GOING FOR GOLD IN EVERYTHING WE DO...PDAC CONVENTION 2019 TORONTO, ON | MARCH 3 –6, 2019...
Transcript of GOING FOR GOLD IN EVERYTHING WE DO...PDAC CONVENTION 2019 TORONTO, ON | MARCH 3 –6, 2019...
GOING FOR GOLD IN EVERYTHING WE DO
PDAC CONVENTION 2019
TORONTO, ON | MARCH 3 – 6, 2019
FORWARD-LOOKINGINFORMATION
Cautionary Note Regarding Forward-Looking Information
The information in this presentation has been prepared as at March 3, 2019. This presentation contains “forward looking statements” and "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of Kirkland Lake Gold with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and include information regarding: (i) the amount of future production over any period; (ii) assumptions relating to revenues, operating cash flow and other revenue metrics set out in the Company's disclosure materials; and (iii) future exploration plans.
Investors are cautioned that forward-looking information is not based on historical facts but instead reflect Kirkland Lake Gold's management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Kirkland Lake Gold believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the future development and growth potential of the Canadian and Australian operations; the future exploration activities planned at the Canadian and Australian operations and anticipated effects thereof; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; and compliance with extensive government regulation. Exploration results that include geophysics, sampling, and drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such results do not provide assurance that further work will establish sufficient grade, continuity, metallurgical characteristics and economic potential to be classed as a category of mineral resource. A mineral resource that is classified as "inferred" or "indicated" has a great amount of uncertainty as to its existence and economic and legal feasibility. It cannot be assumed that any or part of an "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category of resource. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into proven and probable reserves. This forward-looking information may be affected by risks and uncertainties in the business of Kirkland Lake Gold and market conditions. This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in filings made by Kirkland Lake Gold, including its annual information form, financial statements and related MD&A for the financial year ended December 31, 2018, which are 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 information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Kirkland Lake Gold 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. Kirkland Lake Gold does not intend, and do not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
All dollar amounts in this presentation are expressed in U.S. dollars except as otherwise noted. For further details of Kirkland Lake Gold’s Q4 2018 production results, please see the Company’s press releases dated January 8, 2019 and February 21, 2019. For further information on the Company’s three-year production guidance, including the assumptions and qualifications made, please see the Company’s press releases dated December 11, 2018 and February 21, 2019.
Use of Non-IFRS Measures
This Presentation refers to average realized price, operating costs, operating costs per ounce sold, all-in sustaining cost (“AISC”) per ounce of gold sold, free cash flow, sustaining capital expenditures and growth capital expenditure because certain readers may use this information to assess the Company’s performance and also to determine the Company’s ability to generate cash flow and meet its expenditure requirements. This data is furnished to provide additional information and are non-IFRS measures and do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”). These measures should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of operating costs presented under IFRS. Refer to each Company’s most recent MD&A for a reconciliation of these measures. The most comparable IFRS Measure for operating cash costs, operating cash costs per ounce sold and AISC per ounce sold is production costs as presented in the Consolidated Statements of Operations and Comprehensive Income, while total additions and construction in progress are the most comparable measures for sustaining and growth capital expenditures. Operating cash costs, operating cash cost per ounce sold and All-in sustaining costs (“AISC”) per ounce sold in the Company’s 2018 guidance reflect an average US$ to C$ exchange rate of 1.29 and a US$ to A$ exchange rate of 1.34 (as at October 30, 2018). Operating cash costs, operating cash cost per ounce sold and AISC per ounce sold for YTD 2018 reflect an average US$ to C$ exchange rate of 1.2875 and a US$ to A$ exchange rate of 1.3194. Operating cash costs, operating cash costs per ounce and AISC per ounce sold for 2017 reflect an average USD to CAD exchange rate of 1.2965 and a USD to AUD exchange rate of 1.3041. See Kirkland Lake Gold News release dated Feb. 21, 2018 and the Company’s MD&A for the three and twelve months ended December 31, 2018.
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
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HIGH-GRADE GOLD PRODUCTION IN CANADA AND AUSTRALIA
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
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Fosterville Macassa Consolidated1
P&P Mineral Reserves (kozs) 2,720 2,250 5,570
P&P Reserve Grade (g/t Au) 31.0 21.9 15.8
2018 Production (ounces) 356,230 240,126 723,701
2018 Op. Cash Costs ($/Oz Sold)2 200 426 362
2 Key Drivers of Performance – 82% of 2018 Production
TWO OF THE WORLD’S HIGH-GRADE GOLD MINES IN LEADING MINING JURISDICTIONS
1. Includes Holt/Holloway, Taylor and other properties in Canada (on care and maintenance), as well as the Northern Territory properties in Australia (on care and maintenance)2. See Non-IFRS Measures section in forward looking statements (Slide 2) as well as in the MD&A for the three and twelve months ended December31, 2018 starting on page 41.
2018GOLD MEDAL PERFORMANCE
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
RECORD PRODUCTION
723.7 kozs
NET EARNINGS
Cash costs: $362AISC: $685
FREE CASH FLOW1
$249.5M
GROWTH
Revised 2019 guidance
920 – 1,000 kozs
RESERVES2
24% increaseto 5.8M oz
1. See Non-IFRS Measures section in forward-looking statements slide2. As at Dec. 31, 2018 (Announced Feb. 21, 2019).
$273.9M $1.30/share
RECORD UNIT COSTS1
4
596.4
723.7 $481
$362
$812
$685
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
2018 vs 2017: HIGHER PRODUCTION, IMPROVED COSTS
PRODUCTION (kozs) OPERATING CASH COSTS ($/oz) 1 AISC ($/oz) 1
1. See Non-IFRS Measures section in forward-looking statements slide. 5
21%25% 16%
$178.0
$249.5
$132.4$0.64/share
$273.9$1.30/share
MARGINS DRIVEPROFITABILITYAND CASH FLOW
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
YTD 2018 NET EARNINGS ($ millions)
YTD 2018 FREE CASH FLOW ($ millions) 1
107%
40%
1. See Non-IFRS Measures section in forward-looking statements slide. 6
232
275
299
257
332
D E C . 3 1 / 1 7 M A R . 3 1 / 1 8 J U N . 3 0 / 1 8 S E P . 3 0 / 1 8 D E C . 3 1 / 1 8
STRONG GROWTH CASH POSITION
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
Osisko Shares
$48M
Share Buybacks
$30M
CASH POSITION ($ millions)
Q3 2018 Uses of Cash
$50.2M in Q1
$60.7M in Q2
$52.2M in Q3
$86.4m in Q4
Generating Free Cash Flow
Cash grows $100.6M or 43% in 2018
Significant Growth in Investments in 2018
Sustaining capital: $174M
Growth capital: $103.81
Exploration: $97.9M1
1. Growth capital expenditures exclude $31.3 million of capitalized exploration expenditures, which are included as part of exploration spending. 7
155.2
314.5
596.4
723.5
740 – 800
930 – 1,010995 – 1,055
POTENTIAL TO REACH 1M LOW-COST OZS IN 2019
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
(A) Actual.(F) Forecast.
CONSOLIDATED PRODUCTION GUIDANCE (KOZS) AS AT FEBRUARY 21, 2019
FOSTERVILLE PRODUCTION GUIDANCE
2019: 550 – 610 kozs (Prior: 390 – 430 kozs)
2020: 550 – 610 kozs (Prior: 500 – 540 kozs)
2021: 570 – 610 kozs (unchanged)
MACASSA PRODUCTION GUIDANCE
2019: 230 – 240 kozs
2020: 230 – 240 kozs
2021: 245 – 255 kozs
HOLT COMPLEX PRODUCTION GUIDANCE
2019: 140 – 150 kozs
2020: 150 – 160 kozs
2021: 180 – 190 kozs
920 – 1,000
850 – 910970 – 1,005December 11, 2018 three-
year guidance
February 21, 2019 improved three-year guidance
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723.5
920 – 1,000
2 0 1 8 2 0 1 9 ( G u i d a n c e )
$362
$300 – $320
2 0 1 8 2 0 1 9 ( G u i d a n c e )
$685
$520 – $560
2 0 1 8 2 0 1 9 ( G u i d a n c e )
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
2019 GUIDANCE: HIGHER PRODUCTION, IMPROVED COSTS
PRODUCTION (kozs) OPERATING CASH COSTS ($/oz) 1 AISC ($/oz) 1
1. See Non-IFRS Measures section in forward-looking statements slide. 9
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
CASH OUTLOOK BASED ON DEC. 11/18GUIDANCE
--
$250
$500
$750
$1,000
$1,250
2018A 2019E 2020E 2021E
Projected Cash BalanceUS$ millions
CASH POSITION AT YEAR-END ($ millions)
$332
2018(A) 2019(E) 2020(E) 2021(E)
Gold sales (kozs)
Note: Assumes gold price of US$1,300/oz, USD:CAD of 1.33, USD:AUD of 1.39
BUILDING FINANCIAL STRENGTH
STRONG GROWTH IN CASH DUE TO INCREASED SALES, IMPROVED UNIT COSTS
ORGANIC GROWTH
ONGOING EXPLORATION
CREATING VALUE FOR SHAREHOLDERS
TOP PRIORITIES
FOSTERVILLE MINEBENDIGO, VICTORIAAUSTRALIA
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
FOSTERVILLE: AN EMERGING WORLD LEADER IN GOLD PRODUCTION
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98.4 105.3123.1
151.2
264.0
356.2
550–610 550-610 570-610
2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1
FOSTERVILLEGROWING TO 600,000 OZS/YEAR
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
FOSTERVILLE GOLD PRODUCTION (KOZS)
2018 Guidance
> 330 kozs
Improved 2019 guidance
550 – 610 in 2019 and 2020 Record Production in 2018
356.2 kozs
35% growth from 2017
December 11, 2018 three-year guidance
February 21, 2019 improved three-year guidance
390-430
500-540
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(A) Actual.(F) Forecast.
FOSTERVILLE’S TRANSFORMATION DRIVEN BY GRADE
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
FOSTERVILLE MINERAL RESERVES (kozs & g/t)
Change in Mineralization
Quartz veins with visible gold key to increase reserve ounces and grade
Significant Growth in Mineral Reserve
2.7M ozs @ 31.0 g/t (Dec.31/18)
1.7M ozs @ 23.1 g/t (Dec. 31/17)
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5.25.6
7.0
9.8
17.9
23.1
31.0
0
5
10
15
20
25
30
35
0
500
1,000
1,500
2,000
2,500
3,000
Dec. 31/13 Dec. 31/14 Dec. 31/15 Dec. 31/16 Jun. 30/17 Dec. 31/17 Dec. 31/18
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Fosterville Mineral Reserves
Ounces Grade
23
1
18
2
24
4
49
1
1,0
30
1,7
00
2,7
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FOSTERVILLE SWAN ZONE
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
SWAN MINERAL RESERVES
Key Intercepts: December 2018 Release
598 g/t Au over 6.4 m (ETW 5.8 m)
625 g/t Au over 3.6 m (ETW 3.3 m)
218 g/t Au over 5.6 m (ETW 5.2 m)
144 g/t Au over 16.5 m (ETW 14.4 m)
Swan ZoneMineral Reserve
Swan Zone Mineral Reserve
Dec 31/18: 2.3M ozs @ 49.6 g/tDec 31/17: 1.16m ozs @ 61.2 g/t
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FOSTERVILLE MINE RECORD PRODUCTION Q4 & FY 2018
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
FOSTERVILLE Q4 2018 MINE PLAN (KOZS)
Record Production
356.2 kozs in 2018 (35% growth)124.3 kozs in Q4 2018 (57% growth)
Strong Unit Cost Performance
2018: Op. cash costs: $200/oz; AISC: $442/oz Q4 2018: Op. cash costs: $139/oz; AISC: $332/oz
Key Performance Drivers
Grade outperformance in Swan & Eagle
Increase development around Swan
Advancement of Swan Stopes
Q4 2018Tonnes: 98,797 Grade: 39.7 g/tOunces: 124,307
1km Below Surface
Q4 2018: Swan/Eagle stopes outperform on grade2 Swan stopes brought into mine plan
FOSTERVILLE THREE-YEAR MINE PLAN
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
2019: 550 – 610 kozs
2020: 550 – 610 kozs
2021: 570 – 610 kozs
Mineral Reserves (Dec. 31/18)
Total: 2.7M ozs @ 31.0 g/t
THREE-YEAR MINE PLAN
2019 Unit Cost Guidance
Three-Year Production Guidance
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Swan Zone
Op. cash costs: $170 – 190/oz
FOSTERVILLE IN-MINE TARGETS
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FIGURE: 3D VIEW OF LOWER PHOENIX AND HARRIER GOLD SYSTEMS
9 KMS
STRIKE
HARRIER SOUTHHigh-potential target
Drilling commenced Q4 2018
SWANGrowing reserves
Identifying new targets
ROBBIN’S HILLHigh-potential target3 surface drills active
QUARTZ VEINS WITH VISIBLE GOLD
QUARTZ VEINS WITH VISIBLE GOLD
QUARTZ VEINS WITH VISIBLE GOLD
FOSTERVILLE IN-MINE TARGETS
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
LARGE ORE DEPOSIT EXPLORATION (“LODE”) PROGRAM: POTENTIAL FOR A NEW GOLD CAMP
Key Targets:
Continued extension of Swan
Gap between Swan Zone and 750 m extension (announced in July 2018)
Other potential parallel structures near Phoenix
Extension of Harrier to depth
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FOSTERVILLE HARRIER: HIGH-POTENTIAL TARGET
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SWAN INFILL DRILLING DRIVING GROWTH IN MINERAL RESERVES
KEY ELEMENTS OF LOWER PHOENIXHIGH-GRADE MINERALIZATION
Reverse fault with sizeable offset
Shale unit – Lithological competency contract – Larger faults, slippage Fractured sandstones in hinge
Anticline – Trap of ascending mineralized fluids
Carbon – What role does this play in precipitation?
Crustal level – visible gold – repeating trend seen throughout gold field
Syncline OffsetSyncline Offset
Anticline Offset?? Anticline Offset
Phoenix SystemHarrier System
Target Potential
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FOSTERVILLE HARRIER DOWN-DIP POTENTIAL
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
PARALLELS BETWEEN LOWER PHOENIX AND HARRIER
Key Points:
Harrier anticline fault offset almost identical in structural setting to Phoenix
Recent drilling at Harrier confirmed Anticline offset and intersected gold mineralization
Potential for same model to be applied across Fosterville land position
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FOSTERVILLE SIGNIFICANTEXPLORATIONPOTENTIAL
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
LARGE ORE DEPOSIT EXPLORATION (“LODE”) PROGRAM: POTENTIAL FOR A NEW GOLD CAMP
Key Points:
Extensive commitment to continued growth
Significant growth in Mineral Reserves achieved, more to come
Multiple targets with quartz veining & visible gold detected
LODE program provides camp potential
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CANADIAN OPERATIONSNORTHERN ONTARIO
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
CANADIAN OPERATIONS: THREE OPERATING MINES WITH TOTAL PRODUCTION OF ~8 MOZS OF GOLD
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118.0 122.3
155.2175.2
194.0
240.1 230-240 230-240245-255
+/- 400
69.9 kozs
36% growth from Q4 2017
26% growth from Q3 2018
MACASSAGROWING TO 400,000 OZS/YEAR
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
MACASSA GOLD PRODUCTION (KOZS)
2018 Guidance
220 – 225 kozs
240.1 kozs
24% growth from 2017
Record Production in 2018
Record Quarterly Production in Q4 2018
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(A) Actual.(F) Forecast.
MACASSASOLID GROWTH IN RESERVES
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
MACASSA MINERAL RESERVES (kozs & g/t)
South Mine Complex
High-grade zone key drivergrade improvement and production growth
Dec. 31, 2018 Mineral Reserve
2.25M ozs @ 21.9 g/t
Significant exploration potential
1,385 1,436
2,010 2,030
2,250
17.1
19.2
20.8 21.021.9
0
5
10
15
20
25
0
500
1,000
1,500
2,000
2,500
Dec. 31/14 Dec. 31/15 Dec. 31/16 Dec. 31/17 Dec. 31/18
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Ounces Grade
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KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
2019: 230 – 240 kozs
2020: 230 – 240 kozs
2021: 245 – 255 kozs
Mineral Reserves (Dec. 31/18)
Total: 2.25M ozs @ 21.9 g/t
THREE-YEAR MINE PLAN
2019 Unit Cost Guidance
Three-Year Production Guidance
#4 SHAFT
Op. cash costs: $440 – 460/oz
Longer-Term Outlook
Production begins ramp up to 400 kozs
In 2022 with completion of Phase 1 of
#4 Shaft25
MACASSATHREE-YEAR PLAN
MACASSA #4 SHAFT PROJECT
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
#4 SHAFT: COMPUTER RENDERING, 3D U/G LOCATION MAP, RECENT SURFACE PHOTO
Key Facts:
7,000 ft, 21.5 ft diameter concrete-lined shaft
Hosting capacity of 4,000 tpd
Total capital:
Phase 1 $240M
Phase 2 $80M
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MACASSASIGNIFICANT GROWTH POTENTIAL AROUND SMC
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
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2019 DRILLING PROGRAM AROUND SOUTH MINE COMPLEX
REACHING THE PODIUM IN PRICE PERFORMANCE
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
Strong Share Price PerformanceVersus Peers
(One-Year Return)
GDXJ
TSX:KL
Generating Superior Shareholder Returns
Growing low-cost production
Generating profitability & cash flow
Building financial strength
Increasing quarterly dividend
Repurchased 1.6M shares in 2018
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GDX
2019 GUIDANCESTRONG GROWTH, IMPROVED COSTS,PEAK INVESTMENT LEVELS
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
1. See Non-IFRS Measures section in forward-looking statements slide
$ million unless otherwise states Macassa Taylor Holt Holloway Fosterville2019 Guidance
(Feb 21/19)2019 Guidance
(Dec 11/18)
Gold Production (kozs) 230 – 240 50 – 55 70 – 75 20 550 – 610 920 – 1,000 740 – 800
Op. cash costs ($/oz)1 440 – 460 690 – 710 620 – 640 760 – 780 $170 – 190 300 – 320 360 – 380
AISC ($/oz)1 520 – 560 630 – 680
Operating cash costs1 290 – 300 270 – 280
Royalty expense 25 – 30 25 – 30
Sustaining capital1 150 – 170 150 – 170
Growth capital1 155 – 165 155 – 165
Exploration 100 – 120 100 – 120
Corporate G & A 26 – 28 26 – 28
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RESERVES STRONG GROWTH AT FOSTERVILLE & MACASSA
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
FOSTERVILLE AND MACASSA MINERAL RESERVES
Fosterville Mineral Reserves1
Macassa Mineral Reserves1
DECEMBER 2018 DECEMBER 2017
2PTONNES
(000’S)
GRADE
(g/t)
OUNCES
(kozs)
TONNES
(000’S)
GRADE
(g/t)
OUNCES
(kozs)
Total 2,720 31.0 2,720 2,290 23.1 1,700
Swan2 1,470 49.6 2,340 588 61.2 1,160
DECEMBER 2018 DECEMBER 2017
TONNES
(000’S)
GRADE
(g/t)
OUNCES
(kozs)
TONNES
(000’S)
GRADE
(g/t)
OUNCES
(kozs)
2P 3,190 21.9 2,250 3,010 21.0 2,030
60% Growth
102% Growth
11% Growth
301. See Mineral Reserve and Mineral Resource disclosures at the end of the presentation.2. The Swan Zone Mineral Reserves estimates are components of the estimates for the Fosterville Mine.
RESERVES 24% GROWTH AT HIGHER GRADES
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
CONSOLIDATED MINERAL RESERVES & MINERAL RESOURCES
24% Growth in Mineral ReservesNet of Depletion of 750 kozs
December 31, 2018 December 31, 2017
Tonnes (000's)
Grade (g/t)
Gold Ozs (000’s)
Depleted Oz2017 (000’s)
Tonnes (000's)
Grade(g/t)
Gold Ozs(000’s)
Macassa 3,190 21.9 2,250 244 3,010 21.0 2,030
Taylor 751 4.9 117 64 1,090 4.8 167
Holt 3,580 4.3 491 75 3,600 4.2 486
Hislop1 176 5.8 33 0 176 5.8 33
Holloway1 257 4.3 36 1 54 5.8 10
Total CDN Operations 7,950 11.4 2,920 384 7,930 10.7 2,730
Fosterville 2,720 31.0 2,720 366 2,290 23.1 1,700
Northern Territory1 666 5.0 107 0 2,800 2.4 215
Total AUS Operations 3,390 25.9 2,820 366 5,090 11.7 1,910
Total2 11,340 15.8 5,750 750 13,020 11.1 4,640
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(1) The Hislop mine is a formerly producing open-pit mine acquired as part of the St Andrew Goldfields acquisition in January 2016. Hislop has not been operated by the Company since the acquisition. The Holloway mine was placed on care and maintenance effective December 31, 2016. The Cosmo mine and Union Reefs mill were placed on care and maintenance effective June 30, 2017.
(2) See Mineral Reserve and Mineral Resource disclosures at the end of the presentation.
FOSTERVILLE SWAN INFILL DRILLING
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
SWAN INFILL DRILLING DRIVING GROWTH IN MINERAL RESERVES
Key Intercepts: December 2018 Release
598 g/t Au over 6.4 m (ETW 5.8 m)
625 g/t Au over 3.6 m (ETW 3.3 m)
218 g/t Au over 5.6 m (ETW 5.2 m)
144 g/t Au over 16.5 m (ETW 14.4 m)
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NORTHERN TERRITORY POTENTIAL FOR VALUE UPSIDE
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
NT: POTENTIAL TO RESUME OPERATIONS AT HIGHER PRODUCTION, LOWER COSTS
56 mineral titles and 5 MLA’s titles held covering 1,600km2
Cosmo Mine Site:
• 60km northwest of Pine Creek • ~225km Southeast of Darwin• Location of Cosmo and Lantern deposits• Underground & drilling programs underway
Union Reefs (“UR”) Mine Site:
• 20km north of Pine Creek • ~285km Southeast of Darwin• Location of processing facility and Prospect and Lady
Alice deposits
Pine Creek: exploration work planned
Maud Creek: advanced exploration project
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HOLT & HOLLOWAY A SOLID PRODUCER
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
HOLT AND HOLLOWAY – POTENTIAL FOR GROWTH
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Two mines and milling facility• Holt: 472.0 kt @ 4.7 g/t for 67.8 kozs
in 2018• Targeting similar production in 2019
at Holt• Resuming production at Holloway
3,000 tpd processing capacity• Conventional CIL milling facility• 3 mill grinding circuit• Mill feed from Holt and Taylor mines
Holt royalty structure impacts economics, Holloway royalty revised and amended
Attractive growth potential with improved economic structure
No exploration drilling ongoing or planned
Gold Production (kozs)
HOLT HOLLOWAY
TONNES
(000’S)
GRADE
(g/t)
OUNCES
(kozs)
TONNES
(000’S)
GRADE
(g/t)
OUNCES
(kozs)
Reserves 3,580 4.3 491 257 4.3 36
Resources1
(M&I)6,883 4.0 895 1,955 4.0 251
Resources
(Inferred)8,523 4.7 1,286 5,309 4.1 706
1. Mineral Resources are reported exclusive of Mineral Reserves. See Mineral Reserve and Mineral Resource disclosures at the end of the presentation.
2018 MINERAL RESERVES AND MINERAL RESOURCES
TAYLOR A NEW MINE WITH POTENTIAL TO GROW
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
TAYLOR – RELATIVELY NEW MINE WITH POTENTIAL FOR GROWTH
Ramp access mine that achieved commercial production in 2015
Record production in 2018• 382.1 kt @ 5.0 g/t for 58,632 ozs• Targeting similar production in 2019
Q4 2018 production was a quarterly record
• 103.8 kt @ 6.1 g/t for 19,305 ozs• Record results mainly reflected grade
outperformance
Significant exploration potential, active drill program in 2019
DECEMBER 2017 DECEMBER 2016
TONNES
(000’S)
GRADE
(g/t)
OUNCES
(kozs)
TONNES
(000’S)
GRADE
(g/t)
OUNCES
(kozs)
Reserves 751 4.9 117 1,090 4.8 167
Resources1
(M&I)826 5.0 133 1,830 6.2 370
Resources
(Inferred)1,988 5.3 337 1,570 5.2 430
1. Mineral Resources are reported exclusive of Mineral Reserves. See Mineral Reserve and Mineral Resource disclosures at the end of the presentation.
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FOOTNOTES TO MINERAL RESERVES AND MINERAL RESOURCES
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
36
Footnotes related to Mineral Reserve Estimates (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the calculation of Mineral Reserves.
(2) Mineral Reserves were estimated using a long-term gold price of US$1,230/oz (C$1,635/oz; A$1,710/oz).
(3) Cut-off grades for Canadian Assets were calculated for each stope, including the costs of: mining, milling, General and
Administration, royalties and capital expenditures and other modifying factors (e.g. dilution, mining extraction, mill recovery).
(4) Cut-off grades for Australian Assets from 0.4 g/t Au to 3.0 g/t Au, depending upon width, mining method and ground
conditions; dilution and mining recovery factors varied by property.
(5) Mineral Reserves estimates for the Canadian Assets were prepared under the supervision of Pierre Rocque, P. Eng.
(6) Mineral Reserves estimates for the Fosterville property were prepared under the supervision of Ion Hann, FAusIMM.
(7) Mineral Reserves estimates for the Northern Territory property were prepared under the supervision of Pierre Rocque, P.Eng.
(8) Mineral Reserves for Fosterville relate to Underground Mineral Reserves and do not include 649,000 tonnes at an average of
7.7 g/t for 160,000 ounces of Carbon-In-Leach Residues - 25% recovery is expected based on operating performances.
(9) Totals may not add exactly due to rounding.
Footnotes related to Mineral Resource Estimates for Canadian Assets (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the calculation of Mineral Resource.
(2) Mineral Resources are reported Exclusive of Mineral Reserves. Mineral Resources were calculated according to KL Gold’s Mineral
Resource Estimation guidelines.
(3) Mineral Resource estimates were prepared under the supervision of Eric Kallio, P. Geo. Senior Vice President, Exploration.
(4) Mineral Resources are estimated using a long-term gold price of US$1,230/oz (C$1,635/oz).
(5) Mineral Resources were estimated using a 8.6 g/t cut-off grade for Macassa, a 2.9 g/t cut-off grade for Holt, and a 2.6 g/t cut-off
grade for Taylor, a 3.9 g/t cut-off grade (Holloway), a 2.5 g/t cut-off grade for Canamax, Card, Runway and Ludgate, a 2.2 g/t cut-
off grade for Hislop and 0 g/t cut-off grade for Aquarius.
(6) Totals may not add up due to rounding.
Footnotes related to Mineral Resource Estimates for Australian Assets (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the estimation of Mineral Resource.
(2) Mineral Resources are estimated using a long-term gold price of US$1,230/oz (A$1,710/oz)
(3) Mineral Resources for the Australian assets are reported exclusive of Mineral Reserves.
(4) Mineral Resources at Fosterville were estimated using cut-off grades 0.7 g/t Au for oxide and 1.0 g/t Au for sulfide
mineralization to potentially open-pitable depths of approximately 100m, below which a cut-off grade of 3.0 g/t Au was used.
(5) Mineral Resources in the Northern Territory were estimated using a cut-off grade of 0.5 g/t Au for potentially open pit
mineralization and cut-offs of 1.0 to 2.0g/t Au for underground mineralization.
(6) Mineral Resource estimates for the Fosterville property were prepared under the supervision of Troy Fuller, MAIG.
(7) Mineral Resource estimates for the Northern Territory properties were prepared under the supervision of Owen Greenberger,
MAIG.
(8) Totals may not add up due to rounding.
MINERAL RESERVES AND MINERAL RESOURCES
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
Cautionary Note to U.S. Investors - Mineral Reserve and Resource Estimates
All resource and reserve estimates included in this news release or documents referenced in this news release have been prepared inaccordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Instituteof Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIMCouncil, as amended (the "CIM Standards"). NI 43-101 is a rule developed by the Canadian Securities Administrators, which establishedstandards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. The terms "mineralreserve", "proven mineral reserve" and "probable mineral reserve" are Canadian mining terms as defined in accordance with NI 43-101 and theCIM Standards. These definitions differ materially from the definitions in SEC Industry Guide 7 ("SEC Industry Guide 7") under the United StatesSecurities Act of 1933, as amended, and the Exchange Act.
In addition, the terms "Mineral Resource", "measured Mineral Resource", "indicated Mineral Resource" and "Inferred Mineral Resource" aredefined in and required to be disclosed by NI 43-101 and the CIM Standards; however, these terms are not defined terms under SEC IndustryGuide 7 and are normally not permitted to be used in reports and registration statements filed with the U.S. Securities and ExchangeCommission (the "SEC"). Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever beconverted into reserves. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and great uncertainty as totheir economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a highercategory. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, exceptin very limited circumstances. Investors are cautioned not to assume that all or any part of a Mineral Resource exists, will ever be convertedinto a Mineral Reserve or is or will ever be economically or legally mineable or recovered.
Qualified Persons
Ian Holland, FAusIMM, Vice President, Australian Operations is a "qualified person" as defined in NI 43-101 and has reviewed and approved the Mineral Reserves technical information and data for the Australian Assets included in this news release.
Simon Hitchman, FAusIMM (CP), MAIG, Principal Geologist, is a "qualified person" as such term is defined in NI 43-101 and has reviewed and approved the Mineral Resources technical information and data for the Australian Assets included in this news release.
Henry Heidrich, P. Eng., Director, Technical Services, Canadian Operations, is a “qualified person” as such term is defined in NI 43-101 and has reviewed and approved the Mineral Reserves estimates in this news release for the Canadian Assets.
Eric Kallio, P. Geo, Senior Vice President, Exploration, is a “qualified person” as such term is defined in NI 43-101 and has reviewed andapproved the Mineral Resource estimates in this news release for the Canadian Assets.
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