Toronto Marketing November 12-13, 2014 A RICH HISTORY A PROFITABLE FUTURE

Transcription

1 Toronto Marketing November 12-13, 2014 A RICH HISTORY A PROFITABLE FUTURE

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 production forecast including ounces produced and grade assumptions; the operating costs and all-in cash cost for fiscal 2015; and exploration programs and their results. 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, and the Company s Management's Discussion and Analysis for the interim period ended July 31, 2014 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 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. 2

3 Company Vision Build a sustainable mining company that is recognized as a safe and responsible intermediate gold producer. We will provide exceptional stakeholder value by delivering operational and exploration excellence through empowering our people to act as owners. George Ogilvie, P.Eng., CEO 3

4 Diverse Board of Directors Harry Dobson, 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 New Appointments Barry Cooper, B.Sc., MBA (Non-executive Director) Former head analyst with CIBC Jeff Parr, CA, BA, MBA (Non-executive Director) CFO of Centerra Gold Barry Olson, M.Sc. (Non-executive Director) Former Sr. VP Projects of Goldcorp 4

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 Worked together at Rambler for ~ 7 years Worked together at Dynatec for ~3.5 years 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 5

6 Investment Highlights Located in Ontario, one of the safest and lowest risk mining jurisdictions globally Attractive NI 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 6

7 Financial Position CAPITAL STRUCTURE* CASH C$41.4 million* ISSUED SHARES 72,081,617 FULLY DILUTED 84,986,448 MARKET CAP ~270 Million 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/ Week Performance* HIGH C$6.19 ROYALTY 2.5% NSR Franco Nevada Corporation LOW C$2.21 option to buyback 1% by October 31, 2016 * Share Capital as of July 31, All other info as of October 31,

8 KGI Share Performance Vs Gold Kirkland Lake (TSX:KGI) Gold Price (C$ / oz) 120% 110% 100% 90% 80% (-20%) 70% 60% (-40%) 50% 40% 30% Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct

9 Kirkland Lake Background 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). 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. 9

10 Grade g/t Second Highest Grade Gold Mine In The World Reserve Grades Mine Operator Location Gold Grade Reserves g/t 000 oz Au Turquoise Ridge Barrick USA ,761 Macassa Kirkland Lake Gold Canada ,385 Pogo Gold Sumitomo Corp. USA ,932 Gosowong Newcrest Indonesia ,235 Moab Khotsong AngloGold Ashanti South Africa ,126 Mponeng AngloGold Ashanti South Africa ,569 Red Lake Gold GoldCorp Canada ,553 TauTona AngloGold Ashanti South Africa ,389 Kupol/Dvoinoye Kinross Russia ,

11 New Mine Plan With Positive Results Old Plan Focussed on QUANTITY and TONNEAGE New Plan Focusses on QUALITY and GRADE Not Dependant on a High Gold Price Requires Less Manpower Fewer Stopes Strict Ore/Waste Management and Dilution Control SIGNIFICANT INCREASE IN GRADE REDUCTION IN COSTS CASH FLOW POSITIVE Additional benefits of new mine plan are SIMPLIFIED PLANNING and ability to FINANCE AT COMPANY s DISCRETION 11

12 Reserves & Resources (Resources are Exclusive of Reserves) RESERVES AND RESOURCES MINE WIDE COMPLEX RESERVES AND RESOURCES SOUTH MINE COMPLEX ( SMC ) CATEGORY (31 st DEC 2013) TONS GRADE (opt) GRADE (gpt) OUNCES CATEGORY (31 st DEC 2013) TONS GRADE (opt) GRADE (gpt) OUNCES Proven 941, ,000 Probable 1,843, ,000 Total P+P 2,784, ,385,000 Proven 328, ,000 Probable 1,163, ,000 Total P+P 1,492, ,000 Measured 1,133, ,000 Indicated 3,019, ,619,000 Total M+I 4,152, ,055,000 Measured 24, ,000 Indicated 1,440, ,005,000 Total M+I 1,464, ,012,000 Inferred 2,092, ,133,000 Inferred 1,205, ,000 Based on current level of Reserves and 70% conversion of Resources (@ 200,000 oz p.a) Macassa has a 14 year Mine Life See Kirkland Lake news release dated April , a copy of which has been filed on SEDAR for further particulars and full NI disclosure including QP statement. 12

13 #3 SHAFT #2 SHAFT South Mine Complex 5025 Level P+P 89, oz/ton 39,000O Oz s M+I 57, oz/ton 22,000 Oz s 5300 Level P+P 620, oz/ton 290,000 Oz s M+I 220, oz/ton 86,000 Oz s Original Two Mining Horizons 4750L 5025L 5300L Third Level Started May Level P+P 481, oz/ton 274,000 Oz s M+I 170, oz/ton 71,000 Oz s 5600 Level P+P 290, oz/ton 209,000 Oz s M+I 220, oz/ton 122,000 Oz s 5400L 5600L Currently in Development for FY 2016 OPEN 5700 to 6600 Level M+I 768, oz/ton 703,000 Oz s OPEN OPEN 6600L 5400L has reserve 0.57 opt (19.5 gpt) 5600L has reserve 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 13

14 Q2/H1 of F2015 Production Update Q1 F2015 Q2 F2015 H1 F2015 Ounces Sold 38,543 38,335 76,878 Tons Milled 93,880 92, ,026 Head Grade (opt) Second stope (5612) brought into production on 5400 level 2 Electric Hydraulic Jumbo s fully operational Main ramp towards the 5600 level progressing well and is on schedule 14

15 Gold Ounces Ounces per Ton Monthly Production Profile Average Grade 0.41 opt 20,000 15, , , Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2014 Oz Recovered Head Grade Jun Jul Aug Sep Oct - Cut-off Grades Raised from 0.18 opt to 0.22 opt. Stopped Mining Incremental Tonnage 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 15

16 Gold Ounces Ounces per Ton Annual Production Profile 250, , ,000 Expectation Gap , , FY Oz Recovered Guidance Head Grade 0 Guided Grades for F2015-F2017 are Based on Historic Achievements Calendar YTD Actual Head Grade is 0.41 opt; Fiscal YTD Actual Head Grade is 0.43 opt 16

17 F2014 & Q1 F2015 Financial Results All amounts stated are in Canadian dollars Financial FY2014 FY2013 Y/Y Change Q1/14 Q4/14 Q1/15 Q1/15 vs. Q1/14 Q1/15 vs. Q4/14 Comments Gold Sales (ounces) Average Price ($) (per ounce) Revenue (000 s) Cash Operating Cost per Ton Produced 125,273 91, % 30,253 30,771 38, % +25% 1,383 1,653-16% 1,435 1,376 1,401-2% +2% 173, , % 43,421 42,356 54, % +27% % % -3% Sold 10,903 ounces at C$1,419 up to September 30 th H2/15 tons are expected to increase by +10% to ~1,100 1,250 tpd, which will positively impact the Cost Per Ton Objective is for Cost Per Ton of $300 in H2/2015 Cash Operating Cost per Ounce Produced 1,078 1,109-3% 1,113 1, % -21% F2015 Objective is for Cash Cost Per Ounce of $800 AICC per Ounce Produced 1,986 2,432-18% 2,094 1,774 1,250-40% -30% F2015 Objective is for AICC < $1,

18 $1,127 $1,307 $956 $1,156 $1,112 $1,052 $1,403 $1,187 $839 $1,073 $1,119 $836 $720 $614 $1,244 C$ per Ounce Ounces $3,000 $2,500 All-In Cash Cost (AICC) All amounts stated are in Canadian dollars Ounces Produced 18,000 16,000 14,000 $2,000 12,000 $1,500 $1,000 10,000 8,000 6,000 $500 4,000 2,000 $- MAY 2013 JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY 2014 JUN JUL - Production Capital Development PP&E Corporate Exploration Royalties Oz Produced 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 Adjusted Shift Schedules 18

19 C$ per ounce Ounces AICC Projection for F2015 $2,500 All amounts stated are in Canadian dollars 18,000 16,000 $2,000 Ounces Produced 14,000 12,000 $1,500 $1,350 10,000 $1,000 8,000 6,000 $500 4,000 2,000 $- FEB MAR APR MAY 2014 JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR ESTIMATED - Production Capital Development PP&E Corporate Exploration Royalties Oz Produced Projection Based on Assumptions of 1,150 tpd, 0.37 opt and 96% Mill Recovery KGI Beginning to Generate FCF Fairly High Degree of Variability Remains until more High Grade Stopes come online 19

20 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 20

21 C$ Millions Capital Expenditures E 2016E 2017E Mineral Properties PP&E ESTIMATED Project Capital was Completed in January 2014 C$9M in Capital Development of 5400L and SMC Main Decline to 5600L Spent in FY

22 Exploration Potential 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 (11.7gpt) 104,000 oz. Infer. 131,000 (12.3gpt) 48,000 oz. 3 drills drilling to expand resource and infill drill UG DRILLING SMC continues to be expanded Multi-ounce intersections 3 drills turning underground Open in multiple directions 22

23 Outlook for F2015 All amounts stated are in Canadian dollars Guidance Metric Q1/15 Actual Status $ / Oz Cash Operating Cost Per Ounce $788 Favourable $1,250-1,350/ Oz AICC Per Ounce Produced $1,250 On Track $58.0 million Sustaining CAPEX $12.0 million On Track $200.0 million Revenue $54.0 million On Track $ million Cash Flow from Operations $17.0 million Favourable $ million Free Cash Flow Generation $5.0 million On Track 23

24 TSX /AIM: KGI Suzette N Ramcharan, CPIR Director of Investor Relations Mobile: sramcharan@klgold.com Tim Blythe / Halimah Hussain (Blytheweigh) Investor Relations / PR Tim.blythe@blytheweigh.com/ halimah.hussain@blytheweigh.com