TORONTO, ONTARIO--(Marketwired - April 9, 2014) - Kirkland Lake Gold Inc. (TSX:KGI)(AIM:KGI) ("Kirkland Lake" or "the Company"), an operating and exploration gold mining company, today announces production guidance and according mine plan for fiscal year 2015 (Begins May 1, 2014).
During fiscal year 2015 the Company expects to produce and sell between 140,000 - 155,000 ounces at an average grade of 0.37 ounces per ton ("opt") at a 96% recovery rate. This is consistent with the average annual 18% increase in production growth over the past 4 years. Current fiscal year production is on track to meet guidance of 120,000 - 125,000 ounces poured and sold. Quarterly production is expected to be steady throughout the year, ranging between 35,000 - 38,750 ounces, or an average daily throughput rate of 1,100 - 1,250 tons per day. The planned ratio of stopes from the higher-grade South Mine Complex ("SMC") versus the Main Break is 66% SMC, 34% Main Break. This represents a 25% increase in SMC stopes from the 5-year average of 53% SMC, 47% Main Break. The increase to mining in the higher grade SMC is representative of the ratios and mining strategy expected for the medium-long term. Grades throughout the year are expected to fluctuate, but the minimum average grade of 0.37 opt should be achievable based on the Company's recent performance from January 1 until March 31, 2014 where the weighted average head grade has been 0.39 opt following the raising of the cut-off grade to 0.22 opt, and the higher ratio of SMC stopes. The Company expects to issue its detailed three-year mine plan during the first quarter of fiscal year 2015.
Mr. George Ogilvie, President and CEO commented, "Fiscal 2015 will be a transition year as the mine adapts to the Company's new mining strategy to focus on a lower tonnage, higher grade mine plan, requiring less labour and a return to mining at or close to the reserve grade. Operating and all-in cash cost guidance will be provided at a later date; but cost reduction will be significantly helped by the completion of the expansion capital spend, sustaining capital requirements reduced to $45 - $50 million per year, reduction in property, plant and equipment requirements, and changes to the workforce and some employee programs. The Company and culture continues to evolve with the adoption of a new communication and mining strategy; which is expected to return the Company to profitability and free cash flow. Fiscal 2015's targets and budgets are based on a $1,350 CAD gold price assumption."
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 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.