Kirkland Lake Gold (KL)

[NYBob]

Kirkland Lake Gold Reports Strong Earnings and Cash Flow in Q2 2018, Improves 2018 Production and Cost Guidance
AUG 01 2018
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TORONTO, Aug. 01, 2018 (GLOBE NEWSWIRE) --

Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or the “Company”) (TSX:KL)
(NYSE:KL) (ASX:KLA) today announced the Company’s financial and
operating results for the second quarter (“Q2 2018”) and first six
months (“YTD 2018”) of 2018.

http://www.klgold.com/news-and-media/news-releases/press-release-details/2018/Kirkland-Lake-Gold-Reports-Strong-Earnings-and-Cash-Flow-in-Q2-2018-Improves-2018-Production-and-Cost-Guidance/default.aspx

Q2 2018 results include strong earnings growth, record cash flow from
operations1 and a significant increase in the Company’s cash position.
The Company also announced improvements to full-year 2018 consolidated
guidance, with production for the year now targeted at over 635,000
ounces with operating cash costs per ounce sold expected to average
$400 – $425.
Full-year guidance for the Fosterville and Macassa mines was also
improved.
The Company’s full financial statements and management discussion &
analysis are available on SEDAR at www.sedar.com and on the Company’s
website at
http://www.klgold.com
All dollar amounts are in U.S. dollars, unless otherwise noted.

Key highlights of Q2 2018 results include:

Strong growth in net earnings: Net earnings totaled $61.5 million ($0.29 per basic share “/share”), 78% increase from $34.6 million ($0.17/share) in Q2 2017 and 23% higher than $50.0 million ($0.24/share) in Q1 2018.

Adjusted net earnings: Adjusted net earnings totaled $63.4 million ($0.30/share) versus $39.3 million ($0.19/share) in Q2 2017 and $52.6 million ($0.25/share).

Record quarterly cash flow from operations: Record cash flow from operating activities1 of $120.9 million, 56% higher than $77.5 million in Q2 2017 and 35% increase from $89.6 million in Q1 2018.

Substantial free cash flow: Free cash flow1,2 growth to $60.7 million, 18% increase from $51.2 million in Q2 2017 and 21% higher than $50.2 million in Q2 2018.

Record quarterly EBITDA: 1,2,3 Record EBITDA of $123.7 million, 30% higher than 95.1 million in Q2 2017 and 17% increase from previous quarterly record of $105.9 million in Q1 2018.

Strong cash position: Cash increased $43.1 million or 16% to $318.4 million at June 30, 2018 from $275.3 million at March 31, 2018, and $86.8 million or 37% from $231.6 million at the end of 2017.

Low unit costs: Production costs totaled $66.5 million in Q2 2018. Operating cash costs per ounce sold2 averaged $404, 16% improvement from $482 in Q2 2017 and 10% better than $447 in Q1 2018. All-in sustaining cost (“AISC”) per ounce sold2 averaged $757 compared to $729 in Q2 2017 and $833 in Q1 2018.

Production ahead of plan: Production totaled 164,685 ounces, 3% increase from 160,305 ounces in Q2 2017 and 12% higher than 147,644 ounces in Q1 2018.

Capital expenditures: Sustaining capital expenditures2 totaled $44.1 million ($86.2 million for YTD 2018), while growth capital expenditures totaled $11.1 million ($15.7 million for YTD 2018), excluding capitalized exploration expenditures. Work related to key projects to ramp up in second half of 2018.

Exploration expenditures: Exploration expenditures totaled $25.3 million ($43.9 million for YTD 2018), including capitalized exploration expenditures, with recent results including the continued intersection of high-grade mineralization outside existing Mineral Resources at Macassa, as well as additional high-grade, visible-gold bearing intersections at the Swan Zone at Fosterville in support of further growth Swan Zone Mineral Reserves.

Quarterly dividend increased on May 2, 2018 to $0.03/share effective the second quarter 2018 quarterly dividend payment, paid on July 13, 2018 (Q1 2018 quarterly dividend of $0.02/share paid on April 13, 2018).
(1) Of continuing operations.
(2) See “Non-IFRS Measures” later in this press release and starting on page 32 of the Company’s MD&A for the three and six months ended June 20, 2018.
(3) Refers to Earnings before Interest, Taxes, Depreciation, and Amortization.

Key highlights of YTD 2018 results include:

Record first-half financial results:
Net earnings of $111.5 million ($0.53/share), 134% increase from $47.7 million ($0.23/share) for YTD 2017
Cash flow from operating activities of $210.5 million, 45% growth from $145.3 million for YTD 2017
Free cash flow totaling $110.9 million, 24% higher than $89.7 million for YTD 2017
EBITDA of $224.3 million, 38% increase from $162.0 million for YTD 2017.
Strong YTD production and unit cost performance versus full-year 2018 guidance
Production of 312,329 ounces, 7% increase from YTD 2017. Based on YTD 2018 results, improved full-year 2018 production guidance was announced today including:
Consolidated production guidance increased to over 635,000 ounces from over 620,000 ounces previously
Fosterville production guidance increased to 275,000 – 300,000 ounces from 260,000 – 300,000 ounces previously (YTD 2018: 141,305 ounces)
Macassa production guidance improved to 220,000 – 225,000 ounces from 215,000 – 225,000 ounces previously (YTD 2018: 114,609 ounces).
Operating cash cost per ounce sold of $424, 19% better than YTD 2017. Based on YTD 2018 results, improved full-year 2018 operating cash cost per ounce guidance was announced today, including:
Consolidated guidance improved to $400 – $425 from $425 – $450
Fosterville operating cash cost per ounce sold guidance improved to $250 – $270 from $270 – $290 previously (YTD 2018: $261)
Macassa operating cash cost per ounce sold guidance improved to $460 – $480 from $475 – $500 (YTD 2018: $453).
AISC per ounce sold of $793, similar to YTD 2017 and in line with guidance of $750 – $800.
Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold, commented: “Positive grade performance at Fosterville and Macassa was a key driver of our strong second quarter performance and record first-half financial results. At Fosterville, our average grade for Q2 2018 of 20.6 grams per tonne was well ahead of expected levels, with the mine benefiting from a record month in June, producing 31,710 ounces at 30.4 grams per tonne. At Macassa, our stopes around the 5,700-foot level, the deepest mining done to date in the South Mine Complex, are high-grade stopes that have outperformed, which resulted in record quarterly production in Q2 2018 of 60,571 ounces at an average grade of 21.5 grams per tonne. Based on the strong results at both mines in the first half of the year, we have improved the full-year 2018 guidance for production and operating cash costs per ounce sold for both Fosterville and Macassa, as well as on a consolidated basis.

“Turning to our growth plans, as expected, the level of work at our key projects is picking up and will continue to accelerate over the balance of the year. At Macassa, surface excavation for the #4 shaft is advancing and we are on track to commence shaft collaring, headframe construction and hoist installation during the second half of the year. We remain on track to commence full-face shaft sinking by the second quarter of 2019 and to achieve completion of phase one of the shaft project by early in 2022. At Fosterville, the rate of underground development related to our ventilation project increased during Q2 2018, while construction of our new water treatment plant continued to progress, as did the drilling of the surface holes for our new paste plant, with plant construction to commence shortly. We have also completed installation of a second gravity circuit at our Fosterville mill, with the circuit becoming operational as of the end of July. Our growth projects at Fosterville remain on track for completion on or close to the original target dates, in support of our goal to reach over 400,000 ounces of annual gold production at Fosterville by 2020.”

Review of Financial and Operating Performance

The following discussion provides key summarized consolidated financial and operating information for the three and six months ended June 30, 2018 and 2017. Results for the three and six months ended June 30, 2017 include production and costs related to the Northern Territory operations in Australia, which were placed on care and maintenance effective June 30, 2017. Also, results for Q2 and YTD 2017 have been restated to exclude discontinued operations, related to the sale of the Stawell Mine.

http://www.klgold.com/news-and-media/news-releases/press-release-details/2018/Kirkland-Lake-Gold-Reports-Strong-Earnings-and-Cash-Flow-in-Q2-2018-Improves-2018-Production-and-Cost-Guidance/default.aspx



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