Kirkland Lake Gold Ltd has announced record levels of quarterly and annual gold production for Q4 2018 and full-year 2018, respectively. Production in Q4 2018 totalled 230,993 oz, 28% higher than the previous record of 180,155 oz achieved in the third quarter of 2018. Q4 2018 production was significantly above target levels for the quarter and was driven by record quarterly production at both Fosterville (124,307 oz) and Macassa (69,936 oz). Production in 2018 totalled 723,477 oz, a 21% increase from 596,405 ounces for full-year 2017.  Three of the company’s mines achieved record annual production in 2018, including 356,230 ounces at Fosterville, 240,126 ounces at Macassa and 58,633 ounces at the Taylor Mine, with the Holt Mine producing 67,770 oz for the year. The company’s cash position at December 31, 2018 totaled approximately $332 million.

Highlights of Q4 2018 and 2018 production results include:

• Q4 2018 production of 230,993 oz, 39% increase from 166,579 oz in the fourth quarter of 2017 and 28% higher than 180,155 oz the previous quarter
• Gold poured in Q4 2018 totalling 224,770 oz, with total gold sales of 225,692 oz
• Production at Fosterville totalling 124,307 oz in Q4 2018, increase of 57% from 79,157 oz in Q4 2017 and 37% higher than 90,618 oz in Q3 2018; production growth in Q4 2018 reflected average grade of 39.7 g/t, significantly above target levels
• Production at Macassa of 69,936 oz in Q4 2018, 36% increase from 51,608 oz in Q4 2017 and 26% higher than 55,582 oz in Q3 2018; average grade in Q4 2018 of 25.9 g/t
• Production from Holt Complex in Q4 2018 included record quarterly production of 19,305 oz at Taylor and production of 16,774 oz at the Holt Mine (compared to 16,541 oz at Taylor and 19,263 oz at Holt in Q4 2017 and 13,333 oz at Taylor and record production of 20,609 oz at Holt in Q3 2018)
• 2018 consolidated production totaling 723,477 oz, 21% higher than 596,405 oz in 2017, with increase reflecting production growth of 92,385 oz or 35% at Fosterville, 45,889 oz or 24% at Macassa, 7,869 oz or 16% at Taylor and 1,093 oz or 2% at Holt
• 2018 gold poured of 722,894 oz, with 2018 gold sales of 722,277 oz.

Other key developments during Q4 2018 include:

• Continued exploration success at Fosterville, with infill drilling in Swan Zone continuing to return intercepts containing exceptionally high-grades, substantial widths and visible gold; Company continues to target significant growth in Swan Zone Mineral Reserves
• Increased financial strength with cash position increasing by approximately 29% during Q4 2018, with year-end 2018 cash totaling approximately $332 million
• Quarterly dividend increased to $0.04 per share effective Q4 2018 payment on January 11, 2019 to shareholders of record on December 31, 2018; company paid Q3 2018 dividend payment of $0.03 per share on October 12, 2018 to shareholders of record on September 30, 2018
• Strong share-price performance with Kirkland Lake Gold commons shares closing on December 31, 2018 at $35.60 per share on the TSX, representing share-price increase of 85% for full year 2018.

Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold, commented: “2018 was an outstanding year for Kirkland Lake Gold. We achieved record production of 723,477 oz and, just as important, embarked on a program of growth that could see the company achieve a million ounces of annual, low-cost gold production as early as 2021. A key part of our progress has been the continued transformation of Fosterville into one of the world’s greatest gold mining operations. As clearly demonstrated in Q4 2018, we continue to see much greater levels of high-grade quartz-veins with visible gold at Fosterville than had previously been estimated, which was the main driver of the mine’s substantial outperformance during the quarter and is a key reason why we expect a significant increase in Swan Zone Mineral Reserves. Turning to Macassa, our grade performance in the South Mine Complex has been excellent, with many stopes outperforming in Q4 2018, and our operations team continuing to perform very well in moving our production profile to the deeper, high-grade parts of the mine. Macassa is a very solid, consistent operation that is poised to achieve substantial production growth once our new #4 Shaft is completed, with Phase 1 completion on track for early 2022. In addition, we had record production at Taylor in Q4 2018, reflecting both improved tonnage and higher grades, and also turned in a solid performance at Holt. Entering 2019, we are well positioned for continued growth, with three-year production guidance including 740,000-800,000 oz in 2019, 850,000-910,000 oz in 2020 and 945,000-1,005,000 oz in 2021.”

Production in 2018 was a record 723,477 oz, an increase of 21% from 596,405 oz in 2017. Excluding production from mines currently on care and maintenance, total consolidated production of 722,759 oz in 2018 grew 26% from 575,523 oz for the previous year. The company exceeded the 670,000 oz minimum production target included in its current consolidated production guidance for 2018 by $53.5 million or 8%. During 2018, the company improved its consolidated production guidance three times from the initial consolidated guidance of over 620,000 ounces, announced on January 17, 2018. Improvement in consolidated production guidance during the year were primarily driven by Fosterville, where average grades consistently outperformed target levels during the year.

The Fosterville Mine produced a record 124,307 ounces in Q4 2018, based on processing 98,797 t at an average grade of 39.7 g/t and average recoveries of 98.6%. Q4 2018 production increased 57% from 79,157 oz in Q4 2017, when the mine processed 118,877 t at an average grade of 21.5 g/t and average recoveries of 96.3%. Production in Q4 2018 increased 37% from 90,618 oz in Q3 2018, based on processing 113,101 t at an average grade of 25.6 g/t and average mill recoveries of 97.5%. The average grade in Q4 2018 of 39.7 g/t was the highest ever quarterly average grade at Fosterville by a significant margin and far exceeded target levels for the quarter. The outperformance largely relates to increased operating development activity around the Swan Zone and higher than planned grades from development tonnes processed. In addition, stope production in Q4 2018 from both the Swan and Eagle zones achieved substantially higher than expected grades. Based on the completion of increased operating development metres, the company added two Swan Zone stopes to the mine plan for Q4 2018, which also is contributed to higher levels of production.

Production at Fosterville in 2018 totaled 356,230 oz, a 35% increase from 263,845 oz in 2017. Record production in 2018 resulted from processing 456,909 t at an average grade of 24.9 g/t and average recoveries of 97.3%, which compared to processing 547,476 t at an average grade of 15.8 g/t and average recoveries of 95.0% for YTD 2017. A 58% increase in the average grade compared to 2017 mainly resulted from the continued transition to mining deeper, higher-grade stopes in the Eagle and, as of Q3 2018, the Swan Zone, which include quartz veins containing significant amounts of visible gold. The reduction in tonnes milled compared to the prior year reflected the mine’s focus on extracting high-grade stopes at depth. At current grades, the Fosterville Mill’s refining capacity is being fully utilised, with an expansion of the refinery and gold room planned for 2019. The company is also working to establish additional mining fronts, which is expected to contribute to higher throughput by 2021.

The Macassa Mine produced a record 69,936 oz in Q4 2018, based on processing 85,523 t at and average grade of 25.9 g/t and average recoveries of 98.0%. Q4 2018 production was 36% higher than 51,608 oz in Q4 2017, when 119,129 t were processed at an average grade of 13.9 g/t and average recoveries of 96.8%. The increase in production from the same period in 2017 reflected an 86% increase in the average grade, resulting from mining higher-grade stopes deeper in the South Mine Complex (SMC), as well as the impact of grade outperformance, particularly in SMC stopes around the 5,700-ft level, where mining commenced near the end of 2017. The significant increase in grade more than offset a reduction in tonnes processed. Lower tonnes processed in Q4 2018 largely reflected increased selectivity in processing development material for the purpose of maximizing average grades. Q4 2018 production increased 26% from 55,582 oz in Q3 2018, when the mine processed 92,503 t at an average grade of 19.2 g/t and average mill recoveries of 97.3%. The increase from the previous quarter resulted from higher average grades in Q4 2018, mainly reflecting more favourable grade reconciliations compared to Q3 2018.

Production at Macassa in 2018 totalled 240,126 oz, an increase of 24% from 194,237 oz in 2017. Production in 2018 resulted from processing 354,468 t at an average grade of 21.6 g/t and average recoveries of 97.7%. All tonnes processed in 2018 were from mine production. For 2017, a total of 409,064 t were processed at an average grade of 15.2 g/t and average recoveries of 97.1%. Of tonnes processed in 2017, 387,053 t related to mine production and averaged 16.0 g/t, with the remaining 22,011 t being drawn from low-grade stockpiles and averaging 1.6 g/t.  The 35% increase in the average grade from mine production in 2018 compared to the previous year resulted from mining higher-grade stopes deeper in the SMC during YTD 2018, as well as the impact of favourable grade reconciliations and improved grade control practices.

During Q4 2018, production at the Holt Mine totaled 16,774 oz, based on processing 118,347 t at and average grade of 4.7 g/t and average recoveries of 94.3%. Q4 2018 production compared to production of 19,263 oz in Q4 2017, which resulted from processing 127,494 t at an average grade of 5.0 g/t and average recoveries of 94.9%, and record quarterly production of 20,609 oz in Q3 2018, based on processing 135,849 t at an average grade of 5.0 g/t and average recoveries of 95.0%. Lower average grades compared to both prior periods reflected mine sequencing, while a reduction in tonnes processed largely reflected some stockpiling of ore from Holt in favour of processing high-grade ore from the Taylor Mine during the quarter.

In 2018, Holt produced 67,770 oz, a 2% increase from 66,677 oz in 2017. The small increase in production resulted from a 2% increase in tonnes processes, with the average grade of 4.7 g/t unchanged from the comparable 2017 level.  Production in 2018 was based on 471,819 t processed at and average grade of 4.7 g/t and average recoveries of 94.6%, which compared to 462,987 t processed at an average grade of 4.7 g/t and average recoveries of 94.8% in 2017.

In Q4 2018, the Taylor mine achieved record production of 19,305 oz, a 17% increase from 16,541 oz in Q4 2017 and 4% higher than 13,333 oz the previous quarter. Q4 2018 production resulted from 103,793 t at an average grade of 6.1 g/t and average recoveries of 95.0%, which compared to 89,297 t processed at an average grade of 6.0 g/t and average recoveries of 96.2% in Q4 2017 and 94,092 tonnes at an average grade of 4.7 g/t and average recoveries of 94.3% in Q3 2018.  The increase from Q4 2017 was mainly related to a 16% increase in tonnes processed, while a 30% improvement in the average grade, reflecting both mine sequencing and grade outperformance in Q4 2018, was the key driver of the increase compared to the previous quarter.

For full-year 2018, Taylor produced 58,633 oz from processing 382,059 t at an average grade of 5.0 g/t and average recoveries of 94.7%. Production in 2018 increased 15% from 50,764 oz in 2017, when a total of 292,003 t were processed at an average grade of 5.6 g/t and average recoveries of 96.2%.