Operating Results for end of Dec 3, 2016TORONTO, ONTARIO -- (Marketwired) -- 01/09/17 --
Kirkland Lake Gold Ltd. ("KL Gold" or the "
Company") (TSX:KL) is pleased to announce operating results for the three and twelve months ended December 31, 2016.
The Company advises that it has changed its reporting currency from Canadian to U.S. dollars effective for the year ended December 31, 2016 and accordingly all dollar amounts in this news release are expressed in U.S. dollars, unless otherwise noted.
Full Year 2016 Highlights - 2016 consolidated pro forma gold production 1 from Canadian and Australian operations with 542,751 ounces produced.
- Canadian operations pro forma consolidated gold production of 303,027 ounces 2 . Attributable production of 295,838 ounces exceeds 2016 guidance of 270,000 - 290,000 ounces 3 .
- Australian operations exceeded consolidated 2016 guidance with gold production of 239,724 ounces, above 2016 guidance of 225,000 - 235,000 ounces.
- Record gold production of 175,167 ounces at the Macassa Mine, based on record mine and mill production, record run of mine grade of 16.52 g/t and record recovery of 97.1%.
- Record gold production of 151,755 ounces at the Fosterville Gold Mine based on record average grade of 7.55 g/t and record recovery of 90.1%.
- Strong cash balance at December 31, 2016 of approximately $234 million (C$315 million).
Fourth Quarter 2016 Highlights - Consolidated pro forma gold production of 152,636 ounces from Canadian and Australian operations.
- Record Fosterville gold production of 44,406 ounces based on record grade of 8.48 g/t and record recovery of 92.4%.
- Record Macassa gold production of 52,318 ounces, including run of mine grade of 21.46 g/t and mill recovery of 97.6%.
Tony Makuch, President and CEO of KL Gold stated: "I am pleased to report 2016 pro forma gold production of 542,751 oz, highlighting KL Gold as a new mid-tier gold producer. Both the Canadian and Australian operations exceeded 2016 consolidated guidance. Our pro forma operating results indicate a solid year, largely driven by our low cost, high grade, cornerstone gold mines of Fosterville, Macassa and Taylor which accounted for 68% of total 2016 production. During the fourth quarter, strong production results were driven by record performance from both the Macassa and Fosterville gold mines, due to increased grade and metallurgical recoveries at both sites."
"Despite placing two mines on care and maintenance in 2016, the Company will maintain a production base of over 500,000 ounces of gold in 2017, focusing on high quality ounces. We begin the year with a strong balance sheet and a cash position of approximately $234 million, with a global operating platform from tier one mining jurisdictions. KL Gold is actively conducting extensive exploration, building from the exciting, high grade results announced in 2016 at the Fosterville and Macassa mines. KL Gold has extensive land packages within district scale gold camps, including the prolific Porcupine Destor Fault Zone in Canada, where numerous multi-million-ounce world class gold deposits exist. We believe our 2017 exploration program of $45-$55 million bodes well for resource growth and mine life extensions across key assets, providing future value for our shareholders."
Pro Forma Fourth Quarter and Full Year 2016 Operational Results Canadian Operations | | Q4 2016 | Q4 2015 | Q3 2016 | FY 2016 |
| Macassa Gold Mine | | | | |
| | Ore Milled (tonnes) | 102,289 | 92,532 | 100,357 | 396,633 |
| | Grade (g/t Au) | 16.30 | 14.40 | 13.70 | 14.10 |
| | Recovery (%) | 97.6 | 96.6 | 96.9 | 97.1 |
| | Gold Production (oz) | 52,318 | 37,979 | 42,866 | 175,167 |
| Holt Gold Mine | | | | |
| | Ore Milled (tonnes) | 113,499 | 104,270 | 101,283 | 416,048 |
| | Grade (g/t Au) | 4.57 | 4.56 | 4.80 | 4.52 |
| | Recovery (%) | 94.5 | 94.0 | 95.1 | 94.5 |
| | Gold Production (oz) | 15,761 | 14,348 | 14,950 | 57,086 |
| Taylor Gold Mine | | | | |
| | Ore Milled (tonnes) | 48,254 | 69,084 | 52,466 | 199,231 |
| | Grade (g/t Au) | 6.74 | 7.55 | 7.10 | 6.90 |
| | Recovery (%) | 96.1 | 95.1 | 97.1 | 96.5 |
| | Gold Production (oz) | 10,048 | 15,964 | 11,630 | 42,639 |
| Holloway Gold Mine | | | | |
| | Ore Milled (tonnes) | 65,215 | 40,864 | 53,780 | 203,130 |
| | Grade (g/t Au) | 5.37 | 5.84 | 5.10 | 4.86 |
| | Recovery (%) | 87.3 | 89.2 | 88.4 | 88.7 |
| | Gold Production (oz) | 9,825 | 6,843 | 7,829 | 28,135 |
| Total Pro Forma Canadian Gold Production (oz) 1 | 87,952 | 75,134 | 77,274 | 303,027 |
| | | | | |
Australian Operations | | Q4 2016 | Q4 2015 | Q3 2016 | FY 2016 |
| Fosterville Gold Mine | | | | |
| | Ore Milled (tonnes) | 176,242 | 179,450 | 185,071 | 693,066 |
| | Grade (g/t Au) | 8.48 | 6.33 | 6.91 | 7.55 |
| | Recovery (%) | 92.4 | 86.3 | 89.7 | 90.1 |
| | Gold Production (oz) | 44,406 | 31,519 | 36,967 | 151,755 |
| Cosmo Gold Mine | | | | |
| | Ore Milled (tonnes) | 157,770 | 180,261 | 138,801 | 646,848 |
| | Grade (g/t Au) | 2.78 | 2.56 | 2.51 | 2.87 |
| | Recovery (%) | 94.5 | 86.9 | 95.3 | 93.6 |
| | Gold Production (oz) | 13,307 | 12,898 | 10,677 | 55,765 |
| Stawell Gold Mines 4 | | | | |
| | Ore Milled (tonnes) | 172,049 | 227,229 | 218,702 | 845,573 |
| | Grade (g/t Au) | 1.49 | 1.50 | 1.45 | 1.47 |
| | Recovery (%) | 84.5 | 80.0 | 80.1 | 80.9 |
| | Gold Production (oz) | 6,971 | 8,762 | 8,150 | 32,204 |
| Total Pro forma Australian Operations Gold Production (oz) 1 | 64,684 | 53,179 | 55,794 | 239,724 |
| | | | | |
Fourth Quarter 2016 Mine Operating Highlights Canadian Operations: Macassa Mine The Macassa Mine continued to deliver solid operating results during Q4 2016 with a record quarter of gold production of 52,318 ounces, representing a 22% increase from Q3 2016 of 42,866 ounces. The increased production reflects a record run of mine average grade of 21.46 grams per tonne ("g/t") and record mill recovery of 97.6%. The Macassa mill processed 102,289 tonnes at an average grade of 16.3 g/t (including processing of low grade ore from stockpiles).
Development of the 5400' Level, 5600' Level and 5700' Level in the lower South Mine Complex ("SMC") continues to be advanced. The main decline development is ongoing and is currently below the 5700' Level. The decline towards the LDN zone has now reached the 5700' Level and infrastructure is currently being developed in order to commence production in 2017.
The Macassa Mine delivered record production for the full year 2016 with 175,167 ounces produced, reflecting mill throughput of 396,633 tonnes, including ore from low grade stockpiles and record run of mine average grade of 16.52 g/t (or 14.1 g/t average milled grade).
Holt Mine Complex During the fourth quarter, the Holt Mine Complex performed well. The Holt Mill processed 226,968 tonnes of ore at an average head grade of 5.26 g/t and recoveries of 92.8%, producing a total of 35,634 ounces.
For the year ended 2016 pro forma production from the Holt Mine Complex totalled 127,860
2 ounces of gold from the processing of 818,809 tonnes at an average grade of 5.2 g/t and average recovery of 93.8%.
Holt Mine During Q4 2016, the Holt Mine delivered 113,499 tonnes at a grade of 4.57 g/t to the process plant. After mill recoveries of 94.5%, Holt's gold production was 15,761 ounces.
On a pro forma basis, full year production from the Holt Mine was 416,048 tonnes grading 4.52 g/t, yielding 57,086 ounces of gold after mill recoveries of 94.5%.
Holloway Mine During Q4 2016, the Holloway Mine delivered 65,215 tonnes at a grade of 5.37 g/t to the process plant. After mill recoveries of 87.3%, Holloway's gold production was 9,825 ounces.
On a pro forma basis, full year production from Holloway was 203,130 tonnes grading 4.86 g/t, yielding 28,135 ounces of gold after mill recoveries of 88.7%.
Taylor Gold Mine During Q4 2016, the Taylor Mine delivered 48,254 tonnes at a grade of 6.74 g/t to the process plant, including 2,436 tonnes of low grade material at 2.12 g/t. After mill recoveries of 96.1%, Taylor's gold production was 10,048 ounces.
On a pro forma basis, full year production from the Taylor mine was 199,231 tonnes grading 6.90 g/t, yielding 42,639 ounces of gold after mill recoveries of 96.5%. This includes 9,770 tonnes of low grade material at 2.36 g/t.
Australian Operations: Fosterville Gold Mine Fosterville produced a record 44,406 ounces of gold in Q4 2016, significantly exceeding the previous record achieved in Q2 2016 of 37,245 ounces. This result marks a 20% increase over the 36,967 ounces produced in Q3 2016 and a 41% increase over the 31,519 ounces produced in Q4 2015. Full year production was a record 151,755 ounces, exceeding the previous annual record in 2015 of 123,095 ounces and the previously announced guidance of 130,000 - 140,000 ounces.
Mine production continued to deliver strong, consistent performance during the quarter, totaling 168,812 tonnes at an average grade of 9.45 g/t compared to 191,900 tonnes at 6.64 g/t in Q3 2016 and 172,981 tonnes at 6.38 g/t in Q4 2015. Compared to the previous quarter, mined tonnes decreased 12% with the operation focused on optimizing the extraction of high-grade lenses on multiple levels in the Lower Phoenix area. The resultant grade established a new site quarterly record, above previous high of 8.30 g/t in Q2 2016.
Significant investment in diamond drilling also continued with nine rigs in operation at quarter end, drilling a combination of exploration and resource definition programs. The focus of activities was predominantly on the Harrier South and Lower Phoenix systems, both reporting multiple high-grade intercepts as announced in the
November 8, 2016 Newmarket Gold News Release.
Cosmo Gold Mine Cosmo produced 13,307 ounces of gold, resulting in full year production of 55,765 ounces. Fourth quarter production improved with mining sequencing changes, totaling 156,122 mined tonnes at a grade of 2.78 g/t as compared to 141,091 tonnes at 2.50 g/t in Q3 2016. Mine performance improved with changes to the mine production sequence and accessing additional mining areas to provide production flexibility. Currently there are four diamond drill rigs in operation at Cosmo, following up on potential extensions. Process improvements in the mill continued to focus on quality performance with overall mill recovery of 94.5% during the quarter.
Stawell Gold Mine Stawell produced 6,971 ounces, resulting in full year production of 32,204 ounces. Low-grade oxide stockpiles continued to supplement underground ore resulting in total mill feed of 172,049 tonnes at 1.49 g/t Au and recovery of 84.5%. As previously announced, the operation commenced transitioning to care and maintenance on December 13, 2016 with the mine to be maintained in a state of operational readiness to possibly recommence operations pending exploration success.
Cash Balance Kirkland Lake ended the year with a cash balance of approximately US$234 million (C$315 million), an increase of $73 million from the September 30, 2016 cash balance of $161 million (C$211.5 million). The increase reflects cash flows generated during the fourth quarter as well as cash acquired from Newmarket Gold of approximately $68 million, net of one time transaction costs and $30.5 million to buy back a 1% royalty on the Macassa property.
2017 Outlook Effective December 13, 2016, KL Gold announced the transitioning of the Stawell and Holloway mine into care and maintenance. Looking to 2017, KL Gold intends to maintain a production base of over 500,000 ounces, focusing on high quality ounces from tier one mining jurisdictions. As a multi-mine company, KL Gold has the ability to rationalize the business model of the company to create the best investment vehicle for our shareholders.
| | Macassa | Fosterville | Taylor | Cosmo | Holt | Stawell | Holloway | Consolidated |
| 2016A Production (oz) | 175,167 | 151,755 | 42,639 | 55,765 | 57,086 | 32,204 | 28,135 | 542,751 1 |
| KL Gold 2017 Outlook | | | | | | | |
| Gold Production (ounces) | 180,000 - 185,000 | 140,000 - 145,000 | 55,000 - 60,000 | 60,000 - 65,000 | 65,000 - 70,000 | - | - | 500,000 - 525,000 |
| Operating Cash Costs per ounce* | | | | | | | | $625 - $675 |
| AISC per ounce* | | | | | | | | $950 - $1,000 |
| Growth expenditures ($ million) | | | | | | | | $45 - $55 |
* See Non-GAAP Measures sections in this news release; Operating Cash Costs per ounce and AISC per ounce reflect an average USD to CAD exchange rate of 1.28 and a USD to AUD exchange rate of 1.28. Upcoming Events - TD Securities Mining Conference - January 18-19, 2017
- CIBC Whistler Institutional Investor Conference - January 25-28, 2017
- BMO Capital Markets Global Metals & Mining Conference - February 26-March 1, 2017
- PDAC Convention - March 5-8, 2017