Kirkland Lake Gold Ltd. (TSX:KL) (NYSE:KL) (ASX:KLA) today announced production for the second quarter of 2019 of 214,593 ounces and for the first six months of 2019 of 446,472 ounces. Production in Q2 2019 was driven by record quarterly production at Fosterville totaling 140,701 ounces, bringing year-to-date production at the mine to 269,145 ounces at June 30, 2019. Production at Fosterville is expected to increase from Q2 2019 levels in each of the final two quarters of the year, with the mine remaining on track to achieve full-year 2019 guidance of 570,000 – 610,000 ounces. On a consolidated basis, the Company continues to target full-year 2019 production of 950,000 – 1,000,000 ounces. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.
Highlights of Q2 2019 and H1 2019 production results:
Other key developments during Q2 2019, include:
Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold, commented: “Fosterville achieved a record quarter in Q2 2019, with production exceeding planned levels largely due to strong grade performance in the Swan Zone.
We are targeting higher levels of production from Fosterville in both the third and fourth quarters of the year as ounces produced from the Swan Zone increase, with the mine tracking well towards its full-year 2019 guidance of 570,000 – 610,000 ounces. At Macassa, we saw average grades more in line with expected levels in Q2 2019, which compared to Q1 2019 when the record average quarterly grade of 29.6 g/t was achieved mainly due to grade outperformance in the SMC. Tonnes processed during Q2 2019 were lower than expected, largely reflecting excess water from the spring run-off, which limited the use of the lower loading pocket at the #3 Shaft. The impact of the water extended longer than anticipated, through to the end of the quarter. Water levels are receding, and we do not expect third and fourth quarter production to be impacted. Macassa remains on track to achieve its full-year 2019 guidance of 240,000 – 250,000 ounces.”
Q2 and H1 2019 Production Results
|Q2 2019||Q2 2018||Q1 2019||H1 2019||H1 2018|
|Ore Milled (tonnes)||111,280||121,342||140,184||251,464||245,011|
|Grade (g/t Au)||39.9||20.6||29.0||33.8||18.7|
|Gold Production (ozs)||140,701||77,462||128,445||269,145||141,305|
|Ore Milled (tonnes)||72,681||89,781||77,990||150,671||176,442|
|Grade (g/t Au)||21.5||21.5||29.6||25.7||20.5|
|Gold Production (ozs)||49,196||60,571||72,776||121,972||114,609|
|Ore Milled (tonnes)||185,398||195,054||200,786||386,184||401,798|
|Grade (g/t Au)||4.4||4.5||5.0||4.7||4.6|
|Gold Production (ozs)||24,696||26,652||30,658||55,355||56,415|
|Total Consolidated Production (ozs)||214,593||164,685||231,879||446,472||312,329|
|Total Consolidated Gold Sales (ozs)||212,091||164,305||232,929||445,020||312,068|
Performance Against Full-Year 2019 Production Guidance
|2019 Guidance (,000 ozs)||240 – 250||140 – 150||570 – 610||950 – 1,000|
|H1 2019 Production (ozs)||121,972||55,355||269,145||446,472|
H1 2019 production totaled 446,472, an increase of 43% from 312,329 ounces in H1 2018. The main contributor to the strong growth compared to the same period in 2018 was record production at Fosterville, mainly due to a significant improvement in the average grade. Production from Fosterville is expected to increase significantly during the second half of the year, as is production from the Holt Complex. Macassa ended H1 2019 well positioned to achieve its full-year 2019 production guidance, with production in the second half of the year expected to be similar to the H1 2019 total of 121,972 ounces. The Company remains on track to achieve its full-year 2019 production guidance of 950,000 – 1,000,000 ounces of gold production.
Review of Operating Mines
The Fosterville Mine produced 140,701 ounces in Q2 2019, an increase of 82% from 77,462 ounces in Q2 2018 and 10% higher than 128,445 ounces the previous quarter. Production in Q2 2019 resulted from processing 111,280 tonnes at an average grade of 39.9 g/t and average mill recoveries of 98.7%. The growth in production from both prior periods was due to a significant increase in the average grade, which was 94% and 38% higher than in Q2 2018 and Q1 2019, respectively. The strong grade performance in Q2 2019 resulted from increased mining of high-grade stopes in the Swan Zone during the quarter compared to the previous quarter as the stoping front continued to progress deeper into the high-grade sections of the Swan Zone. There were no production stopes from the Swan Zone included in Q2 2018 production. Tonnes processed in Q2 2019 were largely in line with expected levels, with the reduction from both prior periods largely reflecting a focus on maximizing grade in the mine plan.
Production at Fosterville in H1 2019 totaled 269,145 ounces, an increase of 90% from 141,305 ounces for the same period in 2018. H1 2019 production resulted from processing 251,464 tonnes at an average grade of 33.8 g/t and average recoveries of 98.5%. The increase from H1 2018 was mainly due to an 81% improvement in the average grade, largely reflecting the contribution from high-grade stopes in the Swan Zone to H1 2019 production. Stope production from the Swan Zone commenced during the third quarter of 2018. Mill throughput in H1 2019 averaged 1,390 tonnes per day, in line with expected levels and similar to the 1,350 tonnes per day average achieved in H1 2018.
Following completion of H1 2019, Fosterville was on track to achieve the mine’s full-year 2019 production guidance of 570,000 – 610,000 ounces. Production levels in H2 2019 are expected to be significantly higher than during the first half of the year, reflecting increased production from the Swan Zone.
The Macassa Mine produced 49,196 ounces in Q2 2019, which compared to 60,571 ounces in Q2 2018 and record production of 72,776 ounces the previous quarter. Production in Q2 2019 resulted from processing 72,681 tonnes at an average grade of 21.5 g/t and average recoveries of 97.9%. The change in production from Q2 2018 reflected lower tonnes milled largely reflecting the impact of excessive water in the mine during the spring run-off, which limited the use of the lower loading pocket at the #3 Shaft. The change in production from the previous quarter resulted from a reduction in the average grade from the record quarterly grade of 29.6 g/t in Q1 2019, as well as reduced tonnes milled.
Production at Macassa in H1 2019 totaled 121,972 ounces, an increase of 6% from 114,609 ounces for the same period in 2018. The increase in production in H1 2019 reflected a 25% improvement in the average grade, to 25.7 g/t, reflecting significant grade outperformance from stopes on the 5700 Level of the SMC during Q1 2019. The impact of a higher average grade compared to H1 2018 more than offset a reduction in tonnes milled in H1 2019 versus the same period a year earlier.
At June 30, 2019, Macassa was well positioned to achieve the mine’s full-year 2019 production guidance of 240,000 – 250,000 ounces, with tonnes milled expected to increase in H2 2019 from levels achieved in the first half of the year.
During Q2 2019, the Holt Complex produced 24,696 ounces based on processing 185,398 tonnes at an average grade of 4.4 g/t and at average recoveries of 95.0%. Production in Q2 2019 compared to production of 26,652 ounces in Q2 2018 and 30,658 ounces the previous quarter. The change in production from Q2 2018 largely reflected lower production at Taylor Mine (10,204 ounces versus 12,940 ounces in Q2 2018) as the favourable impact of a higher average grade was more than offset by reduced mill throughput. Compared to the previous quarter, production at Holt Mine of 12,928 ounces in Q2 2019 compared to 17,225 ounces in Q1 2019 with the reduction reflecting lower average grades (3.9 g/t in Q2 2019 versus 4.8 g/t the previous quarter). Q2 2019 production at Taylor compared to production of 12,377 ounces in Q1 2019 with the change reflecting both a lower average grade (5.2 g/t versus 5.4 g/t the previous quarter) and reduced tonnes milled (64,186 tonnes in Q2 2019 versus 75,085 tonnes process in Q1 2019). At Holloway, 1,564 ounces were produced in Q2 2019 versus nil in Q2 2018 and 1,056 ounces the previous quarter.
For H1 2019, the Holt Complex produced 55,355 ounces, similar to the 56,415 ounces produced for the same period in 2018. Production at Holt Mine of 30,153 ounces was largely unchanged from 30,387 ounces in H1 2018. The Taylor Mine produced 22,581 ounces in H1 2019 compared to 25,995 ounces in H1 2018, as reduced levels of mill throughput more than offset an increase in the average grade year over year. The Holloway Mine produced 2,621 ounces in H1 2019 versus 33 ounces while on care and maintenance in H1 2018.
The Company is targeting higher levels of production from the Holt Complex in H2 2019 compared to the first half of the year. Production at Holloway is expected to ramp up with full-year 2019 production targeted at approximately 20,000 ounces. The Company’s full-year 2019 production guidance for the Holt Complex remains unchanged at 140,000 – 150,000 ounces.
Natasha Vaz, P.Eng., Vice President, Technical Services is a “qualified person” as defined in National Instrument 43-101 and has reviewed and approved disclosure of the technical information and data in this News Release.
About Kirkland Lake Gold Ltd.
Kirkland Lake Gold Ltd. 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 over the next three years, including target production of 950,000 – 1,000,000 ounces in 2019, 930,000 – 1,010,000 ounces in 2020 and 995,000 – 1,055,000 ounces in 2021. The production profile of the Company is anchored by two high-grade, low-cost operations, including the Macassa Mine located in Northern Ontario and the Fosterville Mine located in the state of Victoria, Australia. Kirkland Lake Gold’s solid base of quality assets is complemented by district scale exploration potential, supported by a strong financial position with extensive management and operational expertise.
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