Kirkland Lake Gold Inc.: Fiscal 2015 Q1 Financial and Operational Results

TORONTO, ONTARIO--(Marketwired - Sep 8, 2014) - Kirkland Lake Gold Inc. ("KL Gold" or the "Company") (TSX:KGI)(AIM:KGI), an operating and exploration gold company with operations in Ontario, Canada, today announces its operational and financial results for the first quarter (three months ended July 31, 2014) of the fiscal year 2015. All figures in the release are stated in Canadian dollars unless explicitly stated otherwise.

FIRST QUARTER HIGHLIGHTS

Financial Highlights

• Cash inflows from operations were $16.7 million (Q4/14: $3.6 million, Q1/14: $14.7 million).
  
  
• Free cash flow¹ for the quarter was $5.0 million (Q4/14: nil, Q1/14: nil).
  
  
• Income before income taxes for the quarter was $5.6 million (Q4/14: $2.5 million loss, Q1/14: $0.8 million loss).
  
  
• Net and comprehensive income for the quarter was $5.0 million or $0.07 per share (Q4/14: $1.2 million net loss, Q1/14: $1.7 million net loss).
  
  
• The Company closed a flow-through financing on July 3, 2014 for gross proceeds of $7.5 million to be used for near-surface exploration.
  
  
• Cash as at July 31, 2014 was $40.2 million.
  
  

¹ The Company has included non-GAAP performance measures: free cash flow, cash operating cost per ton and per ounce produced and AICC per gold ounce produced, throughout this announcement. This is a common performance measure in the mining industry but does not have any standardized meaning. Refer to Appendix B of the MD&A for a reconciliation of these measures to reported production expenses.

Operational Highlights

• A total of 40,528 ounces were recovered from 93,880 tons milled at an average head grade of 0.45 ounces per ton ("opt").
  
  
• Waste tons milled decreased from the previous quarter's 2,532 tons to 1,060 tons representing a 58% reduction.
  
  

George Ogilvie, Chief Executive Officer, commented:

"I am pleased to report that the first quarter's results affirm our new higher grade, lower tonnage strategy, as we have managed to reduce costs whilst increasing production and head grade. This has resulted in the Company reporting its first net profit in the last five quarters.

The increase in ore tons generated from the South Mine Complex ("SMC") this quarter is extremely encouraging, however, we do anticipate that output will fluctuate on a quarterly basis due to grade variability and stope availability in the SMC. However, over time with more stopes on the 5,400' level and in fiscal 2016 on the 5,600' level, the Company will have the flexibility to smooth the grade and be selective in which stopes it mines. These are early days in our turnaround, but performance has been promising since we implemented our new strategy in November 2013.

I am confident that the Company will achieve its production guidance for fiscal 2015 of between 140,000 - 155,000 ounces of gold and our goal to become a successful and sustainable intermediate gold producer remains on track as we focus on developing high-grade reserves and resources in the SMC as well as our new near-surface ore deposit."

Mine Plan Optimisation

A new mining horizon on the 5,400' level in the higher-grade SMC was developed and the first stope, '5,417', came into production during the quarter. The 5,400' level provides a third mining horizon in the SMC for the Company; which expects to mine 5 stopes from this area in fiscal 2015.

Two new electric/hydraulic single boom jumbos were slung underground during the quarter to be used in the SMC. One jumbo is dedicated to completing development on the 5,400' level and pushing the main decline ramp down to the 5,600' level while the second jumbo will be dedicated to an ore complex (an area with multiple ore headings) within the 5,300' level which will allow the jumbo's high productivity to be fully utilized.

During the quarter, 71 per cent of the tons and 74 per cent of the ounces were generated from the SMC compared to 60 per cent of the tons and 66 per cent of the ounces in Q4/14. The percentage of ore tons generated from the SMC is expected to fluctuate on a quarterly basis, depending on the availability of SMC headings in the mining sequence. SMC contribution of tons is expected to average approximately 66 per cent of total tons by the end of fiscal 2015.

Outlook

The Company has announced production guidance for fiscal 2015 of between 140,000 - 155,000 ounces. This indicates a production increase over fiscal 2014 consistent with the year-on-year average production growth demonstrated by the Company over the last 4 fiscal years.

"The Company is making good progress towards achieving its guidance objectives for the full fiscal year," stated Mr. Ogilvie. Guidance for fiscal 2016 and 2017 remains unchanged at 150,000 - 170,000 and 160,000 - 180,000 ounces respectively.

The Company's exploration program, which is focussed on developing high-grade reserves and resources in the SMC, as well as the new near-surface ore deposit remain key strategic priorities for the Company.

Conference Call Details

The Company will host a conference call to review the results on Tuesday, September 9, 2014 at 10:00 am EST (3:00 pm UK time). Those wishing to access the call can do so using the telephone numbers listed below. The replay call will be available on the Company's website.

Replay Available Until: September 23, 2014 23:59 ET.

No new material information will be disclosed at the conference call.

See the Company's AIF filed with certain securities regulatory authorities in Canada and available on SEDAR at www.sedar.com for a description of additional risk factors affecting the Company and 'Forward Looking Information' in Appendix 4 for a description of other factors that may cause actual results to differ from those anticipated.

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. 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, and 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, 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 Management's Discussion and Analysis and Annual Information Form each for the year 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 from those expected, there may be others that cause results not to be as anticipated. The Company does not intend, and does not assume any obligation, to update these forward-looking statements except as required by applicable law.

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.