Kirkland Lake Gold Announces Significant Expansion of Lantern Deposit at Cosmo Mine

TORONTO, Dec. 19, 2017 (GLOBE NEWSWIRE) --

-- High-grade, visible-gold bearing mineralization intersected more than 250 metres (“m”) north of Lantern Deposit

• Key intercepts:  1,624 grams per tonne (“g/t”) gold (“Au”) over 0.91 m, including 4,750 g/t Au over 0.31 m; 198 g/t Au over 3.0 m, including 1,577 g/t Au over 0.35; 40.8 g/t Au over 18.7 m

-- Mineralization identified over 500 m strike length and 1,200 m down-plunge (to 1,000 m below surface); Lantern Deposit remains open in multiple directions

-- Underground exploration development into Lantern Deposit to commence in early 2018 in support of upgrading and expanding Mineral Resources

-- Lantern exploration program key component of plan to establish economic Mineral Reserve leading to resumption of operations at Cosmo Mine in Northern Territory of Australia.

Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or the “Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today announced positive drilling results at the Cosmo Mine (“Cosmo”) in the Northern Territory (“NT”), Australia. A total of 65 holes for 23,553 m from underground diamond drilling and nine holes for 4,184 m from surface drilling were completed to test the expansion potential of the Lantern Deposit (“Lantern”). The results substantially increase the deposit footprint, particularly to the north, and demonstrate the potential for significant growth in Mineral Resources. The high-grade gold mineralization intersected from recent drilling exhibits a change from fine-grained free gold in Cosmo Deposit to coarser-grained free gold in narrow quartz veins within Lantern.

Included in the new results is the highest-grade gold assay ever reported at Cosmo, totaling 4,750 g/t Au over 0.31 m (estimated true width “ETW” 0.2 m) in hole LU73020, which is located more than 250 m north of the current main Lantern Mineral Resource (see Figure 3). For details of the Lantern Mineral Resource see the NI43-101 Technical Report, entitled, “Report on the Mineral Resources & Mineral Reserves of the Northern Territory Operations, Northern Territory, Australia,” dated March 30, 2017 (the “Technical Report”).

Tony Makuch, President and CEO of Kirkland Lake Gold, commented: “After suspending production at Cosmo on June 30, 2017, we expanded our extensive exploration program at the Lantern Deposit, recognizing the significant potential that exists to identify new Mineral Resources. The results being reported today are very encouraging, as they demonstrate that Lantern is much larger than previously identified with the potential for substantially higher grades. Based on the latest drilling, we have extended Lantern to over 500 m along strike, more than 1,200 m down-plunge and over 1,000 m vertically from surface, with a significant number of high-grade intersections and multiple occurrences of visible gold.

“The progress being made at Lantern increases our confidence that we can establish an economic deposit or deposits in the Northern Territory and resume mining and milling operations at the Cosmo Mine and Union Reefs Mill. In support of this goal, we are initiating an underground exploration development program on two levels, 320 m vertically apart, to access Lantern underground from the existing Cosmo ramp. This development will provide the first underground exposures of the Lantern mineralization, deliver improved drilling access and provide initial production platforms for the potential restart of operations in 2018. Five diamond drill rigs (three underground and two surface) and a reverse-circulation (“RC”) percussion drill rig are currently operating at the Cosmo Mine to further define and expand the Lantern mineralization.”

Drilling Highlights within the Lantern Deposit at the Cosmo Mine

Drill results reported today include 74 new drill holes for a total of 27,737 m. The drilling was completed as part of an extensive program of underground infill & extension diamond drilling, with results demonstrating the significant high-grade potential and down-plunge extent of the Lantern Deposit. 

Key intercepts are listed below, with further details provided in the commentary that follows.

Highlight Drilling Intercepts:

• 1,624 g/t Au over 0.91 m (ETW 0.6 m), including 4,750 g/t Au over 0.31 m (ETW 0.2 m) in hole LU73020 (3600 Lode)
• 198 g/t Au over 3.0 m (ETW 1.0 m), including 1,577 g/t Au over 0.35 m (ETW 0.1 m) in hole LU73017 (3800 Lode)
• 89.7 g/t Au over 1.0 m (ETW 0.8 m) in hole DS001 (3600 Lode)
• 40.8 g/t Au over 18.7 m (ETW 5.2 m), in hole LU101020 (3400 Lode)
• 22.6 g/t Au over 8.8 m (ETW 4.4 m), in hole LU101014 (3900 Lode)
• 14.6 g/t Au over 5.9 m (ETW 2.8 m) in hole LU101014 (3400 Lode), and
• 11.7 g/t Au over 19.1 m (ETW 6.5 m) in hole LU101026 (3600 Lode).

ETW – Estimated True Width, all drill results are presented in Table 1 and all drill collars are listed in Table 2.

A total of 16 holes intersected significant Lantern gold mineralization of over 30 Gram-m (gold grade (g/t Au) x estimated true width (m)). Results above 100 Gram‑m were also recorded for four holes, including: 1,624 g/t Au over 0.91 m (ETW 0.6 m), including 4,750 g/t Au over 0.31 m (ETW 0.2 m) in hole LU73020, 198 g/t Au over 3.0 m (ETW 1.0 m), including 1,577 g/t Au over 0.35 m (ETW 0.1m) in hole LU73017, 40.8 g/t Au over 18.7 m (ETW 5.2 m), in hole LU101020 and 22.6 g/t Au over 8.8 m (ETW 4.4 m), in hole LU101014.

Of the four 100 Gram-m holes, Hole LU73017 is the second deepest drill intercept recorded to date at the Lantern Deposit (Figure 8). Hole DS001, drilled from surface, intersected 89.7 g/t Au over 1.0 m (ETW 0.5m) and is the most southern drill intercept to date at Lantern (Figure 6). Based on current drilling, the Company believes that considerable potential exists for continued expansion of the Lantern mineralization both down-plunge to the north and up-plunge to the south.

There are currently six drill rigs drilling at the Lantern Deposit; comprising three underground diamond drill rigs, two surface diamond drill rigs and one RC percussion drill rig. The RC percussion drill rig commenced in December to potentially define near-surface Lantern Mineral Resources. Underground exploration development to access the Lantern mineralization on two levels is expected to start in the first quarter of 2018 with the first mineralization to be exposed during the second quarter. Each level of geological mapping and sampling will determine the character and continuity of gold grades, including any controlling structures, which will be used to refine the Mineral Resource models and underpin Mineral Reserve estimates and mine production designs. The ongoing exploration program is being conducted to increase Mineral Resources and establish an economic Mineral Reserve base which would facilitate the resumption of mining at Cosmo with a defined and sustainable five-year mine plan.  

Lantern Mineralization – Background

The Lantern mineralization was subject to open-pit mining of oxide areas to a depth of 110 m during 1991-1992 by Dominion Mining. Production during this period totaled 1.37 million tonnes (“Mt”) at an average grade of 2.04 g/t Au for approximately 90 thousand ounces (“kozs”). Studies in early 2016 revealed potential for the underlying Lantern metasediments in the core of the Cosmo-Howley fold to host gold mineralization similar to the Callie Deposit in the Tanami region of the NT. On March 6, 2017, the Company announced the discovery of the Lantern Deposit based on historical information as well as the result of 25 underground drill holes completed in 2016 to test the down-plunge extension of the Cosmo open pit (see Kirkland Lake Gold News Release dated March 6, 2017). On March 28, 2017, an initial Mineral Resource for the Lantern Deposit was announced, totaling 55.5 kozs Au (566 thousand tonnes at an average grade of 3.1 g/t Au) in the Indicated category and 104.0 kozs (1.12 Mt at an average grade of 2.9 g/t Au) in the Inferred category, using a 2.0 g/t Au cut-off (see Kirkland Lake Gold News Release dated March 28, 2017, and the Technical Report dated March 30, 2017).

Since the March 6, 2017 Kirkland Lake Gold News Release, underground diamond drilling of the Lantern targets has been accelerated to expand and then infill the Mineral Resources. It is likely that over 100 additional diamond holes will be included in the year-end 2017 Lantern Mineral Resource estimate, which is expected to result in an increase in Mineral Resource ounces and a higher average grade compared to the previous estimate. 

The additional drilling completed in 2017 has expanded the previous 6 mineralized lodes to more than 30 lodes, which comprise Lantern Deposit, with those in the combined Western Lantern Lode-set being the most continuous and gold endowed (see Figure 2 and Figures 4 to 9 for Lantern Lodes 3400 to 3900). A mineralized strike extent of over 500 m, and vertical extent of 1,000 m is now defined. The mineralization for most lodes is still untested up‑plunge (shallower) to the south on the western limb, and down‑plunge (deeper) to the north. Study of the Lantern and Cosmo alteration zoning suggests that the western fold limb acted as the main conduit for gold-bearing fluids to become trapped in the fold hinge and eastern limb effectively against a blanket of thick and highly-sulfidic carbonaceous black mudstone.

The Lantern mineralization is hosted within iron-rich, weakly-carbonaceous, siltstones and dolomitic siltstones with common intense carbonate, sericite-pyrite-chlorite and blood-red Fe-oxy-hydroxide hypogene alteration, associated with quartz-carbonate veining.  Geological studies strongly suggest most gold was introduced to the rock after the metamorphic peak, which has produced a chlorite-biotite-magnetite-tourmaline-garnet mineral assemblage. Although partly stratabound, gold mineralization occurs in a quartz-sulfide-carbonate vein network of steeply-dipping sub-linear shear veins, and associated sub-horizontal dipping tensile vein arrays.

The Lantern sequence is structurally thickened by local folding and shears with a moderate 40^o to 55^o plunge to the north for the overall mineralized zone, and hosts internal local steeply-plunging high-grade corridors where quartz veins are locally at an oblique angle to overall Lantern structure and are likely to have high gold content.

To view a PDF of the tables and figures as referenced in this News Release, visit the links below:

Tables – http://resource.globenewswire.com/Resource/Download/f9bc80b0-6d13-428d-a411-2dc0bc868e1f 

Figure 1. Location Plan of Cosmo Mine – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/813e95ef-245e-4926-9086-18dfcd2d52c6

Figure 2. Schematic Geological Cross Section of Lantern Deposit, Cosmo Gold Mine – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/e5b21720-9270-484f-beb7-eeef603ce796

Figure 3. Long Projection of Lantern Mineralization – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/1656b355-8f4a-40cf-b9e8-458ad31766dc

Figure 4. Long Projection of Lantern 3400 Lode – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/75afe846-0257-4505-8b93-fee44f119170

Figure 5. Long Projection of Lantern 3500 Lode – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/4e1c4a3b-32fb-414d-87e2-723c5342a1d3

Figure 6. Long Projection of Lantern 3600 Lode – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/8c166c74-8b5f-43f0-93c5-7dbf238af2b9

Figure 7. Long Projection of Lantern 3700 Lode – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/4a23f4df-cd8d-41ab-ad7f-4d74b70fa062

Figure 8. Long Projection of Lantern 3800 Lode – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/d2e5fa82-5645-4fa0-9666-a7c9a4b4fcaa

Figure 9. Long Projection of Lantern 3900 Lode – 
http://www.globenewswire.com/NewsRoom/AttachmentNg/2a3b12b2-c796-4514-910b-b225ae6b964c

Qualified Person

Mark Edwards, FAusIMM (CP), MAIG, Geology Manager, NT Operations, is a "qualified person" as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this News Release.

Drilling and Assay QAQC

Kirkland Lake Gold has in place quality-control systems to ensure best practice in drilling, sampling and analysis of drill core. All diamond drill hole collars (Table 2) are accurately surveyed using a Leica Total Stations instrument and down hole deviations are measured using a down-hole Gyro instrument.

All reported drill intercepts are from NQ2 or HQ3 sized diamond drill core that was sampled from core cut longitudinally in half with a diamond saw. One-half of the drill core was sent for assay and the other half retained for reference. Drill core sample intervals vary between 0.2 and 1.4m in length and were determined from logging of sulfide and visible gold and conform to logged lithological and alteration geological boundaries.

Assay results are based on 50-gram charge fire assay. Intercepts are constrained with wireframe envelopes, generally based on a 2 g/t Au cut-off (where possible) and having a maximum 3 m internal dilution. However, narrower intercepts are reported to highlight lengths of higher gold grade or where mineralization is limited. No upper gold grade cap has been applied to the data. However, during mineral resource work the requirement for capping assay grades will be assessed.

Drill samples from the Lantern Deposit are routinely assayed at North Australian Laboratories Pty Ltd, an independent laboratory in Pine Creek, Northern Territory. Site audits and reviews of the laboratory are conducted from time to time as well as routine assessment of intra-laboratory analyses to ensure quality of reported results.  

About Kirkland Lake Gold Ltd.

Kirkland Lake Gold Ltd. is a mid-tier gold producer with 2017 target production of 580,000 to 595,000 ounces from mines in Canada and Australia. The production profile of the company is anchored from 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.

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 & Director
Phone: +1 416-840-7884
E-mail: tmakuch@klgold.com

Mark Utting, Vice-President, Investor Relations
Phone: +1 416-840-7884
E-mail: mutting@klgold.com

Table 1:  Drill Assay Intercepts for Surface and Underground Drilling for the Lantern Deposit

(The Lantern Results are an update to those reported in March 6, 2017 Kirkland Lake Gold News Release)

Drill Intercept Notes:

• Intercepts with >30 Gram-Metres (gold grade (g/t Au) x estimated true width (m)) are in bold text.
• Intercepts are constrained with wireframe envelopes, generally based on a 2 g/t Au cut-off (where possible) and having a maximum 3 m internal dilution. However, narrower intercepts are reported to highlight lengths of higher gold grade or where mineralization is limited.
• Drillholes that were reported in previous News Releases are shown in italics, and may have different reported intercepts due to changes in the geological understanding of mineralized structures and application of reporting criteria previously applied.

Table 2:   Surface and Underground Diamond Drill Hole Collar Locations, Lantern Deposit.

• Holes previously reported are in italics

Location Plan of Cosmo Mine Schematic Geological Cross Section of Lantern Deposit, Cosmo Gold Mine Long Projection of Lantern Mineralization Long Projection of Lantern 3400 Lode Long Projection of Lantern 3500 Lode Long Projection of Lantern 3600 Lode Long Projection of Lantern 3700 Lode Long Projection of Lantern 3800 Lode Long Projection of Lantern 3900 Lode