Summary of SMC Reserves and Resources by Level
| LEVEL | Proven + Probable (TONS) | Proven + Probable (GRADE) | Proven + Probable (OUNCES) | Measured + Indicated (TONS) | Measured + Indicated (GRADE) | Measured + Indicated (OUNCES) |
| 5025 | 89,000 | 0.44 opt (15.1 gpt) | 39,000 | 57,000 | 0.39 opt (13.3 gpt) | 22,000 |
| 5300 | 620,000 | 0.47 opt (16.1 gpt) | 290,000 | 220,000 | 0.39 opt (13.3 gpt) | 86,000 |
| 5400 | 481,000 | 0.57 opt (19.5 gpt) | 274,000 | 179,000 | 0.41 opt (14.0 gpt) | 71,000 |
| 5600 | 299,000 | 0.70 opt
(24.0 gpt) | 209,000 | 222,000 | 0.55 opt (18.8 gpt) | 122,000 |
| 5700 - 6600 | | | | 768,000 | 0.91 opt (31.1 gpt) | 703,000 |
Mr. George Ogilvie, President and CEO commented, "The current fiscal year is off to a strong start with operations thriving under the new strategy of focusing on quality tons to significantly improve head grades. The year-to-date head grade is 0.42 opt (14.4 gpt) which represents a 30% increase over and above the 0.32 opt (10.9 gpt) achieved in fiscal 2013. This approach will continue over the next three years, where the plan calls for keeping daily ore tons constant in order to keep labour and other mining costs stagnant, with an increase in produced ounces coming from higher grades. Grades in the SMC get significantly richer at depth, where development of additional high-grade areas (incorporated in the fiscal years 2015, 2016 and 2017 mine plans) is underway. It's pleasing to see we are now mining on a third mining horizon, 5400L, in the SMC where reserve grades in the block up to the 5,300L are above 0.55 opt (18.8 gpt). Costs are trending down due by previously announced cost-saving measures while others recently implemented (e.g. change in mill schedule) will start to be realized from June. In addition we should see further productivity improvements in the second half of the calendar year with the arrival of two new one boom, T1 D, electric hydraulic jumbos."
"The Company expects to be free cash flow positive at current gold prices in the next 2 - 3 months. The ounces forecast in fiscal years 2016 and 2017 do not take into account any mining from the near surface mineralization. Our recent flow through financing will allow us to accelerate the exploration drilling of the near surface mineralization; which includes a resource expansion and in-fill drilling to define a reserve. In house a preliminary economic assessment is being undertaken to help define the robustness of the near surface mineralization economics. The study is expected to be complete by the end of the calendar year," concluded Mr. Ogilvie.
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.
The reserve estimates and technical disclosure have been reviewed, verified (including sampling, analytical and test data) and compiled by the Company's geological staff (which includes a 'qualified person', Stewart Carmichael P.Geo., the Company's Chief Exploration Geologist, for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects, of the Canadian Securities Administrators). Mr. Carmichael also supervised the preparation of the information that forms the basis of the technical disclosure in this release.
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, 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 January 31, 2014 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.
Glossary of Terms
National Instrument 43-101 Definitions of Resources and Reserves
The Reserve and Resource estimation classifications as prescribed in National Instrument 43-101 are given here for clarity.
Mineral Resource
Mineral Resources are sub-divided into 3 categories depending on the geological confidence. The highest level with the most confidence is the `Measured' category. The next level of confidence is the `Indicated' category and the lowest level, or the resource with the least confidence, is the `Inferred' category.
Inferred Mineral Resource
An `Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling, gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
Indicated Mineral Resource
An `Indicated Mineral Resource' is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Measured Mineral Resource
A `Measured Mineral Resource' is that part of a Mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
Mineral Reserve
Mineral Reserves are sub-divided into 2 categories. The highest level of Reserves or the level with the most confidence is the `Proven' category and the lower level of confidence of the Reserves is the `Probable' category. Reserves are distinguished from resources as all of the technical and economic parameters have been applied and the estimated grade and tonnage of the resources should closely approximate the actual results of mining. The guidelines state "Minerals Reserves are inclusive of the diluting material that will be mined in conjunction with the Mineral Reserve and delivered to the treatment plant or equivalent facility." The guidelines also state that, "The term `Mineral Reserve' need not necessarily signify that extraction facilities are in place or operative or that all government approvals have been received. It does signify that there are reasonable expectations of such approvals."
Probable Mineral Reserve
A `Probable Mineral Reserve' is the economically mineable part of an Indicated and in some circumstances a Measured Mineral Resource demonstrated by a least a Preliminary Feasibility Study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
Proven Mineral Reserve
A `Proven Mineral Reserve' is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.
A more detailed list of technical terms can be found at http://klgold.com/cmsAssets/docs/pdfs/2013/2013%20Annual%20Information%20Form.pdf
