterly production of 60,571 ounces in Q2 2018, when
the mine processed 89,781 tonnes at an average grade of 21.5 g/t
and average recoveries of 97.7%. The change from the previous
quarter related to a higher average grade in Q2 2018, mainly
reflecting the mining of higher-grade stopes and a greater impact
from positive grade reconciliations during the previous
quarter.
Production at Macassa for YTD 2018 totaled
170,190 ounces, a 19% increase from 142,628 ounces for YTD 2017.
YTD 2018 production resulted from processing 268,945 tonnes at an
average grade of 20.2 g/t and average recoveries of 97.5%. All
tonnes processed in YTD 2018 were from mine production. For YTD
2017, a total of 289,935 tonnes were processed at an average grade
of 15.7 g/t. Of tonnes processed for YTD 2017, 267,924 tonnes
related to mine production and averaged 16.9 g/t, with the
remaining 22,011 tonnes being drawn from low-grade stockpiles and
averaging 1.6 g/t. The 20% increase in the average grade from
mine production for YTD 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 Q3 2018, the Holt mine achieved record
quarterly production of 20,609 ounces, a 21% increase from 16,995
ounces in Q3 2017 and 50% higher than 13,712 ounces the previous
quarter. The increase in production from both prior periods
resulted from a combination of higher tonnage and improved average
grades. Production in Q3 2018 resulted from processing 135,849
tonnes at an average grade of 5.0 g/t and average recoveries of
95.0%, which compared to 124,394 tonnes being processed at an
average grade of 4.5 g/t and average recoveries of 94.5% in Q3 2017
and 95,343 tonnes being processed at an average grade of 4.8 g/t
and average recoveries of 94.2% in Q2 2018. During Q2 2018, the
mine had a 21-day planned shutdown in order to replace
approximately 700 guides on the Holt shaft, which impacted both
tonnes processed and ounces produced for the quarter.
For YTD 2018, Holt produced 50,996 ounces, an 8%
increase from 47,414 ounces for YTD 2017. The increase in
production mainly reflected a 5% improvement in mill throughput, to
353,472 tonnes at and average grade of 4.7 g/t and average
recoveries of 94.7%, which compared 335,493 tonnes processed at an
average grade of 4.6 g/t and average recoveries of 94.7% for YTD
2017.
Taylor
Gold production from the Taylor Mine during Q3
2018 totaled 13,333 ounces, based on processing 94,092 tonnes at an
average grade of 4.7 g/t and average recoveries of 94.3%. Q3 2018
production increased 20% from Q3 2017, when production totaled
11,066 ounces based on 71,897 tonnes processed at an average grade
of 5.0 g/t and average recoveries of 95.5%. Production in Q3 2018
was 3% higher than the previous quarter, when a total of 99,711
tonnes were processed at an average grade of 4.3 g/t and average
recoveries of 94.1%.
For YTD 2018, Taylor produced 39,328 ounces from
processing 278,266 tonnes at an average grade of 4.7 g/t and
average recoveries of 94.6%. YTD 2018 production compared to YTD
2017 production of 34,223 ounces, which resulted from processing
202,706 tonnes at an average grade of 5.5 g/t and average
recoveries of 96.2%.
Q3 and YTD 2018 Financial Results and Conference Call
Details
The Company will release its financial and
operating results for Q3 and YTD 2018 after the market close on
Tuesday, October 30, 2018. The Company will then host a conference
call to review the results the next morning (Wednesday, October 31,
2018) at 8:00 am ET. Those wishing to join the call can do so using
the telephone numbers listed below. The call will also be webcast
and available on the Company’s website at www.klgold.com.
Date: |
WEDNESDAY, October 31,
2018 |
Conference ID: |
6592814 |
Time: |
8:00 am ET |
Toll-free number: |
(833) 241-7254 |
International callers: |
(647) 689-4218 |
Webcast URL: |
https://event.on24.com/wcc/r/1822279/6028C5351514369158F95452E33B0C1D |
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 635,000 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, and its interim financial
statements and related MD&A for the period ended June 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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