TORONTO, July 28, 2021 (GLOBE NEWSWIRE) -- Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or the “Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today announced the Company’s financial and operating results for the second quarter (“Q2 2021”) and first six months (“YTD 2021”) of 2021. The results included record quarterly net earnings and earnings per share driven by strong operating results and revenue growth, largely reflecting continued outperformance at Fosterville. All three of the Company’s cornerstone assets increased production compared to both the second quarter of 2020 (“Q2 2020”) and the previous quarter (“Q1 2021”). The Company also reported solid earnings growth in YTD 2021 compared to the first six months of 2020 (“YTD 2020”), resulting largely from increased revenue. The Company’s full financial statements and management discussion & analysis are available on SEDAR at www.sedar.com and on the Company’s website at www.kl.gold. All dollar amounts are in U.S. dollars, unless otherwise noted.

Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold commented: “We had an excellent quarter in Q2 2021 highlighted by record earnings, record quarterly production, strong revenue growth and significant increases in both operating and free cash flow. All three of our cornerstone assets increased production during Q2 2021, with Fosterville having a particularly successful quarter based largely on continued grade outperformance. In addition, we benefited from solid unit costs performances at all three operations, resulting in operating cash costs and AISC for the quarter that were better than full-year guidance. Also, during Q2 2021, we continued to generate very encouraging drill results and advanced our many growth and business improvement projects at Detour Lake, all of which are being completed as part of our work to transform Detour Lake into one of the world’s largest and most profitable gold mines. We also continued to achieve excellent progress at Macassa, with the #4 Shaft project remaining ahead of schedule and new drill results continuing to intersect wide, high-grade mineralization outside of existing Mineral Reserves. Our financial strength continued to improve during Q2 2021, with cash increasing to $858.4 million, and we remain committed to returning capital to shareholders, renewing our normal course issuer bid and introducing an automatic share purchase plan. We returned $158.6 million to shareholders during the first half of 2021 and have returned an additional $37.7 million in July through our Q2 2021 dividend payment and by repurchasing 945,000 shares through the NCIB.”

RECORD NET EARNINGS AND EPS IN Q2 2021
Net earnings of $224.2M ($0.91/share), 67% increase from Q2 2020, 51% higher than Q1 2021; Adjusted EPS(1)of $246.9M ($0.92/share) in 02 2021

STRONG PRODUCTION GROWTH IN Q2 2021
379,195 oz in Q2 2021, up 15% from Q2 2020 and 25% the previous quarter; 682,042 oz in YTD 2021, 3% increase from YTD 2020

Q2 2021 UNIT COSTS BEAT FY 2021 GUIDANCE
Q2 2021 op. cash costs(1) of $431/oz sold, AISC(1) of $780/oz vs FY 2021 guidance of 450 – $475/oz and $790 – $810/oz, respectively

ON TRACK TO ACHIEVE FY 2021 GUIDANCE
Company now targeting top half of FY production guidance (1,300,000 – 1,400,000 oz), maintains unit cost and capital expenditure guidance

STRONG CASH FLOW GENERATION IN Q2 2021
Op. cash flow of $330.6M, up 49% and 59% from Q2 2020 and Q1 2021; Free cash flow(1) of $131.2M, up 39% from Q2 2020, triple Q1 2021 level

RETURNED $158.6M TO SHAREHOLDERS
Paid $100.3M in dividends in YTD 2021, used $58.3M to repurchase 1,374,100 shares

CONTINUED EXPLORATION SUCCESS
Continued drilling success in Saddle Zone at Detour Lake; New results at Macassa expand mineralization in multiple areas

EXCELLENT PROGRESS WITH GROWTH PROJECTS
Macassa #4 Shaft remains ahead of schedule; growth projects at Detour Lake advancing on plan

PROGRESS WITH ESG INITIATIVES
Significant financial commitments made in support of local communities, further progress achieved towards goal of net-zero emissions by 2050 or earlier
SUMMARY OF PERFORMANCE

Q2 2021

Net earnings of $244.2 million ($0.91 per share), 63% increase from $150.2 million ($0.54 per share) in Q2 2020 and 51% higher than $161.2 million ($0.60 per share) the previous quarter; Adjusted net earnings(1) of $246.9 million ($0.92 per share), 13% increase from $219.3 million ($0.70 per share) in Q2 2020 and $167.8 million ($0.63 per share) in Q1 2021.
Cash flows including net cash provided by operating activities of $330.6 million and free cash flow(1) of $131.2 million.
Revenue of $662.7 million, 14% increase from Q2 2020 and 20% higher than the previous quarter; Revenue of $662.7 million reflected gold sales of 364,575 ounces and an average realized gold price(1) of $1,814 per ounce.
EBITDA(1)(2)of $451.3 million, 46% higher than Q2 2020 and 32% increase from Q1 2021.
Capital expenditures totalling $163.9 million, with sustaining capital expenditures(1) accounting for $81.4 million and growth capital expenditures(1) totalling $82.5 million.
Exploration expenditures totalled $45.7 million, including $38.7 million of capitalized expenditures and $7.0 million of expensed exploration expenditures.
Continued c ommitment to returning capital to shareholders
Normal Course Issuer Bid (the “NCIB”): Renewed in June 2021; Company eligible to repurchase up to 26,694,105 shares between June 9, 2021 and June 8, 2022
Automatic Share Purchase Plan (“ASPP”): Introduced subsequent to renewal of 2021 NCIB; Designated broker may purchase up to 5,000,000 shares at its sole discretion based on purchasing parameters set out by Company until expiry of the NCIB on June 8, 2022, until all shares are purchased under the NCIB; or until ASPP is terminated by Company in accordance with provisions of ASPP.
$62.0 million returned to shareholders: Including $50.1 million for the payment of Q1 2021 quarterly dividend of $0.1875 per share on April 14, 2021 to shareholders of record on March 31, 2021, with $12.0 million being used to repurchase 300,000 shares in June following the renewal of the Company’s NCIB (all shares were repurchased through the ASPP); Subsequent to quarter end, additional 945,000 shares repurchased for $37.7 million
Cash at June 30, 2021 of $858.4 million versus $792.2 million at March 31, 2021 and $847.6 million at December 31, 2020 with no debt; Increase in cash during Q2 2021 largely resulted from strong cash flow, which more than offset impact of higher capital expenditures and income tax paid in Q2 2021, as well as the $62.0 million of cash returned to shareholders.
Solid operating results
Production 379,195 ounces, 15% increase from 329,770 ounces in Q2 2020 and 25% higher than 302,847 ounces the previous quarter
Production costs of $159.7 million
Operating cash costs per ounce sold(1) of $431 in Q2 2021 compared to $374 in Q2 2020 and $542 in Q1 2021
AISC per ounce sold(1) of $780 compared to $751 in Q2 2020 and $846 in Q1 2021.

(1) See “Non-IFRS Measures” in this press release and on pages 25 – 42 of the MD&A for the three and six months ended June 30, 2021.
(2) Refers to Earnings before Interest, Taxes, Depreciation, and Amortization.
YTD 2021

Net earnings of $405.4 million ($1.52 per share), 15% increase from $353.1 ($1.32 per share) in YTD 2020; Adjusted net earnings(1) of $414.7 million ($1.55 per share) versus $398.5 million ($1.49 per share) in YTD 2020.
Cash flows including net cash provided by operating activities of $538.7 million and free cash flow(1) of $173.9 million.
Revenue of $1,214.6 million, an increase of $78.9 million or 7% from $1,135.7 million in YTD 2020; Revenue of $1,214.6 million reflected gold sales of 672,605 ounces and an average realized gold price(1) of $1,802 per ounce.
EBITDA(1)(2)of $792.2 million compared to $701.2 million in YTD 2020.
Capital expenditures of $270.7 million, with sustaining capital expenditures(1) accounting for $141.9 million and growth capital expenditures(1) totalling $128.8 million.
Exploration expenditures totalled $88.1 million, including $75.6 million of capitalized expenditures and $12.5 million of expensed exploration expenditures.
$158.6 million returned to shareholders, $100.3 million for two quarterly dividends, both totalling $0.1875 per share, with the Q4 2020 payment made on January 14, 2021 to shareholders of record on December 31, 2020 and Q1 2021 quarterly dividend paid on April 14, 2021 to shareholder of record on March 31, 2021; $58.3 million used to repurchase 1,374,100 shares through the Company’s NCIB (1,074,100 shares repurchased in January 2021 for $46.3 million and 300,000 shares repurchased in June through ASPP for $12.0 million).
Solid operating results versus full-year 2021 guidance
Production 682,042 ounces, a 3% increase from YTD 2020 (Full-year 2021 guidance: 1,300,000 – 1,400,000 ounces).
Production costs of $329.8 million
Operating cash costs per ounce sold(1) of $482 compared to $407 in YTD 2020 (Full-year 2021 guidance: $450 – $475 per ounce sold)
AISC per ounce sold(1) of $810 compared to $763 in YTD 2020 (Full-year 2021 guidance: $790 – $810 per ounce sold).

(1) See “Non-IFRS Measures” in this press release and on pages 35 – 42 of the MD&A for the three and six months ended June 30, 2021.
(2) Refers to Earnings before Interest, Taxes, Depreciation, and Amortization.
Q2 2021 – Other Key Highlights

Progress towards key value-creation catalysts

Detour Lake: After releasing a new technical report and life-of-mine plan (“LOMP”) on March 31, 2021(1), which included significant production growth and improved unit costs compared to previous operating experience, Detour Lake continued to achieve significant exploration success and advance key growth projects during Q2 2021. The full impact of exploration success achieved and business improvement initiatives undertaken since the acquisition of Detour Lake will be included in a new technical report and LOMP targeted for release during the first half of 2022. The Company expects the new technical report and LOMP to include significant value creation opportunities for the Detour Lake operation.

Macassa: The #4 Shaft project remained over a month ahead of schedule at the end of Q2 2021 and was on track for completion in late 2022. Once completed, production at Macassa is targeted to grow to over 400,000 ounces per year at significantly improved unit costs. In addition, working conditions will be improved at the mine, with total ventilation expected to more than double. The new shaft will also promote future exploration activities as the Company works to continue to grow the South Mine Complex (“SMC”) and to explore the Main/’04 Break and Amalgamated Break across the Kirkland Lake camp.

Fosterville: In addition to achieving stronger than expected operating results in both Q2 2021 and YTD 2021, other key areas of progress were achieved during YTD 2021 in support of future exploration and operating success. In the Lower Phoenix System, a new drill drive (Drill Drive 3912) was completed in June 2021 with five underground drills being deployed by the end of the month to test the down-plunge extension of the Swan Zone. In addition, the twin exploration drive from the Falcon Pit at Fosterville to Robbin’s Hill reached a total of 5,557 metres of advance as of June 30, 2021, with underground drilling of Robbin’s Hill targets now expected to commence in Q3 2021.
Commitment to Responsible Mining: Early in 2021, the Company pledged to achieve net-zero carbon emissions by 2050 or earlier and followed that pledge with a commitment to invest $75 million per year for five years on technology, innovation and in providing community support. During Q2 2021, progress was achieved in a number of key areas in support of the Company’s responsible mining commitments. In the area of community support, the Company launched a $12 million Australian Community Partnership Program to support post-COVID recovery services in the Bendigo area, with partnerships entered into to date including: Haven Home Safe; Bendigo Foodshare; Bendigo Tech School – Girls in STEAM; Bendigo Basketball Stadium; North Central Local Learning and Employment Network (LLEN); and Axedale Camp Getaway. In Kirkland Lake, Ontario, the Company committed $4.1 million to fund multiple projects at the Kirkland Lake Hospital, including the redevelopment of the hospital’s Emergency Department, as well as the procurement of significant equipment encompassing mammography, ultrasound, and point-of-care laboratory equipment. Building on its leadership in minimizing and reducing carbon emissions, the Company took additional steps in Q2 2021 to achieve further reductions, including completing third-party greenhouse gas audits of its operations and improving tracking and modeling of emissions levels. In addition, the Company continued to build its battery-powered fleet at Macassa, adding a second Z-50 haul truck, the world’s first 50-tonne battery-powered underground haul truck.

COVID-19 Response: The Company’s health and safety protocols related to the COVID-19 pandemic remained in place throughout Q2 2021 and were enhanced with the roll out of vaccination programs for employees at Macassa and Detour Lake. In Kirkland Lake, the Company worked with the local health unit to make vaccines available to all employees at Macassa, with Detour Lake running vaccination clinics at the Cochrane Bus Terminal for employees, contractors and members of the local community starting in late June.

In late April 2021, 11 workers (employees and contractors) at Macassa’s near-surface exploration ramp project tested positive for the COVID-19 virus. The event was classified as an outbreak under the criteria followed by the local health unit. During the outbreak, work on the exploration ramp was suspended for approximately seven days while the entire project workforce was tested using rapid testing kits. Work resumed at the project with no additional transmissions being reported and the outbreak was deemed resolved by the local health unit on May 12, 2021.

At Detour Lake, 9 workers (employees and contractors) tested positive for COVID-19 in late May, which was also classified as an outbreak by the local health unit. During this time, the Company added additional resources to complete rapid testing in the camp at Detour, completing more than 1,000 tests in less than 36 hours. Two additional positive results were identified as a result of this testing. The outbreak was declared resolved on June 4, 2021 and no further positive tests have occurred since the outbreak in May.

(1) Readers are referred to the Company’s Press Release dated February 25, 2021 and the Company’s NI 43-101 Technical Report entitled “Detour Lake Operation, Ontario, Canada, NI 43-101 Technical Report” effective December 31, 2020 as filed with the applicable regulatory authorities and the detailed Mineral Reserve and Mineral Resource estimates and footnotes set out therein.

REVIEW OF FINANCIAL AND OPERATING PERFORMANCE

Table 1. Financial and Operating Performance
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