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A PROFITABLE FUTURE
Fiscal 2015_Q3 Update March 11, 2015
A RICH HISTORY
TSX/AIM:KGI
Forward Looking Statements
Cautionary Note Regarding Forward Looking Statements.
This presentation 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 Presentation include, but
may not be limited to; statements regarding the Company’s guidance for fiscal 2015 including ounces
produced and grade assumptions, cash operating cost per ounce and AICC, sustaining capital, revenue,
operating cash flow and free cash flow generation; the ability to bring more higher grade stopes online from
the 5400 level and access to the 5600 level and the timing thereof; the exploration programs and the results
and timing thereof; and production and grade guidance for fiscal 2016 and 2017. 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 are discussed in length in the Company's annual
Management's Discussion and Analysis and Annual Information Form for the year ended April 30, 2014. and the
Company’s Management's Discussion and Analysis for the interim period ended January 31, 2015 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.
TSX/AIM:KGI www.klgold.com 2
Investment Highlights
Located in Ontario, one of the safest and lowest risk mining jurisdictions globally
Attractive NI43-101 high grade reserve and resource profile with a long mine life
Growing annual production, declining cost base and improving unit costs
Company returning to profitability and free cash flow
Significant exploration potential with organic growth
Potential upside with a higher gold price and a weaker Canadian dollar
www.klgold.com 3TSX/AIM:KGI
Experienced and Diverse Board of Directors and Management Team
Diverse Board of Directors
Eric Sprott, Chairman of the Board (Non-executive Director)
Dawn Whittaker, LLB (Non-executive Director)
Pamela Klessig, P.Geo (Non-executive Director)
John Thomson, CA
George Ogilvie, P.Eng
Barry Cooper, B.Sc., MBA (Non-executive Director)
Jeffrey Parr, CA, BA, MBA (Non-executive Director)
Barry Olson, M.Sc. (Non-executive Director)
www.klgold.com 4TSX/AIM:KGI
Synergistic Management Team
GEORGE OGILVIE, P. Eng.
President & CEO, Director
• 25 years management, operating, and
technical expertise in the mining industry
with over 9 years of operating experience
in deep, narrow-vein gold mines (Anglo
Gold, South Africa)
• Former CEO of Rambler Metals and
Mining
JOHN THOMSON, CA
Executive VP and CFO,
Director
• More than 25 years experience in
various senior level finance positions
with companies such as PepsiCo
• Chartered Accountant who studied at
INSEAD
CHRIS STEWART, P. Eng.
VP Operations
• More than 20 years of operating
experience in Northern Ontario in various
senior-level positions. Prior to joining
KGI, was CEO of Liberty Mines Inc.
• Mining Engineering degree from Queen’s
University
Worked together
at Dynatec for
~3.5 years
Worked together at
Rambler for ~ 7 years
www.klgold.com 5TSX/AIM:KGI
Financial Position
CASH C$76.6 million1
DEBT C$120 million
convertible debentures
KGI.DB: 6% coupon/ $15.00 strike
C$54.5MM mature Jun/2017
KGI.DB.A: 7.5% coupon/ $13.70 strike
C$65.5MM mature Dec/2017
ROYALTY 2.5% NSR
Franco Nevada Corporation
option to buyback 1% by October 31, 2016, at a cost
of $36MM less any money paid against the 1%
52 Week Performance
2
HIGH C$6.19
LOW C$2.51
www.klgold.com 6TSX/AIM:KGI
1As at February 18, 2015 – Upon Close of Bought Deal Financing (see Appendix for more details on Financing).
2 As at March 11, 2015
CAPITAL STRUCTURE 2
ISSUED SHARES 80,016,617
Stock Options 4,244,800
Convertible Debentures 8,869,829
FULLY DILUTED 93,017,046
MARKET CAP ~408 Million2
Major Shareholders (~50%)
2
Resolute Funds (11%)
Eric Sprott (10%)
Columbia Wanger Asset Management LLC (8%)
Equinox Partners (7%)
Van Eck Associates Corporation (5%)
Harry Dobson (4%)
ABC Funds (4%)
60%
70%
80%
90%
100%
110%
120%
130%
140%
150%
Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
Kirkland Lake (TSX:KGI) Gold Price (C$ / oz)
KGI Share Price vs Gold Price
15%
(1%)
Strategic Review
Concluded
Flow Through
Financing
Q1/15 Results
Drilling
Results
Q2/15 Production
Results
MRMR Update
Q4/14 Results
BOD
Appointment
& Financing
www.klgold.com 7TSX/AIM:KGI
Q2/15 Results
3 Year Production
Guidance
Q1/15
Production
Drilling
Results
Q3/15 Production
Results
Drilling
Results
Close $35MM
Financing
Kirkland Lake Background
The Kirkland Lake gold camp
has been producing gold for
over 100 years.
Almost 25 Moz’s has been
produced to date, from seven
mines.
Based on grade, it is one of the
richest gold camps in the world.
www.klgold.com 8TSX/AIM:KGI
KGI owns five former producing high grade mines with historical
production of ~22 Moz’s of gold at an average head grade of
0.44 opt (15.1 grams per tonne).
One of the Highest Grade Gold Mines In The World
Mine Operator Location
Gold Grade Reserves MRMR
g/t Au Date
Macassa Mine Complex Kirkland Lake Gold Canada (Ontario) (0.50 opt) 17.1 1.4 Moz Dec/2013
Turquoise Ridge Barrick USA (Nevada) 16.9 4.5 Moz Dec/2014
Pogo Gold Sumitomo Corp. USA 12.5 4.9Moz Dec/2013
Gosowong Newcrest Indonesia 12.0 1,235 Dec/2014
Moab Khotsong AngloGold Ashanti South Africa 10.0 6,126 Dec/2013
Mponeng AngloGold Ashanti South Africa 10.0 14,569 Dec/2013
Red Lake Gold GoldCorp Canada 10.0 2,553 Dec/2014
TauTona AngloGold Ashanti South Africa 9.1 1,389 Dec/2013
Kupol/Dvoinoye Kinross Russia 8.5 2,081 Dec/2014
17.1 16.9
12.5 12.0
10.0 10.0 10.0 9.1 8.5
0.0
5.0
10.0
15.0
20.0
Gradeg/t
Reserve Grades
www.klgold.com 9TSX/AIM:KGI
Company Source – This is a selective group of producing mines only with mineral reserves in excess of 1Moz’s (gold only)
Reserves & Resources
(Resources are Exclusive of Reserves)
See Appendix for more disclosure on MRMR statement which is as of December 31 ,2013.
Based on current level of Reserves and 70% conversion of Resources
(@ 200,000 oz p.a), KGI has a 14 year Mine Life
www.klgold.com 10TSX/AIM:KGI
Mine Wide Complex
Mineral Reserves
(P&P)
1.4 Moz’s
2.8M tons @ 17.1 g/t
(0.50 opt)
Mineral Resources
(M&I)
2.1 Moz’s
4.2 M tons @ 16.8 g/t
(0.49 opt)
Mineral Resources
(Inferred)
1.1 Moz’s
2.1 M tons @ 18.5 g/t
(0.54 opt)
SMC
0.8 Moz’s
1.5 M tons @ 18.5 g/t
(0.54 opt)
1.0 Moz’s
1.5 M tons @ 23.7 g/t
(0.69 opt)
0.8 Moz’s
1.2 M tons @ 23.0 g/t
(0.67 opt)
Breakout
of SMC
only
South Mine Complex
• 5400L has reserve grade @ 0.57 opt (19.5 gpt)
• 5600L has reserve grade @ 0.70 opt (23.9 gpt)
• Production from 5400L and 5600L allows delineation drilling of resources, especially below 5600L
• Remains Open at Depth and Across Strike
5025 Level
P+P 89,000 Tons @ 0.44 oz/ton 39,000 Oz’s
M+I 57,000 Tons @ 0.30 oz/ton 22,000 Oz’s
5300 Level
P+P 620,000 Tons @ 0.47 oz/ton 290,000 Oz’s
M+I 220,000 Tons @ 0.30 oz/ton 86,000 Oz’s
5400 Level
P+P 481,000 Tons @ 0.57 oz/ton 274,000 Oz’s
M+I 170,000 Tons @ 0.41 oz/ton 71,000 Oz’s
5600 Level
P+P 290,000 Tons @ 0.70 oz/ton 209,000 Oz’s
M+I 220,000 Tons @ 0.55 oz/ton 122,000 Oz’s
5700 to 6600 Level
M+I 768,000 Tons @ 0.91 oz/ton
703,000 Oz’s
Original Two
Mining Horizons
Third Level
Started
May 2014
Currently in Development
for FY 2016 OPEN
#3SHAFT
#2WINZE
www.klgold.com 11TSX/AIM:KGI
5025L
5300L
5400L
6600L
5600L
4750L
Development Legend
Completed
F2015 Development
F2016 Development
OPENOPEN
Q3 F2015 Production Update
Q1
F2015
38,543
93,880
0.45
Q2
F2015
38,335
92,146
0.41
Q3
F2015
39,722
91,148
0.44
YTD
F2015
116,600
277,174
0.43
Guidance
F2015
153 – 157
Koz’s*
0.37
Ounces
Sold
Tons
Milled
Head Grade
(opt)
• Third stope (5412) brought into production on 5400 level during Q3
• 2 Electric Hydraulic Jumbo’s fully operational
• Main ramp towards the 5600 level progressing well and is on schedule
www.klgold.com 12TSX/AIM:KGI
* Production guidance revised upwards from 140,000 – 155,000 ounces to 153,000 – 157,000 ounces on March 11, 2015
Monthly Production Profile
• Cut-off Grades Raised from 0.18 opt to 0.22 opt.
• Stopped Mining “Incremental Tons”
• Implemented Strict Ore/ Waste Segregation UG
• Increasing UG Delineation Drilling in SMC
• Employing more UG Geologists
• Assay Lab is Manned 24/7
• Restructuring Organization
• Implementing Leadership Training
• Looking to Upgrade MIS
www.klgold.com 13TSX/AIM:KGI
0.34
0.31
0.30
0.26
0.29
0.45
0.39
0.34
0.37
0.34
0.47
0.51
0.39
0.43
0.41
0.47
0.44
0.42
-
0.10
0.20
0.30
0.40
0.50
0
5,000
10,000
15,000
20,000
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Oz Recovered
Head Grade
F2015
F2015 YTD Average 0.43 opt
HeadGrade(OuncesPerTon)
GoldProduction(Ounces)
0.37
0.40
0.37
0.32
0.41
0.37
0.31
0.33
0.37
0.39
0.41
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
-
50,000
100,000
150,000
200,000
250,000
07 08 09 10 11 12 13 14 15 16 17
GoldOunces
Oz Recovered Guidance Head Grade Linear (Oz Recovered)
Fiscal Year
Previous Guidance
Annual Production Profile
Expectation Gap
• Guided Grades for F2015-F2017 are Based on Historic Achievements
• Fiscal YTD Actual Head Grade is 0.43 opt
www.klgold.com 14TSX/AIM:KGI
HeadGrade(OuncesPerTon)
= 200 employees
Q3
Results
Q3/15 Vs
Q3/14
YTD
Results
F2015 Vs
F2014
COSTS
Cash Cost Per Ton
$328
US$281
-5%
-13%
$340
US$302
0%
-7%
Cash Operating Cost Per
Ounce
$766
US$656
-30%
-36%
$813
US$728
-26%
-32%
All In Cash Costs
$1,249
US$1,070
-35%
-40%
$1,289
US$1,153
-38%
-42%
SALES
Gold Sales 39,722 +18% 116,600 +23%
Average Sales Price $1,371 0% $1,389 0%
Revenues $54.5MM +18% $161.9MM +24%
CASH
FLOW
Cash Flow from Operations $23.7MM +85% $57.3MM +59%
Free Cash Flow $11.6MM NA $22.8MM NA
Q3 & YTD F2015 Financial Highlights
- All US$ equivalents are converted at the average CAD to USD exchange rate during the reporting period.
- See Pg. 23 for fiscal 2015 guidance on certain financial metrics provided above and Pg.24 in the appendix for further financial results.
www.klgold.com 15TSX/AIM:KGI
0.26
0.29 0.45
0.39
0.34
0.37
0.34
0.47 0.51
0.39
0.43
0.41 0.47
0.44
0.42
-
0.10
0.20
0.30
0.40
0.50
0.60
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
NOV DEC JAN FEB MAR APR MAY
2014
JUN JUL AUG SEP OCT NOV DEC JAN
AICC per ounce Produced - 15 month trend
Production Capital Development PP&E Corporate Exploration Royalties Head Grade
AICC Achieved Over Past 15 Months
All amounts stated are in Canadian dollars
• 16% Reduction in Labour Force and Cancelled Incentive Programs (e.g. home loan assistance and travel)
• Major Capital Projects (PP&E) Completed in January 2014
www.klgold.com 16TSX/AIM:KGI
CostinC$perOunceProduced
HeadGrade(OuncesPerTon)
F2014 F2015
$1,073 $1,119
$836
$1,244
$720
$614
$947 $924
$809
$684
$931
$728
$1,250
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN Q4E
Production Capital Development PP&E Corporate Exploration Royalties
AICC Projection for F2015
All amounts stated are in Canadian dollars
• Projection Based on Assumptions of 1,150 tpd, 0.37 opt and 96% Mill Recovery
• KGI now has three consecutive quarters of Free Cash Flow generation
• AICC excludes any mining and income tax (of which the Company only pays a nominal amount in mining taxes)
www.klgold.com 17TSX/AIM:KGI
F2015
CostinC$perOunceProduced
F2015_YTD Average Sales Price C$1,389
F2015_YTD AICC C$1,289
Capital Expenditures
• Project Capital was Completed in January 2014
• C$9M in Capital Development of 5400L and SMC Main Decline to 5600L Spent in FY15
• F2015 Capex reduced by $5MM to $53MM after Q2, and down to $43MM after Q3
0
10
20
30
40
50
60
70
80
90
100
2010 2011 2012 2013 2014 2015E 2016E 2017E
C$Millions
Mineral Properties PP&E
ESTIMATED
9.7
22.4 30.9 45.8 46.9 55.0 43.0 51.0 51.0
28.9
24.5 44.0
29.6
6.8
7.0 7.0
www.klgold.com 18TSX/AIM:KGI
SMC Underground Drilling
www.klgold.com 19TSX/AIM:KGI
UG DRILLING
• SMC continues to be expanded
• Multi-ounce intersections
• 3 drills turning underground
• Open in multiple directions
53-2493 (NSZ)
1.85 opt/ 11.6 feet
(63.43 gpt/ 3.5 metres)
53-2597 (NSZ)
0.36 opt/14.7 feet
(12.34 gpt/ 4.5 metres)
53-2595 (NFZ)
3.55 opt/ 11.4 feet
(121.72 gpt/ 3.5 metres)
‘04 Break Underground Drilling
www.klgold.com 20TSX/AIM:KGI
Selected Highlights
DH 34-666
2.53 opt/ 2.4 feet
(86.75 g/t over
0.7 metres)
DH 34-668
0.80 opt/ 4.4 feet
(27.43 g/t over
1.3 metres)
See press release dated February 23, 2015
Near Surface Exploration Target
SURFACE DRILLING
• Near surface mineralization is within 2 Km’s of mill
• Mill has excess capacity of +/- 1,000 tpd
• Mineralization from 100’ to 1,000’ below surface
• Open across strike and at depth
• M&I 310,000 tons @0.34opt (11.7gpt) 104,000 oz.
• Infer. 131,000 tons @0.36opt (12.3gpt) 48,000 oz.
• 3 drills drilling to expand resource and infill drill
www.klgold.com 21TSX/AIM:KGI
Outlook for F2015
Guidance Metric
YTD 2015
Actual
Revised
Guidance
$800 – 850/ Oz Cash Operating Cost Per Ounce
$813
US$723
No Change
$1,250 - 1,350/ Oz AICC Per Ounce Produced
$1,289
US$1,144
No Change
$53 million* Sustaining CAPEX $36 million $50 million
$200 million Revenue $162 million $218 - $222 million
$50 - 60 million Cash Flow from Operations $57 million $70 - $75 million
$15 - 20 million Free Cash Flow Generation $22 million $30 - $35 million
All amounts stated are in Canadian dollars
www.klgold.com 22TSX/AIM:KGI
* Capital was revised from $58 million to $53 million on October 31, 2014, and revised to $50 million on January 31, 2015
APPENDIX
Notes, additional disclosure and other information
www.klgold.com 23TSX/AIM:KGI
Analyst Coverage
Firm Analyst
Dundee Securities Joe Fazzini
CIBC World Markets Cosmos Chiu
Macquarie Capital Markets Michael Siperco
National Bank Financial Raj Ray
BMO Capital Markets Brian Quast
Clarus Securities Jamie Spratt
PI Financial Philip Ker
Firm Analyst
M Partners Derek Macpherson
Pareto Securities John McClintock
Mirabaud Securities Richard Morgan
Panmure Gordon & Co Alison Turner
Investec Bank Hunter Hillcoat
Very Independent Research John Tumazos
KIRKLAND LAKE GOLD IS FOLLOWED BY THE ANALYSTS LISTED ABOVE. THIS LIST IS PROVIDED FOR INFORMATION PURPOSES ONLY AND IS
SUBJECT TO CHANGE AS COVERAGE IS ADDED OR DROPPED BY A FIRM.
OPINIONS, ESTIMATES OR FORECASTS REGARDING KIRKLAND LAKE GOLD'S PERFORMANCE THAT ARE MADE BY THESE ANALYSTS ARE THEIRS
ALONE AND DO NOT REPRESENT THE OPINIONS, ESTIMATES OR FORECASTS OF KIRKLAND LAKE GOLD OR ITS MANAGEMENT.
KIRKLAND LAKE GOLD DOES NOT IMPLY ITS ENDORSEMENT OF, OR CONCURRENCE WITH, SUCH INFORMATION, CONCLUSIONS OR
RECOMMENDATIONS AND TAKES NO RESPONSIBILITY FOR MONITORING, SUPPLEMENTING OR CORRECTING ANY INFORMATION OR FORECASTS
PROVIDED BY THE ANALYSTS.
www.klgold.com 24TSX/AIM:KGI
F2014 & Q3 F2015 Financial Results
Financial
FY2015
YTD
FY2014
YTD
Y/Y
Change
Q3/15 Q2/15 Q3/14
Q3/15
vs.
Q2/15
Q3/15
vs.
Q3/14
Gold Sales
(ounces)
116,600 94,502 +23% 39,722 38,335 33,719 +4% +18%
Average Price Sold
(per ounce)
$1,389
US$1,243
$1,385
US$1,348
0%
- 6%
$1,371
US$1,175
$1,395
US$1,262
$1,369
US$1,280
-2%
-7%
0%
-8%
Revenue (000’s) 161,953 84,737 +24% 54,471 53,479 46,165 +2% +18%
Cash Operating
Cost per Ton
Produced
$340
US$302
$340
US$324
0%
-7%
$328
US$281
$350
US$317
$347
US$324
-6%
-11%
-5%
-13%
Cash Operating
Cost per Ounce
Produced
$813
US$723
$1,109
US$1,073
-26%
-32%
$766
US$656
$889
US$804
$1,094
US$1,023
-14%
-18%
-30%
-36%
All-in Cash Cost
(“AICC”) per Ounce
Produced
$1,289
US$1,144
$2,102
US$2,033
-38%
-42%
$1,249
US$1,070
$1,374
US$1,243
$1,923
US$1,797
-9%
-14%
-35%
-40%
All amounts stated are in Canadian dollars unless otherwise stated
www.klgold.com 25TSX/AIM:KGI
- All US$ equivalents are converted at the average CAD to USD exchange rate during the reporting period.
- See Pg. 23 for fiscal 2015 guidance on certain financial metrics provided above
C$35MM Bought Deal Offering
www.klgold.com 26TSX/AIM:KGI
Shares
Issued Price
Gross
Proceeds
C$30MM Offering 6,900,000 $4.35 $30MM
Over-allotment* 1,035,000 $4.35 $ 5MM
Total 7,935,000 $4.35 $35MM
Notes:
- Over-allotment was exercised in full upon closing
- Proceeds will be used to strengthen the balance sheet and for general
corporate purposes.
Reserves & Resources
(Resources are Exclusive of Reserves)
RESERVES AND RESOURCES
MINE WIDE COMPLEX
CATEGORY
(31st DEC 2013)
TONS
GRADE
(opt)
GRADE
(gpt)
OUNCES
Proven 941,000 0.43 14.7 401,000
Probable 1,843,000 0.53 18.2 984,000
Total P+P 2,784,000 0.50 17.1 1,385,000
Measured 1,133,000 0.39 13.4 436,000
Indicated 3,019,000 0.54 18.5 1,619,000
Total M+I 4,152,000 0.49 16.8 2,055,000
Inferred 2,092,000 0.54 18.5 1,133,000
As at December 31, 2013
See Kirkland Lake news release dated April 28 2014, a copy of which has been filed on SEDAR for further particulars and full NI 43-101 disclosure including QP statement.
Based on current level of Reserves and 70% conversion of Resources (@ 200,000 oz p.a)
Macassa has a 14 year Mine Life
RESERVES AND RESOURCES
SOUTH MINE COMPLEX (“SMC”)
CATEGORY
(31st DEC 2013)
TONS
GRADE
(opt)
GRADE
(gpt)
OUNCES
Proven 328,000 0.45 15.4 147,000
Probable 1,163,000 0.57 19.5 665,000
Total P+P 1,492,000 0.54 18.5 812,000
Measured 24,000 0.30 10.3 7,000
Indicated 1,440,000 0.70 24.0 1,005,000
Total M+I 1,464,000 0.69 23.7 1,012,000
Inferred 1,205,000 0.67 23.0 808,000
www.klgold.com 27TSX/AIM:KGI
New Mine Plan With Positive Results
Old Plan Focussed on QUANTITY and TONS
New Plan Focuses on QUALITY and GRADE
SIGNIFICANT
INCREASE IN
GRADE
REDUCTION
IN COSTS
CASH
FLOW
POSITIVE
• Not Dependant on a High Gold Price
• Requires Less Manpower
• Fewer Stopes
• Strict Ore/Waste Management and Dilution Control
Additional benefits of new mine plan are SIMPLIFIED PLANNING
and ability to FINANCE AT COMPANY’s DISCRETION
www.klgold.com 28TSX/AIM:KGI
Expansion Capital
• Hoisting system capable of hoisting 3,600 tpd
• Mary-Anne Compartment installed in Shaft providing service cage
• Mill upgraded to handle 2,200 tpd
• Underground infrastructure and battery equipment in place for SMC
www.klgold.com 29TSX/AIM:KGI
WWW.KLGOLD.COM
Suzette N Ramcharan, CPIR
Director of Investor Relations
+1-416-840-7884
Mobile: +1-647-284-5315
sramcharan@klgold.com
Tim Blythe / Halimah Hussain
(Blytheweigh)
Investor Relations / PR
+44-207-138-3204
Tim.blythe@blytheweigh.com/
halimah.hussain@blytheweigh.com
TSX /AIM: KGI

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09 kgi-q3 update-11mar15

  • 1. A PROFITABLE FUTURE Fiscal 2015_Q3 Update March 11, 2015 A RICH HISTORY TSX/AIM:KGI
  • 2. Forward Looking Statements Cautionary Note Regarding Forward Looking Statements. This presentation 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 Presentation include, but may not be limited to; statements regarding the Company’s guidance for fiscal 2015 including ounces produced and grade assumptions, cash operating cost per ounce and AICC, sustaining capital, revenue, operating cash flow and free cash flow generation; the ability to bring more higher grade stopes online from the 5400 level and access to the 5600 level and the timing thereof; the exploration programs and the results and timing thereof; and production and grade guidance for fiscal 2016 and 2017. 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 are discussed in length in the Company's annual Management's Discussion and Analysis and Annual Information Form for the year ended April 30, 2014. and the Company’s Management's Discussion and Analysis for the interim period ended January 31, 2015 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. TSX/AIM:KGI www.klgold.com 2
  • 3. Investment Highlights Located in Ontario, one of the safest and lowest risk mining jurisdictions globally Attractive NI43-101 high grade reserve and resource profile with a long mine life Growing annual production, declining cost base and improving unit costs Company returning to profitability and free cash flow Significant exploration potential with organic growth Potential upside with a higher gold price and a weaker Canadian dollar www.klgold.com 3TSX/AIM:KGI Experienced and Diverse Board of Directors and Management Team
  • 4. Diverse Board of Directors Eric Sprott, Chairman of the Board (Non-executive Director) Dawn Whittaker, LLB (Non-executive Director) Pamela Klessig, P.Geo (Non-executive Director) John Thomson, CA George Ogilvie, P.Eng Barry Cooper, B.Sc., MBA (Non-executive Director) Jeffrey Parr, CA, BA, MBA (Non-executive Director) Barry Olson, M.Sc. (Non-executive Director) www.klgold.com 4TSX/AIM:KGI
  • 5. Synergistic Management Team GEORGE OGILVIE, P. Eng. President & CEO, Director • 25 years management, operating, and technical expertise in the mining industry with over 9 years of operating experience in deep, narrow-vein gold mines (Anglo Gold, South Africa) • Former CEO of Rambler Metals and Mining JOHN THOMSON, CA Executive VP and CFO, Director • More than 25 years experience in various senior level finance positions with companies such as PepsiCo • Chartered Accountant who studied at INSEAD CHRIS STEWART, P. Eng. VP Operations • More than 20 years of operating experience in Northern Ontario in various senior-level positions. Prior to joining KGI, was CEO of Liberty Mines Inc. • Mining Engineering degree from Queen’s University Worked together at Dynatec for ~3.5 years Worked together at Rambler for ~ 7 years www.klgold.com 5TSX/AIM:KGI
  • 6. Financial Position CASH C$76.6 million1 DEBT C$120 million convertible debentures KGI.DB: 6% coupon/ $15.00 strike C$54.5MM mature Jun/2017 KGI.DB.A: 7.5% coupon/ $13.70 strike C$65.5MM mature Dec/2017 ROYALTY 2.5% NSR Franco Nevada Corporation option to buyback 1% by October 31, 2016, at a cost of $36MM less any money paid against the 1% 52 Week Performance 2 HIGH C$6.19 LOW C$2.51 www.klgold.com 6TSX/AIM:KGI 1As at February 18, 2015 – Upon Close of Bought Deal Financing (see Appendix for more details on Financing). 2 As at March 11, 2015 CAPITAL STRUCTURE 2 ISSUED SHARES 80,016,617 Stock Options 4,244,800 Convertible Debentures 8,869,829 FULLY DILUTED 93,017,046 MARKET CAP ~408 Million2 Major Shareholders (~50%) 2 Resolute Funds (11%) Eric Sprott (10%) Columbia Wanger Asset Management LLC (8%) Equinox Partners (7%) Van Eck Associates Corporation (5%) Harry Dobson (4%) ABC Funds (4%)
  • 7. 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Kirkland Lake (TSX:KGI) Gold Price (C$ / oz) KGI Share Price vs Gold Price 15% (1%) Strategic Review Concluded Flow Through Financing Q1/15 Results Drilling Results Q2/15 Production Results MRMR Update Q4/14 Results BOD Appointment & Financing www.klgold.com 7TSX/AIM:KGI Q2/15 Results 3 Year Production Guidance Q1/15 Production Drilling Results Q3/15 Production Results Drilling Results Close $35MM Financing
  • 8. Kirkland Lake Background The Kirkland Lake gold camp has been producing gold for over 100 years. Almost 25 Moz’s has been produced to date, from seven mines. Based on grade, it is one of the richest gold camps in the world. www.klgold.com 8TSX/AIM:KGI KGI owns five former producing high grade mines with historical production of ~22 Moz’s of gold at an average head grade of 0.44 opt (15.1 grams per tonne).
  • 9. One of the Highest Grade Gold Mines In The World Mine Operator Location Gold Grade Reserves MRMR g/t Au Date Macassa Mine Complex Kirkland Lake Gold Canada (Ontario) (0.50 opt) 17.1 1.4 Moz Dec/2013 Turquoise Ridge Barrick USA (Nevada) 16.9 4.5 Moz Dec/2014 Pogo Gold Sumitomo Corp. USA 12.5 4.9Moz Dec/2013 Gosowong Newcrest Indonesia 12.0 1,235 Dec/2014 Moab Khotsong AngloGold Ashanti South Africa 10.0 6,126 Dec/2013 Mponeng AngloGold Ashanti South Africa 10.0 14,569 Dec/2013 Red Lake Gold GoldCorp Canada 10.0 2,553 Dec/2014 TauTona AngloGold Ashanti South Africa 9.1 1,389 Dec/2013 Kupol/Dvoinoye Kinross Russia 8.5 2,081 Dec/2014 17.1 16.9 12.5 12.0 10.0 10.0 10.0 9.1 8.5 0.0 5.0 10.0 15.0 20.0 Gradeg/t Reserve Grades www.klgold.com 9TSX/AIM:KGI Company Source – This is a selective group of producing mines only with mineral reserves in excess of 1Moz’s (gold only)
  • 10. Reserves & Resources (Resources are Exclusive of Reserves) See Appendix for more disclosure on MRMR statement which is as of December 31 ,2013. Based on current level of Reserves and 70% conversion of Resources (@ 200,000 oz p.a), KGI has a 14 year Mine Life www.klgold.com 10TSX/AIM:KGI Mine Wide Complex Mineral Reserves (P&P) 1.4 Moz’s 2.8M tons @ 17.1 g/t (0.50 opt) Mineral Resources (M&I) 2.1 Moz’s 4.2 M tons @ 16.8 g/t (0.49 opt) Mineral Resources (Inferred) 1.1 Moz’s 2.1 M tons @ 18.5 g/t (0.54 opt) SMC 0.8 Moz’s 1.5 M tons @ 18.5 g/t (0.54 opt) 1.0 Moz’s 1.5 M tons @ 23.7 g/t (0.69 opt) 0.8 Moz’s 1.2 M tons @ 23.0 g/t (0.67 opt) Breakout of SMC only
  • 11. South Mine Complex • 5400L has reserve grade @ 0.57 opt (19.5 gpt) • 5600L has reserve grade @ 0.70 opt (23.9 gpt) • Production from 5400L and 5600L allows delineation drilling of resources, especially below 5600L • Remains Open at Depth and Across Strike 5025 Level P+P 89,000 Tons @ 0.44 oz/ton 39,000 Oz’s M+I 57,000 Tons @ 0.30 oz/ton 22,000 Oz’s 5300 Level P+P 620,000 Tons @ 0.47 oz/ton 290,000 Oz’s M+I 220,000 Tons @ 0.30 oz/ton 86,000 Oz’s 5400 Level P+P 481,000 Tons @ 0.57 oz/ton 274,000 Oz’s M+I 170,000 Tons @ 0.41 oz/ton 71,000 Oz’s 5600 Level P+P 290,000 Tons @ 0.70 oz/ton 209,000 Oz’s M+I 220,000 Tons @ 0.55 oz/ton 122,000 Oz’s 5700 to 6600 Level M+I 768,000 Tons @ 0.91 oz/ton 703,000 Oz’s Original Two Mining Horizons Third Level Started May 2014 Currently in Development for FY 2016 OPEN #3SHAFT #2WINZE www.klgold.com 11TSX/AIM:KGI 5025L 5300L 5400L 6600L 5600L 4750L Development Legend Completed F2015 Development F2016 Development OPENOPEN
  • 12. Q3 F2015 Production Update Q1 F2015 38,543 93,880 0.45 Q2 F2015 38,335 92,146 0.41 Q3 F2015 39,722 91,148 0.44 YTD F2015 116,600 277,174 0.43 Guidance F2015 153 – 157 Koz’s* 0.37 Ounces Sold Tons Milled Head Grade (opt) • Third stope (5412) brought into production on 5400 level during Q3 • 2 Electric Hydraulic Jumbo’s fully operational • Main ramp towards the 5600 level progressing well and is on schedule www.klgold.com 12TSX/AIM:KGI * Production guidance revised upwards from 140,000 – 155,000 ounces to 153,000 – 157,000 ounces on March 11, 2015
  • 13. Monthly Production Profile • Cut-off Grades Raised from 0.18 opt to 0.22 opt. • Stopped Mining “Incremental Tons” • Implemented Strict Ore/ Waste Segregation UG • Increasing UG Delineation Drilling in SMC • Employing more UG Geologists • Assay Lab is Manned 24/7 • Restructuring Organization • Implementing Leadership Training • Looking to Upgrade MIS www.klgold.com 13TSX/AIM:KGI 0.34 0.31 0.30 0.26 0.29 0.45 0.39 0.34 0.37 0.34 0.47 0.51 0.39 0.43 0.41 0.47 0.44 0.42 - 0.10 0.20 0.30 0.40 0.50 0 5,000 10,000 15,000 20,000 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Oz Recovered Head Grade F2015 F2015 YTD Average 0.43 opt HeadGrade(OuncesPerTon) GoldProduction(Ounces)
  • 14. 0.37 0.40 0.37 0.32 0.41 0.37 0.31 0.33 0.37 0.39 0.41 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 - 50,000 100,000 150,000 200,000 250,000 07 08 09 10 11 12 13 14 15 16 17 GoldOunces Oz Recovered Guidance Head Grade Linear (Oz Recovered) Fiscal Year Previous Guidance Annual Production Profile Expectation Gap • Guided Grades for F2015-F2017 are Based on Historic Achievements • Fiscal YTD Actual Head Grade is 0.43 opt www.klgold.com 14TSX/AIM:KGI HeadGrade(OuncesPerTon) = 200 employees
  • 15. Q3 Results Q3/15 Vs Q3/14 YTD Results F2015 Vs F2014 COSTS Cash Cost Per Ton $328 US$281 -5% -13% $340 US$302 0% -7% Cash Operating Cost Per Ounce $766 US$656 -30% -36% $813 US$728 -26% -32% All In Cash Costs $1,249 US$1,070 -35% -40% $1,289 US$1,153 -38% -42% SALES Gold Sales 39,722 +18% 116,600 +23% Average Sales Price $1,371 0% $1,389 0% Revenues $54.5MM +18% $161.9MM +24% CASH FLOW Cash Flow from Operations $23.7MM +85% $57.3MM +59% Free Cash Flow $11.6MM NA $22.8MM NA Q3 & YTD F2015 Financial Highlights - All US$ equivalents are converted at the average CAD to USD exchange rate during the reporting period. - See Pg. 23 for fiscal 2015 guidance on certain financial metrics provided above and Pg.24 in the appendix for further financial results. www.klgold.com 15TSX/AIM:KGI
  • 16. 0.26 0.29 0.45 0.39 0.34 0.37 0.34 0.47 0.51 0.39 0.43 0.41 0.47 0.44 0.42 - 0.10 0.20 0.30 0.40 0.50 0.60 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 NOV DEC JAN FEB MAR APR MAY 2014 JUN JUL AUG SEP OCT NOV DEC JAN AICC per ounce Produced - 15 month trend Production Capital Development PP&E Corporate Exploration Royalties Head Grade AICC Achieved Over Past 15 Months All amounts stated are in Canadian dollars • 16% Reduction in Labour Force and Cancelled Incentive Programs (e.g. home loan assistance and travel) • Major Capital Projects (PP&E) Completed in January 2014 www.klgold.com 16TSX/AIM:KGI CostinC$perOunceProduced HeadGrade(OuncesPerTon) F2014 F2015
  • 17. $1,073 $1,119 $836 $1,244 $720 $614 $947 $924 $809 $684 $931 $728 $1,250 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN Q4E Production Capital Development PP&E Corporate Exploration Royalties AICC Projection for F2015 All amounts stated are in Canadian dollars • Projection Based on Assumptions of 1,150 tpd, 0.37 opt and 96% Mill Recovery • KGI now has three consecutive quarters of Free Cash Flow generation • AICC excludes any mining and income tax (of which the Company only pays a nominal amount in mining taxes) www.klgold.com 17TSX/AIM:KGI F2015 CostinC$perOunceProduced F2015_YTD Average Sales Price C$1,389 F2015_YTD AICC C$1,289
  • 18. Capital Expenditures • Project Capital was Completed in January 2014 • C$9M in Capital Development of 5400L and SMC Main Decline to 5600L Spent in FY15 • F2015 Capex reduced by $5MM to $53MM after Q2, and down to $43MM after Q3 0 10 20 30 40 50 60 70 80 90 100 2010 2011 2012 2013 2014 2015E 2016E 2017E C$Millions Mineral Properties PP&E ESTIMATED 9.7 22.4 30.9 45.8 46.9 55.0 43.0 51.0 51.0 28.9 24.5 44.0 29.6 6.8 7.0 7.0 www.klgold.com 18TSX/AIM:KGI
  • 19. SMC Underground Drilling www.klgold.com 19TSX/AIM:KGI UG DRILLING • SMC continues to be expanded • Multi-ounce intersections • 3 drills turning underground • Open in multiple directions 53-2493 (NSZ) 1.85 opt/ 11.6 feet (63.43 gpt/ 3.5 metres) 53-2597 (NSZ) 0.36 opt/14.7 feet (12.34 gpt/ 4.5 metres) 53-2595 (NFZ) 3.55 opt/ 11.4 feet (121.72 gpt/ 3.5 metres)
  • 20. ‘04 Break Underground Drilling www.klgold.com 20TSX/AIM:KGI Selected Highlights DH 34-666 2.53 opt/ 2.4 feet (86.75 g/t over 0.7 metres) DH 34-668 0.80 opt/ 4.4 feet (27.43 g/t over 1.3 metres) See press release dated February 23, 2015
  • 21. Near Surface Exploration Target SURFACE DRILLING • Near surface mineralization is within 2 Km’s of mill • Mill has excess capacity of +/- 1,000 tpd • Mineralization from 100’ to 1,000’ below surface • Open across strike and at depth • M&I 310,000 tons @0.34opt (11.7gpt) 104,000 oz. • Infer. 131,000 tons @0.36opt (12.3gpt) 48,000 oz. • 3 drills drilling to expand resource and infill drill www.klgold.com 21TSX/AIM:KGI
  • 22. Outlook for F2015 Guidance Metric YTD 2015 Actual Revised Guidance $800 – 850/ Oz Cash Operating Cost Per Ounce $813 US$723 No Change $1,250 - 1,350/ Oz AICC Per Ounce Produced $1,289 US$1,144 No Change $53 million* Sustaining CAPEX $36 million $50 million $200 million Revenue $162 million $218 - $222 million $50 - 60 million Cash Flow from Operations $57 million $70 - $75 million $15 - 20 million Free Cash Flow Generation $22 million $30 - $35 million All amounts stated are in Canadian dollars www.klgold.com 22TSX/AIM:KGI * Capital was revised from $58 million to $53 million on October 31, 2014, and revised to $50 million on January 31, 2015
  • 23. APPENDIX Notes, additional disclosure and other information www.klgold.com 23TSX/AIM:KGI
  • 24. Analyst Coverage Firm Analyst Dundee Securities Joe Fazzini CIBC World Markets Cosmos Chiu Macquarie Capital Markets Michael Siperco National Bank Financial Raj Ray BMO Capital Markets Brian Quast Clarus Securities Jamie Spratt PI Financial Philip Ker Firm Analyst M Partners Derek Macpherson Pareto Securities John McClintock Mirabaud Securities Richard Morgan Panmure Gordon & Co Alison Turner Investec Bank Hunter Hillcoat Very Independent Research John Tumazos KIRKLAND LAKE GOLD IS FOLLOWED BY THE ANALYSTS LISTED ABOVE. THIS LIST IS PROVIDED FOR INFORMATION PURPOSES ONLY AND IS SUBJECT TO CHANGE AS COVERAGE IS ADDED OR DROPPED BY A FIRM. OPINIONS, ESTIMATES OR FORECASTS REGARDING KIRKLAND LAKE GOLD'S PERFORMANCE THAT ARE MADE BY THESE ANALYSTS ARE THEIRS ALONE AND DO NOT REPRESENT THE OPINIONS, ESTIMATES OR FORECASTS OF KIRKLAND LAKE GOLD OR ITS MANAGEMENT. KIRKLAND LAKE GOLD DOES NOT IMPLY ITS ENDORSEMENT OF, OR CONCURRENCE WITH, SUCH INFORMATION, CONCLUSIONS OR RECOMMENDATIONS AND TAKES NO RESPONSIBILITY FOR MONITORING, SUPPLEMENTING OR CORRECTING ANY INFORMATION OR FORECASTS PROVIDED BY THE ANALYSTS. www.klgold.com 24TSX/AIM:KGI
  • 25. F2014 & Q3 F2015 Financial Results Financial FY2015 YTD FY2014 YTD Y/Y Change Q3/15 Q2/15 Q3/14 Q3/15 vs. Q2/15 Q3/15 vs. Q3/14 Gold Sales (ounces) 116,600 94,502 +23% 39,722 38,335 33,719 +4% +18% Average Price Sold (per ounce) $1,389 US$1,243 $1,385 US$1,348 0% - 6% $1,371 US$1,175 $1,395 US$1,262 $1,369 US$1,280 -2% -7% 0% -8% Revenue (000’s) 161,953 84,737 +24% 54,471 53,479 46,165 +2% +18% Cash Operating Cost per Ton Produced $340 US$302 $340 US$324 0% -7% $328 US$281 $350 US$317 $347 US$324 -6% -11% -5% -13% Cash Operating Cost per Ounce Produced $813 US$723 $1,109 US$1,073 -26% -32% $766 US$656 $889 US$804 $1,094 US$1,023 -14% -18% -30% -36% All-in Cash Cost (“AICC”) per Ounce Produced $1,289 US$1,144 $2,102 US$2,033 -38% -42% $1,249 US$1,070 $1,374 US$1,243 $1,923 US$1,797 -9% -14% -35% -40% All amounts stated are in Canadian dollars unless otherwise stated www.klgold.com 25TSX/AIM:KGI - All US$ equivalents are converted at the average CAD to USD exchange rate during the reporting period. - See Pg. 23 for fiscal 2015 guidance on certain financial metrics provided above
  • 26. C$35MM Bought Deal Offering www.klgold.com 26TSX/AIM:KGI Shares Issued Price Gross Proceeds C$30MM Offering 6,900,000 $4.35 $30MM Over-allotment* 1,035,000 $4.35 $ 5MM Total 7,935,000 $4.35 $35MM Notes: - Over-allotment was exercised in full upon closing - Proceeds will be used to strengthen the balance sheet and for general corporate purposes.
  • 27. Reserves & Resources (Resources are Exclusive of Reserves) RESERVES AND RESOURCES MINE WIDE COMPLEX CATEGORY (31st DEC 2013) TONS GRADE (opt) GRADE (gpt) OUNCES Proven 941,000 0.43 14.7 401,000 Probable 1,843,000 0.53 18.2 984,000 Total P+P 2,784,000 0.50 17.1 1,385,000 Measured 1,133,000 0.39 13.4 436,000 Indicated 3,019,000 0.54 18.5 1,619,000 Total M+I 4,152,000 0.49 16.8 2,055,000 Inferred 2,092,000 0.54 18.5 1,133,000 As at December 31, 2013 See Kirkland Lake news release dated April 28 2014, a copy of which has been filed on SEDAR for further particulars and full NI 43-101 disclosure including QP statement. Based on current level of Reserves and 70% conversion of Resources (@ 200,000 oz p.a) Macassa has a 14 year Mine Life RESERVES AND RESOURCES SOUTH MINE COMPLEX (“SMC”) CATEGORY (31st DEC 2013) TONS GRADE (opt) GRADE (gpt) OUNCES Proven 328,000 0.45 15.4 147,000 Probable 1,163,000 0.57 19.5 665,000 Total P+P 1,492,000 0.54 18.5 812,000 Measured 24,000 0.30 10.3 7,000 Indicated 1,440,000 0.70 24.0 1,005,000 Total M+I 1,464,000 0.69 23.7 1,012,000 Inferred 1,205,000 0.67 23.0 808,000 www.klgold.com 27TSX/AIM:KGI
  • 28. New Mine Plan With Positive Results Old Plan Focussed on QUANTITY and TONS New Plan Focuses on QUALITY and GRADE SIGNIFICANT INCREASE IN GRADE REDUCTION IN COSTS CASH FLOW POSITIVE • Not Dependant on a High Gold Price • Requires Less Manpower • Fewer Stopes • Strict Ore/Waste Management and Dilution Control Additional benefits of new mine plan are SIMPLIFIED PLANNING and ability to FINANCE AT COMPANY’s DISCRETION www.klgold.com 28TSX/AIM:KGI
  • 29. Expansion Capital • Hoisting system capable of hoisting 3,600 tpd • Mary-Anne Compartment installed in Shaft providing service cage • Mill upgraded to handle 2,200 tpd • Underground infrastructure and battery equipment in place for SMC www.klgold.com 29TSX/AIM:KGI
  • 30. WWW.KLGOLD.COM Suzette N Ramcharan, CPIR Director of Investor Relations +1-416-840-7884 Mobile: +1-647-284-5315 sramcharan@klgold.com Tim Blythe / Halimah Hussain (Blytheweigh) Investor Relations / PR +44-207-138-3204 Tim.blythe@blytheweigh.com/ halimah.hussain@blytheweigh.com TSX /AIM: KGI