|By Marketwired .||
|February 4, 2014 04:00 AM EST||
KIRKLAND LAKE, ONTARIO -- (Marketwired) -- 02/04/14 -- Kirkland Lake Gold Inc. ("Kirkland Lake" or "the Company") (TSX: KGI)(AIM: KGI), an operating and exploration gold mining company, announces operational results for the third quarter of its fiscal year 2014 and provides an update on its mine optimization plan.
Mr Harry Dobson, Chairman commented "I am very pleased with operational improvements and the impact which these, together with some cost reductions will have on the financial performance of the Company. Work is ongoing but the full extent of these changes will be observed by all shareholders in the current quarter ending April 30, 2014."
Operational improvements include:
-- In November, mining cut-off grades were raised to 0.22 ounces per ton ("opt") from 0.18 opt resulting in a head grade for January of 0.45 ounce per ton - a 46% increase compared to the year-to-date average. -- On January 19, the Company hoisted a record 3,118 tons in a 24-hour period consisting of 1,738 tons of ore and 1,380 tons of waste. -- On January 29, the Company poured 4,706.65 troy ounces at 85% fineness totalling 4,000 fine ounces - the Company's largest gold pour in a one week period. -- Gold production in January was excellent with 13,483 ounces produced. Total gold production during the quarter was 31,022 ounces. -- Dry commissioning of the new ball mill has started and will be completed in February. -- Underground stope development and sustaining capital resources over the next 12 months will focus on increasing mining ratios from high grade workplaces on the 5,400' and 5,600' levels in the SMC. Significantly less stope development will take place in the '04/Main Break. -- Revised full year guidance resulting from this new six-month mine-plan results in a reduction in fiscal 2014 (ending April 30, 2014) production guidance to 120,000 - 125,000 ounces. This nevertheless represents a 30% - 36% increase over fiscal 2013.
Mr. George Ogilvie, President and CEO commented, "The new mine plan focuses on raising head grades, requiring less tons and lowering cash costs per ounce produced. These changes began to reflect themselves in January's results; however material improvements in production and cost performance should be fully reflected in the fourth quarter and beyond. The Company is planning for a head grade of 0.38 opt throughout Q4/14."
Cost saving initiatives result in annual savings of approximately $23.3 million. The Company has also now completed its $95.0 million expansion capital spend.
-- As of January 31, 144 employees had been released from employment saving the Company approximately $15.0 million annually and all contractors are now offsite. -- The Company has also cancelled non-essential capital spending saving $6.0 million, ended its travel allowance policy saving $2.0 million and is retiring older inefficient equipment.
Mr. John Thomson, CFO, commented, " The migration away from a tonnage focussed strategy to a plan focussed on mining at historic reserve grades, together with the completion of all expansion projects, results in a business model focussed on a more sustainable and realistic increase in gold production at lower cash costs which is going to return the Company to profitability and free cash-flow in the near future. The operating cost metrics communicated at the start and throughout the expansion project remain very achievable."
The Company is also pleased to announce that a new reserve and resource update will be published in the Q1/15. This update will include a first-time official resource calculation on the Company's surface drilling program.
The Company's third quarter operating results are summarized in the below table:
Nov'13 Dec'13 Jan'14 Tonnes Produced (short tons) 35,328 31,909 30,680 Gold Produced (Oz) 8,427 9,112 13,483 Tonnes Milled (short tons) 27,895 37,297 30,420 Head Grade (Oz per short ton) 0.26 0.29 0.45 Mill Recovery (%) 94% 95% 96% Gold Recovered (Oz) 6,970 10,110 13,145 Gold Poured (Oz) 9,903 9,726 14,162
About the Company
Kirkland Lake Gold's corporate goal is to create a self-sustaining and long-lived intermediate gold mining company based in the historic Kirkland Lake Gold Camp. The Company plans to do this by mining to the reserve grade, generating profits and free cash flow for the shareholders. The Company will also look to take advantage of its increased infrastructure capacity in the appropriate gold price environment. At the same time, the Company is committed to maintaining a significant exploration program aimed at developing and maintaining a property wide reserve and resource base sufficient to sustain a mine life of more than ten years.
Over the last several years the Company has invested significant capital to improve the infrastructure of the business including upgrading the production hoist, skips, mill, underground mobile equipment and capital development.
From initial discovery to present day there have been over 24 million ounces of gold mined from the Kirkland Lake camp while the current reserve and resource provides for potentially 10 years of mining with significant exploration upside.
Cautionary Note Regarding Forward Looking Statements
This Press Release contains statements which constitute "forward-looking statements", including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to the future business activities and operating performance of the Company. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, are intended to identify such forward-looking statements. Forward-looking statements used in this Press Release include, but may not be limited to, statements regarding the acceptance of the Rights Plan by the TSX and the timing thereof, the approval of the Rights Plan by shareholders of the Company, the Company's production capacity and its exploration program. Investors are cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made such as, without limitation, opinion, assumptions and estimates of management regarding the Company's business, its ability to complete the strategic and mine plan review and its ability to increase its production capacity and decrease its production cost. Such opinions, assumptions and estimates, are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.
These factors include the outcome of the strategic review process the Board has implemented, the Company's expectations in connection with the projects and exploration programs being met, the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating gold prices, currency exchange rates (such as the Canadian dollar versus the United States Dollar), possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company's corporate mineral resources, changes in project parameters as plans continue to be refined, changes in project development, construction, production and commissioning time frames, risks related to joint venture operations, the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, and limitations on insurance, as well as those risk factors discussed or referred to in the Company's annual Management's Discussion and Analysis and Annual Information Form for the year ended April 30, 2013 and the Company's Management's Discussion and Analysis for the interim period ended October 31, 2013 filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company 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 be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements except as otherwise required by applicable law.
Kirkland Lake Gold Inc.
George Ogilvie, P.Eng
+1 709 532 5716
+1 705 568 6444 (FAX)
Kirkland Lake Gold Inc.
Director of Investor Relations
+1 705 568 6444 (FAX)
NOMAD: Panmure Gordon (UK) Limited
Callum Stewart / Adam James
+44 (0) 20 7886 2500