PDAC Australia Minerals Session

Transcription

1 TSX: KL NYSE: KL ASX: KLA March 2018 PDAC Australia Minerals Session OPERATIONAL EXCELLENCE ORGANIC GROWTH SHAREHOLDER RETURNS

2 FORWARD LOOKING STATEMENTS Cautionary Note Regarding Forward-Looking Information This presentation contains statements which constitute 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 (iv) the temporary suspension of operations at the Cosmo Mine and the anticipated effects thereof. Investors are cautioned that forward-looking information is not based on historical facts but instead reflect KL 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 ability of Kirkland Lake Gold to successfully integrate the operations and employees of its Canadian and Australian operations, and realize synergies and cost savings, and to the extent, anticipated; the potential impact on exploration activities; the potential impact on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; the re-rating potential following the consummation of the merger; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; and compliance with extensive government regulation. 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 Kirkland Lake Gold s annual information form, financial statements and related MD&A for the year ended December 31, 2017 and their interim financial reports and related MD&A for the quarters ended March 31, June 30 and September 30, 2017 filed with the securities regulatory authorities in certain provinces of Canada and available at 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 forwardlooking information except as otherwise required by applicable law. All dollar amounts in this presentation are expressed in U.S. Dollars unless otherwise noted. Use of Non-GAAP Measures This Presentation refers to average realized price, operating costs, all-in sustaining costs per ounce of gold sold, free cash flow and cash costs of production 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. This data is furnished to provide additional information and are non-gaap 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. 2

3 KL: HIGH GRADE, LOW COST GOLD MINES IN LEADING MINING JURISDICTIONS 2 Key Drivers of Performance 77% of 2017 Production Fosterville Macassa Consolidated (1) P&P Mineral Reserves (kozs) 1,700 2,030 4,640 P&P Reserve Grade (g/t Au) Production (ounces) 263, , , Op. Cash Costs ($/Oz Sold) 2, ) Consolidated mineral reserves include reserves at Fosterville, Macassa, Taylor, Holt, as well as mines currently not in operation, including Holloway and Hislop in Canada and the Northern Territory in Australia 2) See Non-IFRS Measures sections in forward looking statements 3) Operating Cash Costs per ounce reflect an average USD to CAD exchange rate of 1.30 and a USD to AUD exchange rate of See Kirkland Lake Gold News release dated February 21,

4 3 PILLARS OF VALUE CREATION Operational Excellence Strong performance against guidance Generating strong earnings, free cash flow Discipline Organic Growth Growing reserves and resources Targeting a million ounces/year from existing mines Focused on Shareholders Returns Strong share price performance Repurchasing shares Paying dividends 4

5 1. OPERATIONAL EXCELLENCE Beat 2017 production guidance Improved guidance three times Record quarter in Q4 2017: 166,579 ozs Achieved improved unit cost guidance Cash costs $481/oz (initial guidance: $625 $67) AISC 1 of $812/oz (initial guidance: $950 $1,000) Sound financial management $157M of earnings from continuing ops in 2017 $178M in free cash flow in 2017 $232M in cash 2 at Dec. 31/17 No debt debentures repaid or converted to equity Focused on profitable mining Two high-cost mines on care and maintenance Stawell mine sold December 2017 PERFORMANCE VERSUS GUIDANCE $ millions unless otherwise stated Nine-Month 2017 Results (ex. production) Performance Guidance Production (kozs) Operating cash costs ($/oz) 2,3 $481 $475 $500 AISC ($/oz) 2,3 $812 $800 $825 Operating cash costs 2 $285 $270 $280 Capital expenditures $165 $160 $180 Exploration $48 $45 $55 Royalty cost $21 $22 $25 G & A $22 $20 1) 2017 production includes: Fosterville 263,845 ozs (FY) & 79,157 ozs (Q4); Macassa 194,237 ozs (FY) & 51,608 ozs (Q4); Holt 66,677 ozs (FY) & 19,263 ozs (Q4), Taylor 50,764 ozs (FY) & 16,538 ozs (Q4); Cosmo 20,595 ozs (FY) & nil (Q4), Holloway 287 ozs (FY) & 13 ozs (Q4) 2) Operating Cash Costs per ounce and AISC per ounce are examples of Non-IFRS measures. Please see the Non-IFRS Measures section in forward looking statements on Slide 2. In addition, please see Kirkland Lake Gold s News Release dated February 21, 2018 and full-year and Q MD&A for additional reporting details related to Operating Cash Costs per ounce and AISC per ounce results 3) Operating Cash Costs per ounce and AISC per ounce guidance for 2018 reflects an average USD to CAD exchange rate of 1.30 and a USD to AUD exchange rate of Operating Cash Costs per ounce and AISC per ounce results in 2017 reflect an average USD to CAD exchange rate of 1.30 and USD to AUD exchange rate of See Kirkland Lake Gold News release dated February 21, ) Refers to all-in sustaining costs 2) Refers to cash and cash equivalents 5

6 2018: HIGHER PRODUCTION, LOWER UNIT COSTS, INVESTING FOR GROWTH 1 Production growth to approx. 620 koz Macassa: kozs Taylor: kozs Holt: kozs Fosterville: kozs Improved unit costs Operating cash costs below $500/oz AISC to improve below $800/oz Investing for future growth Sustaining: Supports production over multiple years Growth: Macassa shaft, near-term growth at Fosterville Increasing commitment to exploration in 2018 Australia: $60M $75M at Fosterville and Northern Territory Canada: Continued growth of SMC at Macassa and expansion of mineralization at Taylor 1) Includes examples of forward-looking statements $ millions unless otherwise stated 2018 Guidance Production (kozs) +620 Operating cash costs ($/oz) 1,2 $425 $450 AISC ($/oz) 1,2 $750 $800 Operating cash costs 1 $260 $270 Sustaining capital expenditures $150 Fosterville $170 Growth capital expenditures $85 $95 Exploration $75 $90 Royalty cost $22 $27 G & A $20 $22 1) Operating Cash Costs, Operating Cash Costs per ounce and AISC per ounce are examples of Non-IFRS measures. Please see the Non-IFRS Measures section in forward looking statements on Slide 2. In addition, please see Kirkland Lake Gold s News Release dated February 21, 2018 and full-year Macassa and Q MD&A for additional reporting details related to Operating Cash Costs per ounce and AISC per ounce results (AISC refers to all-in sustaining costs) 2) Operating Cash Costs per ounce and AISC per ounce guidance reflects an average USD to CAD exchange rate of 1.30 and a USD to AUD exchange rate of

7 2. DISCIPLINED ORGANIC GROWTH Targeting a million ounces/year in 5 7 years 1 Fosterville to reach >400 kozs by 2020 with full production at Swan Zone Macassa to achieve >400 kozs in 5 to 7 years with new shaft Targeting growth at Taylor mine, resumption of operations at Cosmo Achieving significant exploration success Fosterville: Swan Zone discovery (1, g/t), multiple in-mine and district targets Cosmo: Significant expansion of Lantern Deposit recently announced Macassa SMC extended 259 m to east New mineralization discovered 1.8 km east of Taylor Aggressive investment in exploration Exploration expenditures targeted at $75 $90M in ) Includes examples of forward-looking statements 7

8 3. FOCUSED ON SHAREHOLDER RETURNS KL top performing stock on S&P/TSX Comp. Index in 2017 with 174.5% share price increase (on full-year basis) Repurchased 5.4M shares for C$76.5M Introduced dividend in July, increasing to C$0.02/share in January 2018 Used cash to eliminate debt, reduce royalties, make strategic investments Global market presence listed on TSX (symbol: KL), NYSE (symbol: KL) and ASX (symbol: KLA) Close on Thursday, Feb. 22, 2018 TSX: C$20.21 NYSE: $15.91 ASX: A$

9 FOSTERVILLE CORNERSTONE OPERATION

10 CENTRAL VICTORIA WORLD CLASS GOLD PROVINCE +80Moz Historical Production from Region Stawell: 2.3Moz Fosterville: 1.4Moz 2005-current

11 Gold Ounces (oz) Gold Grade (g/t Au) GROWTH OF HIGH GRADE RESERVES 1,800,000 1,600,000 1,400,000 1,200,000 Mineral Reserves UG only High grade reserve growth driven by discovery in Lower Phoenix and Harrier South gold systems ,700, ,000, , ,030, , , , , , , ,000 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Jun 2017 Dec , Reserve Ounces Grade (g/t Au) 11

12 Gold Grade (g/t) Gold Production (oz) INCREASED PRODUCTION - INCREASED MARGINS High-Grade Production , , ,406 46, , , , ,000 70,000 60,000 50,000 40,000 30,000 Low-Cost, High-Margin Ounces ,000 Q Q Q Q Q Q Production Costs US$/oz The Fosterville Gold Mine is the largest gold producer in the state of Victoria and is scheduled to produce 260k - 300k oz of gold at an operating cost of $270 - $290 per ounce 1 sold in $765 $641 $571 AISC OCC $574 $ year life based on reserves Excellent potential to extend life with resource to reserve conversion and exploration 11 drill rigs currently in operation $471 $388 $420 $354 $295 $220 $226 Q Q Q Q Q Q ) See the Company s MD&A for the three and twelve months ended December 31, 2017 dated February 21, 2018 for more information on Fosterville s operating performance. (See Slide 2 for information regarding Non-GAAP measures).

13 MINING OPERATION DECEMBER 2017 RESERVES Development increased to 1,000m/month drill platforms and access to additional production sources (Harrier South, Lower Phoenix North) Harrier Decline Harrier South Lower Phoenix North Phoenix Decline Lower Phoenix South 13

14 SWAN HIGH GRADE DISCOVERY Central Decline Phoenix Decline Swan Mineral Reserve 1,160Koz at 61.2g/t Au M & I Mineral Resource Inferred Mineral Resource 2P Mineral Reserve (ex Swan) Swan Mineral Reserve Planned / Conceptual Development As Mined Development and Stopes Not closed off by drilling current programs targeting extensions 14

15 SWAN GROWING RAPIDLY! 15

16 PROCESSING BIOX REMAINS IMPORTANT Record mill recovery of 95.0% in 2017 Gravity circuit installed in % of gold recovered. Anticipated to increase to ~50% over medium term ~30%+ spare capacity organic growth opportunity

17 DISTRICT SCALE POTENTIAL HOW MANY MORE SWANS? Mining lease (~17km 2 ) contains ~10km strike length of Mineral Resources ~7km on Fosterville Fault Line, and ~3km on O Dwyer s Fault Line Surrounding exploration leases encompass ~505km 2 and ~60km potential gold-bearing structures on 7 interpreted fault lines FGM Mill 5 of the 7 lines contain known gold occurrences with historic resources and/or historic workings Processing plant within 30km of prospective targets Accelerated regional exploration program underway utilising leading technologies e.g. seismic Recent application for a further 1,394km 2 of exploration leases, 2 out of 3 licences granted with the 3 rd pending

18 NORTHERN TERRITORY GROWTH OPPORTUNITY Large Tenement Package 406.9km 2 100%, 1,547.8km 2 JV (49% KLG) Resources 1.8Moz M&I, 1.3Moz Inferred 2.4Mtpa Mill at Union Reefs To be updated: Landholding sole/jv Current resources

19 NORTHERN TERRITORY GROWTH OPPORTUNITY Six Rigs Currently Drilling Strategy Develop Multiple Production Centres to Utilise Installed Mill Capacity

20 3 PILLARS OF VALUE CREATION Operational Excellence Strong performance against guidance Generating Strong earnings, free cash flow Discipline Organic Growth Growing reserves and resources Targeting a million ounces/year from existing mines Focused on Shareholders Returns Strong share price performance Repurchasing shares Paying dividends 20