TORONTO, ONTARIO--(Marketwired - Aug. 4, 2016) - Kirkland Lake Gold Inc. (TSX:KGI) -
H1 and Q2 2016 Highlights
Pre-released gold production of 130,613 ounces (68,338 in Q2/16);
Sold 141,453 ounces of gold (72,144 ounces in Q2/16);
Realized an average price per ounce of gold sold of US$1,211 (US$1,271 in Q2/16);
Operating costs per ounce of gold sold(1) of US$641 (based on total production expenses(1) of C$159,482) (US$667 based on total production expenses(1) of C$81,740 during Q2/16);
All-in sustaining costs per ounce of gold sold(1) ("AISC") of US$925 (US$990 in Q2/16);
Generated $227.9 million in revenue ($118.1 million in Q2/16);
Realized net and comprehensive income of $26.3 million ($13.8 million in Q2/16) and $26.6million ($14.0 million in Q2/16) respectively, or $0.24 per share ($0.12 per share in Q2/16);
Generated free cash flow(1) of $57.3 million ($31.9 million in Q2/16);
Ended the quarter with a cash balance of $157.5 million;
Subsequent to quarter end, closed a flow-through financing for proceeds of $15 million;
The Company remains on track to meet its production guidance of between 270,000 to 290,000 ounces for 2016.
Kirkland Lake Gold Inc. ("Kirkland Lake Gold" or the "Company"), an intermediate gold producer with operations in Ontario, Canada, today announces second quarter financial results for the three ("Q2/16") and six months ("H1/16") ended June 30, 2016. All figures in this release are in Canadian dollars unless stated otherwise.
"Kirkland Lake delivered another quarter with positive earnings, free cash flow and a strengthened balance sheet," said Anthony Makuch, President & CEO. "With the recently closed flow-through financing of $15 million, we will become more aggressive in exploring our highly prospective land position in both the Kirkland Lake camp and along the Porcupine-Destor Fault Zone. We look forward to providing an update on our exploration programs as they become available."
Financial Summary
The Company changed its fiscal year from an April 30th year-end to a December 31st calendar year end effective January 1, 2016. As such, for comparative purposes, the current quarter results will be compared to a similar period in the previous year (see table below). The Company also reminds readers that since Q1/16, all measurements are in metric as opposed to its previous form of imperial measurements. The conversions are 1 short ton = 0.9072 tonnes; and 1 troy ounce per ton = 34.2857 grams per metric tonne ("g/t").

The following abbreviations are used to describe the periods under review throughout this press release.
Abbreviation Period Abbreviation Period
H1/16 January 1, 2016 - June 30, 2016 Q1/SY15 May 1, 2015 - July 31, 2015
Q2/16 April 30, 2016 - June 30, 2016 Q4/15 February 1, 2015 - April 30, 2015
Q1/16 January 1, 2016 - March 31, 2016 Q3/15 November 1, 2014 - January 31, 2015
Q3/SY15 November 1, 2015 - December 31, 2015 Q2/15 August 1, 2014 - October 31, 2014
Q2/SY15 August 1, 2015 - October 31, 2015
The Company reported net and comprehensive income for the quarter of approximately $13.8 million and $14.0 million respectively, or $0.12 per share compared to $4.2 million or $0.05 per share for the quarter ended July 31, 2015 (Q1/SY15).
Free cash flow for the quarter was $31.9 million compared to $3.1 million during Q1/SY15, reflecting higher realized gold prices, lower AISC, and increased production and sales subject to the additional production from the Holt-Holloway and Taylor mines. With the free cash flow generation during the quarter, the Company had $157.5 million in cash and cash equivalents at quarter end compared to $81.14 million at July 31, 2015 (Q1/SY15).
*Comparative figures and consolidated results do not include results from the Holloway-Holt and Taylor mines prior to close of the transaction with St Andrew Goldfields Ltd. ("St Andrew"), on January 26, 2016.

*All figures in CAD$ unless otherwise stated Q2/16 Q1/SY15 6 monthsended Jun 30/16 6 months ended Jul 31/15
Average CAD/USD for the period 1.2886 1.2481 1.3302 1.2483
Gold Sales (ounces) 72,144 39,109 141,453 80,313
Average Realized Price (US$ per Oz Sold)(1) 1,271 1,187 1,211 1,194
Revenue (000's) 118,143 61,723 227,931 119,657
Production Expense 81,740 45,463 159,482 89,013
General and Administrative 6,433 1,541 10,675 3,717
Exploration 4,129 2,196 6,710 3,995
Finance Expense 5,172 6,094 10,720 10,033
Finance Income (1,309 ) (1,016 ) (1,549 ) (2,808 )
Income before Income Taxes 21,978 7,445 41,893 15,707
Provision for Income Taxes 8,214 3,216 15,610 3,604
Operating Cost per tonne(1) 208 407 234 400
Operating Cost (US$ per Oz Sold)(1) 667 678 641 676
Capital Development Investment 18,755 9,498 35,482 20,395
Purchase of Property, Plant and Equipment 2,266 1,366 5,633 3,368
AISC (US$ per Oz Sold)(1) 990 956 925 991

Operations Overview
Kirkland Lake Gold pre-released production results with a total of 68,338 ounces of gold production In Q2/16 and a total of 130,613 ounces for H1/16. The operations performed well during the quarter with grades, recoveries, and throughput all in line with expectations.
The cost per tonne of $208 achieved during the quarter was positively impacted by higher throughput which was mainly driven by the contribution of the Holt-Holloway and Taylor mines and higher tonnes from Macassa, as well as additional tonnes from the low grade stockpiles. As such, the cost per tonne was substantially lower when compared to a cost per tonne of $407 for the similar period in the previous year (Q1/SY15). The operating cost per ounce sold of US$667 was lower in Q2/16 when compared to an operating cost per ounce sold of US$691 in Q1/SY15 as a result of the Holt-Holloway and Taylor mines contribution.
For H1/16, the operating costs were slightly higher than the top end of guidance, but are expected to decrease in the second half of the year as production at Macassa moves into higher grade stopes, and throughput continues to increase at both Holt and Taylor.
A breakdown of operational performance at each operation is summarized in the table below.
*H1/16 results do not include results from the Holloway-Holt and Taylor mines prior to close of the transaction with St Andrew Goldfields Ltd. ("St Andrew"), on January 26, 2016.
Financial KPIs Q2/16 Macassa Holt Holloway Taylor Consolidated
Gold Sold (ounces) 41,344 13,407 5,080 12,313 72,144
Operating cost per tonne milled 302 125 174 125 208
Operating cost per gold ounce sold (US$) 645 877 1,204 476 667
Capital Spending (000s) 13,091 5,171 631 2,114 21,007
AISC per ounce Sold (US$) 1,003 1,147 1,343 638 990
Financial KPIs 6 months ended Jun 30/16 ("H1/16") Macassa Holt Holloway Taylor Consolidated
Gold Sold (ounces) 82,159 26,815 10,139 22,340 141,453
Operating cost per tonne milled 327 124 174 127 234
Operating cost per gold ounce sold (US$) 589 817 1,128 472 641
Capital Spending (000s) 27,206 8,707 1,010 4,192 41,115
AISC per ounce Sold (US$) 923 1,047 1,240 640 925

Exploration
During Q2/16 exploration programs continued to focus on underground drilling at the Macassa Mine Complex, regional surface drilling testing the easterly strike extension of the South Mine Complex ("SMC"), as well as underground drilling from the 4250' Level testing the up-dip extension of the '04 Break mineralization.
The Company released results from underground drilling from the 5300' Level exploration drift testing the SMC further to the south, which expanded the known zone of mineralization. Infill drilling was able to join two previous zones (the Hanging Wall Zone and the New South Zone) with three new intersections which returned similar grades and widths (see press release dated May 24, 2016, available on the Company website www.klgold.com).
Exploration drilling commenced at the Taylor and Holloway mines during the quarter. At Taylor drilling targeted both the easterly and westerly strike extension of the West Porphyry Zone (which includes the 1004 lens; the area currently being mined). At Holloway drilling commenced west of the mine property, which will test for mineral potential associated with the mafic volcanic / ultramafic contact. A second drill is active on the Holloway property to test the easterly strike extension of the Deep Thunder Zone, which lies approximately 1 kilometre east of the Smoke Deep Zone.
Subsequent to quarter end, the Company closed a non-brokered flow-through financing for proceeds of approximately $15 million, to be spent before December 31, 2017. As such, the Company plans to increase its previous budget of $18 million to $24 million, which will include $6 million flow-through dollars. The focus will be to increase the Company's efforts on the regional exploration program in the Kirkland Lake Camp, and to drill test targets along the Porcupine-Destor Fault Zone.

H1/16 Key Performance Indicators
The 2016 guidance metrics issued on April 14, 2016, are summarized against the results for the six months ended June 30, 2016. The AISC(1) have been positively affected in Q2/16 due to the lower spend on Property, Plant & Equipment ("PP&E") which is attributable to the timing in the delivery of equipment. As such, the AISC(1) is expected to be higher over the next two quarters.
2016 Guidance Guidance Metrics H1/16 Results
270,000 - 290,000 Gold Production (ounces) 130,613
7.7 Head Grade (g/t Au) 8.2
US$600 - $650 Operating Costs(1) (US$/Oz Sold) US$641
US$1,000 - $1,050 All-In Sustaining Costs(1) (US$/Oz Sold) US$925
For a description of risk factors affecting the Company and 'Forward Looking Information', see the Company's Annual Information Form for the year ended December 31, 2015, and the Company's MD&A for the period ended June 30, 2016, filed with certain securities regulatory authorities in Canada and available on SEDAR at www.sedar.com. For a description and reconciliation of Non-GAAP measures please see below and refer to Appendix B of the Company's MD&A for period ended June 30, 2016, as filed on SEDAR at www.sedar.com, or at the end of this release.