Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or
the “
Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today
announced that the Company has revised and increased its
consolidated three-year production guidance and improved its
unit-cost guidance for 2019. The Company also announced today
Mineral Reserve and Mineral Resource estimates for December 31,
2018, which include growth in Mineral Reserve ounces and average
grades at both Fosterville and Macassa, as well as on a
consolidated basis.
Key Highlights of the Production
Guidance and Mineral Reserve Estimates Include:
- Potential for a million ounces in 2019 with
three-year production guidance increased to 920,000 – 1,000,000
ounces for this year, 930,000 – 1,010,000 ounces for 2020 and
995,000 – 1,055,000 for 2021; Fosterville three-year guidance
revised to 550,000 – 610,000 ounces for 2019 and 2020, with
production guidance for 2021 remaining unchanged at 570,000 –
610,000 ounces, respectively; Production to resume at Holloway,
with 20,000 ounces expected in 2019 increasing to 50,000 ounces by
2021
- Consolidated unit-cost guidance for 2019
improved, with operating cash costs per ounce guidance
revised to $300 – $320 from $360 – $380 previously, with AISC per
ounce sold improved to $520 – $560 compared to previous guidance of
$630 – $680; Fosterville’s 2019 operating costs per ounce sold
guidance improved to $170 – $190 from $200 – $220 previously
- Consolidated Mineral Reserves increase 1.1 million
ounces or 24% to 5,750,000 ounces @ 15.8 grams per tonne
(“g/t”) at December 31, 2018 (total additions of 1,860,000 ounces
before depletion of 750,000 ounces)
- Fosterville Mineral Reserves increase 1,020,000 ounces
or 60% to 2,720,000 ounces @ 31.0 g/t at December 31, 2018
from 1,700,000 ounces @ 23.1 g/t (total additions in 2018 of
1,386,000 ounces before depletion of 366,000 ounces); Growth in
Mineral Reserves at December 31, 2018 reflects 34% increase in
average grade and 19% growth in total tonnes, to 2,720,000 tonnes
from 2,290,000 tonnes at December 31, 2017
- Mineral Reserves at Macassa increase 11% to
2,250,000 ounces @ 21.9 g/t from 2,030,000 ounces @ 21.0 g/t at
December 31, 2017 (total additions of 464,000 ounces before
depletion of 244,000 ounces)
Tony Makuch, President and Chief Executive
Officer of Kirkland Lake Gold, commented: “Since November 2016,
Fosterville has been transformed into one of the world’s
highest-grade, most profitable gold mines, which has greatly
benefited Kirkland Lake Gold and its shareholders. The completion
of Fosterville’s December 31, 2018 Mineral Reserve and Mineral
Resource estimates, with the related revisions to its life of mine
plan and production profile, have taken that transformation to an
even higher level, with the potential for much more to come.
Largely driven by the 34% increase in the Fosterville Mineral
Reserve grade, we are now on track to achieve significantly higher
levels of production at Fosterville in 2019 than previously
expected and could reach one million ounces of annual gold
production as early as this year. Just as encouraging as the growth
in ounces, is the fact that with a higher average grade at
Fosterville, as well as at Macassa, our Mineral Reserve ounces are
more valuable, which means improved unit costs and increased cash
flow per ounce going forward based on current gold prices.
“Looking at our Mineral Reserves in more detail,
the 24% increase in consolidated Mineral Reserves is a testament to
the effectiveness of the infill drilling programs at Fosterville
and Macassa. At Fosterville, there is considerable potential
for further Mineral Reserve growth at a number of areas, including
the Swan Zone, other parts of the Lower Phoenix system, Harrier and
a number of other targets, like Robbin’s Hill, where early
exploration results demonstrate the potential for attractive
economic orebodies. Turning to Macassa, we converted close to half
a million ounces of Mineral Resources to Mineral Reserves in 2018
and have a number of high-potential areas in and around the South
Mine Complex (“SMC”) that we are targeting for future growth in
Mineral Reserves and Mineral Resources.”
Improved 2019 Full-Year
Guidance
On February 21, 2019, the Company announced
revised and improved full-year 2019 consolidated guidance. The
revision included increasing guidance for consolidated production
to 920,000 – 1,000,000 ounces from the previous guidance of 740,000
– 800,000 ounces, announced on December 11, 2018. The revision to
consolidated production guidance resulted from an increase in
production guidance in 2019 for Fosterville to 550,000 – 610,000
ounces from 390,000 – 430,000 ounces, with the improvement related
to changes to the mine plan to provide access to high-grade
Swan Zone stopes earlier than previously expected, as well as
increased average grades at the mine included in the December 31,
2018 Mineral Reserve and Mineral Resource estimates. Also
contributing to the increase in consolidated production guidance
was the decision to resume operations at the Holloway mine, which
is expected to contribute approximately 20,000 ounces of production
in 2019.
A number of other components of the Company’s
full-year 2019 guidance have been revised as a result of the
increase in target production. Operating cash costs per ounces sold
in 2019 are now targeted at $300 –$320 compared to $360 - $380
previously. Fosterville’s operating cash costs per ounce sold
guidance is revised to $170 – $190 from $200 – $220. New full-year
2019 guidance for operating cash costs per ounces sold at Holloway
is introduced at $760 – $780 as a result of the restart of
operations at the mine. Full-year 2019 operating cash costs on a
consolidated basis is revised to $290 – $300 from $270 – $280 to
reflect the addition of close to $20 million of operating cash
costs related to production at the Holloway mine. AISC per
ounce sold guidance for full-year 2019 is also improved, to $520 –
$560 compared to $630 – $680 in the initial guidance released on
December 11, 2018. The significant improvement in AISC per ounce
guidance mainly reflects the increase in target production at
Fosterville.
Full-Year 2019 Consolidated Guidance
|
Revised
Guidance |
Initial
Guidance |
($ millions unless otherwise stated) |
February 21,
2019 |
December 11,
2018 |
Gold production (kozs) 1 |
920 - 1,000 |
740 – 800 |
Operating cash costs/ounce sold ($/oz)2 |
300 - 320 |
360 – 380 |
AISC/ounce sold ($/oz)2 |
520 - 560 |
630 – 680 |
Operating cash costs2 |
290 - 300 |
270 – 280 |
Royalty costs |
25 - 30 |
25 – 30 |
Sustaining capital2 |
150 - 170 |
150 – 170 |
Growth capital2,3 |
155 - 165 |
155 – 165 |
Exploration and evaluation |
100 - 120 |
100 – 120 |
Corporate G&A expense3 |
26 - 28 |
26 – 28 |
(1) Production and unit-cost guidance for 2019 does not include
results for the Northern Territory.(2) See “Non-IFRS Measures” set
out starting on page 35 of the MD&A for the three and nine
months ending September 30,2 018 for further details. The most
comparable IFRS Measure for operating cash costs is production
costs, as presented in the Consolidated Statements of Operations
and Comprehensive Income, and total additions and construction in
progress for sustaining and growth capital. Operating cash costs
per ounce and AISC per ounce sold are comparable to production
costs on a unit basis. Operating cash costs, operating cash cost
per ounce sold and AISC per ounce sold reflect an average US$ to C$
exchange rate of 1.33 and a US$ to A$ exchange rate of 1.39.(3)
Includes general and administrative costs and severance payments.
Excludes non-cash share-based payment expense.
Improved Three-Year Production
Guidance1
On February 21, 2019, the Company announced
revisions to its three-year production guidance. The increases
reflected higher levels of target production at Fosterville due to
a significant increase in the average grade in the mine’s December
31, 2019 Mineral Reserve and Mineral Resource estimates. In
addition, the planned restart of operations at the Holloway mine is
expected to contribute an additional 20,000 ounces of production in
2019, 30,000 ounces in 2020 and 50,000 ounces in 2021.
Three-Year Production Guidance
Revised (Feb. 21/19) |
Macassa |
Holt Complex2 |
Fosterville |
Consolidated |
2019 (kozs) |
230 – 240 |
140 – 150 |
550 – 610 |
920 – 1,000 |
2020 (kozs) |
230 – 240 |
150 – 160 |
550 – 610 |
930 – 1,010 |
2021 (kozs) |
245 – 255 |
180 – 190 |
570 – 610 |
995 – 1,055 |
(1) Three-year
production guidance does not include any production from the
Northern Territory. |
(2) Includes
production from the Holt mine, Holloway mine and Taylor mine. |
Initial
(Dec. 11/18) |
Macassa |
Holt Complex2 |
Fosterville |
Consolidated |
2019 (kozs) |
230 –
240 |
120 –
130 |
390 –
430 |
740 –
800 |
2020 (kozs) |
230 –
240 |
120 –
130 |
500 –
540 |
850 –
910 |
2021 (kozs) |
245 –
255 |
130 –
140 |
570 –
610 |
970 –
1,005 |
(1) Three-year
production guidance does not include any production from the
Northern Territory. |
(2) Includes
production from the Holt mine, Holloway mine and Taylor mine. |
CONSOLIDATED MINERAL RESERVES AND
MINERAL RESOURCES AS AT DECEMBER 31, 2018
Mineral Reserves and Mineral Resources as at
December 31, 2018 were estimated using a long-term gold price of
$1,230 per ounce (C$1,635 per ounce; A$1,710 per ounce). All
Mineral Resource estimates are provided exclusive of Mineral
Reserves. Comparisons to previous Mineral Reserves and Mineral
Resources in this news release are to estimates as at December 31,
2017. For more historical comparisons, Mineral Resource estimates
for the Australian operations prior to the mid-year 2017 Mineral
Reserve and Mineral Resource estimates for Fosterville, released in
June 2017, were calculated inclusive of Mineral Reserves and,
therefore, are not directly comparable to the December 31, 2018 and
December 31, 2017 estimates. Detailed footnotes for the December
31, 2018 Mineral Reserve and Mineral Resource estimates are
provided later in this news release.
CONSOLIDATED MINERAL RESERVE ESTIMATE
(EFFECTIVE DECEMBER 31, 2018)
|
December 31, 2018 |
|
December 31, 2017 |
|
Tonnes (000's) |
Grade(g/t) |
Gold Ozs(000’s) |
Depleted Oz2017 (000’s) |
Tonnes (000's) |
Grade(g/t) |
Gold Ozs(000’s) |
Macassa |
3,190 |
21.9 |
2,250 |
244 |
3,010 |
21.0 |
2,030 |
Taylor |
751 |
4.9 |
117 |
64 |
1,090 |
4.8 |
167 |
Holt |
3,580 |
4.3 |
491 |
75 |
3,600 |
4.2 |
486 |
Hislop(1) |
176 |
5.8 |
33 |
0 |
176 |
5.8 |
33 |
Holloway(1) |
257 |
4.3 |
36 |
1 |
54 |
5.8 |
10 |
Total CDN Operations |
7,950 |
11.4 |
2,920 |
384 |
7,930 |
10.7 |
2,730 |
Fosterville |
2,720 |
31.0 |
2,720 |
366 |
2,290 |
23.1 |
1,700 |
Northern Territory(1) |
666 |
5.0 |
107 |
0 |
2,800 |
2.4 |
215 |
Total AUS Operations |
3,390 |
25.9 |
2,820 |
366 |
5,090 |
11.7 |
1,910 |
Total |
11,340 |
15.8 |
5,750 |
750 |
13,020 |
11.1 |
4,640 |
(1) The Hislop mine is a
formerly producing open-pit mine acquired as part of the St Andrew
Goldfields acquisition in January 2016. Hislop has not been
operated by the Company since the acquisition. The Holloway mine
was placed on care and maintenance effective December 31, 2016. The
Cosmo mine and Union Reefs mill were placed on care and maintenance
effective June 30, 2017. |
CONSOLIDATED MEASURED & INDICATED MINERAL RESOURCES
(EFFECTIVE DECEMBER 31, 2018)
Measured & Indicated |
December 31, 2018 |
December 31, 2017 |
|
Tonnes(000's) |
Grade(g/t) |
Gold Ozs(000’s) |
Tonnes (000's) |
Grade(g/t) |
Gold Ozs(000’s) |
Macassa |
1,787 |
17.1 |
982 |
3,800 |
17.1 |
2,090 |
Taylor |
826 |
5.0 |
133 |
1,830 |
6.2 |
370 |
Holt |
6,883 |
4.0 |
895 |
6,510 |
4.1 |
860 |
Aquarius |
22,300 |
1.3 |
926 |
22,300 |
1.3 |
930 |
Holloway |
1,955 |
4.0 |
251 |
1,370 |
5.3 |
230 |
Hislop |
1,147 |
3.6 |
132 |
1,150 |
3.6 |
130 |
Ludgate |
522 |
4.1 |
68 |
520 |
4.1 |
70 |
Canamax |
240 |
5.1 |
39 |
240 |
5.1 |
40 |
Total CDN Operations |
35,660 |
3.0 |
3,426 |
37,720 |
3.9 |
4,720 |
|
December 31, 2018 |
December 31, 2017 |
Fosterville |
14,800 |
4.4 |
2,110 |
13,900 |
4.8 |
2,150 |
Northern Territory |
22,200 |
2.5 |
1,750 |
24,100 |
2.3 |
1,810 |
Total AUS Operations |
36,900 |
3.3 |
3,860 |
38,000 |
3.2 |
3,960 |
CONSOLIDATED INFERRED MINERAL RESOURCES
(EFFECTIVE DECEMBER 31, 2018)
Inferred |
December 31, 2018 |
December 31, 2017 |
|
Tonnes000's) |
Grade(g/t) |
Gold Ozs(000’s) |
Tonnes(000's) |
Grade(g/t) |
Gold Ozs(000’s) |
Macassa |
610 |
16.7 |
328 |
1,920 |
22.2 |
1,370 |
Taylor |
1,988 |
5.3 |
337 |
2,570 |
5.2 |
430 |
Holt |
8,523 |
4.7 |
1,286 |
8,000 |
4.8 |
1,220 |
Holloway |
5,309 |
4.1 |
706 |
2,710 |
5.2 |
460 |
Hislop |
797 |
3.7 |
95 |
800 |
3.7 |
100 |
Ludgate |
1,396 |
3.6 |
162 |
1,400 |
3.6 |
160 |
Card |
238 |
3.3 |
25 |
240 |
3.3 |
30 |
Canamax |
170 |
4.3 |
23 |
170 |
4.3 |
20 |
Runway |
213 |
3.7 |
25 |
210 |
3.7 |
20 |
Total CDN Operations |
19,240 |
4.8 |
2,990 |
18,020 |
6.6 |
3,810 |
Fosterville |
10,300 |
5.5 |
1,830 |
8,280 |
7.1 |
1,900 |
Northern Territory |
18,100 |
2.6 |
1,490 |
16,300 |
2.5 |
1,280 |
Total AUS Operations |
28,400 |
3.6 |
3,320 |
24,580 |
4.0 |
3,180 |
CANADIAN OPERATIONS MINERAL RESERVES AND MINERAL
RESOURCES AS AT DECEMBER 31, 2018
Macassa
Mineral Reserves at Macassa in 2018 increased
11% after depletion of approximately 244,000 ounces, with total
Mineral Reserves at December 31, 2018 of 2,250,000 ounces at an
average grade of 21.9 g/t, which compared to Mineral Reserves of
2,030,000 ounces at an average grade of 21.0 g/t at December 31,
2017.
Measured and Indicated (“M&I”) Mineral
Resources at December 31, 2018 totaled 982,000 ounces at an average
grade of 17.1 g/t, while Inferred Mineral Resources totaled 328,000
ounces at an average grade of 16.7 g/t. By comparison, Mineral
Resources at December 31, 2017 totaled M&I Mineral Resources of
2,090,000 ounces at an average grade of 17.1 g/t, and Inferred
Mineral Resources of 1,370,000 ounces at an average grade of 22.2
g/t. The change in Mineral Resources compared to the prior year
resulted from conversion of 464,000 ounces of Mineral Resources to
Mineral Reserves. In addition, following a review of existing
Mineral Resources, the Company determined that approximately 1.0
million ounces of Inferred Mineral Resources and 0.6 million
ounces of M&I Mineral Resources should be removed from Mineral
Resources, largely in areas of historic mining outside of the SMC,
with some additional deletions relating to reinterpretations based
on new drilling.
During 2019, the Company is planning
approximately 90,000 metres of underground drilling at Macassa,
using three underground drills. The 2019 drilling program is mainly
targeting the continued expansion of the SMC to the east, the west
and to depth, with the aim of growing Mineral Resources in support
of future growth in Mineral Reserves.
|
December 31, 2018 |
December 31, 2017 |
% Change |
Macassa |
Tonnes (000's) |
Grade(g/t) |
GoldOunces(000’s) |
Tonnes(000's) |
Grade(g/t) |
GoldOunces(000’s) |
GoldGrade |
GoldOunces |
Mineral Reserves |
|
|
|
|
|
|
|
|
Proven |
288 |
21.7 |
201 |
386 |
16.7 |
207 |
30 |
-3 |
Probable |
2,900 |
22.0 |
2,050 |
2,620 |
21.7 |
1,830 |
-1 |
12 |
Proven + Probable |
3,190 |
21.9 |
2,250 |
3,010 |
21.0 |
2,030 |
4 |
11 |
Mineral Resources |
Exclusive of Mineral Reserves |
Exclusive of Mineral Reserves |
|
Measured |
453 |
18.4 |
268 |
1,570 |
17.8 |
900 |
3 |
-70 |
Indicated |
1,335 |
16.6 |
714 |
2,230 |
16.6 |
1,190 |
-1 |
-40 |
Measured + Indicated |
1,787 |
17.1 |
982 |
3,800 |
17.1 |
2,090 |
4 |
58 |
Inferred |
610 |
16.7 |
328 |
1,920 |
22.2 |
1,370 |
-25 |
-76 |
Taylor
Mineral Reserves at Taylor at December 31, 2018
totaled 117,000 ounces at an average grade of 4.9 g/t, which
compared to Mineral Reserves at December 31, 2017 of 167,000 ounces
at an average grade of 4.8 g/t. The reduction in Mineral Reserves
in 2018 reflected 64,000 ounces of depletion that was not replaced
through the conversion of Mineral Resources. M&I Mineral
Resources at Taylor at December 31, 2018 totaled 133,000 ounces at
an average grade of 5.0 g/t, which compared to M&I Mineral
Resources at December 31, 2017 of 370,000 ounces at an average
grade of 6.2 g/t. Inferred Mineral Resources totaled 337,000 ounces
at an average grade of 5.3 g/t at December 31, 2018 versus 430,000
ounces at an average grade of 5.2 g/t at the end of 2017. The
reduction in Mineral Resources compared to the December 31, 2017
estimates reflected reinterpretations of zones and weaker than
expected grade continuity in some areas, as well as a concentration
of drill metres on step-out drilling aimed at identifying new areas
of gold mineralization and following up on previous extensions of
gold mineralization rather than resource conversion.
In 2019, the Company is planning approximately
44,000 metres of surface and underground drilling (26,000 metres
from surface and 18,000 metres from underground). Key targets of
the 2019 drilling program will be areas below and to the East of
the 1004 Zone of the West Porphyry Deposit.
|
December 31, 2018 |
December 31, 2017 |
% Change |
Taylor |
Tonnes (000's) |
Grade(g/t) |
GoldOunces(000’s) |
Tonnes(000's) |
Grade(g/t) |
GoldOunces(000’s) |
GoldGrade |
GoldOunces |
Mineral Reserves |
|
|
|
|
|
|
|
|
Proven |
- |
- |
- |
445 |
5.5 |
78 |
N/A |
N/A |
Probable |
751 |
4.9 |
117 |
646 |
4.3 |
89 |
14 |
31 |
Proven + Probable |
751 |
4.9 |
117 |
1,090 |
4.8 |
167 |
2% |
-30% |
Mineral Resources |
Exclusive of Mineral Reserves |
Exclusive of Mineral Reserves |
|
|
Measured |
- |
- |
- |
590 |
8.1 |
150 |
N/A |
N/A |
Indicated |
826 |
5.0 |
133 |
1,240 |
5.3 |
210 |
-6 |
-37 |
Measured + Indicated |
826 |
5.0 |
133 |
1,830 |
6.2 |
370 |
-19 |
-64 |
Inferred |
1,988 |
5.3 |
337 |
2,570 |
5.2 |
430 |
2 |
-22 |
Holt
Mineral Reserves at the Holt mine at December
31, 2018 totaled 491,000 ounces at an average grade of 4.3 g/t, a
slight increase from 486,000 ounces at an average grade of 4.2 g/t
at December 31, 2017. The mine converted 81,000 ounces of Mineral
Resources to Mineral Reserves, which more than offset the 75,000
ounces of depletion during 2018. Measured and indicated resources
totaled 895,000 ounces at an average grade of 4.0 g/t, a 4%
increase from 860,000 ounces at an average grade of 4.1 g/t at
December 31, 2017. Inferred Mineral Resources at December 31, 2018
totaled 1,286,000 ounces at an average grade of 4.7 g/t, 5% higher
than 1,220,000 ounces at an average grade of 4.8 g/t at the same
time the previous year.
The Company is not planning extensive
exploration drilling in 2019 subject to completing a revised
royalty agreement relating to the Holt properties.
|
December 31, 2018 |
December 31, 2017 |
% Change |
Holt |
Tonnes (000's) |
Grade(g/t) |
GoldOunces(000’s) |
Tonnes(000's) |
Grade(g/t) |
GoldOunces(000’s) |
GoldGrade |
GoldOunces |
Mineral Reserves |
|
|
|
|
|
|
|
|
Proven |
1,930 |
4.1 |
253 |
1,770 |
4.0 |
229 |
3 |
10 |
Probable |
1,660 |
4.5 |
238 |
1,830 |
4.4 |
257 |
2 |
-7 |
Proven + Probable |
3,580 |
4.3 |
491 |
3,600 |
4.2 |
486 |
2 |
1 |
Mineral Resources |
Exclusive of Mineral Reserves |
Exclusive of Mineral Reserves |
|
|
Measured |
4,036 |
4.1 |
527 |
3,730 |
4.1 |
500 |
- |
5 |
Indicated |
2,847 |
4.0 |
367 |
2,780 |
4.1 |
370 |
-2 |
-1 |
Measured + Indicated |
6,883 |
4.0 |
895 |
6,510 |
4.1 |
860 |
-2 |
4 |
Inferred |
8,523 |
4.7 |
1,286 |
8,000 |
4.8 |
1,220 |
-2 |
5 |
Holloway
The Company announced today plans to resume
operations at the Holloway mine as a result of entering into an
amended and restated royalty agreement with Franco-Nevada
Corporation, which will establish a fixed 3% net smelter returns
royalty from the Holloway properties. With a planned restart of
production activities, the Company is now targeting approximately
20,000 ounces of production in 2019, growing to approximately
50,000 ounces by 2021.
At December 31, 2018, Mineral Reserves at the
Holloway mine totaled 36,000 ounces at an average grade of 4.3 g/t,
which compared to Mineral Reserves of 10,000 ounces at an average
grade of 5.8 g/t at December 31, 2017. M&I Mineral Resources at
December 31, 2018 totaled 251,000 ounces at an average grade of 4.0
g/t, while Inferred Mineral Resources totaled 706,000 ounces at an
average grade of 4.1 g/t. By comparison, M&I Mineral Resources
at December 31, 2017 totaled 230,000 ounces at an average grade of
5.2 g/t, while Inferred Mineral Resources totaled 540,000 ounces at
an average grade of 5.2 g/t.
|
December 31, 2018 |
December 31, 2017 |
% Change |
Holloway |
Tonnes (000's) |
Grade(g/t) |
GoldOunces(000’s) |
Tonnes(000's) |
Grade(g/t) |
GoldOunces(000’s) |
GoldGrade |
GoldOunces |
Mineral Reserves |
|
|
|
|
|
|
|
|
Proven |
24 |
3.8 |
3 |
- |
- |
- |
- |
10 |
Probable |
233 |
4.4 |
33 |
54 |
5.8 |
10 |
-24 |
230 |
Proven + Probable |
257 |
4.3 |
36 |
54 |
5.8 |
10 |
-26 |
260 |
Mineral Resources |
Exclusive of Mineral Reserves |
Exclusive of Mineral Reserves |
|
|
Measured |
286 |
3.8 |
35 |
156 |
4.1 |
21 |
83 |
66 |
Indicated |
1,669 |
4.0 |
217 |
1,211 |
5.4 |
210 |
-26 |
3 |
Measured + Indicated |
1,955 |
4.0 |
251 |
1,367 |
5.2 |
230 |
43 |
9 |
Inferred |
5,309 |
4.1 |
706 |
2,710 |
5.2 |
460 |
-21 |
53 |
AUSTRALIAN OPERATIONS MINERAL RESERVES AND MINERAL
RESOURCES AS AT DECEMBER 31, 2018
Fosterville
In 2018, the transformation of Fosterville into
one of the world’s most profitable, highest-grade gold mines gained
further momentum. Exploration work during the year at Fosterville
focused on infill and extension drilling at a number of in-mine
targets, as well as work to evaluate district targets in close
proximity to the mine. Encouraging infill drilling results from the
Swan Zone were reported in July, September and December in support
of Mineral Resource conversion into Mineral Reserves. In addition,
development of an exploration drift at Harrier South at Fosterville
commenced during Q2 2018, with drilling from the drift commencing
in Q4 2018 in order to test the depth potential of the Harrier
South system. Harrier is a highly attractive exploration target
where concentrations of quartz veining with visible gold have been
intersected similar to those found at the Lower Phoenix system near
the high-grade Swan Zone.
Largely based on the success of the Swan Zone
infill drilling, Mineral Reserves at December 31, 2018 increased
1,020,000 ounces from the December 31, 2017 Mineral Reserve, to
2,720,000 ounces at an average grade of 31.0 g/t from 1,700,000
ounces at an average grade of 23.1 g/t at December 31, 2017. The
increase in ounces represented 60% growth, while the average grade
was 34% higher than the prior year’s Mineral Reserve estimate. The
60% increase in Mineral Reserve ounces was achieved after depletion
of 366,000 ounces through 2018 gold production, resulting in total
additions to Mineral Reserves of 1,386,000 ounces. With the
completion of the December 31, 2018 Mineral Reserve and Mineral
Resource estimates, the Mineral Reserve at Fosterville has grown by
a total of 2,476,000 ounces or 1,015% from 244,000 ounces at
December 31, 2015 Mineral Reserve estimate, the existing Mineral
Reserve when Fosterville was acquired by Kirkland Lake Gold in
November 2016.
Mineral Reserves in the Swan Zone doubled from
the prior year level, increasing to 2,340,000 ounces at an average
grade of 49.6 g/t at December 31, 2018 from 1,160,000 ounces at
61.2 g/t at December 31, 2017. A significant proportion of Swan
Mineral Resources at December 31, 2017 were converted into Mineral
Reserves in the December 31, 2018 estimates, consistent with the
priority placed on Mineral Resource conversion in the 2018 drilling
program. In addition to continued infill drilling to convert
Mineral Resources, future drilling around the Swan Zone will also
target continued expansion of the Zone, including following up on
drill results in 2018 that intersected the Lower Phoenix Gold
System approximately 750 metres down-plunge from the deepest
Mineral Resources in the Swan Zone. Fosterville
continues to have a large base of Mineral Resources to support
future growth in Mineral Reserves, as well as a number of
attractive exploration targets with significant potential to add
future Mineral Resources. At December 31, 2018, M&I Mineral
Resources totaled 2,110,000 ounces at an average grade of 4.4 g/t,
which compared to M&I Mineral Resources of 2,150,000 ounces at
an average grade of 4.8 g/t at December 31, 2017. Inferred Mineral
Resources at December 31, 2018 totaled 1,830,000 ounces at an
average grade of 5.5 g/t, versus 1,900,000 ounces at an average
grade of 7.1 g/t at December 31, 2017.
During 2019, exploration work at Fosterville is
focusing on continuing to extend known mineralized zones and test
new mineralized structures in the Lower Phoenix and Harrier
systems, and at Robbin’s Hill. In addition, work is continuing on
the LODE (“Large Ore Deposit Exploration”) program, which is
evaluating a number of regional targets, some of which are beneath
former open pits along known fault structures around the
Fosterville mine.
|
December 31, 2018 |
December 31, 2017 |
% Change |
Fosterville |
Tonnes (000's) |
Grade(g/t) |
GoldOunces(000’s) |
Tonnes(000's) |
Grade(g/t) |
GoldOunces(000’s) |
GoldGrade |
GoldOunces |
Mineral Reserves |
|
|
|
|
|
|
|
|
Proven |
178 |
16.7 |
96 |
236 |
14.8 |
112 |
13 |
-14 |
Probable |
2,550 |
32.0 |
2,620 |
2,050 |
24.1 |
1,590 |
33 |
65 |
Proven + Probable |
2,720 |
31.0 |
2,720 |
2,290 |
23.1 |
1,700 |
34 |
60 |
Mineral Resources |
Exclusive of Mineral Reserves |
Exclusive of Mineral Reserves |
|
Measured |
1,900 |
2.9 |
177 |
1,940 |
2.9 |
181 |
- |
-2 |
Indicated |
12,900 |
4.7 |
1,930 |
11,900 |
5.1 |
1,970 |
-8 |
-2 |
Measured + Indicated |
14,800 |
4.4 |
2,110 |
13,900 |
4.8 |
2,150 |
-8 |
-2 |
Inferred |
10,300 |
5.5 |
1,830 |
8,280 |
7.1 |
1,900 |
-23 |
-4 |
|
December 31, 2018 |
December 31, 2017 |
% Change |
Swan(1) |
Tonnes (000's) |
Grade(g/t) |
GoldOunces(000’s) |
Tonnes(000's) |
Grade(g/t) |
GoldOunces(000’s) |
GoldGrade |
GoldOunces |
Mineral Reserves |
|
|
|
|
|
|
|
|
Proven |
62 |
27.6 |
55 |
0 |
0 |
0 |
N/A |
N/A |
Probable |
1,410 |
50.6 |
2,290 |
588 |
61.2 |
1,160 |
-17 |
97 |
Proven + Probable |
1,470 |
49.6 |
2,340 |
588 |
61.2 |
1,160 |
-19% |
102 |
Mineral Resources |
Exclusive of Mineral Reserves |
Exclusive of Mineral Reserves |
|
|
Measured |
2 |
59.6 |
4 |
0 |
0.0 |
0 |
N/A |
N/A |
Indicated |
32 |
15.7 |
16 |
46 |
116 |
171 |
-86 |
-91 |
Measured + Indicated |
34 |
18.3 |
20 |
46 |
116 |
171 |
-84 |
-88 |
Inferred |
249 |
13.4 |
107 |
570 |
36.6 |
671 |
-63 |
-84 |
(1) The Swan Zone Mineral Reserve and Mineral Resource
estimates are components of the estimates for the Fosterville
mine.
Figure 1.
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/b130f2c7-7fca-429a-aaa3-11cd0b2e571f
Northern Territory (Cosmo Mine/Union
Reefs Mill)
On June 30, 2017, Kirkland Lake Gold suspended
operations at the Cosmo mine and Union Reefs mill with the
operations being placed on care and maintenance. Following the move
to care and maintenance, the Cosmo mine and Union Reef mill are
being maintained in a state of readiness to resume operation in the
event that new Mineral Reserves are delineated which establish an
economic deposit or deposits in the Northern Territory.
In 2018, an extensive program of surface and
underground exploration drilling and development was completed
involving approximately 114,700 metres of drilling and the
development of three exploration drifts at the Cosmo mine into the
Lantern Deposit. On April 30, 2018, the Company announced
that high-grade, visible-gold bearing mineralization had been
intersected 1,000 metres below surface down plunge of former
producing open pits at Union Reefs, the location of the Company’s
processing facility. The results highlighted the potential that
exists to establish additional sources of gold production in the
Northern Territory. On November 5, 2018, the Company reported
additional high-grade, visible-gold bearing mineralization at the
Lady Alice Deposit at Union Reefs and also announced the discovery
of high-grade mineralization at depth to the south of the existing
Mineral Resources at Union Reefs. On December 11, 2018, the Company
announced that work in the Northern Territory was moving to the
advanced exploration phase, with a focus on a potential restart of
mining and milling operations as early as the second half of
2019.
Mineral Reserves in the Northern Territory at
December 31, 2018 totaled 107,000 ounces at 5.0 g/t, which compared
to 215,000 ounces at an average grade of 2.4 g/t at December 31,
2017. The doubling of the average Mineral Reserve grade in the
December 31, 2018 estimate resulted from an increase in the cut-off
grade for the purpose of Mineral Reserve calculations at the Cosmo
mine, the impact of additional drilling at Lantern and the removal
of lower-grade ounces at other targets. M&I Mineral
Resources totaled 1,750,000 ounces at an average grade of 2.5 g/t
versus 1,810,000 ounces at an average grade of 2.3 g/t at December
31, 2017. Inferred Mineral Resources increased 16% at December 31,
2018 to 1,490,000 ounces at an average grade of 2.6 g/t from
1,280,000 ounces at an average grade of 2.5 g/t at December 31,
2016.
In 2019, exploration drilling is focusing on
Mineral Resource growth and definition of the Lantern Deposit and
the continued evaluation of targets at Union Reefs. Advanced
exploration work is progressing towards a possible restart
decision.
|
December 31, 2018 |
December 31, 2017 |
% Change |
Northern Territory |
Tonnes (000's) |
Grade(g/t) |
GoldOunces(000’s) |
Tonnes(000's) |
Grade(g/t) |
GoldOunces(000’s) |
GoldGrade |
GoldOunces |
Mineral Reserves |
|
|
|
|
|
|
|
|
Proven |
33 |
3.1 |
3 |
92 |
3.5 |
112 |
-11 |
-73 |
Probable |
633 |
5.1 |
103 |
2,710 |
2.4 |
1,590 |
113 |
-50 |
Proven + Probable |
666 |
5.0 |
107 |
2,800 |
2.4 |
1,700 |
108 |
-50 |
Mineral Resources |
Exclusive of Mineral Reserves |
Exclusive of Mineral Reserves |
|
Measured |
1,770 |
4.7 |
268 |
1,750 |
4.7 |
264 |
- |
2 |
Indicated |
20,400 |
2.3 |
1,480 |
22,400 |
2.1 |
1,540 |
10 |
-4 |
Measured + Indicated |
22,200 |
2.5 |
1,750 |
24,100 |
2.3 |
1,810 |
9 |
-3 |
Inferred |
18,100 |
2.6 |
1,490 |
16,300 |
2.5 |
1,280 |
4 |
16 |
Technical Reports
The National Instrument 43-101 (“NI 43-101”)
2016 Technical Report for Fosterville dated March 30, 2017 and
effective December 31, 2016 along with the 2017 Technical Report
for Fosterville dated April 2, 2018 and effective December 30, 2017
supports the Company’s end-of-2018 Mineral Reserve and Mineral
Resource disclosure and was prepared by Troy Fuller, MAIG, and Ion
Hann, FAusIMM.
An updated NI 43-101 Technical Report effective
December 31, 2018 will be available on the Company’s SEDAR profile
at www.sedar.com for both the Fosterville and Macassa mines within
45 days of this news release.
Qualified Persons
Pierre Rocque, P.Eng., Vice President, Technical
Services operations is a "qualified person" as defined in NI 43-101
and has reviewed and approved disclosure of the Mineral Reserves
technical information and data for the Canadian assets included in
this news release.
Ian Holland, FAusIMM, Vice President, Australian
Operations is a "qualified person" as defined in NI 43-101 and has
reviewed and approved the Mineral Reserves technical information
and data for the Australian Assets included in this news
release.
Simon Hitchman, FAusIMM (CP), MAIG, Principal
Geologist, is a "qualified person" as such term is defined in NI
43-101 and has reviewed and approved the Mineral Resources
technical information and data for the Australian Assets included
in this news release.
Detailed footnotes related to Mineral Reserve Estimates
(dated December 31, 2018)
- CIM definitions (2014) were followed in the calculation of
Mineral Reserves.
- Mineral Reserves were estimated using a long-term gold price of
US$1,230/oz (C$1,635/oz; A$1,710/oz).
- Cut-off grades for Canadian Assets were calculated for each
stope, including the costs of: mining, milling, General and
Administration, royalties and capital expenditures and other
modifying factors (e.g. dilution, mining extraction, mill
recovery.
- Cut-off grades for Australian Assets from 0.4 g/t Au to 3.0 g/t
Au, depending upon width, mining method and ground conditions;
dilution and mining recovery factors varied by property.
- Mineral Reserves estimates for the Canadian Assets were
prepared under the supervision of P. Rocque, P. Eng.
- Mineral Reserves estimates for the Fosterville property were
prepared under the supervision of Ion Hann, FAusIMM.
- Mineral Reserves estimates for the Northern Territory property
were prepared under the supervision of Pierre Rocque. P. Eng.
- Mineral Reserves for Fosterville relate to Underground Mineral
Reserves and do not include 649,000 tonnes at an average of 7.7 g/t
for 160,000 ounces of Carbon-In-Leach Residues – 25% recovery is
expected based on operating performances.
- Totals may not add exactly due to rounding.
Detailed footnotes related to Mineral
Resource Estimates for Canadian Assets (dated December 31,
2018)
- CIM definitions (2014) were followed in the calculation of
Mineral Resource.
- Mineral Resources are reported Exclusive of Mineral Reserves.
Mineral Resources were calculated according to KL Gold’s Mineral
Resource Estimation guidelines.
- Mineral Resource estimates were prepared under the supervision
of Eric Kallio, P. Geo. Senior Vice President, Exploration.
- Mineral Resources are estimated using a long-term gold price of
US$1,230/oz (C$1,635/oz).
- Mineral Resources were estimated using a 8.6 g/t cut-off grade
for Macassa, a 2.9 g/t cut-off grade for Holt, and a 2.6 g/t
cut-off grade for Taylor, a 3.9 g/t cut-off grade (Holloway), a 2.5
g/t cut-off grade for Canamax, Card, Runway and Ludgate, a 2.2 g/t
cut-off grade for Hislop and 0 g/t cut-off grade for Aquarius.
- Totals may not add up due to rounding.
Detailed footnotes related to Mineral Resource Estimates
for Australian Assets (dated December 31, 2018)
- CIM definitions (2014) were followed in the estimation of
Mineral Resource.
- Mineral Resources are estimated using a long-term gold price of
US$1,230/oz (A$1,710/oz)
- Mineral Resources for the Australian assets are reported
exclusive of Mineral Reserves.
- Mineral Resources at Fosterville were estimated using cut-off
grades 0.7 g/t Au for oxide and 1.0 g/t Au for sulfide
mineralization to potentially open-pitable depths of approximately
100m, below which a cut-off grade of 3.0 g/t Au was used.
- Mineral Resources in the Northern Territory were estimated
using a cut-off grade of 0.5 g/t Au for potentially open pit
mineralization and cut-offs of 1.0 to 2.0g/t Au for underground
mineralization.
- Mineral Resource estimates for the Fosterville property were
prepared under the supervision of Troy Fuller, MAIG.
- Mineral Resource estimates for the Northern Territory
properties were prepared under the supervision of Owen Greenberger,
MAIG.
- Totals may not add up due to rounding.
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
920,000 – 1,000,000 ounces in 2019, 930,000 – 1,010,000 ounces in
2020 and 995,000 – 1,055,000 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 News Release includes certain
"forward-looking statements". All statements other than statements
of historical fact included in this release are forward-looking
statements that involve various risks and uncertainties. These
forward-looking statements include, but are not limited to,
statements with respect to planned exploration programs, costs and
expenditures, changes in Mineral Resources and conversion of
Mineral Resources to proven and probable reserves, and other
information that is based on forecasts of future operational or
financial results, estimates of amounts not yet determinable and
assumptions of management. These forward-looking statements
include, but are not limited to, statements with respect to future
exploration potential, project economics, timing and scope of
future exploration, anticipated costs and expenditures, changes in
Mineral Resources and conversion of Mineral Resources to proven and
probable reserves, and other information that is based on forecasts
of future operational or financial results, estimates of amounts
not yet determinable and assumptions of management.
Any statements that express or involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions or future events or
performance (often, but not always, using words or phrases such as
"expects" or "does not expect", "is expected", "anticipates" or
"does not anticipate", "plans", "estimates" or "intends", or
stating that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved) are not
statements of historical fact and may be "forward-looking
statements." Forward-looking statements are subject to a variety of
risks and uncertainties that could cause actual events or results
to differ from those reflected in the forward-looking statements.
Exploration results that include geophysics, sampling, and drill
results on wide spacings may not be indicative of the occurrence of
a mineral deposit. Such results do not provide assurance that
further work will establish sufficient grade, continuity,
metallurgical characteristics and economic potential to be classed
as a category of Mineral Resource. A Mineral Resource that is
classified as "Inferred" or "indicated" has a great amount of
uncertainty as to its existence and economic and legal feasibility.
It cannot be assumed that any or part of an "indicated Mineral
Resource" or "Inferred Mineral Resource" will ever be upgraded to a
higher category of resource. Investors are cautioned not to assume
that all or any part of mineral deposits in these categories will
ever be converted into proven and probable reserves.
There can be no assurance that forward-looking
statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such
statements. Important factors that could cause actual results to
differ materially from the Company’s expectations include, among
others, risks related to international operations, risks related to
obtaining the permits required to carry out planned exploration or
development work, the actual results of current exploration
activities, conclusions of economic evaluations and changes in
project parameters as plans continue to be refined as well as
future prices of gold, as well as those factors discussed in the
section entitled "Risk Factors" in the Company’s Annual Information
Form and other disclosures of "Risk Factors" by the Company and its
predecessors, available on SEDAR. Although Kirkland Lake Gold has
attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
Cautionary Note to U.S. Investors - Mineral
Reserve and Resource Estimates
All resource and reserve estimates included in
this news release or documents referenced in this news release have
been prepared in accordance with Canadian National Instrument
43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101")
and the Canadian Institute of Mining, Metallurgy and Petroleum (the
"CIM") - CIM Definition Standards on Mineral Resources and Mineral
Reserves, adopted by the CIM Council, as amended (the "CIM
Standards"). NI 43-101 is a rule developed by the Canadian
Securities Administrators, which established standards for all
public disclosure an issuer makes of scientific and technical
information concerning mineral projects. The terms "mineral
reserve", "proven mineral reserve" and "probable mineral reserve"
are Canadian mining terms as defined in accordance with NI 43-101
and the CIM Standards. These definitions differ materially from the
definitions in SEC Industry Guide 7 ("SEC Industry Guide 7") under
the United States Securities Act of 1933, as amended, and the
Exchange Act.
In addition, the terms "Mineral Resource",
"measured Mineral Resource", "indicated Mineral Resource" and
"Inferred Mineral Resource" are defined in and required to be
disclosed by NI 43-101 and the CIM Standards; however, these terms
are not defined terms under SEC Industry Guide 7 and are normally
not permitted to be used in reports and registration statements
filed with the U.S. Securities and Exchange Commission (the "SEC").
Investors are cautioned not to assume that all or any part of
mineral deposits in these categories will ever be converted into
reserves. "Inferred Mineral Resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an Inferred Mineral Resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of Inferred
Mineral Resources may not form the basis of feasibility or
pre-feasibility studies, except in very limited circumstances.
Investors are cautioned not to assume that all or any part of a
Mineral Resource exists, will ever be converted into a Mineral
Reserve or is or will ever be economically or legally mineable or
recovered.
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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