Press release from Marketwire
Kirkland Lake Gold Inc.: Fiscal 2012 Third Quarter Financial and Operational Results; Expansion to 2,200 Tons of Ore Per Day to Be Accelerated
Tuesday, March 13, 2012
Kirkland Lake Gold Inc.: Fiscal 2012 Third Quarter Financial and Operational Results; Expansion to 2,200 Tons of Ore Per Day to Be Accelerated03:00 EDT Tuesday, March 13, 2012KIRKLAND LAKE, ONTARIO--(Marketwire - March 13, 2012) - Kirkland Lake Gold Inc., (TSX:KGI)(AIM:KGI) ('Kirkland Lake' or the 'Company'), an operating and exploration gold mining company located in Ontario, Canada, announces an operations update and its third quarter financial results for its fiscal 2012 year ended January 31, 2012. Mr. Harry Dobson, Chairman commented, "We are pleased to announce that phase three plans to advance to 2,200 tons per day of ore production will now be executed over the next fourteen months, requiring additional capital of only $20 million for the mill expansion. While this decision has slightly impacted short term gold production, the resulting production from these tonnage levels will be 250,000 - 300,000 ounces of gold at reduced costs per ton and ounce, and positions the company to realize the earning power of it's asset base earlier. This approach is consistent with the company's strategy to keep capital expenditures as low as possible. As of January, $60.6 million of the $75 million phase's one and two expansion program has increasingly been supported from cash flows. Total expansion capital should remain at or below $100 million dollars." FINANCIAL AND OPERATIONAL RESULTSHighlights of the third quarter (in Canadian dollars) were: Net income before income taxes for the third quarter was $13.6 million ($0.19 per share), compared to $11.8 million ($0.17 per share) for the previous quarter. Cash flows generated from operating activities were $20.1 million for the quarter compared to $13.4 million in the previous quarter.Production costs for the quarter were $291 per ton of ore ($908 per ounce of gold), compared with $273 per ton ($793 per ounce) in the prior quarter. Lower costs per ton and per ounce are expected as higher levels of ore tonnage are achieved. 72,504 tons of ore were milled at a head grade of 0.33 ounces of gold per ton (opt) and a recovery of 96.0% to produce 23,241 ounces of gold. 25,245 ounces were sold.Year-to-date cash balance has reduced by just $8.0 million while meeting operating, exploration costs, and capital expenditures. Expansion capital remains on budget. Fiscal year 2012 guidance is being revised to an estimated 100,000 - 105,000 ounces due to a more aggressive approach to the expansion program. MINE EXPANSION - PHASE III PRODUCTION GROWTH TO 250,000 - 300,000 OUNCES OF ANNUAL PRODUCTION The Company has, in several cases and due to the better than expected financial results, revised the project scope to complete more work in order to achieve a higher production rate than planned starting in fiscal year 2014 (May 2013). A Phase III production expansion is being implemented to increase the average daily ore tonnage rate to 2,200 tons per day by the start of fiscal year 2014, which should result in an accelerated production profile in fiscal years 2014 - 2016 to an estimated 250,000 - 300,000 ounces per year, compared to an estimated 210,000 - 240,000 ounces as previously planned. The overall expansion program budget remains targeted at $75 million of which $60.6 million had been spent at the end of January 2012.It has been determined that for an additional $20 million, the mill can be expanded from 1,600 to 2,200 tons per day. No additional project costs are expected elsewhere at the mine. Work is on track to meet an average daily ore tonnage rate of 1,600 tons per day by November 2012. Underground working face development is on schedule and there are currently enough additional working faces being planned or developed to support fiscal year 2013 production levels of an estimated 180,000 - 200,000 ounces per year. Equipment deliveries and labour increases to meet this production rate are also on schedule. The scope of the hoisting capacity upgrade has been increased to 3,000 tons per day from 2,300 tons in the original plan. As a result of studies undertaken for phase III, a decision was made to take advantage of the working platform being in the shaft in order to complete additional shaft upgrades. No significant increase in hoisting capacity from the current capacity is expected until August 2012 when the working platform will be replaced by the new service cage.About the CompanyThe Company purchased the Macassa Mine and the 1,450 ton per day mill along with four former producing gold properties - Kirkland Lake, Teck-Hughes, Lake Shore and Wright Hargreaves - in December 2001. These properties, which have historically produced approximately 22 million ounces of gold, extend over seven kilometres between the Macassa Mine to the west and Wright Hargreaves to the east and, for the first time, are being developed and explored under one owner. This camp is located in the Southern Abitibi Greenstone Belt of Kirkland Lake, Ontario, Canada.Cautionary Note Regarding Forward Looking StatementsThis Press Release may contain statements which constitute 'forward-looking, including statements regarding the plans, intentions, beliefs and current expectations of the Company, its directors, or its officers with respect to the future business activities and operating performance of the Company. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future business activities or performance and involve risks and uncertainties, and that the Company's future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the periodic filings with the Canadian securities regulatory authorities, including the Company's Annual Information Form and quarterly and annual Management's Discussion & Analysis, which may be viewed on SEDAR 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 be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements.FOR FURTHER INFORMATION PLEASE CONTACT: Brian HinchcliffeKirkland Lake Gold Inc.President1 705 567 52081 705 568 6444 (FAX)email@example.comORLindsay CarpenterKirkland Lake Gold Inc.Director of Investor Relations1 416 840 7884416 850 1617 (FAX)firstname.lastname@example.orgORLorna Spears / Philippe PolmanPelham Bell Pottinger+44 (0) 20 7861 email@example.comORGuy WilkesOcean Equities Ltd.+44 207 786 firstname.lastname@example.orgORKatherine Roe / Callum StewartNOMAD: Panmure Gordon (UK) Limited+44 20 7459 email@example.com / firstname.lastname@example.orgNeither the Toronto Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed and neither accepts responsibility for the adequacy or accuracy of this news release.