Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or
the “
Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today
announced record production for the third quarter of 2019 (“Q3
2019”) of 248,400 ounces and for the first nine months of 2019
(“YTD 2019”) of 694,873 ounces. Production in Q3 2019 was driven by
record quarterly production at Fosterville totaling 158,327 ounces,
bringing YTD 2019 production at the mine to 427,472 ounces.
Production at Fosterville is expected to increase from Q3 2019
levels in the final quarter of the year, with the mine on track to
achieve its full-year 2019 guidance of 570,000 – 610,000 ounces.
Production at Macassa in Q3 2019 totaled 62,945 ounces, with YTD
2019 production totaling 184,918 ounces. Macassa ended Q3 2019 well
positioned to achieve its full-year 2019 guidance of 240,000 –
250,000 ounces. All dollar amounts are expressed in U.S. dollars,
unless otherwise noted.
The Company’s cash position increased $146
million or 31% during Q3 2019, with total cash and equivalents at
September 30, 2019 totaling $615 million. For YTD 2019, cash and
equivalents increased $283 million or 85% from $332 million at
December 31, 2018.
Highlights of Q3 2019 and YTD 2019
production results:
- Record consolidated
production of 248,400 ounces in Q3 2019, 38% increase from
180,155 ounces in third quarter of 2018 (“Q3 2018”) and 16% higher
than 214,593 ounces the previous quarter (“Q2 2019”) (YTD 2019
consolidated production of 694,873 ounces, 41% increase from
492,484 ounces for first nine months of 2018 (“YTD 2018”))
- Gold poured in Q3
2019 of 252,984 ounces, with consolidated gold sales
totaling 256,276 ounces (YTD 2019 gold poured of 697,977 ounces,
with total gold sales of 701,296 ounces)
- Record quarterly production
at Fosterville totaling 158,327 ounces, an increase of 75%
from 90,618 ounces in Q3 2018 and 13% higher than 140,701 ounces in
Q2 2019 (YTD 2019 production of 427,472 ounces, an 84% increase
from 231,923 ounces in YTD 2018)
- Production at
Macassa in Q3 2019 totaling 62,945 ounces, 13% higher than
55,582 ounces in Q3 2018 and 28% increase from 49,196 ounces the
previous quarter (YTD 2019 production of 184,918 ounces, 9% higher
than 170,190 ounces in YTD 2018)
- Production at Holt
Complex of 27,128 ounces versus 33,955 ounces in Q3 2018
and 24,696 ounces in Q2 2019 (YTD 2019 production of 82,483
ounces compared to 90,371 ounces for YTD 2018).
Other key developments during Q3 2019,
include:
- Exploration success at Macassa
- Underground drilling intersected high-grade gold mineralization
close to 300 metres to the west and 200 metres to the east of South
Mine Complex (“SMC”), encouraging drilling results reported within
new high-grade zone along the Amalgamated Break.
- Continued focus on shareholder returns
- Q2 2019 quarterly dividend of $0.04/share paid on July 12, 2019
to shareholders of record on June 28, 2019 (representing first
quarterly dividend paid in US dollars); with Q3 2019 quarterly
dividend of $0.04/share to be paid on October 11, 2019 to
shareholders of record on September 30, 2019.
- Common share price increased 67% in YTD 2019 on the TSX,
closing on Monday, September 30, 2019 at C$59.35 per share ($44.80
per share on the NYSE; $69.38 per share on the ASX).
Subsequent to end of Q3
2019
- Test processing commences in Northern
Territory
- Test processing of Lantern Deposit
mineralization commenced at the Union Reefs mill in early October
as part of advanced exploration program to evaluate a potential
resumption of operations in the Northern Territory of
Australia.
Tony Makuch, President and Chief Executive
Officer of Kirkland Lake Gold, commented: “Record production in Q3
2019 resulted from strong results at our two high-grade mines,
Fosterville and Macassa. At Fosterville, production continued to
ramp up in the Swan Zone, with both higher tonnage and improved
grades being achieved compared to Q2 2019. Production at
Fosterville has increased every quarter so far in 2019 and we
expect this trend to continue, with the final quarter of 2019
targeted to be our strongest of the year. Turning to Macassa,
tonnes processed increased substantially in Q3 2019 compared to the
previous quarter. We also continued to achieve solid grade
performance in stopes on the 5600, 5700 and 5800 levels of the
South Mine Complex (“SMC”). The strong results at Fosterville and
Macassa, combined with the impact of higher gold prices, drove a
substantial build up in our cash position during Q3 2019, with cash
and equivalents increasing over 30% during the quarter to $615
million at September 30, 2019.”
Q3 and YTD 2019 Production
Results1
|
Q3 2019 |
Q3 2018 |
Q2 2019 |
YTD 2019 |
YTD 2018 |
Fosterville |
|
|
|
|
|
Ore Milled (tonnes) |
119,412 |
113,101 |
111,280 |
370,876 |
358,112 |
Grade (g/t Au) |
41.8 |
25.6 |
39.9 |
36.4 |
20.9 |
Recovery (%) |
98.6 |
97.5 |
98.7 |
98.6 |
96.6 |
Gold Production (ozs) |
158,327 |
90,618 |
140,701 |
427,472 |
231,923 |
Macassa |
|
|
|
|
|
Ore Milled (tonnes) |
85,834 |
92,503 |
72,681 |
236,505 |
268,945 |
Grade (g/t Au) |
23.3 |
19.2 |
21.5 |
24.8 |
20.2 |
Recovery (%) |
97.8 |
97.3 |
97.9 |
98.0 |
97.5 |
Gold Production (ozs) |
62,945 |
55,582 |
49,196 |
184,918 |
170,190 |
Holt Complex2 |
|
|
|
|
|
Ore Milled (tonnes) |
214,542 |
229,996 |
185,398 |
600,726 |
632,083 |
Grade (g/t Au) |
4.2 |
4.9 |
4.4 |
4.5 |
4.7 |
Recovery (%) |
94.2 |
94.7 |
95.0 |
95.0 |
94.7 |
Gold Production (ozs) |
27,128 |
33,955 |
24,696 |
82,483 |
90,371 |
Total Consolidated Production (ozs) |
248,400 |
180,155 |
214,593 |
694,873 |
492,484 |
Total Consolidated Gold Sales (ozs) |
256,276 |
184,517 |
212,091 |
701,296 |
496,585 |
- Numbers may not add due to rounding
- The Holt Complex includes the Holt Mine, Taylor Mine and
Holloway Mine, which all feed the Holt Mill. On February 21, 2019,
the Company announced plans to resume operations at Holloway
following completion of a revised and updated royalty agreement.
Production from Holloway is included in the Company’s commercial
production effective that date.
Performance Against Full-Year 2019
Production Guidance
|
Macassa |
Holt Complex |
Fosterville |
Consolidated |
2019 Guidance (,000 ozs) |
240 – 250 |
140 – 150 |
570 – 610 |
950 – 1,000 |
YTD 2019 Production (ozs) |
184,918 |
82,483 |
427,472 |
694,873 |
YTD 2019 production totaled 694,873 ounces, an
increase of 41% from 492,484 ounces in YTD 2018. The main
contributor to the strong growth compared to YTD 2018 was record
production at Fosterville, mainly due to a significant improvement
in the average grade reflecting the ramp up of production from the
high-grade Swan Zone. Production from Fosterville is expected to
increase during the fourth quarter of 2019 compared to Q3 2019,
with the mine remaining on track to achieve its full-year 2019
guidance of 570,000 – 610,000 ounces. Macassa produced 184,918
ounces for YTD 2019 and ended the third quarter well positioned to
achieve its full-year 2019 production guidance of 240,000 – 250,000
ounces. The Holt Complex produced 82,483 ounces in the first nine
months of 2019, below expected levels, reflecting both lower than
planned throughput levels and average grades. The Company is
currently reviewing future plans for the Holt Complex operations.
On a consolidated basis, the Company continues to target 950,000 –
1,000,000 ounces of production for full-year 2019.
Review of Operating Mines
Fosterville
The Fosterville Mine produced 158,327 ounces, an
increase of 75% from 90,618 ounces in Q3 2018 and 13% higher than
140,701 ounces in Q2 2019. Production in Q3 2019 resulted from
processing 119,412 tonnes at an average grade of 41.8 g/t with
average mill recoveries of 98.6%. The growth in production from
both prior periods reflected higher average grades and an increase
in total tonnes processed. The average grade increased 63% compared
to the average grade of 25.6 g/t in Q3 2018, with the significant
improvement resulting from the ramping up of production in the
high-grade Swan Zone over the last year. During Q3 2018, the first
Swan Zone stope was produced, contributing approximately 7,500
ounces to that quarter’s production. By comparison, during Q3 2019
11 Swan Zone stopes were produced, which contributed approximately
59% of total tonnes processed and 94% of total ounces produced for
the quarter. The increase in average grade from 39.9 g/t the
previous quarter reflected mine sequencing, with higher average
grades from Swan Zone stopes mined during Q3 2019.
Production at Fosterville for YTD 2019 totaled
427,472 ounces, an 84% increase from 231,923 ounces for YTD 2018.
YTD 2019 production resulted from processing 370,876 tonnes at an
average grade of 36.4 g/t and average recoveries of 98.6%. The
increase from YTD 2018 was mainly due to a 74% improvement in the
average grade, largely reflecting the ramp up of production from
the Swan Zone since the end of Q3 2018. Mill throughput for YTD
2019 averaged 1,359 tonnes per day, in line with expected levels
and higher than the 1,312 tonnes per day average achieved in YTD
2018.
Macassa
The Macassa Mine produced 62,945 ounces in Q3
2019, a 13% increase from 55,582 ounces in Q3 2018 and 28% higher
than 49,196 ounces the previous quarter. Production in Q3 2019
resulted from processing 85,834 tonnes at an average grade of 23.3
g/t with average recoveries of 97.8%. The change in production from
Q3 2018 reflected a higher average grade (19.2 g/t in Q3 2018)
resulting from increased mining of high-grade stopes around the
5600, 5700 and 5800 levels of the SMC. The increase compared to the
previous quarter reflected both an increase in the average grade
and higher tonnes processed. Tonnes processed in Q3 2019 averaged
933 tonnes per day versus 799 tonnes per day in Q2 2019, when
production levels were reduced by the impact of excessive water in
the mine during the spring run-off, which limited the use of the
lower loading pocket at the #3 shaft. Also contributing to
increased tonnage in Q3 2019 was the addition of stopes on the 3400
Level to the production plan for the quarter.
Production at Macassa for YTD 2019 totaled
184,918 ounces, an increase of 9% from 170,190 ounces for the same
period in 2018. The increase in production for YTD 2019 reflected a
23% improvement in the average grade, to 24.8 g/t from 20.2 g/t for
YTD 2018. The impact of a higher average grade compared to YTD 2018
more than offset a reduction in tonnes milled in the first nine
months of 2019 versus the same period a year earlier. Tonnes
processed during YTD 2019 averaged 866 per day versus 985 per day
for the same period in 2018.
Holt Complex
During Q3 2019, the Holt Complex produced 27,128
ounces based on processing 214,542 tonnes at an average grade of
4.2 g/t with average recoveries of 94.2%. Production in Q3 2019
compared to production of 33,955 ounces in Q3 2018 when a total of
229,997 tonnes were processed at an average grade of 4.9 g/t with
average recoveries of 94.7%. The change from Q3 2018 reflected
lower production at both the Holt and Taylor mines. At Holt, lower
production levels compared to Q3 2018 resulted from a reduction in
both tonnes processed and average grades. Lower production at
Taylor resulted from reduced tonnes processed, which more than
offset the impact of higher average grades in Q3 2019. Production
in Q3 2019 of 27,128 ounces compared to production of 24,696 ounces
the previous quarter when a total of 185,398 tonnes were processed
at an average grade of 4.4 g/t with average recoveries of 95.0%.
The increase from Q2 2019 reflected higher production at Holloway
as mining continued to ramp up following the resumption of
operations in the first quarter of 2019. Production at Holloway in
Q3 2019 totaled 3,792 ounces compared to 1,560 ounces the previous
quarter. Production from the Holt and Taylor mines was largely
unchanged quarter over quarter.
For YTD 2019, the Holt Complex produced 82,483
ounces from processing 600,726 tonnes at an average grade of 4.5
g/t with average recoveries of 95%. YTD 2019 production compared to
90,371 ounces for YTD 2018 when a total of 632,083 tonnes at an
average grade of 4.7 g/t with average recoveries of 94.7%. The
reduction versus YTD 2018 reflected lower tonnes processed and
average grades at Holt mine and reduced tonnes processed at Taylor.
The Holloway Mine produced 6,413 ounces in YTD 2019 compared to 47
ounces for the same period in 2018 (resulting from the processing
of stockpiled material) when the mine was on care and maintenance.
Northern Territory
Test processing of mineralization from the
Lantern Deposit at the Cosmo mine commenced in early October 2019.
The processing of Lantern mineralization is being undertaken as
part of an advanced exploration program aimed at evaluating a
potential resumption of operations in the Northern Territory of
Australia. The Company’s advanced exploration activities are
focused on drilling and development at the Cosmo Mine to evaluate
both the Lantern and Cosmo deposits, as well as the drilling of a
number of targets at Union Reefs, the location of the Company’s
milling facility, and at Pine Creek.
Qualified Person
Natasha Vaz, 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 growing gold
producer operating in Canada and Australia that produced 723,701
ounces in 2018 and is on track to achieve significant production
growth over the next three years, including target production of
950,000 – 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 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:
changes to production estimates (which assume accuracy of projected
grade, recovery rates, and tonnage estimates and may be impacted by
unscheduled maintenance, labour and other operating or technical
difficulties); fluctuation in gold price; changes in foreign
exchange rates (particularly the Canadian dollar, Australia dollar
and U.S. dollar); disruptions affecting operations; 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 regulations (including tax legislation); 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, 2018 and for the period ended June 30, 2019, which are
filed with the securities regulatory authorities in certain
provinces of Canada and available at www.sedar.com.
Forward looking statements include information
as to plans, strategy and future operational and financial
performance, project timeline, expected production rates, the use
of stockpile inventory, expected recoveries and other statements
that express management’s expectations or estimates on future
production and full-year guidance. While such statements are
considered reasonable by the Company at the time of making such
statements, 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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