Kirkland Lake Gold Inc.: Fiscal 2012 Second Quarter Financial and Operational Results

Marketwired

KIRKLAND LAKE, ONTARIO--(Marketwire -12/08/11)- Kirkland Lake Gold Inc. (TSX: KGI.TO - News)(AIM: KGI.TO - News) ('Kirkland Lake' or the 'Company'), an operating and exploration gold mining company located in Ontario, Canada, announces an operations update and its second quarter financial results for its fiscal 2012 year ended October 31, 2011.

Mr. Harry Dobson, Chairman commented, "Second quarter production and financial results through end October have seen operations on budget and plan for the first half of fiscal 2012. The mine plan for the year is designed to increase production in the third and fourth fiscal quarters and the annual production target remains between 110,000 to 130,000 of gold. As at end of November, we were slightly ahead of plan in regards of ounces poured and sold."

Quarterly results continue to indicate progress due to planned increases in production. The target of the Expansion Project remains to reach an average milling rate of 1,600 tons per day by November 2012, and to be substantially complete by the end of April, 2012. Required work to meet these goals was on schedule at the end of the quarter, and the $75 million budget remains on target, with $57.3 million spent as at October 31, 2011.

KEY HIGHLIGHTS OF THE QUARTER:

 

--  Net income before taxes was $11.8 million ($0.17 per share), compared to
    $7.9 million ($0.11 per share) for the previous quarter (Q1 of fiscal
    2012), an increase of 49%.

--  Cash flows generated from operating activities were $13.4 million for
    the quarter and $19.7 million year to date (YTD). Cash flows from
    operations have been positive for seven consecutive quarters.

--  A total of 70,054 tons of ore were milled (an increase of 22% from the
    first quarter) at a head grade of 0.36 ounces of gold per ton (opt) and
    a recovery of 96.1% to produce 24,478 ounces of gold. YTD 127,554 tons
    of ore were milled at a head grade of 0.40 opt and a recovery of 96.2%
    to produce 49,538 ounces of gold.

--  The 4% net smelter royalty payable to Kinross Gold Corporation, part of
    the original purchase price of the Mine, terminated during the quarter
    as announced on November 9, 2011.

--  The Company's workforce grew by an additional 76 people in the quarter
    to a total of 832 employees. A total of 275 employees will be added in
    Fiscal Year 2012, of which 147 employees have now been hired.

--  Fifteen drills are now active on the property. Underground exploration
    is targeted on increasing the South Mine Complex (SMC) reserves and
    resources, while maintaining the Main Mine reserves and resources.

--  Surface Exploration in the second quarter included drilling on the main
    mine properties, as well as more grassroots exploration drilling on
    other Company properties.

Production following completion of the Expansion Project remains estimated at 180,000 to 200,000 ounces in fiscal 2013 due to an allowance for a ramp-up in production between May 2012 and November 2012. Production guidance for Fiscal Years 2014 to 2016 is estimated at 210,000 to 250,000 ounces per year.

 

----------------------------------------------------------------------------
Financial Highlights                          Three months ended,
(All amounts in 000's of Canadian
 Dollars, except shares and per
 share figures)
----------------------------------------------------------------------------
                                   Oct 31, 2011  Jul 31, 2011  Oct 31, 2010

----------------------------------------------------------------------------
Gold Sales (ounces)                      24,762        24,178        23,392
Average Price (per ounce)                 1,628         1,476         1,300
----------------------------------------------------------------------------
Revenue                                  40,307        35,698        30,418
Production Expenses                      23,527        24,320        20,484
Exploration Expenses                      3,419         2,912         1,792
Net Income before Income Taxes           11,785         7,934         7,674
Net and Comprehensive Income              9,264        22,180         8,575
Cash Flow from operating activities      13,421         6,223        16,046
Cash Flow from (used in) financing
 activities                               1,031           344         2,379
Cash Flow used in investing
 activities                             (15,941)      (17,499)       (5,635)
Net increase (decrease) in cash          (1,449)      (10,932)       12,790
----------------------------------------------------------------------------
Total cash resources                     38,386        40,292        51,509
Other Current Assets                     18,888        14,983        10,684
Current Liabilities                      20,003        19,131        17,046
Working Capital                          37,721        36,143        45,147
Total Assets                            245,400       230,712       179,809
Total Liabilities                        24,442        23,384        20,367
----------------------------------------------------------------------------
Weighted average number of shares
 outstanding                         69,867,941    69,805,611    67,763,116
Dividends per share                         NIL           NIL           NIL
----------------------------------------------------------------------------

About the Company

The Company purchased the Macassa Mine and the 1,450 ton per day mill along with four former producing gold properties - Kirkland Lake, Teck-Hughes, Lake Shore and Wright Hargreaves - in December 2001. These properties, which have historically produced approximately 22 million ounces of gold, extend over seven kilometres between the Macassa Mine to the west and Wright Hargreaves to the east and, for the first time, are being developed and explored under one owner. This camp is located in the Southern Abitibi Greenstone Belt of Kirkland Lake, Ontario, Canada.

Cautionary Note Regarding Forward Looking Statements

This Press Release may contain statements which constitute 'forward-looking, including statements regarding the plans, intentions, beliefs and current expectations of the Company, its directors, or its officers 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, or its management, are intended to identify such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future business activities or performance and involve risks and uncertainties, and that the Company's future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the periodic filings with the Canadian securities regulatory authorities, including the Company's Annual Information Form and quarterly and annual Management's Discussion & Analysis, which may be viewed on SEDAR 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.

Neither the Toronto Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed and neither accepts responsibility for the adequacy or accuracy of this news release.

Contact:

Kirkland Lake Gold Inc.
Brian Hinchcliffe
President
1 705 567 5208
1 705 568 6444 (FAX)
bhinchcliffe@klgold.com
Kirkland Lake Gold Inc.
Lindsay Carpenter
Director of Investor Relations
1 416 840 7884
416 850 1617 (FAX)
lcarpenter@klgold.com
www.klgold.com
Pelham Bell Pottinger
Lorna Spears / Philippe Polman
+44 (0) 20 7861 3232
pr@pelhambellpottinger.co.uk
Ocean Equities Ltd.
Guy Wilkes
+44 207 786 4370
guy.wilkes@oceanequities.co.uk
NOMAD: Panmure Gordon (UK) Limited
Katherine Roe / Callum Stewart
+44 20 7459 3600
katherine.roe@panmure.com

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