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Kirkland Lake Gold Ltd
Symbol KL
Shares Issued 210,189,007
Close 2019-12-18 C$ 54.56
Recent Sedar Documents

Kirkland Lake drills 1.8 m of 578 g/t Au at Lantern

2019-12-18 12:04 ET - News Release

Mr. Tony Makuch reports

KIRKLAND LAKE GOLD INTERSECTS HIGH-GRADE MINERALIZATION AT MULTIPLE TARGETS IN NORTHERN TERRITORY, RESULTS SUPPORT POTENTIAL RESUMPTION OF OPERATIONS

Kirkland Lake Gold Ltd. has provided an update on further exploration success in the Northern Territory, Australia, at the Union Reefs project (Millars and Union North deposits), the Lantern deposit and the Liberator target near Cosmo, and the Gandy's deposit in the Pine Creek project area. Results continue to highlight the potential for long-term, profitable mining operations in a historic mining district with over 4.5 million ounces of gold produced over the past four decades. Kirkland Lake Gold owns 100-per-cent interests in most of the significant gold deposits.

These results continue to advance the Northern Territory strategy of Kirkland Lake Gold to develop multiple mining centres to feed the central Union Reefs mill. Mining and underground development are under way across the Lantern deposit at Cosmo. Also, the company is continuing to advance the permitting of a portal and decline to support an underground exploration program into the Prospect mineralization at Union Reefs.

Tony Makuch, president and chief executive officer of Kirkland Lake Gold, commented: "The new drill results in the Northern Territory confirm the existence of high-grade mineralization at multiple targets, which supports the potential for long-term, profitable production at our 2.4-million-tonne-per-annum Union Reefs mill. Given the positive results at Lantern and Union Reefs, and new drill programs at Pine Creek and Liberator, we are increasingly confident that we can establish a significant mining centre in the Northern Territory. With continued progress, we could be in a position to resume commercial operations in the Northern Territory as early as late February, when we release our Dec. 31, 2019, mineral reserve and mineral resource estimates. Work is continuing with three underground drills currently working at the Lantern deposit at Cosmo and mineralization continuing to be processed on a test basis at Union Reefs mill."

Lantern deposit

The reported Lantern drilling includes 47 holes, totalling 12,875 metres, since Dec. 31, 2018, targeting the downplunge extensions of the indicated mineral resources. This drilling is focusing on the next levels of mineral reserves below the current mining horizons. Drilling from platforms on the 730 and 850 levels was completed during 2019, primarily focused on the western limb of the Lantern stratigraphy between 350 and 550 m depths below surface, and returned significant intercepts, including:

  • 578 grams per tonne gold over 1.8 m (estimated true width of 0.9 metre), including 3,430 grams per tonne gold over 0.3 m (estimated true width of 0.2 metre) in lode 3600 in hole LU730169;
  • 67.6 grams per tonne gold over 3.1 m (estimated true width of 2.8 metres), including 680 grams per tonne gold over 0.3 m (estimated true width of 0.3 metre) in lode 3600 in hole LU730148;
  • 17.9 grams per tonne gold over 6.4 m (estimated true width of 5.9 metres), including 196 grams per tonne gold over 0.5 m (estimated true width of 0.4 metre) in lode 3500 in hole LU30140;
  • 13.7 grams per tonne gold over 11 m (estimated true width of 6.9 metres), including 49.2 grams per tonne gold over 1.2 m (estimated true width of 0.8 metre) in lode 3500 in hole LU730105;
  • 25.5 grams per tonne gold over 1.9 m (estimated true width of 1.8 metres), including 126 grams per tonne gold over 0.4 m (estimated true width of 0.3 metre) in lode 3500 in hole LU730135;
  • 26.3 grams per tonne gold over 2.2 m (estimated true width of 1.4 metres) in lode 3600 in hole LU730131;
  • 9.8 grams per tonne gold over 6.3 m (estimated true width of 3.9 metres), including 46.6 grams per tonne gold over 0.4 m (estimated true width of 0.3 metre) in lode 3400 in hole LU730144.

These results demonstrate the high-grade potential of the Lantern mineralization beyond the current mining horizon. High-grade mineralization is mainly related to quartz veins, some of which occur at high angles to the overall broadly stratigraphic trend of the deposit. However, the deposit has significant local-scale variation evident in underground development exposures.

Further to the above-reported drilling, diamond drilling also continued to define the downplunge potential of the Lantern deposit from deep within the Cosmo mine development during 2017 and the dedicated diamond drilling platform on the 610RL established in 2018. The reported exploration drilling conducted since the Dec. 31, 2016, Lantern mineral resource includes 50 holes, totalling 23,472 m, targeting the extension of mineralization below the 610RL and north of the 1550mN.

Highlights of the drilling include the following significant intercepts:

  • 8.8 grams per tonne gold over 7.7 m (estimated true width of 6.2 metres) in lode 3600 in hole LU64009;
  • 127 grams per tonne gold over 0.6 m (estimated true width of 0.6 metre) in lode 3600 in hole LU61026;
  • 28 grams per tonne gold over two m (estimated true width of two metres) in lode 3701 in hole LU61019A;
  • 21.6 grams per tonne gold over 2.5 m (estimated true width of one metres) in lode 3701 in hole LU64011;
  • 21.5 grams per tonne gold over 1.7 m (estimated true width of 1.4 metres) in lode 3729 in hole LU64005.

The drilling results highlight significant potential of the Lantern deposit at depth. Mineralization occurs in close association with a sedimentary dolomitic unit, thought to be an altered carbonaceous shale, which provides an impermeable layer and geochemical reaction site to deposit mineralization (lodes 3600 and 3701). A secondary deposition style has also been identified at depth, with a region of structural interaction between the F8 fault and the folded Lantern stratigraphy in the Howley anticline (lodes 3700 and 3729). Exploration drilling continues at the Lantern deposit, with three diamond drills targeting mineral resource conversion and the downplunge extension of resources.

Liberator Prospect

Drilling has been completed at the Liberator Prospect, located approximately one kilometre to the south of the Lantern deposit, where the Cosmo-Howley anticline continues to fold the Lower Koolpin formation meta-sediments. These rocks are stratigraphically lower than the Lantern meta-sediments and host brittle structures and quartz veining similar to those found at the Lantern deposit. The mineralized zone: (i) occurs across the boundary of the Cosmo mineral lease (MLN993) and the 100-per-cent-owned exploration licence; and (ii) was identified during a detailed regional review of the geological and mineralogical setting of the Cosmo mine, along with a review of historical drilling in the area.

The Liberator dolerite is situated stratigraphically lower than the Zamu and Phantom dolerite units, which crop out in the Cosmo and Phantom pits, respectively. These units are folded within the regional-scale Howley anticline, which, at Cosmo to Liberator, plunges north approximately 50 degrees and is commonly offset by regional south-southeast-to-north-northwest shears and faults. Liberator host rocks occur between the Liberator dolerite and the Phantom dolerite, and consist of repeating and banded, metamorphosed mudstone and siltstone sedimentary sequences with common quartz-carbonate and quartz-sulphide veining throughout the units, including the Liberator deposit itself.

Nine diamond drill holes were drilled at Liberator for 4,154 m, with assay results still pending. During geological logging of hole LIBDD0001, visible gold was noted in carbonate-fracture-filled vein breccia, similar to a vein style within the Cosmo mineralization. The drill program has intersected numerous quartz veins with high pyrrhotite and arsenopyrite contents up to 60 per cent of some veins, across downhole lengths of up to 10 m (no estimated true width). Surface diamond drilling comprises four cross-sections covering a 500 m strike across the Liberator target to depths averaging 400 m from surface.

Results from the drilling are expected during early 2020, with follow-up work dependent on the success of the results.

Exploration at Union Reefs

Surface exploration diamond drilling is proceeding at Union Reefs, where up to two drills were active during 2019. Due to the significance of the Union Reefs project and the proximity to the Pine Creek project area, a regional exploration office and new core logging and processing shed were set up at the Union Reefs facility.

The gold deposits at Union Reefs are hosted on two lines of lode: the Union line to the west and the Lady Alice line to the east. Both lines have had significant historical open-pit mining activities, which extend over 3.6 kilometres in length. Each line is dominated by quartz-sulphide veins that occur within a Proterozoic turbiditic sequence composed of interbedded greywackes and siltstones. The sequence is folded into a series of anticlines with smaller-scale parasitic folds on their limbs. The gold-bearing veins are present as vertical linear sheets oriented along the centre of folds, which have an approximate north-northeast-south-southwest axial plane direction. Large-scale veining occurs in the mineralized zones and is typified by 0.3 m to greater than or equal to one m quartz veins containing sulphides (such as pyrite, arsenopyrite, galena and sphalerite). The quartz veins have margins of moderate to intense chlorite and sericite alteration. The quartz veins also commonly host visible gold.

Drilling during 2019 comprised 53 diamond drill holes for 24,539 m and focused on the Millars deposit, located on the southern portion of the Union Reefs mineral lease (MLN1109). Drilling is also under way at the Union North deposit, which is approximately 150 m along strike from the Prospect mineral reserves. The Millars mineralization is located within the Lady Alice mineralized corridor, with Prospect located farther to the north on the Union line. The Millars mineralization is similar to that identified in the Prospect deposit with narrow, higher-grade intercepts related to quartz veining.

Some of the more significant Millars intercepts include:

  • Seven grams per tonne gold over 5.6 m (estimated true width of 2.9 metres), including 68.7 grams per tonne gold over 0.4 m (estimated true width of 0.2 metre) in lode 200 in hole URSDD0042;
  • 26.3 grams per tonne gold over three m (estimated true width of 1.4 metres), including 57.4 grams per tonne gold over 1.3 m (estimated true width of 0.6 metre) in lode 300 in hole URSDD0022;
  • 530 grams per tonne gold over 0.4 m (estimated true width of 0.2 metre) in lode 610 in hole URSDD0070;
  • 17.5 grams per tonne gold over two m (estimated true width of 1.5 metres), including 113 grams per tonne gold over 0.3 m (estimated true width of 0.2 metre) in lode 910 in hole URSDD0037;
  • 53.4 grams per tonne gold over two m (estimated true width of 1.4 metres), including 89 grams per tonne gold over 0.7 m (estimated true width of 0.5 metre) in lode 910 in hole URSDD0074.

Exploration drilling at Union Reefs is planned to continue into 2020 at the Millars deposit to potentially define sufficient mineral resources and mineral reserves to support an expanded mine plan. There is potential for a second decline to be constructed to access the Millars deposit, which is approximately two kilometres from the Union Reefs mill.

An environmental impact assessment was submitted for the Union Reefs North decline, which will be used to access the Prospect mineral reserves, with a potential commencement date of mid-2020, pending statutory approvals. The EIA covers the first two years of mining, focusing on the mineral reserves of 276,000 tonnes at 4.4 grams per tonne gold for 39,200 ounces (see National Instrument 43-101 technical report on the Northern Territory operations, effective Dec. 31, 2016, and filed on SEDAR on March 30, 2017).

The Prospect decline will be the first foray into underground mining on the Union Reefs site, which has historic mining production of approximately one million ounces from open-pit mining. Previously reported deep diamond drilling at the Prospect deposit (see KL press release dated April 30, 2018) has intersected high-grade mineralization approximately 1,000 m below surface with an intercept of 95 grams per tonne gold over 1.1 m (estimated true width of one metre), including 161 grams per tonne gold over 0.6 m (estimated true width of 0.5 metre), in hole URNDD0097. This highlights the potential for significant depth projections of mineralization below the current mineral reserve base.

The Union Reefs deposits all remain open at depth, and there continues to be a significant portion of the site's strike length that hasn't been tested outside of an open-pit-style exploration target.

Exploration at Pine Creek

The Pine Creek project area, adjacent to the small but regionally significant town of Pine Creek, is approximately 60 kilometres to the southeast of Cosmo and 15 kilometres to the south of the Union Reefs mill. The area has eight mineral resource areas centred around a series of historical open pits mined in the 1980s to mid-1990s, which the company believes has potential to increase mineral resources at depth beneath the existing open pits, especially the shallower Gandy's North deposit.

The gold mineralization at Pine Creek is hosted in quartz-sulphide veins following an umbrella-shaped "saddle reef" model, where the gold-bearing veins are located along bedding slip planes at the centre of fold hinges. The folding and faulting in Pine Creek is oriented in a north-northeast-south-southwest direction, with occasional crosscutting northwest-southeast-orientated structures that offset stratigraphy and fold hinges. The mineralized bedding slip veins are hosted between interbedded massive greywackes and siltstones. Smaller-scale strike-slip faulting appears to utilize axial planar weaknesses to accommodate further north-south regional shortening within the Pine Creek deposits. These smaller-scale structures appear to allow the propagation of mineralizing fluids up the anticline hinge, creating the umbrella shape often described in historic reporting.

Exploration drilling commenced in the second quarter of 2019 at the Gandy's North deposit, with the two holes, totalling 514 m, completed in May. This drilling targeted potential downplunge high-grade gold mineralization at the Gandy's North deposit as part of the company's strategy to develop the Pine Creek project area to supply feed to the Union Reefs mill.

The significant intercepts reported for the preliminary Gandy's North holes are:

  • 9.7 grams per tonne gold over 4.1 m (estimated true width of 3.3 metres), including 26.7 grams per tonne gold over 0.7 m (estimated true width of 0.6 metre) in lode 100 in hole PCGDD0001;
  • 16.1 grams per tonne gold over three m (estimated true width of 2.8 metres), including 36.1 grams per tonne gold over 0.8 m (estimated true width of 0.8 metre) in lode 100 in hole PCGDD0002;
  • 9.1 grams per tonne gold over 3.5 m (estimated true width of 3.2 metres), including 19.5 grams per tonne gold over 0.8 m (estimated true width of 0.8 metre) in lode 100 in hole PCGDD0002;
  • 5.6 grams per tonne gold over 2.9 m (estimated true width of 2.7 metres), including 15.4 grams per tonne gold over 0.7 m (estimated true width of 0.7 metre) in lode 200 in hole PCGDD002;
  • 14.4 grams per tonne gold over 1.3 m (estimated true width of 1.2 metres) in lode 300 in hole PCGDD002.

Both holes intersected the main Gandy's North mineralized structure and returned encouraging drilling results, with a further 11 diamond drill holes, totalling 3,539 m of diamond drilling, completed between September and November, 2019, with final results pending.

Significant results from the first two holes of the second round of drilling include:

  • 5.4 grams per tonne gold over eight m (estimated true width of 7.6 metres), including 31.7 grams per tonne gold over 0.3 m (estimated true width of 0.3 metres) in hole PCGDD0003;
  • 2.3 grams per tonne gold over 2.4 m (estimated true width of 2.1 metres) in lode 300 in hole PCGDD004.

The grades and widths of mineralization noted in the results above highlight the potential for significant gold grades and scale of the mining area. Drilling will continue in 2020, after the wet season, to test the downplunge potential of the Gandy's North deposit as well as to test for the underground potential below the Gandy's South open pit.

2020 exploration plans for the Northern Territory

Currently, plans for 2020 include drilling at the Cosmo project area within the Lantern deposit as well as drilling within the Union Reefs project around Union North and Millars in the south. There will also be programs completed at the Pine Creek project area, with focus on the Gandy's deposits. Attention will remain on these three project areas as a more detailed life-of-mine plan is developed for the Northern Territory to fulfil the strategy of filling the Union Reefs mill with the highest grade available.

Qualified person

Owen Greenberger, MAIG, exploration manager, Northern Territory operations, is a qualified person, as such term is defined in NI 43-101, and has reviewed and approved the technical information and data included in this news release.

Drilling and assay quality assurance/quality control

Kirkland Lake Gold has in place quality control systems to ensure best practices in drilling, sampling and analysis of drill core. All drill hole collars are accurately surveyed using a Leica total station instrument, and diamond drill hole downhole deviations are measured using a downhole gyro instrument.

All reported drill intercepts are from NQ2-sized or HQ-sized diamond drill core. Drill core was either full-core sampled or cut longitudinally in half with a diamond saw, whereupon one-half of the drill core was assayed and the other half retained for reference. Drill core sample lengths are between 0.15 m and 1.4 m, as determined from logging of sulphide and visible gold and conforming to lithological and alteration boundaries.

Assays are based on 25-gram charge fire assay. Reported intercepts are calculated based on mineralization envelopes using an approximate two g/t Au outer boundary, within which there is a maximum two m internal dilution. The minimum intercept width is 0.3 m. No upper gold grade cap is applied to the reporting of the drilling results.

Drill samples are routinely assayed at North Australian Laboratories Pty. Ltd. (independent laboratory in Pine Creek, Northern Territory) or Intertek Australia Pty. Ltd. (independent laboratory in Darwin, East Arm, Northern Territory). Site audits and reviews of the laboratories are conducted from time to time, as well as routine assessment of intralaboratory analyses, to ensure quality of reported results. Both laboratories operate under contract to Kirkland Lake Gold.

About Kirkland Lake Gold Ltd.

Kirkland Lake Gold is a growing gold producer operating in Canada and Australia that produced 723,701 ounces in 2018 and is on track to achieve significant production growth in 2019.

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