KIRKLAND LAKE, ONTARIO--(Marketwired - Aug 11, 2014) - Kirkland Lake Gold Inc. (the "Company")(KGI.TO)(KGI.L), an operating and exploration gold mining company, announces operational results for the first quarter (May, June, July 2014)
93,880 tons milled at a head grade of 0.45 ounces per ton ("opt") (15.4 grams per ton ("gpt"))
Head grades improved by a further 22% from 0.37 opt (10.6 gpt) in the three months to April 2014 to 0.45 opt (15.4 gpt).
38,543 ounces of gold sold in the quarter
Company on track to achieve its FY 2015 production guidance of 140,000 to 155,000 ounces of gold
During the first quarter, 93,880 tons were milled at a head grade of 0.45 ounces per ton (15.4 gpt) and a recovery rate of 97% for a total of 40,528 ounces of gold with the Company selling 38,543 ounces of gold in the quarter.
Since January 2014 when the new mine strategy was adopted and expansion projects completed, average head grades have improved by 22% from 0.37 opt (10.6 gpt) (for the three months to April 2014) to 0.45 opt (15.4 gpt). The Company's shift from a volume driven approach to a focus on quality tons and margin has resulted in better than forecasted grade results for the quarter.
A new mining horizon on the 5400 level in the higher-grade South Mine Complex ("SMC") was developed and the first stope, 5417 came into production during the quarter. The 5400 level provides a third mining horizon in the SMC for the Company; which expects to mine 5 stopes from this area in fiscal 2015. Proven and probable reserve blocks from the 5400 level up to the 5300 level include 481,000 tons at 0.57 opt (19.5 gpt) containing 274,000 ounces.
Two brand new single boom T1D electric hydraulic jumbo drills have also just arrived on site. One drill has been assigned to the main SMC decline to improve productivity and to develop to the 5600 level where proven and probable reserves include 299,000 tons at 0.70 opt (23.9 gpt) containing 209,000 ounces. The second drill has been assigned to a stoping complex where productivity improvements in quality tons are expected in the second half of fiscal 2015. The Company is on track to produce between 140,000 - 155,000 ounces this fiscal year.
George Ogilvie, Chief Executive Officer, commented, "These are the strongest production results ever seen in the Company's history. The new strategy of focusing on quality tons and increasing ounces produced is beginning to work, despite a 16% reduction in the labour force (206 fewer employees)".
"It was also pleasing to see that the head grades for both June (0.47 opt, 16.1 gpt) and July (0.51 opt, 17.4 gpt) were at the reserve grade. For this first quarter, our actual head grade of 0.45 opt (15.4 gpt) is 21.6% above our FY 2015 guidance of 0.37 opt (12.7 gpt).
"I believe the turnaround in our Company is well on track and that there are many more opportunities for further productivity and efficiency gains within our business. I'm confident through the execution of our business plan we can create significant return on investment for our shareholders and a long lived sustainable business benefiting all stakeholders."
"In the future we will be focusing on increasing the daily tonnage at the reserve grade. The Company will achieve this by opening up more stopes in the newly developed 5400 level of the South Mine Complex where reserve grades are 0.57 opt (19.5 gpt) and by assigning one new T1 D electric hydraulic jumbo to a stoping complex on the 5300 level of the SMC where reserve grades are 0.47 opt (16.1 gpt). The additional tonnage should be realized in the second half of fiscal 2015, keeping the Company well on track to achieve its production guidance; while driving down unit cost per ounce of gold and on a unit cost per ton basis. We remain committed to further reduce non-essential costs.
"We are also intently focused on reaching the 5600 level of the SMC where reserve grades are 0.70 opt (23.9 gpt) as this will provide the Company with a fourth mining horizon in the SMC which is the rationale for assigning the new second T1D electric hydraulic jumbo to this critical area of our business. We expect to reach the 5600 level in time for FY 2016. A third and fourth mining horizon in the SMC with robust grades then sets a solid basis for achieving our three year guidance which we released to the market on June 24, 2014, with further improvements in unit cost per ounce.
The reserve estimates and technical disclosure have been reviewed, verified (including sampling, analytical and test data) and compiled by the Company's geological staff (which includes a 'qualified person', Stewart Carmichael P.Geo., the Company's Chief Exploration Geologist, for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects, of the Canadian Securities Administrators). Mr. Carmichael also supervised the preparation of the information that forms the basis of the technical disclosure in this releaseNeither 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.
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.
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", "should", "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 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 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, 2014 and the Company's Management's Discussion and Analysis for the interim period ended April 30, 2014 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 to 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.
Glossary of Terms
National Instrument 43-101 Definitions of Resources and Reserves
The Reserve and Resource estimation classifications as prescribed in National Instrument 43-101 are given here for clarity.
Mineral Resources are sub-divided into 3 categories depending on the geological confidence. The highest level with the most confidence is the `Measured' category. The next level of confidence is the `Indicated' category and the lowest level, or the resource with the least confidence, is the `Inferred' category.
Inferred Mineral Resource
An `Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling, gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
Indicated Mineral Resource
An `Indicated Mineral Resource' is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Measured Mineral Resource
A `Measured Mineral Resource' is that part of a Mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
Mineral Reserves are sub-divided into 2 categories. The highest level of Reserves or the level with the most confidence is the `Proven' category and the lower level of confidence of the Reserves is the `Probable' category. Reserves are distinguished from resources as all of the technical and economic parameters have been applied and the estimated grade and tonnage of the resources should closely approximate the actual results of mining. The guidelines state "Minerals Reserves are inclusive of the diluting material that will be mined in conjunction with the Mineral Reserve and delivered to the treatment plant or equivalent facility." The guidelines also state that, "The term `Mineral Reserve' need not necessarily signify that extraction facilities are in place or operative or that all government approvals have been received. It does signify that there are reasonable expectations of such approvals."
Probable Mineral Reserve
A `Probable Mineral Reserve' is the economically mineable part of an Indicated and in some circumstances a Measured Mineral Resource demonstrated by a least a Preliminary Feasibility Study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
Proven Mineral Reserve
A `Proven Mineral Reserve' is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.
A more detailed list of technical terms can be found at: http://klgold.com/cmsAssets/docs/pdfs/2013/2013%20Annual%20Information%20Form.pdf.