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Kirkland Lake Gold Inc.: Fiscal 2014 Third Quarter Operational and Financial Results

KIRKLAND LAKE, ONTARIO -- (Marketwired) -- 03/13/14 -- Kirkland Lake Gold Inc. ("Kirkland Lake" or "the Company") (TSX: KGI)(AIM: KGI), an operating and exploration gold mining company, today announces operational and financial results for the third quarter of its fiscal year 2014 (November, December 2013, and January 2014).

Mr. George Ogilvie, President and CEO commented, "The mine optimization plan implemented in November and December subsequent to my appointment fully took effect in January, the last month of the quarter. During this month, operating and financial improvements were significant, producing 13,483 ounces at a head grade of 0.45 ounces per ton, generating $9.6 million in operating cash flow, and lowering all-in cash costs by 40% to C$1,513 per ounce. This all-in cost is expected to be sustained throughout the current quarter (Q4). The company expects to operate at cash-flow break even during the fourth quarter, and return to cash flow positive and profitable operations during the first quarter of fiscal year 2015 (Beginning May 2014). The cash costs in January were also substantially reduced from C$1,104 per ounce in the year to date to C$839 per ounce. It's also extremely encouraging to see Expansion Project Capital being completed with the final commissioning of the primary ball mill in anticipation of increased throughput in fiscal 2015. Annual project and ongoing capital spending will be reduced to $45-$50 million going forward with the completion of this expansion."

KEY HIGHLIGHTS OF THE QUARTER

--  Ounces of gold produced during the quarter were 31,022 ounces. In
    November 2013, cut off grades were raised from 0.18 ounces per ton
    ("opt") to 0.22 opt. As a consequence, 43% of ounces in the third
    quarter were recovered in January once these changes fully took effect.
    Gold production during January was 13,483 ounces at a recovered grade of
    0.44 ounces per ton, a 34% increase compared to the year-to-date
    average. The Company is maintaining this fiscal year's production
    guidance of 120,000 - 125,000 ounces.

--  Increasing the cut-off grade by 22% in January increased the number of
    ounces produced by 31% on the year to date average.

--  Gold sales during the month of January 2014 were 14,121 ounces, an
    increase of 34% compared to the year to date monthly average. Cash
    operating cost per ton produced(1) increased as a result of lower
    tonnages; however, all-in cash cost (AICC) per ounce produced decreased
    40% throughout the quarter from $2,528 per ounce in November 2013, to
    $1,513 per ounce in January 2014. The all AICC produced in January is
    expected to be sustained in Q4.

--  Total cash operating costs for the quarter were $347 per ton, or $1,094
    per ounce, and total AICC costs were $1,923 per ounce. January's AICC
    number of $1,513 per ounce included $900,000 of one-time severance costs
    associated with the workforce reduction announced on February 4, 2013.
    The Company expects to operate at a close to cash-flow break-even rate
    at the end of fiscal year 2014 (April 30, 2013).

--  The $95 million Expansion Project capital spend was completed during the
    quarter. Ongoing capital requirements going forward are expected to be
    approximately $45 - $50 million per year. The final element of the
    project was the dry commissioning of the new ball mill which was
    completed in February, 2014.

--  On November 29, 2013 the Company introduced a hiring freeze and began a
    review of go-forward labour requirements. As a result of this review,
    together with natural attrition, manpower reduced by 112 in the quarter
    to 1,103 employees as at January 31, 2014. As at 12 March 2014, the
    Company now has 1,085 employees. The reduction in manpower is
    appropriate and in-line with the Company's new mining strategy and
    production plans.

--  Underground capital development for the quarter migrated away from the
    Main Break to focus on new zones in the SMC, in particular, the
    development of new high grade workplaces on the 5,450' and 5,600' level
    decline.

--  During the quarter, the new operational management team acted swiftly to
    improve the financial performance of the Company by increasing cut-off
    grades, stopping the mining of incremental tonnage, and implementing
    cost reductions to better align the cost base of the business with the
    mine plan for the coming 12-18 months. A limited amount of waste tons
    are milled to recover ounces that may become mixed with waste material
    when switching between ore and waste in the #3 Shaft surface bin. Going
    forward waste tons will be separated, assayed, and only if economically
    viable will they be milled.

--  Revenue for the quarter was $46.2 million; an increase of 12% compared
    to the previous quarter due to 3,189 more ounces being sold. Revenue
    increased 57% compared to the same period in the previous fiscal year
    with 16,380 more ounces being sold offset by a materially lower price of
    gold (Q3/14: $1,369 per ounce of gold; Q3/13: $1,700 per ounce of gold).

--  Cash flows from operations during the quarter were ($1.7M). Operating
    cash flows for the month of January 2014 were $9.6 million. The Company
    has generated $13.8 million in cash flows from operations year to date.

--  Net loss before income taxes for the third quarter was $6.1 million
    which compares to net loss before income taxes of $5.7 million for Q3/13
    and a net loss before income taxes of $6.1 million for the previous
    quarter (Q2/14). The net loss in Q3/14 was largely attributable to a
    $5.4 million gold inventory valuation adjustment resulting from lower
    unit operating costs. Operating margins rose 5% to 15% by the end of the
    quarter.

CONFERENCE CALL

Kirkland Lake Gold will also host a conference call on Friday, March 14 at 11:00 am EST to discuss the Company's third quarter and nine-month 2014 operating and financial results. Those wishing to access the call can do so using the following numbers:

Toll-Free North America: (877) 223-4471

Local and International: (647) 788-4922

Conference ID: 4998322

Conference Title: Kirkland Lake Gold Third Quarter 2014 Financial Results Conference Call

To view the table associated with this press release, please visit the following link: http://media3.marketwire.com/docs/kgi0313table.pdf.

About the Company

Kirkland Lake Gold's corporate goal is to create a self-sustaining and long-lived intermediate gold mining company based in the historic Kirkland Lake Gold Camp. The Company plans to do this by mining to the reserve grade, generating profits and free cash flow 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 camp while the current reserve and resource provides for potentially 10 years of mining with significant exploration upside.

Cautionary Note Regarding Forward Looking Statements

This Press 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", "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 Press Release include, but may not be limited to, statements regarding the acceptance of the Rights Plan by the TSX and the timing thereof, the approval of the Rights Plan by shareholders of the Company, the Company's production capacity and its exploration program. Investors are cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made such as, without limitation, opinion, assumptions and estimates of management regarding the Company's business, its ability to complete the strategic and mine plan review and its ability to increase its production capacity and decrease its production cost. 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 outcome of the strategic review process the Board has implemented, 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), possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company's corporate mineral resources, changes in project parameters as plans continue to be refined, changes in project development, construction, production and commissioning time frames, risks related to joint venture operations, 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 unanticipated weather changes, 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 annual Management's Discussion and Analysis and Annual Information Form for the year ended April 30, 2013 and the Company's Management's Discussion and Analysis for the interim period ended October 31, 2013 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 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.

(1)  The Company has included non-GAAP performance measures: cash operating
     cost per ton and ounce produced and AICC per gold ounce produced,
     throughout this document. This is a common performance measure in the
     mining industry but does not have any standardized meaning. Refer to
     Appendix B in the Management Discussion and Analysis for a
     reconciliation of these measures to reported production expenses.

Contacts:
Kirkland Lake Gold Inc.
George Ogilvie, P.Eng
CEO
+1 709 532 5716
+1 705 568 6444 (FAX)
[email protected]

Kirkland Lake Gold Inc.
Lindsay Dunlop
Director of Investor Relations
+1 416-840-7884
+1 705 568 6444 (FAX)
[email protected]
www.klgold.com

NOMAD: Panmure Gordon (UK) Limited
Katherine Roe / Callum Stewart / Adam James
+44 (0) 20 7886 2500

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