KIRKLAND LAKE GOLD INC.
TORONTO - Kirkland Lake Gold Inc. ("Kirkland Lake Gold" or the "Company") (TSX:KGI), announces total gold production of 69,464 ounces for the first quarter of 2016 ("Q1/16") from the Macassa and East Timmins Operations (the Holt, Holloway and Taylor mines).
This number excludes production of 7,189 ounces at East Timmins during the first 25 days of January as the acquisition of St Andrew Goldfields Ltd. ("St Andrew"), closed on January 26. The Company also provides 2016 guidance metrics.
- Q1 production of 69,464 1 ounces from the Macassa Mine Complex and the newly acquired East Timmins Operations.
- Macassa Mine Complex achieves 365 days (1 year) without a lost time injury.
- 2016 guidance provided including production of between 270,000 - 290,000 ounces of gold; Cash Operating Costs of between $800 - $850 (US$600 - US$650); and All-In Sustaining Costs 2 of between $1,300 - $1,350 (US$1,000 - US$1,050).
- Closing cash balance as at March 31, 2016 of $130.5 million.
1 Total production stated excludes production at the East Timmins Operations from January 1 to 25, 2016 (7,189 ounces).
2 AISC costs per ounce sold is a non-GAAP performance measures. While it is a common performance measures in the mining industry it does not have any standardized meaning. The Company provides a reconciliation of its non-GAAP performance measures in its most recent Management Discussion & Analysis ("MD&A"), for the period ended December 31, 2015.
3 All US dollar equivalents are based on a USD to CAD exchange rate of 1.3.
Mr. George Ogilvie, President & Chief Executive Officer commented, "We are pleased to report a solid first quarter of production from the Macassa Mine Complex of 41,054 ounces at a head grade of 15.4 g/t. We have been working diligently on the integration process and are happy to report production from the East Timmins Operations of 21,221 ounces of production, with grades at Taylor averaging 7.6 g/t for the reported period."
"We are providing guidance for 2016 which includes total production of between 270,000 to 290,000 ounces of gold. We are anticipating a total capital spend of $120 million dollars of which $52 million will be focused on advancing capital development at the East Timmins Operations. The exploration budget has been increased to approximately $18 million, with $10 million focused on the Kirkland Lake Camp and $8 million on the East Timmins Operations, mainly for exploration at Taylor and Holloway. We continue to assess the East Timmins properties in order to properly plan for a regional exploration program late in 2016 or beginning in 2017.
"Our team has worked hard over the past 2.5 years to reach where we are today. Currently we have a market capitalization of just under $1 billion; anticipated production between 270,000 – 290,000 ounces of gold; a solid balance sheet of $130.5 million cash in excess of our current obligations due in 2017; and strong future cash flows expected over the next two years.
"Our commitment to operating in a safe and responsible manner continues to pay off, as we have hit a health and safety milestone of operating in excess of 365 days (1 year) with no Lost Time Injuries at the Macassa Mine Complex. Our primary commitment is to our shareholders and stakeholders in the communities in which we operate. I am also extremely pleased that Kirkland Lake Gold was the recipient of the 2015 People's Choice Award in the category of Mining and Forestry as presented by the Kirkland Lake District Chamber of Commerce.
"Our goal has always been to return the business to profitability, deleverage the balance sheet and grow the production profile. In achieving these goals, we have generated significant value for our shareholders. The acquisition and integration of the East Timmins Operations has allowed us to de-risk the business so that we can focus on unlocking future upside for our shareholders within the current suite of assets, and through organic growth in two prolific Canadian mining camps. We strongly believe that with the foundation we have built over the past two years, we have a solid footing for continued success."
Good Grades and Solid Production from the Macassa Mine Complex
In the first quarter of 2016 the Macassa Mine Complex continued to deliver solid operating results. A total of 85,845 tonnes of ore were mined at a head grade of 15.3 g/t and recoveries of 97.3% for 41,054 ounces of gold. The Company poured 40,663 ounces and sold 40,815 ounces of gold during the quarter.
The second new battery haulage truck (MT20) was commissioned and put into service in February. Both of the new haul trucks are performing well and will allow for an increase in capital development in the lower parts of the South Mine Complex ("SMC"), while maintaining the planned ore production rate from this area of the mine.
During Q1/16 the mine averaged 943 tonnes per day ("tpd"), or 1,040 short tons per day. With the integration of the East Timmins Operations which report in metric, Kirkland Lake will report all figures in metric on a go forward basis.
Development on the 5400 Level and 5600 Level in the lower SMC is progressing well. During Q1/16 an exploration drift was completed on the 4250 Level to drill test the '04/Main Break mineralization above the 3400 Level (see press release dated February 23, 2015).
Exploration drilling is underway with one drill rig, and results will be released as they become available.
The Macassa Mine Complex reached a significant milestone by achieving 1 year with no Lost Time Injuries.
The team's continued commitment to delivering on the goals and objectives of the Company while maintaining a safe working environment is commendable.
East Timmins Operations
The East Timmins Operations performed well during the first quarter of 2016 (the period of January 26 to March 31, 2016), with production of 21,221 ounces from the Holt, Holloway and Taylor mines at an average head grade of 5.1 g/t.
Holt generated 74,453 tonnes of ore at a head grade of 4.3 g/t and recoveries of 94.6% for 9,662 ounces of gold.
The Taylor Mine, which declared commercial production in November 2015 and in Q1/16 generated 31,487 tonnes of ore at a head grade of 7.6 g/t and recoveries of 95.8% for 7,347 ounces of gold.
Holloway generated 31,664 tonnes of ore at a head grade of 4.5 g/t and recoveries of 91.1% for 4,212 ounces of gold.
The main focus at the East Timmins Operations was the communication and integration of the operations and team. While we were slightly under budget in the first quarter, we are pleased with the progress and enthusiasm the team has made since becoming part of Kirkland Lake Gold.
The budget for the East Timmins Operations includes approximately $50 million in capital expenditures which should show positive results from the operations over the next 12 to 18 months.