TORONTO, Feb. 19, 2020 (GLOBE NEWSWIRE) -- Kirkland Lake Gold Ltd. (“Kirkland Lake Gold” or the “Company”) (TSX:KL) (NYSE:KL) (ASX:KLA) today announced the launch of the Value Enhancement Program, a number of initiatives aimed at maximizing value for shareholders. Included among the initiatives are returning significant amounts of capital to shareholders, growing both production and Mineral Reserves through the addition of the Detour Lake mine to the Company’s portfolio and designating assets as non-core where they are not generating adequate returns. The Company also today released updated 2020 guidance, incorporating the impact of the Value Enhancement Program and released Mineral Reserve and Mineral Resource estimates for December 31, 2019.

Details Value Enhancement Program Initiative Include:

Repurchasing 20 million shares: 20 million common shares to be repurchased over the next 12 – 24 months through the Company’s normal course issuer bid (“NCIB”). Pursuant to the terms of the current NCIB, the Company can repurchase up to 19,749,092 shares between now and the NCIB’s expiry on May 28, 2020. The Company plans on renewing the NCIB upon its expiry. The Company also announces its intention to enter into an automatic share purchase plan with its designated broker to allow for purchases to be completed on a pre-determined schedule, subject to the approval of the TSX. Assuming the closing prices on the NYSE and TSX on Tuesday, February 18, 2020, the 20 million of share repurchases would represent approximately $750 million (C$1,000 million).
Doubling quarterly dividend to $0.125 per share: Quarterly dividend increased to $0.125 per share effective Q1 2020 to be paid on April 13, 2020 to shareholders of record as of March 31, 2020. On an annual basis, the $0.50 per share of dividends will return approximately $145 million of capital to shareholders per year.
Adding approximately 600,000 ounces of annual production and 14.8 million ounces of Mineral Reserves through acquisition of Detour Lake Mine: Completion of the Detour Gold Corporation acquisition on January 31, 2020 adds approximately 600,000 ounces of annual production and 14.8 million ounces of Mineral Reserves. The Company plans to invest $25 – $30 million in 2020 on exploration drilling at Detour Lake, with the objective being to significantly grow Mineral Reserves in support of substantially increasing production and driving down unit costs. The addition of Detour Lake is expected to add significantly to the Company’s free cash flow in 2020 and going forward.
Considering strategic options for maximizing value at Holt Complex and in Northern Territory: Following completion of the Detour Gold acquisition, the Company has designated the Holt Complex in Northern Ontario and the Company’s assets in the Northern Territory in Australia as non-core with plans to consider all options to maximize value from these assets. The Holt Complex last year produced 113,952 ounces at operating cash costs of $938 per ounce and all-in sustaining costs (“AISC”) of $1,386 per ounce. The Company is currently conducting an advanced exploration program and doing rehabilitation work at the Northern Territory assets. The advanced exploration program includes test mining at the Cosmo Mine, test processing at the Union Reefs Mill and extensive regional diamond drilling. The Company plans to continue operating the Holt Complex and move forward with advanced exploration work and rehabilitation efforts in the Northern Territory while it considers strategic options for the assets.
Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold, commented: “Following completion of the Detour Gold acquisition, Kirkland Lake Gold is a company with three high-quality, free cash flow generating assets, Fosterville, Macassa and Detour Lake. The three operations together will produce around 1.4 million ounces of gold this year, and all three have substantial growth potential. We are also an industry leader in profitability and have the strongest balance sheet among our peers. We plan to put our financial strength to use to maximize value for our shareholders. Between our cash on hand and the significant amounts of free cash flow we generate, we are in a position to commit a substantial amount of capital to repurchase our shares, and to double our current quarterly dividend. Very importantly, we can undertake these initiatives while still maintaining a strong balance sheet and ability to internally fund our growth projects.

“We are also taking steps to maximize the value of our business portfolio. The addition of Detour Lake is an important development for our company and our shareholders, that could be transformational from the standpoint of value creation. Results at Detour this year should be similar to the mine’s performance in 2019. Looking ahead, through the work we are planning, we see the potential for Detour Lake to reach over 700,000 ounces of annual production at all-in sustaining costs (“AISC”) of approximately $850 per ounce as early as 2021. With the quality and potential of our three key operations, and circumstances at other assets, we have decided to designate our Holt Complex and assets in the Northern Territory as non-core and will consider all options for maximizing value. We will continue our current work plans at each of these assets while we go through the strategic review process. With the initiatives being announced today, Kirkland Lake Gold is a company with a portfolio of highly competitive, very profitable assets and substantial financial strength. We are also a company that is very committed to rewarding shareholders for their continued support.”

REVISIONS TO FULL-YEAR 2020 GUIDANCE

On February 19, 2020, the Company announced revisions to the full-year 2020 consolidated guidance initially issued on December 18, 2020. The revisions to guidance reflect the addition of Detour Lake Mine to the Company’s business portfolio effective January 31, 2020 (guidance is based on pro forma results for the full year). Guidance for 2020 related to the Holt Complex remains in place while the Company reviews strategic options for these assets. Also, there is no impact on guidance from the Company’s advanced exploration work in the Northern Territory, as the Company’s Northern Territory assets were excluded from the initial 2020 guidance.

Initial 2020 Guidance (as at December 18, 2019)

($ millions unless otherwise stated) Macassa Holt Complex Complex(2) Fosterville Consolidated
Gold production (kozs)(1) 240 – 250 120 – 140 590 – 610 950 – 1,000
Operating cash costs/ounce sold ($/oz)(2) $470 - $490 $790 - $810 $130 - $150 $300 - $330
AISC/ounce sold ($/oz)(2) $570 - $630
Operating cash costs ($M)(2) $310 - $320
Royalty costs ($M) $58 - $62
Sustaining capital ($M)(2) $165 - $175
Growth capital ($M)(2) $70 - $80
Exploration ($M)(3) $120 - $140
Corporate G&A ($M)(4) $40 - $45
(1) Production and unit-cost guidance for 2020 as issued in a press release dated December 18, 2019. The guidance does not include results for the Northern Territory.
(2) See “Non-IFRS Measures” set out starting on page 38 of the MD&A for the three and twelve months ended December 31, 2019 for further details. The most comparable IFRS Measure for operating cash costs, operating cash costs per ounce sold and AISC per ounce sold is production costs, as presented in the Consolidated Statements of Operations and Comprehensive Income, and total additions and construction in progress for sustaining and project capital. Operating cash costs, operating cash cost per ounce sold and AISC per ounce sold reflect an average US$ to C$ exchange rate of 1.30 and a US$ to A$ exchange rate of 1.43.
(3) Exploration expenditures include capital expenditures related to infill drilling for Mineral Resource conversion, capital expenditures for extension drilling outside of existing Mineral Resources and expensed exploration.
(4) Includes general and administrative costs. Excludes non-cash share-based payment expense.

Revised Full-Year 2020 Guidance (as at February 19, 2020

see & read more on
https://www.klgold.com/news-and-media/press-release-details/2020/Kirkland-Lake-Gold-Announces-Value-Enhancement-Program-Increases-2020-Production-Guidance-and-Grows-Mineral-Reserves/default.aspx