Mr. Anthony Makuch reports
KIRKLAND LAKE GOLD INCREASES 2019 PRODUCTION GUIDANCE TO 920,000 - 1,000,000 OUNCES, FOSTERVILLE MINERAL RESERVES INCREASE 60% TO 2.7 MILLION OUNCES AT 31.0 G/T
Kirkland Lake Gold Ltd. has revised and increased its consolidated three-year production guidance and improved its unit cost guidance for 2019. The company also announced today mineral reserve and mineral resource estimates for Dec. 31, 2018, which include growth in mineral reserve ounces and average grades at both Fosterville and Macassa, as well as on a consolidated basis.
Fosterville mineral reserves
Key highlights of the production guidance and mineral reserve estimates include:
-
Potential for a million ounces in 2019 with three-year production guidance increased to 920,000 to one million ounces for this year, 930,000 to 1.01 million ounces for 2020 and 995,000 to 1,055,000 for 2021; Fosterville three-year guidance revised to 550,000 to 610,000 ounces for 2019 and 2020, with production guidance for 2021 remaining unchanged at 570,000 to 610,000 ounces, respectively; production to resume at Holloway, with 20,000 ounces expected in 2019 increasing to 50,000 ounces by 2021;
-
Consolidated unit cost guidance for 2019 improved, with operating cash costs per ounce guidance revised to $300 to $320 from $360 to $380 previously, with all-in sustaining cost per ounce sold improved to $520 to $560 compared with previous guidance of $630 to $680; Fosterville's 2019 operating costs per ounce sold guidance improved to $170 to $190 from $200 to $220 previously;
-
Consolidated mineral reserves increase 1.1 million ounces or 24 per cent to 5.75 million ounces at 15.8 grams per tonne (g/t) at Dec. 31, 2018 (total additions of 1.86 million ounces before depletion of 750,000 ounces);
-
Fosterville mineral reserves increase 1.02 million ounces or 60 per cent to 2.72 million ounces at 31.0 g/t at Dec. 31, 2018, from 1.7 million ounces at 23.1 g/t (total additions in 2018 of 1,386,000 ounces before depletion of 366,000 ounces); growth in mineral reserves at Dec. 31, 2018, reflects 34-per-cent increase in average grade and 19-per-cent growth in total tonnes, to 2.72 million tonnes from 2.29 million tonnes at Dec. 31, 2017;
-
Mineral reserves at Macassa increase 11 per cent to 2.25 million ounces at 21.9 g/t from 2.03 million ounces at 21.0 g/t at Dec. 31, 2017 (total additions of 464,000 ounces before depletion of 244,000 ounces).
Tony Makuch, president and chief executive officer of Kirkland Lake Gold, commented: "Since November, 2016, Fosterville has been transformed into one of the world's highest-grade, most profitable gold mines, which has greatly benefited Kirkland Lake Gold and its shareholders. The completion of Fosterville's Dec. 31, 2018, mineral reserve and mineral resource estimates, with the related revisions to its life of mine plan and production profile, have taken that transformation to an even higher level, with the potential for much more to come. Largely driven by the 34-per-cent increase in the Fosterville mineral reserve grade, we are now on track to achieve significantly higher levels of production at Fosterville in 2019 than previously expected and could reach one million ounces of annual gold production as early as this year. Just as encouraging as the growth in ounces, is the fact that with a higher average grade at Fosterville, as well as at Macassa, our mineral reserve ounces are more valuable, which means improved unit costs and increased cash flow per ounce going forward based on current gold prices.
"Looking at our mineral reserves in more detail, the 24-per-cent increase in consolidated mineral reserves is a testament to the effectiveness of the infill drilling programs at Fosterville and Macassa. At Fosterville, there is considerable potential for further mineral reserve growth at a number of areas, including the Swan zone, other parts of the Lower Phoenix system, Harrier and a number of other targets, like Robbin's Hill, where early exploration results demonstrate the potential for attractive economic orebodies. Turning to Macassa, we converted close to half a million ounces of mineral resources to mineral reserves in 2018 and have a number of high-potential areas in and around the South Mine complex (SMC) that we are targeting for future growth in mineral reserves and mineral resources."
Improved 2019 full-year guidance
On Feb. 21, 2019, the company announced revised and improved full-year 2019 consolidated guidance. The revision included increasing guidance for consolidated production to 920,000 to one million ounces from the previous guidance of 740,000 to 800,000 ounces, announced on Dec. 11, 2018. The revision to consolidated production guidance resulted from an increase in production guidance in 2019 for Fosterville to 550,000 to 610,000 ounces from 390,000 to 430,000 ounces, with the improvement related to changes to the mine plan to provide access to high-grade Swan zone stopes earlier than previously expected, as well as increased average grades at the mine included in the Dec. 31, 2018, mineral reserve and mineral resource estimates. Also contributing to the increase in consolidated production guidance was the decision to resume operations at the Holloway mine, which is expected to contribute approximately 20,000 ounces of production in 2019.
A number of other components of the company's full-year 2019 guidance have been revised as a result of the increase in target production. Operating cash costs per ounce sold in 2019 are now targeted at $300 to $320 compared with $360 to $380 previously. Fosterville's operating cash costs per ounce sold guidance is revised to $170 to $190 from $200 to $220. New full-year 2019 guidance for operating cash costs per ounce sold at Holloway is introduced at $760 to $780 as a result of the restart of operations at the mine. Full-year 2019 operating cash costs on a consolidated basis are revised to $290 to $300 from $270 to $280 to reflect the addition of close to $20-million of operating cash costs related to production at the Holloway mine. AISC per ounce sold guidance for full year 2019 is also improved, to $520 to $560 compared with $630 to $680 in the initial guidance released on Dec. 11, 2018. The significant improvement in AISC per ounce guidance mainly reflects the increase in target production at Fosterville.
FULL-YEAR 2019 CONSOLIDATED GUIDANCE
Revised guidance Initial guidance
($ millions unless otherwise stated) Feb. 21, 2019 Dec. 11, 2018
Gold production (koz) (1) 920-1,000 740-800
Operating cash costs/ounce sold ($/oz) 2,300-320 360-380
AISC/ounce sold ($/oz) (2) 520-560 630-680
Operating cash costs (2) 290-300 270-280
Royalty costs 25-30 25-30
Sustaining capital (2) 150-170 150-170
Growth capital (2) (3) 155-165 155-165
Exploration and evaluation 100-120 100-120
Corporate G&A expense (3) 26-28 26-28
(1) Production and unit cost guidance for 2019 does not include results
for the Northern Territory.
(2) See non-IFRS (international financial reporting standards) measures set
out in the management's discussion and analysis for the three and nine
months ending Sept. 30, 2018, for further details. The most comparable
IFRS measure for operating cash costs is production costs, as presented
in the consolidated statements of operations and comprehensive income,
and total additions and construction in progress for sustaining and
growth capital. Operating cash costs per ounce and AISC per ounce sold
are comparable with production costs on a unit basis. Operating cash
costs, operating cash cost per ounce sold and AISC per ounce sold reflect
an average U.S.-dollar-to-Canadian-dollar exchange rate of 1.33 and a
U.S.-dollar-to-Australian-dollar exchange rate of 1.39.
(3) Includes general and administrative costs and severance payments. Excludes
non-cash share-based payment expense.
Improved three-year production guidance
(1)
On Feb. 21, 2019, the company announced revisions to its three-year production guidance. The increases reflected higher levels of target production at Fosterville due to a significant increase in the average grade in the mine's Dec. 31, 2019, mineral reserve and mineral resource estimates. In addition, the planned restart of operations at the Holloway mine is expected to contribute an additional 20,000 ounces of production in 2019, 30,000 ounces in 2020 and 50,000 ounces in 2021.
THREE-YEAR PRODUCTION GUIDANCE
Revised (Feb. 21, 2019) Macassa Holt complex (2) Fosterville Consolidated
2019 (koz) 230-240 140-150 550-610 920-1,000
2020 (koz) 230-240 150-160 550-610 930-1,010
2021 (koz) 245-255 180-190 570-610 995-1,055
(1) Three-year production guidance does not include any production from the
Northern Territory.
(2) Includes production from the Holt mine, Holloway mine and Taylor mine.
Initial (Dec. 11, 2018) Macassa Holt complex (2) Fosterville Consolidated
2019 (koz) 230-240 120-130 390-430 740-800
2020 (koz) 230-240 120-130 500-540 850-910
2021 (koz) 245-255 130-140 570-610 970-1,005
(1) Three-year production guidance does not include any production from the
Northern Territory.
(2) Includes production from the Holt mine, Holloway mine and Taylor mine.
Consolidated mineral reserves and mineral resources as at Dec. 31, 2018
Mineral reserves and mineral resources as at Dec. 31, 2018, were estimated using a long-term gold price of $1,230 per ounce ($1,635 (Canadian) per ounce; $1,710 (Australian) per ounce). All mineral resource estimates are provided exclusive of mineral reserves. Comparisons with previous mineral reserves and mineral resources in this news release are to estimates as at Dec. 31, 2017. For more historical comparisons, mineral resource estimates for the Australian operations prior to the midyear 2017 mineral reserve and mineral resource estimates for Fosterville, released in June, 2017, were calculated inclusive of mineral reserves and, therefore, are not directly comparable with the Dec. 31, 2018, and Dec. 31, 2017, estimates. Detailed footnotes for the Dec. 31, 2018, mineral reserve and mineral resource estimates are provided later in this news release.
CONSOLIDATED MINERAL RESERVE ESTIMATE (EFFECTIVE DEC. 31, 2018)
Dec. 31, 2018 Dec. 31, 2017
Depleted
Tonnes Grade Au oz oz 2017 Tonnes Grade Au oz
(000s) (g/t) (000s) (000s) (000s) (g/t) (000s)
Macassa 3,190 21.9 2,250 244 3,010 21.0 2,030
Taylor 751 4.9 117 64 1,090 4.8 167
Holt 3,580 4.3 491 75 3,600 4.2 486
Hislop (1) 176 5.8 33 0 176 5.8 33
Holloway (1) 257 4.3 36 1 54 5.8 10
Total Cdn operations 7,950 11.4 2,920 384 7,930 10.7 2,730
Fosterville 2,720 31.0 2,720 366 2,290 23.1 1,700
Northern Territory (1) 666 5.0 107 0 2,800 2.4 215
Total Aus operations 3,390 25.9 2,820 366 5,090 11.7 1,910
Total 11,340 15.8 5,750 750 13,020 11.1 4,640
(1) The Hislop mine is a formerly producing open-pit mine acquired as part of the St.
Andrew Goldfields acquisition in January, 2016. Hislop has not been operated by the
company since the acquisition. The Holloway mine was placed on care and maintenance
effective Dec. 31, 2016. The Cosmo mine and Union Reefs mill were placed on care and
maintenance effective June 30, 2017.
CONSOLIDATED MEASURED AND INDICATED MINERAL RESOURCES (EFFECTIVE DEC. 31, 2018)
Dec. 31, 2018 Dec. 31, 2017
Measured and indicated Tonnes (000s) Grade (g/t) Gold oz (000s) Tonnes (000s) Grade (g/t) Gold oz (000s)
Macassa 1,787 17.1 982 3,800 17.1 2,090
Taylor 826 5.0 133 1,830 6.2 370
Holt 6,883 4.0 895 6,510 4.1 860
Aquarius 22,300 1.3 926 22,300 1.3 930
Holloway 1,955 4.0 251 1,370 5.3 230
Hislop 1,147 3.6 132 1,150 3.6 130
Ludgate 522 4.1 68 520 4.1 70
Canamax 240 5.1 39 240 5.1 40
Total Cdn operations 35,660 3.0 3,426 37,720 3.9 4,720
Dec. 31, 2018 Dec. 31, 2017
Fosterville 14,800 4.4 2,110 13,900 4.8 2,150
Northern Territory 22,200 2.5 1,750 24,100 2.3 1,810
Total Aus operations 36,900 3.3 3,860 38,000 3.2 3,960
CONSOLIDATED INFERRED MINERAL RESOURCES (EFFECTIVE DEC. 31, 2018)
Dec. 31, 2018 Dec. 31, 2017
Inferred Tonnes (000s) Grade (g/t) Gold oz (000s) Tonnes (000s) Grade (g/t) Gold oz (000s)
Macassa 610 16.7 328 1,920 22.2 1,370
Taylor 1,988 5.3 337 2,570 5.2 430
Holt 8,523 4.7 1,286 8,000 4.8 1,220
Holloway 5,309 4.1 706 2,710 5.2 460
Hislop 797 3.7 95 800 3.7 100
Ludgate 1,396 3.6 162 1,400 3.6 160
Card 238 3.3 25 240 3.3 30
Canamax 170 4.3 23 170 4.3 20
Runway 213 3.7 25 210 3.7 20
Total Cdn operations 19,240 4.8 2,990 18,020 6.6 3,810
Fosterville 10,300 5.5 1,830 8,280 7.1 1,900
Northern Territory 18,100 2.6 1,490 16,300 2.5 1,280
Total Aus operations 28,400 3.6 3,320 24,580 4.0 3,180
Canadian operations -- mineral reserves and mineral resources as at Dec. 31, 2018
Macassa
Mineral reserves at Macassa in 2018 increased 11 per cent after depletion of approximately 244,000 ounces, with total mineral reserves at Dec. 31, 2018, of 2.25 million ounces at an average grade of 21.9 g/t, which compared with mineral reserves of 2.03 million ounces at an average grade of 21.0 g/t at Dec. 31, 2017.
Measured and indicated (M&I) mineral resources at Dec. 31, 2018, totalled 982,000 ounces at an average grade of 17.1 g/t, while inferred mineral resources totalled 328,000 ounces at an average grade of 16.7 g/t. By comparison, mineral resources at Dec. 31, 2017, totalled M&I mineral resources of 2.09 million ounces at an average grade of 17.1 g/t, and inferred mineral resources of 1.37 million ounces at an average grade of 22.2 g/t. The change in mineral resources compared with the prior year resulted from conversion of 464,000 ounces of mineral resources to mineral reserves. In addition, following a review of existing mineral resources, the company determined that approximately 1.0 million ounces of inferred mineral resources and 600,000 ounces of M&I mineral resources should be removed from mineral resources, largely in areas of historic mining outside of the SMC, with some additional deletions relating to reinterpretations based on new drilling.
During 2019, the company is planning approximately 90,000 metres of underground drilling at Macassa, using three underground drills. The 2019 drilling program is mainly targeting the continued expansion of the SMC to the east, to the west and to depth, with the aim of growing mineral resources in support of future growth in mineral reserves.
Dec. 31, 2018 Dec. 31, 2017
Tonnes Grade Au oz Tonnes Grade Au oz
Macassa (000s) (g/t) (000s) (000s) (g/t) (000s)
Mineral reserves
Proven 288 21.7 201 386 16.7 207
Probable 2,900 22.0 2,050 2,620 21.7 1,830
Proven + probable 3,190 21.9 2,250 3,010 21.0 2,030
Mineral resources exclusive of mineral reserves exclusive of mineral reserves
Measured 453 18.4 268 1,570 17.8 900
Indicated 1,335 16.6 714 2,230 16.6 1,190
Measured + indicated 1,787 17.1 982 3,800 17.1 2,090
Inferred 610 16.7 328 1,920 22.2 1,370
Taylor
Mineral reserves at Taylor at Dec. 31, 2018, totalled 117,000 ounces at an average grade of 4.9 g/t, which compared with mineral reserves at Dec. 31, 2017, of 167,000 ounces at an average grade of 4.8 g/t. The reduction in mineral reserves in 2018 reflected 64,000 ounces of depletion that were not replaced through the conversion of mineral resources. M&I mineral resources at Taylor at Dec. 31, 2018, totalled 133,000 ounces at an average grade of 5.0 g/t, which compared with M&I mineral resources at Dec. 31, 2017, of 370,000 ounces at an average grade of 6.2 g/t. Inferred mineral resources totalled 337,000 ounces at an average grade of 5.3 g/t at Dec. 31, 2018, versus 430,000 ounces at an average grade of 5.2 g/t at the end of 2017. The reduction in mineral resources compared with the Dec. 31, 2017, estimates reflected reinterpretations of zones and weaker than expected grade continuity in some areas, as well as a concentration of drill metres on stepout drilling aimed at identifying new areas of gold mineralization and following up on previous extensions of gold mineralization rather than resource conversion.
In 2019, the company is planning approximately 44,000 metres of surface and underground drilling (26,000 metres from surface and 18,000 metres from underground). Key targets of the 2019 drilling program will be areas below and to the east of the 1004 zone of the west porphyry deposit.
Dec. 31, 2018 Dec. 31, 2017
Tonnes Grade Au oz Tonnes Grade Au oz
Taylor (000s) (g/t) (000s) (000s) (g/t) (000s)
Mineral reserves
Proven - - - 445 5.5 78
Probable 751 4.9 117 646 4.3 89
Proven + probable 751 4.9 117 1,090 4.8 167
Mineral resources exclusive of mineral reserves exclusive of mineral reserves
Measured - - - 590 8.1 150
Indicated 826 5.0 133 1,240 5.3 210
Measured + indicated 826 5.0 133 1,830 6.2 370
Inferred 1,988 5.3 337 2,570 5.2 430
Holt
Mineral reserves at the Holt mine at Dec. 31, 2018, totalled 491,000 ounces at an average grade of 4.3 g/t, a slight increase from 486,000 ounces at an average grade of 4.2 g/t at Dec. 31, 2017. The mine converted 81,000 ounces of mineral resources to mineral reserves, which more than offset the 75,000 ounces of depletion during 2018. Measured and indicated resources totalled 895,000 ounces at an average grade of 4.0 g/t, a 4-per-cent increase from 860,000 ounces at an average grade of 4.1 g/t at Dec. 31, 2017. Inferred mineral resources at Dec. 31, 2018, totalled 1,286,000 ounces at an average grade of 4.7 g/t, 5 per cent higher than 1.22 million ounces at an average grade of 4.8 g/t at the same time the previous year.
The company is not planning extensive exploration drilling in 2019 subject to completing a revised royalty agreement relating to the Holt properties.
Dec. 31, 2018 Dec. 31, 2017
Tonnes Grade Au oz Tonnes Grade Au oz
Holt (000s) (g/t) (000s) (000s) (g/t) (000s)
Mineral reserves
Proven 1,930 4.1 253 1,770 4.0 229
Probable 1,660 4.5 238 1,830 4.4 257
Proven + probable 3,580 4.3 491 3,600 4.2 486
Mineral resources exclusive of mineral reserves exclusive of mineral reserves
Measured 4,036 4.1 527 3,730 4.1 500
Indicated 2,847 4.0 367 2,780 4.1 370
Measured + indicated 6,883 4.0 895 6,510 4.1 860
Inferred 8,523 4.7 1,286 8,000 4.8 1,220
Holloway
The company announced today plans to resume operations at the Holloway mine as a result of entering into an amended and restated royalty agreement with Franco-Nevada Corp., which will establish a fixed 3-per-cent net smelter returns royalty from the Holloway properties. With a planned restart of production activities, the company is now targeting approximately 20,000 ounces of production in 2019, growing to approximately 50,000 ounces by 2021.
At Dec. 31, 2018, mineral reserves at the Holloway mine totalled 36,000 ounces at an average grade of 4.3 g/t, which compared with mineral reserves of 10,000 ounces at an average grade of 5.8 g/t at Dec. 31, 2017. M&I mineral resources at Dec. 31, 2018, totalled 251,000 ounces at an average grade of 4.0 g/t, while inferred mineral resources totalled 706,000 ounces at an average grade of 4.1 g/t. By comparison, M&I mineral resources at Dec. 31, 2017, totalled 230,000 ounces at an average grade of 5.2 g/t, while inferred mineral resources totalled 540,000 ounces at an average grade of 5.2 g/t.
Dec. 31, 2018 Dec. 31, 2017
Tonnes Grade Au oz Tonnes Grade Au oz
Holloway (000s) (g/t) (000s) (000s) (g/t) (000s)
Mineral reserves
Proven 24 3.8 3 - - -
Probable 233 4.4 33 54 5.8 10
Proven + probable 257 4.3 36 54 5.8 10
Mineral resources exclusive of mineral reserves exclusive of mineral reserves
Measured 286 3.8 35 156 4.1 21
Indicated 1,669 4.0 217 1,211 5.4 210
Measured + indicated 1,955 4.0 251 1,367 5.2 230
Inferred 5,309 4.1 706 2,710 5.2 460
Australian operations mineral reserves and mineral resources as at Dec. 31, 2018
Fosterville
In 2018, the transformation of Fosterville into one of the world's most profitable, highest-grade gold mines gained further momentum. Exploration work during the year at Fosterville focused on infill and extension drilling at a number of in-mine targets, as well as work to evaluate district targets in close proximity to the mine. Encouraging infill drilling results from the Swan zone were reported in July, September and December in support of mineral resource conversion into mineral reserves. In addition, development of an exploration drift at Harrier South at Fosterville commenced during Q2 2018, with drilling from the drift commencing in Q4 2018 in order to test the depth potential of the Harrier South system. Harrier is a highly attractive exploration target where concentrations of quartz veining with visible gold have been intersected similar to those found at the Lower Phoenix system near the high-grade Swan zone.
Largely based on the success of the Swan zone infill drilling, mineral reserves at Dec. 31, 2018, increased 1.02 million ounces from the Dec. 31, 2017, mineral reserve, to 2.72 million ounces at an average grade of 31.0 g/t from 1.7 million ounces at an average grade of 23.1 g/t at Dec. 31, 2017. The increase in ounces represented 60-per-cent growth, while the average grade was 34 per cent higher than the prior year's mineral reserve estimate. The 60-per-cent increase in mineral reserve ounces was achieved after depletion of 366,000 ounces through 2018 gold production, resulting in total additions to mineral reserves of 1,386,000 ounces. With the completion of the Dec. 31, 2018, mineral reserve and mineral resource estimates, the mineral reserve at Fosterville has grown by a total of 2,476,000 ounces or 1,015 per cent from 244,000 ounces at Dec. 31, 2015, mineral reserve estimate, the existing mineral reserve when Fosterville was acquired by Kirkland Lake Gold in November, 2016.
Mineral reserves in the Swan zone doubled from the prior year level, increasing to 2.34 million ounces at an average grade of 49.6 g/t at Dec. 31, 2018, from 1.16 million ounces at 61.2 g/t at Dec. 31, 2017. A significant proportion of Swan mineral resources at Dec. 31, 2017, was converted into mineral reserves in the Dec. 31, 2018, estimates, consistent with the priority placed on mineral resource conversion in the 2018 drilling program. In addition to continued infill drilling to convert mineral resources, future drilling around the Swan zone will also target continued expansion of the zone, including following up on drill results in 2018 that intersected the Lower Phoenix gold system approximately 750 metres down plunge from the deepest mineral resources in the Swan zone.
Fosterville continues to have a large base of mineral resources to support future growth in mineral reserves, as well as a number of attractive exploration targets with significant potential to add future mineral resources. At Dec. 31, 2018, M&I mineral resources totalled 2.11 million ounces at an average grade of 4.4 g/t, which compared with M&I mineral resources of 2.15 million ounces at an average grade of 4.8 g/t at Dec. 31, 2017. Inferred mineral resources at Dec. 31, 2018, totalled 1.83 million ounces at an average grade of 5.5 g/t, versus 1.9 million ounces at an average grade of 7.1 g/t at Dec. 31, 2017.
During 2019, exploration work at Fosterville is focusing on continuing to extend known mineralized zones and test new mineralized structures in the Lower Phoenix and Harrier systems, and at Robbin's Hill. In addition, work is continuing on the LODE (large ore deposit exploration) program, which is evaluating a number of regional targets, some of which are beneath former open pits along known fault structures around the Fosterville mine.
Dec. 31, 2018 Dec. 31, 2017
Tonnes Grade Au oz Tonnes Grade Au oz
Fosterville (000s) (g/t) (000s) (000s) (g/t) (000s)
Mineral reserves
Proven 178 16.7 96 236 14.8 112
Probable 2,550 32.0 2,620 2,050 24.1 1,590
Proven + probable 2,720 31.0 2,720 2,290 23.1 1,700
Mineral resources exclusive of mineral reserves exclusive of mineral reserves
Measured 1,900 2.9 177 1,940 2.9 181
Indicated 12,900 4.7 1,930 11,900 5.1 1,970
Measured + indicated 14,800 4.4 2,110 13,900 4.8 2,150
Inferred 10,300 5.5 1,830 8,280 7.1 1,900
Dec. 31, 2018 Dec. 31, 2017
Tonnes Grade Au oz Tonnes Grade Au oz
Swan (1) (000s) (g/t) (000s) (000s) (g/t) (000s)
Mineral reserves
Proven 62 27.6 55 0 0 0
Probable 1,410 50.6 2,290 588 61.2 1,160
Proven + probable 1,470 49.6 2,340 588 61.2 1,160
Mineral resources exclusive of mineral reserves exclusive of mineral reserves
Measured 2 59.6 4 0 0.0 0
Indicated 32 15.7 16 46 116 171
Measured + indicated 34 18.3 20 46 116 171
Inferred 249 13.4 107 570 36.6 671
(1) The Swan zone mineral reserve and mineral resource estimates are components of the estimates
for the Fosterville mine.
Northern Territory (Cosmo mine/Union Reefs mill)
On June 30, 2017, Kirkland Lake Gold suspended operations at the Cosmo mine and Union Reefs mill with the operations being placed on care and maintenance. Following the move to care and maintenance, the Cosmo mine and Union Reef mill are being maintained in a state of readiness to resume operation in the event that new mineral reserves are delineated which establish an economic deposit or deposits in the Northern Territory.
In 2018, an extensive program of surface and underground exploration drilling and development was completed involving approximately 114,700 metres of drilling and the development of three exploration drifts at the Cosmo mine into the Lantern deposit. On April 30, 2018, the company announced that high-grade, visible-gold-bearing mineralization had been intersected 1,000 metres below surface down plunge of former producing open pits at Union Reefs, the location of the company's processing facility. The results highlighted the potential that exists to establish additional sources of gold production in the Northern Territory. On Nov. 5, 2018, the company reported additional high-grade, visible-gold-bearing mineralization at the Lady Alice deposit at Union Reefs and also announced the discovery of high-grade mineralization at depth to the south of the existing mineral resources at Union Reefs. On Dec. 11, 2018, the company announced that work in the Northern Territory was moving to the advanced exploration phase, with a focus on a potential restart of mining and milling operations as early as the second half of 2019.
Mineral reserves in the Northern Territory at Dec. 31, 2018, totalled 107,000 ounces at 5.0 g/t, which compared with 215,000 ounces at an average grade of 2.4 g/t at Dec. 31, 2017. The doubling of the average mineral reserve grade in the Dec. 31, 2018, estimate resulted from an increase in the cut-off grade for the purpose of mineral reserve calculations at the Cosmo mine, the impact of additional drilling at Lantern and the removal of lower-grade ounces at other targets. M&I mineral resources totalled 1.75 million ounces at an average grade of 2.5 g/t versus 1.81 million ounces at an average grade of 2.3 g/t at Dec. 31, 2017. Inferred mineral resources increased 16 per cent at Dec. 31, 2018, to 1.49 million ounces at an average grade of 2.6 g/t from 1.28 million ounces at an average grade of 2.5 g/t at Dec. 31, 2016.
In 2019, exploration drilling is focusing on mineral resource growth and definition of the Lantern deposit and the continued evaluation of targets at Union Reefs. Advanced exploration work is progressing toward a possible restart decision.
Dec. 31, 2018 Dec. 31, 2017
Tonnes Grade Au oz Tonnes Grade Au oz
Northern Territory (000s) (g/t) (000s) (000s) (g/t) (000s)
Mineral reserves
Proven 33 3.1 3 92 3.5 112
Probable 633 5.1 103 2,710 2.4 1,590
Proven + probable 666 5.0 107 2,800 2.4 1,700
Mineral resources exclusive of mineral reserves exclusive of mineral reserves
Measured 1,770 4.7 268 1,750 4.7 264
Indicated 20,400 2.3 1,480 22,400 2.1 1,540
Measured + indicated 22,200 2.5 1,750 24,100 2.3 1,810
Inferred 18,100 2.6 1,490 16,300 2.5 1,280
Technical reports
The National Instrument 43-101 2016 technical report for Fosterville dated March 30, 2017, and effective Dec. 31, 2016, along with the 2017 technical report for Fosterville dated April 2, 2018, and effective Dec. 30, 2017, support the company's end of 2018 mineral reserve and mineral resource disclosure and were prepared by Troy Fuller, MAIG, and Ion Hann, FAusIMM.
An updated NI 43-101 technical report effective Dec. 31, 2018, will be available on the company's SEDAR profile for both the Fosterville and Macassa mines within 45 days of this news release.
Qualified persons
Pierre Rocque, PEng, vice-president, technical services, operations, is a qualified person as defined in NI 43-101 and has reviewed and approved disclosure of the mineral reserves technical information and data for the Canadian assets included in this news release.
Ian Holland, FAusIMM, vice-president, Australian operations, is a qualified person as defined in NI 43-101 and has reviewed and approved the mineral reserves technical information and data for the Australian assets included in this news release.
Simon Hitchman, FAusIMM (CP), MAIG, principal geologist, is a qualified person as such term is defined in NI 43-101 and has reviewed and approved the mineral resources technical information and data for the Australian assets included in this news release.
Detailed footnotes related to mineral reserve estimates (dated Dec. 31, 2018)
-
CIM definitions (2014) were followed in the calculation of mineral reserves.
-
Mineral reserves were estimated using a long-term gold price of $1,230 (U.S.)/oz ($1,635 (Canadian)/oz; $1,710 (Australian)/oz).
-
Cut-off grades for Canadian assets were calculated for each stope, including the costs of: mining, milling, general and administration, royalties and capital expenditures, and other modifying factors (such as dilution, mining extraction, mill recovery).
-
Cut-off grades for Australian assets from 0.4 g/t Au to 3.0 g/t Au, depending upon width, mining method and ground conditions; dilution and mining recovery factors varied by property.
-
Mineral reserves estimates for the Canadian assets were prepared under the supervision of Mr. Rocque.
-
Mineral reserves estimates for the Fosterville property were prepared under the supervision of Ion Hann, FAusIMM.
-
Mineral reserves estimates for the Northern Territory property were prepared under the supervision of Mr. Rocque.
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Mineral reserves for Fosterville relate to underground mineral reserves and do not include 649,000 tonnes at an average of 7.7 g/t for 160,000 ounces of carbon-in-leach residues -- 25-per-cent recovery is expected based on operating performances.
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Totals may not add exactly due to rounding.
Detailed footnotes related to mineral resource estimates for Canadian assets (dated Dec. 31, 2018)
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CIM definitions (2014) were followed in the calculation of mineral resource.
- Mineral resources are reported exclusive of mineral reserves. Mineral resources were calculated according to Kirkland Lake Gold's mineral resource estimation guidelines.
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Mineral resource estimates were prepared under the supervision of Eric Kallio, PGeo, senior vice-president, exploration.
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Mineral resources are estimated using a long-term gold price of $1,230 (U.S.)/oz ($1,635 (Canadian)/oz).
- Mineral resources were estimated using a 8.6 g/t cut-off grade for Macassa, a 2.9 g/t cut-off grade for Holt and a 2.6 g/t cut-off grade for Taylor; a 3.9 g/t cut-off grade (Holloway); a 2.5 g/t cut-off grade for Canamax, Card, Runway and Ludgate; a 2.2 g/t cut-off grade for Hislop; and zero g/t cut-off grade for Aquarius.
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Totals may not add up due to rounding.
Detailed footnotes related to mineral resource estimates for Australian assets (dated Dec. 31, 2018)
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CIM definitions (2014) were followed in the estimation of mineral resource.
- Mineral resources are estimated using a long-term gold price of $1,230 (U.S.)/oz ($1,710 (Australian)/oz).
- Mineral resources for the Australian assets are reported exclusive of mineral reserves.
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Mineral resources at Fosterville were estimated using cut-off grades 0.7 g/t Au for oxide and 1.0 g/t Au for sulphide mineralization to potentially open-pittable depths of approximately 100 m, below which a cut-off grade of 3.0 g/t Au was used.
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Mineral resources in the Northern Territory were estimated using a cut-off grade of 0.5 g/t Au for potentially open-pit mineralization and cut-offs of 1.0 to 2.0 g/t Au for underground mineralization.
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Mineral resource estimates for the Fosterville property were prepared under the supervision of Troy Fuller, MAIG.
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Mineral resource estimates for the Northern Territory properties were prepared under the supervision of Owen Greenberger, MAIG.
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Totals may not add up due to rounding.
About Kirkland Lake Gold Ltd.
Kirkland Lake Gold is a mid-tier gold producer operating in Canada and Australia that produced 723,477 ounces in 2018 and is on track to achieve significant production growth over the next three years, including target production of 920,000 to one million ounces in 2019, 930,000 to 1.01 million ounces in 2020 and 995,000 to 1,055,000 ounces in 2021. The production profile of the company is anchored by two high-grade, low-cost operations, including the Macassa mine located in Northern Ontario and the Fosterville mine located in the state of Victoria, Australia. Kirkland Lake Gold's solid base of quality assets is complemented by district-scale exploration potential, supported by a strong financial position with extensive management and operational expertise.
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