Resource World Magazine

O C T O B E R / N O V E M B E R 2 0 1 9 www.resourceworld.com 31 MINING K irkland Lake Gold Ltd. [KL-TSX, NYSE; KLA-ASX] continues to post strong financial results for the quarter and has set record net earnings for the first half of 2019. The key drivers of its impressive earnings were strong revenue growth as well as improved unit (per ounce) production costs and lower exploration expenses. "During Q2 2019, we continued to generate strong growth in production, earnings and cash flows compared to the same period in 2018," said Tony Makuch, President and CEO. "Based on our results to date, and expectations for the remainder of the year, we remain well positioned to achieve our full-year 2019 consolidated operating guidance, which includes pro- duction of 950,000 – 1,000,000 ounces with operating cash costs per ounce sold averaging US $285-US $305 and AISC per ounce sold averaging US $520-US $560." Record half-year financial results • Net earnings of US $214.3 million ($1.02/ share); 92% increase from US $111.5 mil- lion ($0.53/share) for YTD 2018 • Adjusted net earnings of $217.7 million ($1.04/share); 88% higher than $116.0 mil- lion ($0.55/share) for YTD 2018 • Net cash from operating activities of $352.7 million; 68% growth from $210.5 million for YTD 2018 • Free cash flow totaling $146.1 million; 32% higher than $110.9 million for same period in 2018 • Revenue of $586.2 million; 42% growth from $412.9 million for YTD 2018 • EBITDA of $387.4 million; 73% increase from $224.3 million for YTD 2018. The company posted strong net earn- ings tallying US $104.2 million or $0.50 per share, on revenue of US $281 million during Q2 2019. That represents a 69% increase over the comparable period last year which saw record net earnings of US $61.5 million or $0.29 per share on rev- enue of US $214.7 million. Kirkland Lake's operating cash flow increased by 52%. Net cash provided by operating activities rang in at US $178.4 million, a 48% increase over the same period in 2018. Total production from the company's three operating mines dur- ing the second quarter tallied to 214,593 ounces. That represents a 30% increase from 164,685 ounces in Q2 2018. Operating cash costs per ounce sold aver- aged US $312, a 23% improvement from US $404 in Q2 2018. All-In-Sustaining-Costs per ounce sold averaged US $638, 16% better than US $757 in Q2 2018. The com- pany's cash position at the end of June 2019 totaled US $469.4 million. Kirkland Lake's production profile is anchored by two high-grade, low-cost operations: the Macassa Mine in northern Ontario and the Fosterville Mine in the state of Victoria, Australia. Fosterville is leading the way with quar- terly production hitting 140,700 ounces with operating cash costs at US $120/oz and AISC of US $318/oz gold. This was due to exceptional grades of nearly 40 g/t gold and high recoveries of 98.7%. These fac- tors helped achieve a record quarter and exceeded target production levels. The company reports that it is now positioned to significantly grow production at Fosterville during the second half of the year. "At Fosterville, we continued to advance our key growth projects, including con- struction of a new ventilation system, paste-fill plant and new water treatment plant," stated Makuch. "The water treat- ment plant is expected to be in operation during the third quarter, with the ventila- tion and paste-fill projects also targeted for completion during the second half of the year." Tonnage at Macassa was affected by water in the mine from the spring run- off but the company reported that higher production levels at Macassa in July put the mine back on track to achieve its full- year guidance of over 240,000 ounces gold production. The first half of 2019 saw the mine produce 122,000 ounces gold at cash costs of US $384/oz gold and an AISC of US $686/oz gold. Average grades at the mine were pegged at 25.7 g/t gold with recover- ies at 98.1%. "We will be commencing full-face sink- ing at the Macassa #4 shaft project during August, which will mark a major milestone for the project, said Makuch. "The project remains on track for Phase one completion by the second quarter of 2022." At the Holt Mine complex, also in Ontario, Kirkland Lake Gold is ramping up production and continues to target producing approximately 20,000 ounces for the year. The company expects to see higher levels of mill throughput at the Holt Mine and plans to achieve increased production from the mine in the final two quarters of 2019. In other news, Kirkland Lake Gold announced that it has acquired 2 mil- lion units of Bonterra Resources Inc. [BTR-TSXV] though a private placement financing valued at CDN $5 million. This investment boosts Kirkland Lake Gold's holdings to 8,510,629 shares and 1,000,000 warrants, representing approximately 11.32% of the currently issued and out- standing shares on a non-diluted basis and approximately 12.48% of the issued and outstanding shares on a partially diluted basis, assuming the exercise of the war- rants held by the company. n Kirkland Lake Gold on track for record year by Thomas Schuster

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