INTERMEDIATE GOLD PRODUCTION IN ONTARIO HIGH GRADE CAMP JANUARY 2012
KIRKLAND LAKE GOLD INC. CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS This Press Release may contain statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 of the United States of America, including statements regarding the plans, intentions, beliefs and current expectations of the Company, its directors, or its officers with respect to the future business activities and operating performance of the Company. The words may, would, could, will, intend, plan, anticipate, believe, estimate, expect and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Investors are cautioned that any such forwardlooking statements are not guarantees of future business activities or performance and involve risks and uncertainties, and that the Company s future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the Company s periodic filings with the Securities and Exchange Commission, including the Company s annual report on Form 20-F and current report on Form 6-K, which may be viewed on EDGAR at www.sec.gov, and its periodic filings with the Canadian securities regulatory authorities, including the Company s Annual Information Form and quarterly and annual Management s Discussion & Analysis, which may be viewed on SEDAR 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 be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. 2
MANAGEMENT AND EXECUTIVE BOARD MEMBERS Harry Dobson CHAIRMAN Decades of experience in mining capital markets Cofounder of Kirkland Lake Gold with Brian Hinchcliffe Brian Hinchcliffe PRESIDENT, CEO AND DIRECTOR Over thirty years experience in the development of mining projects and companies 10 years working at J Aron Goldman Sachs as a metals trader Cofounder of Kirkland Lake Gold with Harry Dobson John Thomson CFO AND DIRECTOR Chartered Accountant who has studied at INSEAD Variety of senior level positions with companies such as PepsiCo Mark Tessier COO AND DIRECTOR Led mine expansion at Goldcorp s Red Lake Mine, a new discovery in a historic camp resulting in 2.8 million ounces of production over 7 years BSc. In Mining Engineering with Honours from Queens University Also worked at the Denison Mine in Elliot Lake, the Dome Mine in Timmins, the Golden Giant Mine at Hemlo, and for JS Redpath Limited 3
KIRKLAND LAKE GOLD PROFILE LISTINGS KGI Toronto (TSX) KGI London (AIM) SHARES OUTSTANDING 69,904,112Basic 71,703,112Fully diluted RECENT $21.31 52 week high $11.29 52 week low OWNERSHIP European institutions 30% North American institutions 30% Management and Directors 27% Retail 13% MARKET CAP $1.18 billion (Jan 5, 2011, $16.88) CASH BALANCE C$40.5 million (Dec 7, 2011) No debt ANALYST COVERAGE National Bank Financial Dundee Securities CIBC World Markets Evolution Securities PanmureGordon Ocean Equities MINE GOLD OUNCES RECOVERED GOLD OUNCES PER TON Wright-Hargreaves 4,821,296 0.49 Lake Shore 8,602,791 0.50 Teck Hughes 3,709,007 0.38 Kirkland Minerals 1,172,955 0.37 Macassa 3,569,253 0.44 Total 1917 to 2004 21,875,302 0.44 (15.1 g/t) 4
10 KILOMETRES OF STRIKE LENGTH 5
KGI CORPORATE STRATEGY BUILD RESERVES AND RESOURCES TO +5 MILLION OUNCES INCREASE ANNUAL PRODUCTION to 210,000-250,000 OUNCES CURRENT PRODUCTION GROWTH (MAY 1 APRIL 30 FISCAL YEAR) FY2011: 81,860 ozs at 0.39 opt a record production figure FY2012: 110,000 130,000 ozs (CY May 1, 2011 April 30, 2012) FY2013: 180,000 200,000 ozs (CY May 1, 2012 April 30, 2013) FY 2014-16 210,000 250,000 ozs (Begin CY May 1, 2013) CASH COSTS TO DECREASE WITH PRODUCTION EXPANSION Cash costs per ton will decrease through economies of scale Grade elevates with more tonnage from higher grade SMC, will help cost per ounce decline 4% NSR to Kinross paid in full October 31, 2011 and eliminated EXPANSION CAPEX SIGNIFICANTLY LOWERED BY USE OF EXISTING INFRASTRUCTURE Hoisting capacity increase to 2,300 tpd using existing shaft, will support planned production levels 1,400 TPD mill on the property capable of expansion to 1,600 tpdwhich supports phase II production levels SMC production ramp and related facilities complete late FY 2012 RESERVE AND RESOURCE DEVELOPMENT FY 2012 EXPLORATION BUDGET SET AT $15.8 MILLION Increase to 15 diamond drills 12 underground at Macassa Mine and 3 on surface east of Macassa testing shallow and deep targets FY 2012 Q2 RESULTS Q2 FY 2012 net income for the quarter was $11.8 M, ($0.17 per share) Tonnage increased 22% 70,054 tons of ore were milled at a head grade of 0.36 ounces of gold per ton (opt) and a recovery of 96.1% to produce 24,478 ounces of gold 6
EXISTING INFRASTRUCTURE IN KL GOLD CAMP #3 SHAFT #2 SHAFT 3400 L 3800 L 4250 L 4500 L 4750 L 5025 L 5300 L 5700 L LARGELY UNEXPLORED 2475 L 3000 L 3075 L 7000 L SOUTH MINE COMPLEX 7
SOUTH MINE COMPLEX RESERVE/RESOURCE GROWTH DISCOVERY HOLE 90 FEET OF 2.30 OUNCESOF GOLD Grade Reported In Oz/Ton as at Dec 31st, 2010 OUNCES 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 -.74.74.76.79.76.85.78.79.84.65.67.67.74.66.63.56.39.68 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 CAL 2010 P+P RESERVE M+I RESOURCES INF RESOURCES CATEGORY (FY 2010) TONS GRADE (OUNCES) GRADE (GRAMS) OUNCES Proven Probable Measured Indicated 171,000 859,000 7,000 857,000 0.65 0.75 0.36 0.67 22.3 25.7 12.3 23.0 111,000 647,000 2,000 576,000 Inferred 911,000 0.79 27.1 723,000 See Kirkland Lake news release dated July 14th, 2010, a copy of which has been filed on SEDAR for further particulars. The contents of the above slide have been verified and approved by the Company s Chief Exploration Geologist, Stewart Carmichael, P.Geo, a qualified person for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral projects. 8
MINE WIDE RESERVE/RESOURCE GROWTH Grade Reported In Oz/Ton as at December 31st, 2010 OUNCES 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000.47.35.50.50.40.63.54.41.61.54.44.59.56.47.58.55.48.60 P+P RESERVE M+I RESOURCES INF RESOURCES CATEGORY (FY 2010) TONS GRADE (OUNCES) GRADE (GRAMS) OUNCES Proven Probable Measured Indicated 0 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 CAL 2010 1,187,000 1,460,000 992,000 1,768,000 0.45 0.64 0.39 0.53 15.4 21.9 13.4 18.2 532,000 932,000 391,000 937,000 Inferred 1,740,000 0.60 20.6 1,043,000 See Kirkland Lake news release dated July 14th, 2010, a copy of which has been filed on SEDAR for further particulars. The contents of the above slide have been verified and approved by the Company s Chief Exploration Geologist, Stewart Carmichael, P.Geo, a qualified person for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral projects. 9
KL GOLD CAMP EXPANSION STRATEGY 10
GOLD PRODUCTION FORECAST IN FISCAL YEARS INCLUDES PHASE II ONLY CASH COSTS TO DECREASE WITH EXPANDED PRODUCTION 300,000 1,200 GOLD RECOVE ERED (OUNCES) 250,000 200,000 150,000 100,000 50,000 1,000 800 600 400 200 CASH COSTS (CA AD$) 0 2011 2012 2013 2014 2015 2016 Fiscal Year Runs from May 1 April 30 0 Gold Recovered Ounces Cash Costs ($) 11
PHASE II GOLD PRODUCTION EXPANSION YEAR DAILY ORE TONNAGE YEARLY PRODUCED OUNCES FY 2012 (Current) 700 800 TPD 110,000 130,000 FY 2013(May 1, 2012 April 30, 2013) 1,200 1,400 TPD 180,000 200,000 FY 2014(May 1, 2013 April 30, 2014) 1,600 TPD 210,000 250,000 FY 2015(May 1, 2014 April 30, 2015) 1,600 TPD 210,000 250,000 FY 2016(May 1, 2015 April 30, 2016) 1,600 TPD 210,000 250,000 PHASE II Mill capacity will expand from 1,400 tpd to 1,600 tpd, will support planned production levels Hoisting capacity increase from 1,000 2,300 tpdusing existing shaft supports planned production levels PHASE III - UNDER EVALUATION Evaluating 2,000 3,000 tpdof ore daily ore tonnage which translates to 300,000 350,000 ounces of annual production Evaluating how to increase mill throughput beyond 1,600 tpd Further increases to hoisting capacity possible using existing shaft 12
INCREASE TO HOISTING CAPACITY USING EXISTING SHAFT ACTUAL CONFIGURATION PHASE II CONFIGURATION POSSIBLE FUTURE CONFIGURATION SKIP 10 T. SKIP 10 T. SKIP 10 T. SKIP 10 T. SKIP 14 T. SKIP 14 T. 8 hours/day 13 skips/hour 1,000 tpd 10 tons/skip 18 hours/day 13 skips/hour 2,300 tpd 10 tons/skip 18 hours/day 13 skips/hour *3,200 tpd 14 tons/skip *Options to increase skipping capacity to up to 4,200 tpd currently being studied 13
PRODUCTION EXPANSION PROGRAMS DRIVES TO SUPPORT 60-70 WORKING FACES NEW SECOND POWER TRANSFORMER Doubles power Adds supply redundancy NEW COMPRESSOR COOLING News radiators allow for future heat recovery NEW SERVICE HOIST Frees up skipping hoist; doubles skipping capacity Automation upgrades to skipping hoist and pockets improves efficiencies DRY/OFFICE EXPANSION Gives dry capacity for 1100 people Adds 6,000 sq. Feet of office space NEW #2 SHAFT POWER LINE 5 kilovolt line allows for backup for #2 or #3 shaft NEW COMPRESSORS High efficiency increases air production by 275% UPGRADE TO SHAFT SERVICES Increases compressed air & additional 4160v power delivery to underground workings 80% increase to water pumping capacity 14
MILL CAPACITY 1,400 TPD, EXPANDING TO 1,600 TPD 96-97% MILLING RECOVERY RATE 15
NEW PRODUCTION VISION: TRACKLESS HAULAGE RAMP TO THE SOUTH #2 WINZE 50 LEVEL 51 LEVEL 53 LEVEL 51 LOADING POCKET #3 SHAFT LEGEND COMPLETED DEVELOPMENT CURRENT DEVELOPMENT NEXT DEVELOPMENT FUTURE DEVELOPMENT 54 Level north & south drifts 56 Level north & south drifts 57 Level north & south drifts 70 Level North drifts to 04 & 05 Zones 66 Level north & south drifts 69 Level north & south drifts 64 Level north & south drifts 61 Level north & south drifts 60 Level north & south drifts 58 Level north & south drifts 16
RECRUITMENT, TRAINING, AND HIRING EMPLOYEE RETENTION PROGRAMS: RESUME FLOW Competitive wage and bonus structure 7 day on, 7 day off work schedule 600 Company family doctor 500 Mine located in the town of Kirkland Lake Housing initiatives 2011 retention rate of 96% Recipient of the 2010 Excellence in Safety Award for lowest accident frequency for Underground Mines with over 250 employees in the Province of Ontario HIRING AND TRAINING 400 300 200 100 0 July August September July August September 237 people hired in FY 2011 Total number of employees as of July 2011 is 765 up from 250 in 2008 17
CANADA POLITICALLY SAFE AND LOWERING TAXES TO ATTRACT INVESTMENT Canada remained the top destination for global exploration over last few years, attracting 16% of world spending (Australia second). Exploration expenditures on gold for 2011 forecast $1 bln Capital expenditures spent developing Canada s mining properties totalled $8.2 B in 2009 Canada has decreased the Federal Tax from 25% to 15% commencing 2012. Ontario Provincial Tax is 10% for a combined tax of 25% Undertaking IFRS transition commencing Q1 2012 financials released on October 5, 2011 A $14.2 M deferred tax asset was reflected on the Balance Sheet in our Q1 2012 financial statements At current gold price and anticipated production expansion, the company will have exhausted all brought forward losses (approximately $28 million CAD) and be liable to tax at approximately 26% by December 2012 18
2011: 100-YEAR ANNIVERSARY OF FIRST GOLD DISCOVERY IN KIRKLAND LAKE 19
STEP OUT HOLES TO THE WEST EXTEND MINERALIZATION 2,000 FEET? 20
MAY 2011: 8.16 OUNCES OF GOLD OVER 47 FEET TRUE WIDTH 21
NOVEMBER 2011 DRILLING EXTENDS SMC TO EAST 22
6.14 OUNCES OF GOLD OVER 13.7 FEET 23
POSITIONED FOR GROWTH HIGH GRADE DEPOSIT Proven + Probable: 1,464,000 ozs @ 0.55 opt or 18.9 gpt Measured + Indicated: 1,328,000 ozs @ 0.48 opt or 16.5 gpt Inferred: 1,043,000 ozs @ 0.60 opt or 20.6 gpt GROWING YEARLY PRODUCTION AND CASH FLOW, DECLINING CASH COSTS Building yearly production to 210,000 250,000 ozs by start of FY 2014 (CY May 1, 2013) and onwards Cash costs to decrease through economies of scale and operating efficiencies 4% NSR to Kinross paid in full October 31, 2011and eliminated Low expansion capex due to use of existing infrastructure $57 M of $75 M expansion capital spent as of October 31, 2011 EXCELLENT EXPLORATION POTENTIAL IN PROLIFIC HISTORIC CAMP New high grade discovery (SMC) in historic camp in different geologic setting than quartz vein hosted Main Break, which produced 21.8 M ounces of gold SMC remains open in all directions and at depth 2012 exploration programs focused on SMC, step-out holes 2,000 feet to West of SMC, surface programs and more POLITICALLY SAFE JURISDICTION, CANADA 13,110 acres of property on 100% owned ground to explore and develop Fully permitted 24
CONTACT FOR FURTHER INFORMATION PLEASE CONTACT: Brian Hinchcliffe President and CEO and Director 705-567-5208 bhinchcliffe@klgold.com John Thomson CFO and Director 705-567-5208 jthomson@klgold.com Lindsay Carpenter Director of Investor Relations 416-840-7884 lcarpenter@klgold.com