TIDMKGI
Kirkland Lake Gold Reports Fiscal 2015 Third Quarter Results With YTD Free Cash Flow Generation of $22 Million
FOR: KIRKLAND LAKE GOLD INC.
TSX, AIM SYMBOL: KGI
March 11, 2015
Kirkland Lake Gold Reports Fiscal 2015 Third Quarter Results With YTD Free Cash Flow Generation of $22 Million
TORONTO, ONTARIO--(Marketwired - March 11, 2015) - Kirkland Lake Gold Inc. ("Kirkland Lake Gold" or the
"Company") (TSX:KGI)(AIM:KGI), an operating and exploration gold company with operations in Ontario, Canada,
today announces financial results for the third quarter of fiscal 2015 ("Q3/15"), which include the three and
nine months ended January 31, 2015. All figures in this release are in Canadian dollars unless stated
otherwise.
Highlights(2)
=- Achieved a head grade of 0.44 ounces per ton ("opt"), or 15.1 grams per
tonne ("g/t") in Q3/15; 0.43 opt or 14.7 g/t for the nine months of
fiscal 2015 ("YTD").
=- Sold 39,722 ounces of gold at an average realized price per ounce of
$1,371 (US$1,175) in Q3/15; YTD sold 116,600 ounces at an average
realized price per ounce of $1,389 (US$1,243).
=- Cash Operating Costs per Ounce of Gold Produced(1) of $766 (US$656); and
$813 (US$728) YTD.
=- All-In Cash Cost per Ounce of Gold Produced(1) ("AICC") of $1,249
(US$1,070); YTD AICC of $1,289 (US$1,153).
=- Income before income taxes of $7.3 million in Q3/15; $17.2 million YTD.
=- Net and comprehensive income of $4.2 million or $0.06 per share during
the quarter; $11.9 million or $0.17 per share ($0.16 per diluted share)
YTD.
=- Generated cash flow from operations during the quarter of $23.7 million;
$57.3 million YTD.
=- Generated free cash flow(1) of $11.6 million during the quarter; $22.8
million YTD.
=- Cash as at January 31, 2015 was $44.0 million. After closing the bought
deal equity financing ("Financing"), on February 18, 2015, the cash
balance was $76.6 million.
Mr. George Ogilvie, Chief Executive Officer of the Company commented, "We are very pleased to see three
consecutive quarters of positive results from the operations, generating positive free cash flow and ensuring
we will achieve our stated guidance.
"We have made tremendous progress following the turnaround a year and a half ago and we are committed to strive
for continuous improvements to strengthen the Company and create a return on investment for our shareholders.
During the quarter, we announced the appointment of Eric Sprott as Chairman of the Board of Directors, and
entered into a $35 million financing. I believe the success of the financing and Mr. Sprott's joining of the
board are key signs that there is renewed faith in our abilities to execute and succeed."
Click on the link for a video interview with George Ogilvie, discussing the Q3 results.
http://webcasting.brrmedia.co.uk/broadcast/136240?popup=true
(1) The Company has included non-GAAP performance measures: average sales
price per ounce sold, cash cost per ton produced, cash cost per ounce
produced, AICC per gold ounce produced and free cash flow throughout
this announcement. This is a common performance measure in the mining
industry but does not have any standardized meaning under IFRS. Refer
to Appendix B of the MD&A for a reconciliation of these measures to
reported production expenses.
(2) All US dollar equivalents are converted at the average CAD to USD
exchange rate during the reporting period.
Financial and Operational Metrics
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Q3/15 Q3/15
vs vs FY2015 FY2014
Q3/15 Q2/15 Q3/14 Q2/15 Q3/14 Production YTD YTD Y o Y
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994(i) 1,002 1,064 -1% -7% Tons per day 1,005 1,092 -8%
("tpd")
91,418 92,146 97,917 -1% -7% Tons Produced 277,444 301,375 -8%
0.44 0.41 0.33 7% 33% Head Grade 0.43 0.33 34%
39,158 36,292 31,022 8% 26% Ounces Produced 115,978 92,588 25%
1,014 1,022 1,215 -1% -17% Headcount 1,014 1,215 -17%
(manpower)
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In CAD$
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Q3/15 Q3/15
vs vs FY2015 FY2014
Q3/15 Q2/15 Q3/14 Q2/15 Q3/14 Financial YTD YTD Y o Y
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39,722 38,335 33,719 4% 18% Gold Sales 116,600 94,502 23%
(ounces)
1,371 1,395 1,369 -2% 0% Average Price(1) 1,389 1,385 0%
($) (per ounce)
54,471 53,479 46,165 2% 18% Revenue (000's) 161,953 130,902 24%
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328 350 347 -6% -5% Cash Operating 340 340 -%
Cost per Ton
Produced(1)
766 889 1,094 -14% -30% Cash Operating 813 1,106 -26%
Cost per Ounce
Produced(1)
1,249 1,374 1,923 -9% -35% AICC(1) 1,289 2,054 -38%
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In US$ Equivalent
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1,175 1,262 1,280 -7% -8% Average Price(1) 1,243 1,324 -6%
($) (per ounce)
281 317 324 -11% -13% Cash Operating 304 324 -7%
Cost per Ton
Produced(1)
656 804 1,023 -18% -36% Cash Operating 728 1,056 -32%
Cost per Ounce
Produced(1)
1,070 1,243 1,797 -14% -40% AICC(1) 1,153 1,964 -42%
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(i) The production rate (tpd) achieved during the quarter does not take into account closures during the annual
December holidays. The 1,030 tpd figure is the average production rate achieved for each day of operation
during the quarter.
Operations
Development work during Q3/15 progressed as planned with one jumbo advancing the main ramp development towards
the 5600 level and the other jumbo focused on stope development. In addition, a third stope on the 5400 level
within the South Mine Complex ("SMC") entered into production in early December. The Company is anticipating it
will have a total of five stopes in production on the 5400 level by the end of this fiscal year (April 30,
2015), which will ensure more consistent ore production from the 5400 level as we move into fiscal 2016, where
the average reserve grade is 0.57 opt (19.5 g/t).
The average production rate achieved for Q3/15 was 1,030 tpd, a 3% increase over the previous quarter. However,
during the month of January there was a significant increase to 1,220 tpd with 37,800 ore tons delivered to the
mill. This increase resulted from better than anticipated worker productivity and higher stope availability
throughout the mine due to improved transitioning in the mining cycle from ore production to paste filling back
to ore production cycles.
The head grade achieved during the quarter of 0.44 opt (15.1 g/t), is an increase of 9% over the previous
quarter, with a milling recovery of 96.6%.
Exploration
During the quarter, the Company provided an update for underground drilling which extended the New South Zone
(associated with the SMC) by 180 feet (54.9 metres) down dip from previous intersections and intersected a new
high grade parallel footwall zone (see news release dated January 20, 2015, accessible at www.klgold.com). The
Company expects to update its company-wide resource and reserve estimates before fiscal year end.
(1) The Company has included non-GAAP performance measures: average sales
price per ounce sold, cash cost per ton produced, cash cost per ounce
produced, AICC per gold ounce produced and free cash flow throughout
this announcement. This is a common performance measure in the mining
industry but does not have any standardized meaning under IFRS. Refer
to Appendix B of the MD&A for a reconciliation of these measures to
reported production expenses.
Fiscal 2015 Outlook
The Company continues to make good progress and as such is revising its production guidance from 140,000 -
155,000 ounces to 153,000 - 157,000 ounces of gold. The Company is also revising some of its financial guidance
metrics for the current fiscal year as outlined below.
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F2015 Guidance YTD F2015 Revised
CAD$ Metric Actual Guidance
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$800 - 850 Cash operating cost $813/oz No Change
per ounce
$1,250 - 1,350 AICC per ounce $1,289/oz No Change
produced
$58.0 million Sustaining capital $34.5 million $50 million
expense (CAPEX)
$200.0 million Revenue $162.0 million $218 - $222 million
$50.0 - 60.0 million Cash flow from $57.0 million $70 - $75 million
operations
$15.0 - 20.0 million Free cash flow $22.4 million $30 - $35 million
generation
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Conference Call Details
The Company will hold a conference call to discuss the third quarter results on March 11, 2015, at 11:00am EDT
(3:00pm BST). You are invited to participate via teleconference using the details below. A replay of the call
will be posted on the Company's website (www.klgold.com).
Participant Dial-In Numbers
Toll-Free North America: +1 (877) 291-4570; Local and International: +1 (647) 788-4919
Local from Switzerland: (0-800) 835-354; Local from the United Kingdom: (0-800) 051-7107
Conference ID: 1445227
Replay Dial-In Numbers
Local and International: +1 (416) 621-4642
Toll Free North America: +1 (800) 585-8367
Conference ID: 1445227
Replay Available Until: March 25, 2015 at 11:59PM ET
The following abbreviations are used to describe the periods under review throughout this release.
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Abbreviation Period Abbreviation Period
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F2015 May 1, 2014 - April 30, F2014 May 1, 2013 - April 30,
2015 2014
YTD F2015 May 1, 2014 - January YTD F2014 May 1, 2013 - January
31, 2015 31, 2014
Q3/15 November 1, 2015 - Q3/14 November 1, 2014 -
January 31, 2015 January 31, 2014
Q2/15 July 1, 2014 - October Q2/14 July 1, 2013 - October
31, 2014 31, 2013
Q1/15 May 1, 2014 - June 30, Q1/14 May 1, 2013 - June 30,
2014 2013
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For a description of additional risk factors affecting the Company and 'Forward Looking Information', see the
Company's Annual Information Form filed with certain securities regulatory authorities in Canada and available
on SEDAR at www.sedar.com in Appendix 4 in the AIF. For 'Forward Looking Information', as presented in the
Management Discussion and Analysis ("MD&A") for the period ended January 31, 2015, see Appendix D in the MD&A
for a description of other factors that may cause actual results to differ from those anticipated.
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Financial Highlights Reporting Period (Fiscal 2015)
(All amounts in 000's
of Canadian Dollars,
except gold price
per ounce, shares
and per share YTD YTD
figures) Q3/15 Q2/15 Q3/14 F2015 F2014
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Gold Sales (ounces) 39,722 38,335 33,719 116,600 94,502
Average Gold Price
(per ounce) 1,371 1,395 1,369 1,389 1,385
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Revenue 54,471 53,479 46,164 161,953 130,902
Production Expenses 41,747 43,254 46,987 126,237 123,900
Exploration
Expenditure 1,492 1,617 1,521 4,315 6,478
Other Expenses 3,933 4,225 3,810 14,157 12,570
Income (Loss) before
Income Taxes 7,299 4,383 (6,153) 17,244 (13,094)
Net and Comprehensive
Income (Loss) 4,248 2,684 (4,221) 11,912 (5,675)
Per share (basic and 0.17 /
diluted) 0.06 0.04 (0.06) 0.16 (0.14)
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Cash Flow from
operations 23,711 16,552 3,553 57,337 23,768
Cash Flow (used in)
from financing
activities (8,428) (4,663) (8,369) (16,805) (3,642)
Cash Flow (used in)
investing activities (12,092) (10,684) (19,152) (34,531) (44,279)
Net increase
(decrease) in cash 2,627 1,205 (24,629) 5,125 (24,814)
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Total cash resources 44,019 41,392 51,670 44,019 51,670
Other Current Assets 24,145 24,057 21,036 24,145 21,036
Current Liabilities 31,878 34,047 43,415 31,878 43,415
Working Capital 36,286 31,402 29,291 36,286 29,291
Total Assets 423,537 417,483 410,914 423,537 410,914
Total Liabilities 164,572 161,626 172,267 164,572 172,267
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Basic weighted
average number of
shares outstanding 72,080,581 72,046,482 70,150,912 71,639,992 70,150,912
Dividends per share NIL NIL NIL NIL NIL
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Qualified Persons
Production and processing at KL Gold's milling facility are under the supervision of Mr. Chris Stewart, P.Eng.,
Vice President of Operations and the exploration program is under the supervision of Mr. Stewart Carmichael,
P.Geo., Manager of Exploration. Messrs. Stewart and Carmichael are 'qualified persons' for the purpose of
National Instrument 43-101, Standards of Disclosure for Mineral Projects, of the Canadian Securities
Administrators, and have reviewed and approved this news release.
About the Company
Kirkland Lake Gold Inc.'s corporate goal is to create a self-sustaining and long-lived intermediate gold mining
company based in the historic Kirkland Lake gold camp, as well as to explore opportunities for growth in other
safe mining jurisdictions. The Company plans to do this by mining to the reserve grade, generating profits and
free cash flow with a view to maximising value for the shareholders. The Company will also look to take
advantage of its increased infrastructure capacity in the appropriate gold price environment. At the same time,
the Company is committed to maintaining a significant exploration program aimed at developing and maintaining a
property wide reserve and resource base sufficient to sustain a mine life of more than ten years.
Over the last several years the Company has invested significant capital to improve the infrastructure of the
business including upgrading the production hoist, skips, mill, underground mobile equipment and capital
development. From initial discovery to present day there have been over 24 million ounces of gold mined from
the Kirkland Lake gold camp while the current reserve and resource provides for potentially 14 years of mining
with exploration upside.
Neither the Toronto Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed or accepts
responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward Looking Statements
This news release contains statements which constitute "forward-looking statements", including statements
regarding the plans, intentions, beliefs and current expectations of the Company with respect to the future
business activities and operating performance of the Company. The words "may", "would", "could", "should",
"will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate
to the Company, are intended to identify such forward-looking statements. Forward-looking statements used in
this news release include, but may not be limited to: statements regarding the Company's guidance for fiscal
2015 which includes production estimates in respect of ounces produced, operating cost per ounce and all-in
cash costs; anticipated revenue, cash flow from operations and free cash flow generation. Investors are
cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management
which management considers reasonable at the date the statements are made such as, without limitation,
opinions, assumptions and estimates of management regarding the Company's business, its ability to increase its
production capacity and decrease its production costs. Such opinions, assumptions and estimates, are inherently
subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual
events or results to differ materially from those projected in the forward-looking statements.
These factors include the Company's expectations in connection with the projects and exploration programs being
met, the impact of general business and economic conditions, global liquidity and credit availability on the
timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating
gold prices, currency exchange rates (such as the Canadian dollar versus the United States Dollar), variations
in ore grade or recovery rates, changes in accounting policies, changes in the Company's mineral reserves and
resources, changes in project parameters as plans continue to be refined, changes in project development,
construction, production and commissioning time frames, the possibility of project cost overruns or
unanticipated costs and expenses, higher prices for fuel, power, labour and other consumables contributing to
higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as
anticipated, unexpected changes in mine life, seasonality and weather, costs and timing of the development of
new deposits, success of exploration activities, permitting time lines, government regulation of mining
operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, and limitations
on insurance, as well as those risk factors discussed or referred to in the Company's Management's Discussion
and Analysis and Annual Information Form for the year ended April 30, 2014 and the Company's Management's
Discussion and Analysis for the interim period ended January 31, 2015 filed with the securities regulatory
authorities in certain provinces of Canada and available at www.sedar.com. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect,
actual results may vary materially from those described herein as intended, planned, anticipated, believed,
estimated or expected. Although the Company has attempted to identify important risks, uncertainties and
factors which could cause actual results to differ materially, there may be others that cause results not to be
as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to
update these forward-looking statements except as otherwise required by applicable law.
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Kirkland Lake Gold Inc.
George Ogilvie, P.Eng
Chief Executive Officer
+1 709 532 5716
+1 705 568 6444 (FAX)
gogilvie@klgold.com
OR
Kirkland Lake Gold Inc.
Suzette N. Ramcharan, CPIR
Director of Investor Relations
+1 647-284-5315
+1 705 568 6444 (FAX)
sramcharan@klgold.com
www.klgold.com
OR
NOMAD: Panmure Gordon (UK) Limited
Dominic Morley / Adam James
+44 (0) 20 7886 2500
OR
Blytheweigh
Tim Blythe/Halimah Hussain/Camilla Horsfall
+44 (0) 20 7138 3204
Kirkland Lake Gold Inc.
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