11:00:19 EST Tue 24 Nov 2020
Enter Symbol
or Name
USA
CA



Kirkland Lake Gold Ltd
Symbol KL
Shares Issued 286,635,908
Close 2020-02-19 C$ 49.58
Recent Sedar Documents

Kirkland estimates 2020 Au production, doubles dividend

2020-02-20 02:01 ET - News Release

Mr. Anthony Makuch reports

KIRKLAND LAKE GOLD ANNOUNCES VALUE ENHANCEMENT PROGRAM, INCREASES 2020 PRODUCTION GUIDANCE AND GROWS MINERAL RESERVES

Kirkland Lake Gold Ltd. has launched its value enhancement program, a number of initiatives aimed at maximizing value for shareholders. Included among the initiatives are returning significant amounts of capital to shareholders, increasing both production and mineral reserves through the addition of the Detour Lake mine to the company's portfolio, and designating assets as non-core, where they are not generating adequate returns. The company also today released updated 2020 guidance, incorporating the impact of the value enhancement program and released mineral reserve and mineral resource estimates for Dec. 31, 2019.

Details of value enhancement program initiative include:

  • Repurchasing 20 million shares: 20 million common shares to be repurchased over the next 12 to 24 months through the company's normal course issuer bid (NCIB); pursuant to the terms of the current NCIB, the company can repurchase up to 19,749,092 shares between now and the NCIB's expiry on May 28, 2020; the company plans on renewing the NCIB upon its expiry; the company also announces its intention to enter into an automatic share purchase plan with its designated broker to allow for purchases to be completed on a predetermined schedule, subject to the approval of the Toronto Stock Exchange; assuming the closing prices on the New York Stock Exchange and the Toronto Stock Exchange on Feb. 18, 2020, the 20 million of share repurchases would represent approximately $750-million ($1,000-million (Canadian));
  • Doubling quarterly dividend to 12.5 cents per share: Quarterly dividend increased to 12.5 cents per share, effective first quarter 2020 to be paid on April 13, 2020, to shareholders of record as of March 31, 2020; on an annual basis, the 50 cents per share of dividends will return approximately $145-million of capital to shareholders per year;
  • Adding approximately 600,000 ounces of annual production and 14.8 million ounces of mineral reserves through acquisition of Detour Lake mine: completion of the Detour Gold Corp. acquisition on Jan. 31, 2020, adds approximately 600,000 ounces of annual production and 14.8 million ounces of mineral reserves; the company plans to invest $25-million to $30-million in 2020 on exploration drilling at Detour Lake, with the objective being to significantly increase mineral reserves in support of substantially increasing production and driving down unit costs; the addition of Detour Lake is expected to add significantly to the company's free cash flow in 2020 and going forward;
  • Considering strategic options for maximizing value at Holt complex and in Northern Territory: following completion of the Detour Gold acquisition, the company has designated the Holt complex in Northern Ontario and the company's assets in the Northern Territory in Australia as non-core with plans to consider all options to maximize value from these assets; the Holt complex last year produced 113,952 ounces at operating cash costs of $938 per ounce and all-in sustaining costs (AISC) of $1,386 per ounce; the company is currently conducting an advanced exploration program and doing rehabilitation work at the Northern Territory assets; the advanced exploration program includes test mining at the Cosmo mine, test processing at the Union Reefs mill and extensive regional diamond drilling; the company plans to continue operating the Holt complex and move forward with advanced exploration work and rehabilitation efforts in the Northern Territory while it considers strategic options for the assets.

Tony Makuch, president and chief executive officer of Kirkland Lake Gold, commented: "Following completion of the Detour Gold acquisition, Kirkland Lake Gold is a company with three high-quality, free-cash-flow-generating assets: Fosterville, Macassa and Detour Lake. The three operations together will produce around 1.4 million ounces of gold this year, and all three have substantial growth potential. We are also an industry leader in profitability and have the strongest balance sheet among our peers. We plan to put our financial strength to use to maximize value for our shareholders. Between our cash on hand and the significant amounts of free cash flow we generate, we are in a position to commit a substantial amount of capital to repurchase our shares and to double our current quarterly dividend. Very importantly, we can undertake these initiatives while still maintaining a strong balance sheet and ability to internally fund our growth projects.

"We are also taking steps to maximize the value of our business portfolio. The addition of Detour Lake is an important development for our company and our shareholders that could be transformational from the standpoint of value creation. Results at Detour this year should be similar to the mine's performance in 2019. Looking ahead, through the work we are planning, we see the potential for Detour Lake to reach over 700,000 ounces of annual production at all-in sustaining costs (AISC) of approximately $850 per ounce as early as 2021. With the quality and potential of our three key operations, and circumstances at other assets, we have decided to designate our Holt complex and assets in the Northern Territory as non-core and will consider all options for maximizing value. We will continue our current work plans at each of these assets while we go through the strategic review process. With the initiatives being announced today, Kirkland Lake Gold is a company with a portfolio of highly competitive, very profitable assets and substantial financial strength. We are also a company that is very committed to rewarding shareholders for their continued support."

Revisions to full-year 2020 guidance

On Feb. 20, 2020, the company announced revisions to the full-year 2020 consolidated guidance initially issued on Dec. 18, 2020. The revisions to guidance reflect the addition of the Detour Lake mine to the company's business portfolio, effective Jan. 31, 2020 (guidance is based on pro forma results for the full year). Guidance for 2020 related to the Holt complex remains in place while the company reviews strategic options for these assets. Also, there is no impact on guidance from the company's advanced exploration work in the Northern Territory as the company's Northern Territory assets were excluded from the initial 2020 guidance.

                                      INITIAL 2020 GUIDANCE 
                                      (as at Dec. 18, 2019)
                              ($ millions unless otherwise stated)

                                               Macassa   Holt complex (2)   Fosterville   Consolidated

Gold production (koz) (1)                      240-250           120-140        590-610      950-1,000 
Operating cash costs/ounce sold ($/oz) (2)   $470-$490         $790-$810      $130-$150      $300-$330 
AISC/ounce sold ($/oz) (2)                                                                   $570-$630 
Operating cash costs ($M) (2)                                                                $310-$320 
Royalty costs ($M)                                                                             $58-$62  
Sustaining capital ($M) (2)                                                                  $165-$175 
Growth capital ($M) (2)                                                                        $70-$80  
Exploration ($M) (3)                                                                         $120-$140 
Corporate G&A ($M) (4)                                                                         $40-$45  

(1) Production and unit cost guidance for 2020 as issued in a press release dated Dec. 18, 2019. 
The guidance does not include results for the Northern Territory.
(2) See "Non-IFRS Measures" set out starting on page 38 of management's discussion and analysis
for the three and 12 months ended Dec. 31, 2019, for further details. The most comparable 
international financial reporting standard measure for operating cash costs, operating cash 
costs per ounce sold and AISC per ounce sold is production costs, as presented in the 
consolidated statements of operations and comprehensive income, and total additions and 
construction in progress for sustaining and project capital. 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 1.30 and a U.S.-dollar-to-Australian-dollar exchange rate of 1.43.
(3) Exploration expenditures include capital expenditures related to infill drilling for mineral 
resource conversion, capital expenditures for extension drilling outside of existing mineral 
resources and expensed exploration.
(4) Includes general and administrative costs. Excludes non-cash share-based payment expense.

                                        REVISED FULL-YEAR 2020 GUIDANCE 
                                             (as at Feb. 19, 2020)
                                      ($ millions unless otherwise stated)
 
                                               Macassa   Detour Lake (1)   Holt complex   Fosterville   Consolidated 

Gold production (koz) (1)                      240-250          520-540         120-140       590-610    1,470-1,540
Operating cash costs/ounce sold ($/oz) (2)   $470-$490        $720-$740       $790-$810     $130-$150      $450-$470 
AISC/ounce sold ($/oz) (2)                                                                  $820-$840 
Operating cash costs ($M) (2)                                                               $700-$720 
Royalty costs ($M)                                                                            $85-$90  
Sustaining capital ($M) (2)                                                                 $420-$430 
Growth capital ($M) (2)                                                                       $70-$80  
Exploration ($M) (3)                                                                        $150-$170 
Corporate G&A ($M) (4)                                                                        $50-$55  

(1) Production, unit cost and expenditure guidance for 2020 as issued in a press release dated 
Dec. 18, 2019, is adjusted for the addition of Detour Lake, effective Feb. 1, 2020. The guidance 
does not include results for the Northern Territory.
(2) See "Non-IFRS Measures" set out starting on page 38 of the MD&A for the three and 12 months 
ended Dec. 31, 2019, for further details. The most comparable IFRS measure for operating cash 
costs, operating cash costs per ounce sold and AISC per ounce sold is production costs, as 
presented in the consolidated statements of operations and comprehensive income, and total 
additions and construction in progress for sustaining and project capital. 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 1.30 and a U.S.-dollar-to-Australian-dollar exchange rate of 
1.43.
(3) Exploration expenditures include capital expenditures related to infill drilling for 
mineral resource conversion, capital expenditures for extension drilling outside of existing 
mineral resources and expensed exploration.
(4) Includes general and administrative costs and severance payments. Excludes share-based 
payment expense.

Consolidated production guidance for 2020 is increased from 950,000 to one million ounces to 1.47 million to 1.54 million ounces. The change reflects the addition of 520,000 to 540,000 ounces from Detour Lake, representing expected production over the final 11 months of the year. Operating cash cost and AISC per ounce sold guidance is increased to $450 to $470 from $300 to $330 and $820 to $840 from $580 to $630, respectively. The increases to both operating cash cost and AISC per ounce are the result of the addition of Detour Lake. Among other revisions, sustaining capital expenditure guidance increases to $420-million to $430-million from $165-million to $175-million, reflecting the addition of Detour Lake, where all capital expenditures are recorded as sustaining capital. The increase in exploration expenditure guidance reflects the company's intention to invest aggressively in exploration drilling Detour Lake over the next year. Corporate general and administrative guidance increases to $50-million to $55-million from $40-million to $45-million previously due to added costs related to the addition of the Detour Lake mine.

Consolidated mineral reserves and mineral resources as at Dec. 31, 2019

On Feb. 20, 2020, the company released mineral reserve and mineral resource estimates as at Dec. 31, 2019, with the comparison period being Dec. 31, 2018. Included in the company's mineral reserve and mineral resource estimates are mineral reserves and mineral resources related to the acquired assets of Detour Gold as at Dec. 31, 2019.

Highlights of the Dec. 31, 2019, mineral reserves and mineral resource estimates include:

  • Consolidated mineral reserves increase 257 per cent to 20.47 million ounces with addition of 14,846,000 ounces of open-pit mineral reserves at Detour Lake mine;
  • Mineral reserves at Macassa increase 9 per cent to 2,453,000 ounces, including mineral reserves at depth of 2.36 million ounces at an average grade of 22.1 grams per tonne, and 93,000 ounces at an average grade of 10.7 g/t in near-surface zones, along the amalgamated break; development from surface is commencing toward the near-surface zones with the aim of establishing a second mining front at Macassa;
  • Mineral reserves at Fosterville of 2.32 million ounces include 2.1 million ounces of 21.8 g/t in the Lower Phoenix and Harrier systems (including 1.56 million ounces at 38.6 g/t at Swan zone) and 218,000 ounces at 5.5 g/t above 650 metres below surface at Robbin's Hill; twin development ramps are being driven to Robbins Hill, which is expected to become a second mining operation at Fosterville; exploration expenditures at Fosterville are estimated at $70-million to $80-million in 2020, with the focus being on drilling and development in areas where quartz veining with visible gold has been intersected.
  • Mineral reserves at Holt complex increase 9 per cent to 702,000 ounces at 4.0 grade; Northern Territory mineral reserves grow 20 per cent to 128,000 ounces at 4.0 g/t.

Mineral reserves and mineral resources were as at Dec. 31, 2019. For Kirkland Lake Gold assets as at Dec. 31, 2019, mineral reserves and mineral resources were estimated using a long-term gold price of $1,300 (U.S.) per ounce ($1,700 (Canadian) per oz; $1,765 (Australian) per oz). For Detour Lake mineral reserves and mineral resources as at Dec. 31, 2019, the long-term gold price is assumed to be $1,000 (U.S.) per oz with an assumed exchange rate of $1 (U.S.) to $1.10 (Canadian). All mineral resource estimates are provided exclusive of mineral reserves. Comparisons with previous mineral reserves and mineral resources in this press release are to estimates as at Dec. 31, 2018. 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, 2019, and Dec. 31, 2018, estimates. Detailed footnotes for the Dec. 31, 2019, mineral reserve and mineral resource estimates are provided later in this press release.

                                    CONSOLIDATED MINERAL RESERVE ESTIMATE 
                                          (effective Dec. 31, 2019)
 
                                      Dec. 31, 2019                                     Dec. 31, 2018         

Proven and probable          Tonnes       Grade     Gold oz    Depleted oz      Tonnes       Grade     Gold oz
                              (000s)       (g/t)      (000s)    2019 (000s)      (000s)       (g/t)      (000s)

Macassa                       3,320        22.1       2,360            246       3,190        21.9       2,250
Macassa near surface            273        10.7          93              -           -           -           -
Holt complex (1)              5,432         4.0         702            120       4,588         4.4         644
Hislop (1)                      176         5.8          33              -         176         5.8          33
                            -------        ----      ------          -----      ------        ----       -----
Total Cdn underground         9,200        10.8       3,190            367       7,950        11.4       2,920
                            -------        ----      ------          -----      ------        ----       -----
Detour Lake pit             397,680        0.99      12,640
West Detour pit              54,920        0.94       1,660
North pit                     5,950        0.98         187
Detour low-grade fines       18,900        0.59         360
                            -------        ----      ------          -----      ------        ----       -----
Total Cdn open pit          477,450        0.97      14,846              0           0        0.00           0
                            -------        ----      ------          -----      ------        ----       -----
Total Cdn operations        486,650        1.15      18,030            367       7,950        11.4       2,920
                            -------        ----      ------          -----      ------        ----       -----
Fosterville                   3,000        21.8       2,100            627       2,720        31.0       2,720
Robbins Hill                  1,240         5.5         218              -           -           -           -
Northern Territory (1)          988         4.0         128             10         666         5.0         107
                            -------        ----      ------          -----      ------        ----       -----
Total AUS operations          5,220        14.6       2,450            637       3,390        25.9       2,820
                            -------        ----      ------          -----      ------        ----       -----
Total                       491,900        1.29      20,470          1,004      11,340        15.7       5,740
                            -------        ----      ------          -----      ------        ----       -----

(1) The Hislop mine is a former producer acquired as part of the St. Andrew Goldfields acquisition in 
January, 2016. Hislop has not been operated since the acquisition. The Holloway mine was placed on 
care and maintenance, effective Dec. 31, 2016, and resumed operation in the first quarter 2019. 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, 2019)
 
Measured and indicated                       Dec. 31, 2019                        Dec. 31, 2018            

                                   Tonnes        Grade      Gold oz       Tonnes        Grade      Gold oz
                                    (000s)        (g/t)       (000s)       (000s)        (g/t)       (000s)
Canada ops, underground
Macassa                             1,616         13.8          717        1,621         17.0          886
Macassa near surface                   47          7.8           12          167         17.9           96
Holt complex                        7,752          4.2        1,047        9,664          4.1        1,279
Hislop                              1,147          3.6          132        1,147          3.6          132
Detour zone 58N                     2,900          5.8          534            -            -            -
Ludgate                                 -            -            -          522          4.1           68
Canamax                               240          5.1           39          240          5.1           39
                                  -------         ----        -----       ------         ----        -----
Total Canada underground           13,702          5.7        2,482       13,360          5.8        2,500
                                  -------         ----        -----       ------         ----        -----
Canada ops, open pit
Detour Lake                        81,400         1.15        3,003
West Detour                        31,000         0.88          878
Aquarius                           22,300         1.29          926       22,300         1.29          926
                                  -------         ----        -----       ------         ----        -----
Total Canada open pit             134,700          1.1        4,807       22,300          1.3          926
                                  -------         ----        -----       ------         ----        -----
Total Cdn operations              148,402          1.5        7,290       35,660          3.0        3,426
                                  -------         ----        -----       ------         ----        -----

                                             Dec. 31, 2019                         Dec. 31, 2018

Fosterville                        12,300          5.3        2,080       11,600          5.0        1,850
Robbin's Hill                       3,460          3.5          386        3,210          2.5          256
                                  -------         ----        -----       ------         ----        -----
Northern Territory                 17,200          2.5        1,410       22,200          2.5        1,750
                                  -------         ----        -----       ------         ----        -----
Total AUS operations               32,900          3.7        3,870       36,900          3.3        3,860
                                  -------         ----        -----       ------         ----        -----

                               CONSOLIDATED INFERRED MINERAL RESOURCES 
                                     (effective Dec. 31, 2019)
 
Inferred                                   Dec. 31, 2019                       Dec. 31, 2018            

                                  Tonnes       Grade     Gold oz      Tonnes       Grade     Gold oz
                                   (000s)       (g/t)      (000s)      (000s)       (g/t)      (000s)
Canada ops, underground
Macassa                            1,039        16.7         557         580        16.8         313
Macassa near surface                 146        11.5          54          30        15.5          15
Holt complex                       9,097         4.4       1,294      15,820         4.6       2,329
Hislop                               797         3.7          95         797         3.7          95
Detour zone 58N                    1,000         4.4         136           -           -           -
Ludgate                                -           -           -       1,396         3.6         162
Canamax                              170         4.3          23         170         4.3          23
                                  ------        ----       -----      ------         ---       -----
Total Canada underground          12,248         5.5       2,160      18,792         4.9       2,937
                                  ------        ----       -----      ------         ---       -----
Canada ops, open pit
Detour Lake                       33,600        0.79         855
West Detour                        9,300        0.95         282
                                  ------        ----       -----      
Total Canada open pit             42,900        0.82       1,137
                                  ------        ----       -----      
Total Cdn operations              55,148         1.9       3,297      18,792         4.9       2,937
                                  ------        ----       -----      ------         ---       -----
               
                                           Dec. 31, 2019                        Dec. 31, 2018

Fosterville                        8,450         6.4       1,740       6,930         6.0       1,330
Robbin's Hill                      2,670         4.5         383       3,390         4.6         504
                                  ------        ----       -----      ------         ---       -----
Northern Territory                15,200         2.6       1,270      18,100         2.6       1,490
                                  ------        ----       -----      ------         ---       -----
Total AUS operations              26,400         4.0       3,390      28,400         3.6       3,320
                                  ------        ----       -----      ------         ---       -----

Canadian operations mineral reserves and mineral resources as at Dec. 31, 2019

Macassa

Mineral reserves at Macassa in 2019 increased 9 per cent after depletion of approximately 246,000 ounces, with total mineral reserves at Dec. 31, 2019, of 2.45 million ounces at an average grade of 21.2 g/t. Included in total mineral reserves at Macassa are mineral reserves at depth of 2.36 million ounces at an average grade of 22.1 g/t, and 93,000 ounces at an average grade of 10.7 g/t in near-surface zones, along the amalgamated break. The Dec. 31, 2019, mineral reserves compared with total mineral reserves of 2.25 million ounces at an average grade of 21.9 g/t at Dec. 31, 2018.

Measured and indicated mineral resources at Dec. 31, 2019, totalled 730,000 ounces at an average grade of 13.7 g/t, while inferred mineral resources totalled 611,000 ounces at an average grade of 16.0 g/t. The reduction in M&I mineral resources compared with the Dec. 31, 2018, estimate reflected the focus of drilling during 2019 on mineral resource conversion into mineral reserves.

In 2020, total capital and expensed exploration expenditures at Macassa are targeted at $40-million to $50-million. Significant exploration development is planned at Macassa in 2020, including work on a new exploration decline, to access and explore previously identified high-grade zones near surface along the amalgamated break. In addition, development to extend exploration drifts is planned on the 5,150, 5,705 and 5,807 levels mainly in support of drilling to infill and extend the SMC and to evaluate targets at depth along the amalgamated break. A total of 270,000 metres of underground and surface drilling are planned at Macassa in 2020, with the primary targets being the SMC, amalgamated break, and select targets along the Main and 04 breaks.

                                         MACASSA RESERVES AND RESOURCES

                                        Dec. 31, 2019                               Dec. 31, 2018      

Macassa                      Tonnes         Grade     Gold ounces        Tonnes         Grade     Gold ounces
                              (000s)         (g/t)          (000s)        (000s)         (g/t)          (000s)
Mineral reserves
Proven                          383          20.3             250           288          21.7             201
Probable                      2,930          22.4           2,110         2,900          22.0           2,050
                              -----          ----           -----         -----          ----           -----
Proven+probable               3,320          22.1           2,360         3,190          21.9           2,250
                              -----          ----           -----         -----          ----           -----
Mineral resources                   Exclusive of mineral reserves               Exclusive of mineral reserves
                              -----          ----           -----         -----          ----           -----
Measured                        311          16.0             160           453          18.4             268
Indicated                     1,305          13.3             558         1,168          16.4             618
                              -----          ----           -----         -----          ----           -----
Measured+indicated            1,616          13.8             717         1,621          17.0             886
                              -----          ----           -----         -----          ----           -----
Inferred                      1,039          16.7             557           580          16.8             313
                              -----          ----           -----         -----          ----           -----

                                      Dec. 31, 2019                           Dec. 31, 2018  
                    
Macassa near surface        Tonnes       Grade      Gold ounces      Tonnes       Grade     Gold ounces
                             (000s)       (g/t)           (000s)      (000s)       (g/t)          (000s)
Mineral reserves
Proven                           -           -                -           -           -               -
Probable                       273        10.7               93           -           -               -
                               ---        ----               --         ---        ----              --
Proven+probable                273        10.7               93           -           -               -
                               ---        ----               --         ---        ----              --
Mineral resources                 Exclusive of mineral reserves           Exclusive of mineral reserves
                               ---        ----               --         ---        ----              -- 
Measured                         -           -                -           -           -               -
Indicated                       47         7.8               12         167        17.9              96
                               ---        ----               --         ---        ----              --
Measured+indicated              47         7.8               12         167        17.9              96
                               ---        ----               --         ---        ----              --
Inferred                       146        11.5               54          30        15.5              15
                               ---        ----               --         ---        ----              --

Holt complex

Mineral reserves at the Holt complex are distributed at three mines: the Holt mine, Taylor mines and Holloway mine. As at Dec. 31, 2019, total mineral reserves at the three mines totalled 702,000 based on 5,432,000 tonnes at an average grade of 4.0 g/t. The 702,000 ounces of mineral reserves were 9 per cent higher than 644,000 ounces from 4,588,000 tonnes at an average grade of 4.4 g/t as at Dec. 31, 2018. M&I mineral resources at the Holt, Taylor and Holloway totalled 1,047,000 ounces at an average grade of 4.4 g/t versus 1,279,000 ounces at an average grade of 4.2 g/t as at Dec. 31, 2018.

On Feb. 19, 2020, the company announced that it was designating the Holt complex as non-core and will consider all options for maximizing value. Operations at the Holt complex are continuing during the period of strategic review.

                                   HOLT COMPLEX RESERVES AND RESOURCES          

                                        Dec. 31, 2019                             Dec. 31, 2018                         

Holt complex                 Tonnes        Grade      Gold ounces       Tonnes        Grade    Gold ounces
                              (000s)        (g/t)           (000s)       (000s)        (g/t)         (000s)
Mineral reserves
Proven                        2,507          3.7              296        1,954          4.1            256
Probable                      2,925          4.3              406        2,644          4.6            388
                              -----          ---            -----       ------          ---          -----
Proven+probable               5,432          4.0              702        4,588          4.4            644
                              -----          ---            -----       ------          ---          -----
Mineral resources                   Exclusive of mineral reserves            Exclusive of mineral reserves
                              -----          ---            -----       ------          ---          -----  
Measured                      4,319          4.1              563        4,322          4.0            562
Indicated                     3,433          4.4              484        5,342          4.2            717
                              -----          ---            -----       ------          ---          -----
Measured+indicated            7,752          4.4            1,047        9,664          4.2          1,279
                              -----          ---            -----       ------          ---          -----
Inferred                      9,097          4.4            1,294       15,820          4.6          2,329
                              -----          ---            -----       ------          ---          -----

Detour

On Jan. 31, 2020, the company completed the acquisition of Detour Gold. Through the acquisition, Detour Gold became a subsidiary of the company, and the company obtained 100-per-cent ownership of the Detour Lake open-pit mine. As a result of the acquisition, the company gained 14,846,000 ounces of open-pit mineral reserves at an average grade of 0.97 g/t. The company also gained 3,881,000 ounces of M&I open-pit mineral resources at an average grade of 1.08 g/t and 1,137,000 ounces of inferred open-pit mineral resources at 0.82 g/t. Through 58 North zone, located 8.0 kilometres from the current Detour Lake open pit, a total of 534,000 ounces of underground M&I mineral resources have been added at an average grade of 5.8 g/t, as well as 136,000 ounces of inferred mineral resources at an average grade of 4.35 g/t. There was no change to the mineral resource estimates from Dec. 31, 2018, to Dec. 31, 2019.

In 2019, there was no infill drilling targeting the conversion of mineral resources to mineral reserves within the Detour Lake pit and West Detour project. Based on the expected throughput rates projected in the life-of-mine plan, the remaining mineral reserve life of the Detour Lake operation is approximately 21 years as of Dec. 31, 2019. In 2020, the company is planning an extensive program of exploration drilling within and around the current Detour Lake open pit, with drilling also planned on a number of regional targets. Exploration expenditures in 2020 from Feb. 1, 2020, are estimated at $25.0-million to $30.0-million.

  
                                  DETOUR RESERVES AND RESOURCES          
     
                                     Dec. 31, 2019                            Dec. 31, 2018    

Detour                     Tonnes        Grade    Gold ounces       Tonnes        Grade    Gold ounces
                            (000s)        (g/t)         (000s)       (000s)        (g/t)         (000s)
Open pit
Mineral reserves
Proven                     81,050         1.24          3,240
Probable                  396,400         0.91         11,606
                          -------         ----         ------
Proven+probable           477,450         0.97         14,846
                          -------         ----         ------
Mineral resources               Exclusive of mineral reserves            Exclusive of mineral reserves  
                          -------         ----         ------
Measured                   16,700         1.34            722
Indicated                  95,600         1.03          3,160
                          -------         ----         ------
Measured+indicated        112,300         1.08          3,881
                          -------         ----         ------
Inferred                   42,900         0.82          1,137
                          -------         ----         ------

                                  Dec. 31, 2019                         Dec. 31, 2018                    

Detour                    Tonnes      Grade     Gold ounces     Tonnes      Grade     Gold ounces
                           (000s)      (g/t)          (000s)     (000s)      (g/t)          (000s)
Underground
Mineral reserves
Proven                         -          -               -
Probable                       -          -               -
                           -----       ----             ---
Proven+probable                -          -               -
                           -----       ----             ---
Mineral resources             Exclusive of mineral reserves         Exclusive of mineral reserves  
Measured                       -          -               -
Indicated                  2,900       5.80             534
                           -----       ----             ---
Measured+indicated         2,900       5.80             534
                           -----       ----             ---
Inferred                   1,000       4.35             136
                           -----       ----             ---

Australian operations mineral reserves and mineral resources as at Dec. 31, 2019

Fosterville

Mineral reserves at Fosterville as at Dec. 31, 2019, totalled 2.32 million ounces, which included 2.1 million ounces at an average grade of 21.8 g/t in the Lower Phoenix and Harrier systems and 218,000 ounces at Robbin's Hill at an average grade of 5.5 g/t. The mineral reserves at Robbin's Hill are located above 650 metres below surface, well above the depth where the Swan zone was discovered in the Lower Phoenix system. Included within the 2.1 million ounces are 1.56 million ounces at an average grade of 38.6 g/t in the Swan zone.

Mineral reserves as at Dec. 31, 2019, compared with total mineral reserves as at Dec. 31, 2018, of 2.7 million ounces at an average grade of 31.0 g/t, which included 2.34 million ounces at 49.6 g/t in the Swan zone and no mineral reserves at Robbin's Hill. The change from the previous year reflected depletion during 2019 of approximately 627,000 ounces at a grade of 39.6 g/t, the results of infill drilling within the existing Swan mineral reserve that resulted in lower-grade estimates in some areas, and a focus during 2019 on extending mineralized structures and advancing Robbin's Hill as a possible second mining operation.

Solid growth was achieved in mineral resources, including growth in M&I mineral resources to 2.08 million ounces at an average grade of 5.3 g/t at Lower Phoenix and Harrier versus 1,850 ounces at an average grade of 5.0 g/t as at Dec. 31, 2018. Inferred mineral resources at Lower Phoenix and Harrier increased 31 per cent to 1.74 million ounces at an average grade of 6.4 g/t versus 1.33 million ounces at an average grade of 6.0 g/t the previous year. The significant mineral resources at Fosterville demonstrate that the traditional sulphide mineralization, which hosts the quartz with visible gold mineralization that is found in concentration in the Swan zone, is present over large areas, with quartz and visible being intersected at multiple targets.

Drilling during 2019 demonstrated that the Phoenix mineralized structure extends and is continuous for at least 950 metres down plunge from the bottom of the Swan zone, which represents an extremely large exploration target for future drilling. In addition, the Cygnet zone, footwall to the Swan zone, was identified over a 650-metre strike length and 300-metre depth. Drilling at Robbin's Hill intersected visible gold mineralization 550 metres below the Dec. 31, 2018, mineral resources, while drilling to depth at Harrier remained at an early stage, with visible gold having been intersected higher in the Harrier system.

Exploration expenditures at Fosterville are targeted at $70-million to $80-million, including $15-million to $20-million related to the underground development for a twin 4.8-kilometre underground exploration drive to connect Robbin's Hill to existing mine infrastructure at Fosterville. The decline is a three-year project that will support underground exploration of Robbin's Hill and other targets, and provide valuable infrastructure for future mine operations. In addition, a total of 230,000 metres of underground and surface drilling are planned at Fosterville in 2020, with the primary targets continuing to be the areas where quartz veining with visible gold has been intersected: the Lower Phoenix system, Cygnet, Harrier and Robbin's Hill. The company will also continue exploration work at a number of regional targets.

                                    FOSTERVILLE RESERVES AND RESOURCES 

                                        Dec. 31, 2019                               Dec. 31, 2018 
                 
Fosterville                  Tonnes         Grade     Gold ounces        Tonnes         Grade     Gold ounces
                              (000s)         (g/t)          (000s)        (000s)         (g/t)          (000s)
Mineral reserves
Proven                          695          31.9             714           178          16.7              96
Probable                      2,300          18.8           1,390         2,550          32.0           2,620
                             ------          ----           -----        ------          ----           -----
Proven+probable               3,000          21.8           2,100         2,720          31.0           2,720
                             ------          ----           -----        ------          ----           -----
Mineral resources                   Exclusive of mineral reserves               Exclusive of mineral reserves
                             ------          ----           -----        ------          ----           ----- 
Measured                      2,000           3.7             240         1,900           2.9             177
Indicated                    10,300           5.6           1,840         9,660           5.4           1,670
                             ------          ----           -----        ------          ----           -----
Measured+indicated           12,300           5.3           2,080        11,600           5.0           1,850
                             ------          ----           -----        ------          ----           -----
Inferred                      8,450           6.4           1,740         6,930           6.0           1,330
                             ------          ----           -----        ------          ----           -----

                                   SWAN RESERVES AND RESOURCES
  
                                   Dec. 31, 2019                            Dec. 31, 2018   
                
Swan (1)                   Tonnes       Grade     Gold ounces      Tonnes       Grade    Gold ounces
                            (000s)       (g/t)          (000s)      (000s)       (g/t)         (000s)
Mineral reserves
Proven                        493        40.5             641          62        27.6             55
Probable                      764        37.4             919       1,410        50.6          2,290
                            -----        ----           -----       -----        ----          -----
Proven+probable             1,260        38.6           1,560       1,470        49.6          2,340
                            -----        ----           -----       -----        ----          -----
Mineral resources               Exclusive of mineral reserves          Exclusive of mineral reserves
                            -----        ----           -----       -----        ----          ----- 
Measured                       30        46.4              45           2        59.6              4
Indicated                      59        18.2              34          32        15.7             16
                            -----        ----           -----       -----        ----          -----
Measured+indicated             89        27.7              79          34        18.3             20
                            -----        ----           -----       -----        ----          -----
Inferred                       93        19.3              57         249        13.4            107
                            -----        ----           -----       -----        ----          -----

The Swan zone mineral reserve and mineral resource estimates are components of the estimates for the Fosterville mine.

                                 ROBBIN'S HILL RESERVES AND RESOURCES

                                      Dec. 31, 2019                            Dec. 31, 2018              

Robbin's Hill (1)           Tonnes        Grade     Gold ounces       Tonnes        Grade     Gold ounces
                             (000s)        (g/t)          (000s)       (000s)        (g/t)          (000s)
Mineral reserves
Proven                           -            -               -            -            -               -
Probable                     1,240          5.5             218            -            -               -
                             -----          ---             ---        -----          ---             ---
Proven+probable              1,240          5.5             218            -            -               -
                             -----          ---             ---        -----          ---             ---
Mineral resources                 Exclusive of mineral reserves             Exclusive of mineral reserves
                             -----          ---             ---        -----          ---             ---
Measured                         -            -               -            -            -               -
Indicated                    3,460          3.5             386        3,210          2.5             256
                             -----          ---             ---        -----          ---             ---
Measured+indicated           3,460          3.5             386        3,210          2.5             256
                             -----          ---             ---        -----          ---             ---
Inferred                     2,670          4.5             383        3,390          4.6             504
                             -----          ---             ---        -----          ---             ---

(1) The Robbin's Hill mineral reserve and mineral resource estimates are reported separately from Fosterville as it is anticipated that Robbin's Hill will be a new and separate mining operation feeding the Fosterville mill.

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, an active exploration program, including drilling and development, was undertaken at the Cosmo mine, where a new deposit, the Lantern deposit, was identified in 2017. In early 2019, an advanced exploration program was launched, which included drilling at multiple targets around the Cosmo mine and at Union Reefs and Pine Creek, and development at the Lantern deposit to support test mining and, as of October, 2019, test processing at the Union Reefs mill.

Mineral reserves in the Northern Territory at Dec. 31, 2019, totalled 128,000 ounces at 4.0 g/t, which compared with 107,000 ounces at 5.0 g/t at Dec. 31, 2018. On Feb. 20, 2020, the company announced that it was designating the Northern Territory assets as non-core, with plans to consider all strategic options for maximizing value. During the period of strategic review, the company will continue to perform advanced exploration work, including test mining at the Cosmo mine and test processing at Union Reefs, in addition to continuing exploration drilling.

  
                             NORTHERN TERRITORY RESERVES AND RESOURCES
 
                                   Dec. 31, 2019                          Dec. 31, 2018                          

Northern Territory         Tonnes       Grade     Gold ounces      Tonnes       Grade    Gold ounces
                            (000s)       (g/t)          (000s)      (000s)       (g/t)         (000s)
Underground
Mineral reserves
Proven                          -           -               -          33         3.1              3
Probable                      988         4.0             128         633         5.1            103
                            -----         ---             ---       -----         ---            ---
Proven+probable               988         4.0             128         666         5.0            107
                            -----         ---             ---       -----         ---            ---
Mineral resources               Exclusive of mineral reserves          Exclusive of mineral reserves
                            -----         ---             ---       -----         ---            --- 
Measured                      102         4.7              15         702         3.4             77
Indicated                   6,790         3.5             768       8,910         3.2            914
                            -----         ---             ---       -----         ---            ---
Measured+indicated          6,890         3.5             784       9,610         3.2            990
                            -----         ---             ---       -----         ---            ---
Inferred                    5,490         3.7             653       5,980         3.8            725
                            -----         ---             ---       -----         ---            ---

                                    Dec. 31, 2019                          Dec. 31, 2018      

Northern Territory         Tonnes       Grade     Gold ounces      Tonnes       Grade     Gold ounces
                            (000s)       (g/t)          (000s)      (000s)       (g/t)          (000s)
Open pit
Mineral reserves
Proven                          -           -               -           -           -               -
Probable                        -           -               -           -           -               -
                           ------         ---             ---      ------         ---             ---
Proven+probable                 -           -               -           -           -               -
                           ------         ---             ---      ------         ---             ---
Mineral resources               Exclusive of mineral reserves           Exclusive of mineral reserves
                           ------         ---             ---      ------         ---             ---    
Measured                    1,070         5.6             192       1,070         5.6             192
Indicated                   9,230         1.5             431      11,500         1.5             570
                           ------         ---             ---      ------         ---             ---
Measured+indicated         10,300         1.9             623      12,500         1.9             762
                           ------         ---             ---      ------         ---             ---
Inferred                    9,750         2.0             613      12,100         2.0             767
                           ------         ---             ---      ------         ---             ---

Technical reports

Fosterville property entitled "Updated NI 43-101 Technical Report, Fosterville Gold mine in the State of Victoria, Australia," and the amended and restated National Instrument 43-101 technical report for Macassa entitled "Macassa Property, Ontario, Canada, Updated NI 43-101 Technical Report," effective Dec. 31, 2018, and dated April 1, 2018, and July 19, 2018, respectively.

The Fosterville report was prepared by Troy Fuller, MAIG, and Ion Hann, FAusIMM, both of whom are qualified persons as such term is defined in NI 43-101 and employees of the company. The Fosterville report supports the scientific and technical disclosure in the updated mineral resource and mineral reserve estimates contained in the company's news release dated Feb. 21, 2019. The Macassa report was prepared by Mariana Pinheiro Harvey, PEng, Robert Glover, PGeo, William Tai, PEng, and Ben Harwood, PGeo, all of whom are qualified persons as such term is defined in NI 43-101 and employees of the company. The Macassa report supports the scientific and technical disclosure in the updated mineral resource and mineral reserve estimates contained in the company's news release dated Feb. 21, 2019. Both the Fosterville report and the Macassa report are available under the company's profile on SEDAR. Further information regarding the company's mineral reserves and mineral resources, effective Dec. 31, 2018, is set out in the company's press release dated Feb. 21, 2019, as filed on SEDAR.

Qualified persons

Natasha Vaz, PEng, vice-president, technical services, 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 (excluding Detour) included in this news release.

Eric Kallio, PGeo, senior vice-president, exploration, is a qualified person as defined in NI 43-101, and has reviewed and approved disclosure of the mineral resource technical information and data for the Canadian assets (excluding Detour) 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.

Andre Leite, PEng, AUSIMM CP (min.), MEng, technical services manager, is a qualified person as defined in NI 43-101, and has reviewed and approved disclosure of the mineral reserves and mineral resources technical information and data for the Detour assets included in this news release.

Detailed footnotes related to mineral reserve estimates (dated Dec. 31, 2019), with the exception of Detour

1. CIM (Canadian Institute of Mining, Metallurgy and Petroleum) definitions (2019) were followed in the estimation of mineral reserves.

2. Mineral reserves were estimated using a long-term gold price of $1,300 (U.S.) per ounce ($1,700 (Canadian) per oz and $1,765 (Australian) per oz).

3. Cut-off grades for Canadian assets were calculated for each stope and included the costs of: mining, milling, general and administration, royalties and capital expenditures, and other modifying factors (for example, dilution, mining extraction and mill recovery).

4. Cut-off grades for Australian assets were calculated for each mining block and included the costs of: mining, milling, general and administration, royalties and capital expenditures, and other modifying factors (for example, dilution, mining extraction and mill recovery).

5. Dilution estimates vary by mining methods and range from 5 per cent to 50 per cent.

6. Extraction estimates vary by mining methods and range from 50 per cent to 100 per cent.

7. Mineral reserves estimates for Canadian operations were prepared under the supervision of N. Vaz, PEng.

8. Mineral reserves estimates for Australian operations were prepared under the supervision of I. Holland, FAusIMM.

9. Mineral reserves are stated at a mill feed reference point.

10. Totals may not add up due to rounding.

Detailed footnotes related to Detour's mineral reserve and resource estimates (dated Dec. 31, 2019)

1. The company's mineral reserve and mineral resource statement is classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves adopted by the CIM Council in accordance with the requirements of National Instrument 43-101 (Standards of Disclosure for Mineral Projects). Mineral reserve and mineral resource estimates reflect the company's reasonable expectation that all necessary permits and approvals will be obtained and maintained.

2. Mineral reserves were estimated using a gold price of $1,000 (U.S.) per oz, and mineral resources were estimated using a gold price of $1,200 (U.S.) per oz at a U.S.-dollar/Canadian-dollar exchange rate of 1.10.

3. Mineral reserves and resources were based on a cut-off grade of 0.50 g/t Au.

4. LG fines (sourced from material grading 0.40 to 0.50 g/t Au) classified as measured or indicated were reported as probable mineral reserves and included in the mine plan. Reported tonnage is defined as material scheduled to be fed from 2021 to the end of the mine as per the 2018 life-of-mine plan.

5. Further information, including key assumptions and methods used to estimate mineral resources and mineral reserves, is described in the technical report on the Detour Lake operation, dated Nov. 26, 2018.

6. Mineral underground resources for 58N are reported at a cut-off grade of 2.2 g/t Au, using a gold price of $1,300 (U.S.) per ounce and a U.S.-dollar/Canadian-dollar exchange rate of 1.25 with an assumed mining dilution of 12 per cent.

7. Mineral resources are reported exclusive of mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resources are constrained within an economic pit shell.

8. Mineral reserves and mineral resource estimates for the Detour operation were prepared under the supervision of A. Leite, PEng, AUSIMM CP (min.), MEng, PEng.

9. Totals may not add due to rounding.

Detailed footnotes related to mineral resource estimates for Canadian assets (dated Dec. 31, 2019) with the exception of Detour

1. CIM definitions (2019) were followed in the calculation of mineral resource.

2. Mineral resources are reported exclusive of mineral reserves. Mineral resources were calculated according to Kirkland's mineral resource estimation guidelines.

3. Mineral resource estimates were prepared under the supervision of Eric Kallio, PGeo, senior vice-president, exploration.

4. Mineral resources are estimated using a long-term gold price of $1,300 (U.S.) per oz ($1,700 (Canadian) per oz).

5. Mineral resources were estimated using a range of 3.4 g/t to 8.6 g/t cut-off grades for the Macassa mine, a 2.8 g/t cut-off grade for the Holt mine and the Holloway mine, a 2.5 g/t cut-off grade for Holt near surface, a 2.6 g/t cut-off grade for Taylor, a 2.5 g/t cut-off grade for Canamax, a 2.2 g/t cut-off grade for Hislop, and a 0 g/t cut-off grade for Aquarius.

6. Totals may not add up due to rounding.

Detailed footnotes related to mineral resource estimates for Australian assets (dated Dec. 31, 2019)

1. CIM definitions (2019) were followed in the estimation of mineral resource.

2. Mineral resources are estimated using a long-term gold price of $1,300 (U.S.) per oz ($1,765 (Australian) per oz).

3. Mineral resources for the Australian assets are reported exclusive of mineral reserves.

4. Mineral resources at Fosterville were estimated using cut-off grades of 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.

5. Mineral resources in the Northern Territory were estimated using a cut-off grade of 0.5 to 0.7 g/t Au for potentially open-pit mineralization and cut-offs of 1.5 to 2.0 g/t Au for underground mineralization.

6. Mineral resource estimates for the Fosterville property were prepared under the supervision of Troy Fuller, MAIG.

7. Mineral resource estimates for the Northern Territory properties were prepared under the supervision of Owen Greenberger, MAIG.

8. Totals may not add up due to rounding.

About Kirkland Lake Gold Ltd.

Kirkland Lake Gold is a growing gold producer operating in Canada and Australia that produced 974,615 ounces in 2019, with target production for 2020 of 1.47 million to 1.54 million ounces. The production profile of the company is anchored by three high-quality operations, including the Macassa mine and the Detour Lake mine, both 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 expertise.

We seek Safe Harbor.

© 2020 Canjex Publishing Ltd. All rights reserved.