Welcome!

News Feed Item

Kirkland Lake Gold Inc.: Fiscal 2014 Full Year Financial and Operational Results

KIRKLAND LAKE, ONTARIO -- (Marketwired) -- 07/09/14 -- Kirkland Lake Gold Inc. (the "Company") (TSX:KGI)(AIM:KGI), an operating and exploration gold mining company, today announces operational and financial results for the fourth quarter (February, March, April 2014) and fiscal year 2014. All figures in the release are stated in Canadian dollars unless explicitly stated.

Mr. Harry Dobson, Chairman commented, "Fiscal year 2014 was a year of change for the Company. Following the appointment of George Ogilvie, P. Eng into the Chief Executive role, operational changes were made immediately. A new lower tonnage, higher grade mine plan was put in place along with a concurrent cost-cutting program to reduce the rate of cash burn as well as to lower the Company's cost per ounce on a sustainable basis. The effects of these changes were demonstrated in the fourth quarter results, where All-In Sustaining Cash costs (AISC's) were further reduced to CAD$1,776 per ounce, with AISC's for just the month of April lowered to CAD$1,466 per ounce. The average sales price realized in April was CAD$1,422 per ounce, so the Company is now operating at very close to breakeven rate and expects at current gold prices to become consistently profitable and cash flow positive during the second fiscal quarter 2015. Grades have also significantly improved with a calendar year to date grade of 0.39 ounces per ton (opt) (13.3 grams per tonne (gpt), and fiscal year to date grades of 0.42 opt (14.4 gpt) as announced on June 24. The Company is on track to meets its fiscal year 2015 guidance of 140,000 - 155,000 ounces and we are seeing further reductions in the AICC/AISC for the year so far. Fiscal 2015 is poised to be a turnaround year for the Company as production and grades increase, further cost reductions are realized, and as we advance our near surface ounces to a preliminary economic study by the end of the calendar year."

KEY HIGHLIGHTS OF THE YEAR


--  Production for the year totalled 385,837 tons at a head grade of 0.33
    opt (11.3 gpt) and a recovery rate of 95% to produce 122,309 ounces, an
    increase of 34% from previous fiscal year.  
    
--  Gold sales for the year were 125,273 ounces, an increase of 37% over the
    previous year (91,771 ounces). Cash operating cost per ton produced(1)
    increased; however, all-in cash cost (AICC) or all-in sustaining costs
    (AISC) per ounce produced decreased 18% compared to the previous fiscal
    year. AICC/AISC for Q4/14 decreased 9% to CAD$1,776, compared to the
    previous quarter (Q3/14: CAD$1,923) and 22% compared to the same quarter
    in fiscal 2013 (Q4/13: CAD$2,277. All-in costs for the April, the last
    month of the 2014 fiscal year were CAD$1,466 per ounce, and costs
    continue to trend down further in the first 2-months of fiscal year
    2014. 
    
--  Cash operating costs for the year were CAD$1,078 per ounce. During the
    fourth quarter when the effects of the mine optimization plan were full
    realized, operating costs were lowered to CAD$1,000 per ounce with April
    cash costs being CAD$836 per ounce. 
    
--  Cash flow from operating activities for the year was CAD$27.3M. This was
    mainly due to items not affecting cash and changes in working capital
    offsetting the reported CAD$11.1M loss.  
    
--  Net loss and comprehensive loss for fiscal year 2014 was CAD$11.1M
    (CAD$0.16 per share). Revenue of CAD$173.3M for the year increased 14%
    from the previous fiscal year (CAD$151.6M) with 33,503 more ounces being
    sold compared to the previous year, offset with a 16% (CAD$270 per
    ounce) decrease in the average sale price of gold year over year. The
    Company operated at a close to breakeven rate in the last month of
    Q4/14, and expects to operate at a cash flow positive rate during the
    second quarter of its current fiscal year 2015 as further improvements
    from the mine optimization plan and cost cutting programs are realized. 
    
--  At the start of Q3/14, following operational management changes, a mine
    optimization plan was introduced, along with a concurrent cost-cutting
    program. The new mine plan is focused on a lower tonnage, higher grade
    strategy, therefore cut off grades were increased from 0.18 opt (6.2
    gpt) to 0.22 opt (7.5 gpt). As a result, head grades increased from an
    average of 0.31 opt (10.6 gpt) in the first and second quarter to 0.34
    opt (11.6 gpt) in the third and fourth quarter of fiscal 2014. The full
    consequences of the new mine plan were realized in Q4/14 with production
    margins rising 10% from -2% in Q3/14 to 8% in Q4/14. Head grade has
    continued to significantly improve with 0.42 opt (14.4 gpt) head grade
    realized during the first 51 days of the current fiscal year 2015.  
    
--  Consistent with the new mine plan that shifts away from the lower grade
    Main Break areas and focuses more heavily on the higher grade South Mine
    Complex ("SMC"), underground capital development remains focused on new
    zones in the SMC, in particular the development of new high grade
    workplaces on the 5,400' and 5,600' levels. Over the course of fiscal
    year 2014, the ratio of tons being mined in the SMC increased from 53%
    in Q1/14 to 63% in Q3/14 and 60% in Q4/14. In fiscal 2015, it is planned
    that 66% of tons will be mined from the SMC. 
    
--  The cost-cutting initiatives were introduced to slow the level of cash
    burn the business was experiencing while the mine optimization plan was
    being implemented. The Company made a number of policy changes and
    reduced headcount (from 1,250 to 1,059 employees) to reduce costs and
    better align the cost structure of the business to the anticipated
    revenues from the new mine plan. The cost saving initiatives, and
    estimated go-forward annual savings totalled CAD$24.7M. With the
    exception of the elimination of non-essential spending in Property Plant
    & Equipment, these savings will be sustained. 
    
--  The CAD$95.0M Mine Expansion Project was completed on budget during the
    fiscal year. Key expansion projects that were completed include the
    hoist upgrade, mill expansion, plant equipment purchases (including
    battery powered scoops and trucks) and underground capital development.
    The final element of the project was the dry commissioning of a new ball
    mill in February, 2014. 
    
--  Following the completion of the Mine Expansion Project spending,
    together with the adoption of a new mine plan and the cost reductions
    announced by the Company, total cash resources (including short-term
    investments) as at April 30, 2014 were CAD$38.9M. 
    
--  The Company entered into a 2.5% net smelter return (NSR) royalty with
    Franco-Nevada Corporation ("FNV") on October 31, 2013 for proceeds of
    US$50.0M (CAD$51.2M). The Company also made the final payment of $30.0M
    to Osisko Mining Corp in Q1/14 ('Osisko') for the remaining 50% share in
    the former joint venture properties acquired in fiscal 2013. The funds
    have been and will continue to be used for development of the Company's
    properties. 
    
--  Exploration spending was cut by CAD$9.7M to CAD$7.5M during the year to
    reduce expenses. At year end, eight diamond drills were active including
    one on surface. Despite the reduction in spending, the Company announced
    on April 28, 2014 a first-time NI 43-101 calculation on its near-surface
    ounces (surface to -1,000 feet). The Company plans to add two additional
    diamond drills to the surface program in the current fiscal year 2015.
    Two drills will concentrate on delineation and infill drilling while the
    other will focus on exploration. 

(1) The Company has reported non GAAP performance measures: Cash operating cost per ton and per ounce produced and AICC per ounce produced throughout this document. These are common performance measures in the mining industry. Please refer to Appendix B in our MD&A which shows a reconciliation to reported production expenses.


     The Company will be hosting a conference call on Thursday July 10 at   
     10:00 am EST to discuss these results. Please see below dial in        
     formation:                                                             
                                                                            
Participant Dial-In Number(s):                                              
Toll-Free North America: (877) 223-4471                                     
Local and International: (647) 788-4922                                     
Conference ID: 70737057                                                     
                                                                            
Replay Dial In:                                                             
Local and International: (416)-621-4642                                     
Toll Free North America: (800)-585-8367                                     
Conference ID: 70737057                                                     
                                                                            
Replay Available Until: July 24, 2014 23:59 ET                              
----------------------------------------------------------------------------
Financial Highlights                                                        
(All amounts in 000's of Canadian                                           
 Dollars, except gold price per                                             
 ounce, shares and per share                 Year ended April 30,           
 figures)                                                                   
                                  ------------------------------------------
                                           2014          2013          2012 
----------------------------------------------------------------------------
Gold Sales (ounces)                     125,273        91,771        97,888 
Average Gold Price (per ounce)            1,385         1,653         1,633 
----------------------------------------------------------------------------
Revenue                                 173,258       151,692       159,824 
Production Expenses                     162,755       124,002        98,328 
Exploration Expenditure                   7,537        17,097        14,241 
Other Expenses                           18,593        13,366         4,927 
Net (Loss) Income before Income                                             
 Taxes                                  (15,627)       (2,773)       42,328 
Net and Comprehensive (Loss)                                                
 Income                                 (11,077)       (3,646)       41,270 
Per share (basic and diluted)             (0.16)        (0.05)   0.58, 0.57 
Cash Flow from operating                                                    
 activities                              27,258        33,959        51,200 
Cash Flow (used in) from financing                                          
 activities                              (5,461)      106,235        11,812 
Cash Flow used in investing                                                 
 activities                             (60,650)     (106,235)      (63,907)
Net (decrease) increase in cash         (38,853)       51,770          (895)
----------------------------------------------------------------------------
Total cash resources                     38,897        76,966        30,172 
Other Current Assets                     23,732        30,719        22,086 
Current Liabilities                      45,361        71,565        25,013 
Working Capital                          17,268        36,120        27,245 
Total Assets                            409,385       448,782       270,329 
Total Liabilities                       126,363       201,423        37,674 
----------------------------------------------------------------------------
Weighted average number of shares                                           
 outstanding                         70,150,912    70,150,912    71,528,490 
Dividends per share                         NIL           NIL           NIL 
----------------------------------------------------------------------------

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 more than 10 years of mining with significant exploration upside.

Neither 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.

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", "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 Press Release include, but may not be limited to, statements regarding 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 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 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, 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 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.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes a lot of work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reduction in cost ...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists l...
Virtualization over the past years has become a key strategy for IT to acquire multi-tenancy, increase utilization, develop elasticity and improve security. And virtual machines (VMs) are quickly becoming a main vehicle for developing and deploying applications. The introduction of containers seems to be bringing another and perhaps overlapped solution for achieving the same above-mentioned benefits. Are a container and a virtual machine fundamentally the same or different? And how? Is one techn...
My team embarked on building a data lake for our sales and marketing data to better understand customer journeys. This required building a hybrid data pipeline to connect our cloud CRM with the new Hadoop Data Lake. One challenge is that IT was not in a position to provide support until we proved value and marketing did not have the experience, so we embarked on the journey ourselves within the product marketing team for our line of business within Progress. In his session at @BigDataExpo, Sum...
MongoDB Atlas leverages VPC peering for AWS, a service that allows multiple VPC networks to interact. This includes VPCs that belong to other AWS account holders. By performing cross account VPC peering, users ensure networks that host and communicate their data are secure. In his session at 20th Cloud Expo, Jay Gordon, a Developer Advocate at MongoDB, will explain how to properly architect your VPC using existing AWS tools and then peer with your MongoDB Atlas cluster. He'll discuss the secur...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service.
Niagara Networks exhibited at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex softw...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, will discuss the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information,
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
In his session at Cloud Expo, Alan Winters, an entertainment executive/TV producer turned serial entrepreneur, will present a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to max...
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...