GOING FOR GOLD IN EVERYTHING WE DO...$332 --$250 $500 $750 $1,000 $1,250 $1,500 $1,750 2018A 2019E...
Transcript of GOING FOR GOLD IN EVERYTHING WE DO...$332 --$250 $500 $750 $1,000 $1,250 $1,500 $1,750 2018A 2019E...
GOING FOR GOLD IN EVERYTHING WE DO
KLGOLD.COM TSX: KL NYSE: KL ASX: KLA
PRECIOUS METALS SUMMIT | BEAVER CREEK, CO | September 2019
FORWARD-LOOKING INFORMATION
Cautionary Note Regarding Forward-Looking Information
The information in this presentation has been prepared as at September 6, 2019. This presentation contains “forward looking statements” and "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of Kirkland Lake Gold with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and include information regarding: (i) the amount of future production over any period; (ii) assumptions relating to revenues, operating cash flow and other revenue metrics set out in the Company's disclosure materials; and (iii) future exploration plans.
Investors are cautioned that forward-looking information is not based on historical facts but instead reflect Kirkland Lake Gold's management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Kirkland Lake Gold believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the future development and growth potential of the Canadian and Australian operations; the future exploration activities planned at the Canadian and Australian operations and anticipated effects thereof; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; and compliance with extensive government regulation. Exploration results that include geophysics, sampling, and drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such results do not provide assurance that further work will establish sufficient grade, continuity, metallurgical characteristics and economic potential to be classed as a category of mineral resource. A mineral resource that is classified as "inferred" or "indicated" has a great amount of uncertainty as to its existence and economic and legal feasibility. It cannot be assumed that any or part of an "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category of resource. Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever be converted into proven and probable reserves. This forward-looking information may be affected by risks and uncertainties in the business of Kirkland Lake Gold and market conditions. This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in filings made by Kirkland Lake Gold, including its annual information form, financial statements and related MD&A for the quarter ended June 30, 2019 and the financial year ended December 31, 2018, which are filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Kirkland Lake Gold 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. Kirkland Lake Gold does not intend, and do not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
All dollar amounts in this presentation are expressed in U.S. dollars except as otherwise noted. For further details of Kirkland Lake Gold’s Q2 2019 production results, please see the Company’s press releases dated July 10, 2019 and July 30, 2019. For further information on the Company’s three-year production guidance, including the assumptions and qualifications made, please see the Company’s press releases dated December 11, 2018 , February 21, 2019, May 7, 2019.
Use of Non-IFRS Measures
This Presentation refers to average realized price, operating costs, operating costs per ounce sold, all-in sustaining cost (“AISC”) per ounce of gold sold, free cash flow, sustaining capital expenditures and growth capital expenditure because certain readers may use this information to assess the Company’s performance and also to determine the Company’s ability to generate cash flow and meet its expenditure requirements. This data is furnished to provide additional information and are non-IFRS measures and do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”). These measures should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of operating costs presented under IFRS. Refer to each Company’s most recent MD&A for a reconciliation of these measures. 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, while total additions and construction in progress are the most comparable measures for sustaining and growth capital expenditures. Operating cash costs, operating cash cost per ounce sold and All-in sustaining costs (“AISC”) per ounce sold in the Company’s 2019 guidance reflect an average US$ to C$ exchange rate of 1.33 and a US$ to A$ exchange rate of 1.41 (as at June 30, 2019). Operating cash costs, operating cash cost per ounce sold and AISC per ounce sold for YTD 2019 reflect an average US$ to C$ exchange rate of 1.33 and a US$ to A$ exchange rate of 1.42.
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KL: DELIVERING SUPERIOR SHAREHOLDER RETURNS
3
2017175% Increase
201885% Increase
2019+62% YTD
TSX:KL
GDXJ
GDX
Factors Driving Outperformance
Growing low-cost productionIndustry leading earnings & cash flowExploration success and reserve growthIncreasing quarterly dividend Repurchasing shares No debt
4
2 Key Drivers of Performance – 82% of 2018 Production
1. See Non-IFRS Measures section in forward looking statements (Slide 2) as well as in the MD&A for the three and six months ended June 30, 2019.
Fosterville Macassa
P&P Mineral Reserves (kozs) 2,720 2,250
P&P Reserve Grade (g/t Au) 31.0 21.9
2019 Production Guidance (kozs) 570 – 610 240 – 250
2019 Op. Cash Costs Guidance ($/Oz Sold)1 130 – 150 400 – 420
HIGH-GRADE GOLD PRODUCTION IN AUSTRALIA AND CANADA
FostervilleMacassa
PRODUCTION: 33% CAGR1 (2016 – 20192)
51. Refers to compound annual growth rate.2. Assumes mid-point of 2019 production guidance.
FOSTERVILLE PRODUCTION GUIDANCE
2019: 570 – 610 kozs2020: 550 – 610 kozs2021: 570 – 610 kozsMACASSA PRODUCTION GUIDANCE
2019: 240 – 250 kozs2020: 230 – 240 kozs2021: 245 – 255 kozs
HOLT COMPLEX PRODUCTION GUIDANCE
2019: 140 – 150 kozs2020: 150 – 160 kozs2021: 180 – 190 kozs
155.2
313.7
596.4
723.7
930 – 1,010
2015(A) 2016(A) 2017(A) 2018(A) 2019(F) 2020(F) 2021(F)
(A) Actual.(F) Forecast.
950 – 1,000995 – 1,055Consolidated Production
(Kozs)
312
411447
503 – 553
H1 2018(A) H2 2018(A) H1 2019(A) H2 2019(F)
TARGETING RECORD HALF-YEAR IN H2 2019
(A) Actual.(F) Forecast.
FULL-YEAR 2019 PRODUCTION GUIDANCE
Fosterville: 570 – 610 kozsMacassa: 240 – 250 kozsHolt Complex: 140 – 150 kozs
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Consolidated Production (Kozs)
$571
$481
$362
$285 – $305
2016(A) 2017(A) 2018(A) 2019(F)
LOW UNIT COSTS DRIVE PROFITABILITY & CASH FLOW
OPERATING CASH COSTS ($/oz) 1
1. See Non-IFRS Measures section in forward-looking statements slide. 7
(A) Actual.(F) Forecast.
(A) Actual.(F) Forecast.
$930
$812
$685
$520 – $560
2016(A) 2017(A) 2018(A) 2019(F)
AISC ($/oz)1
312.3
446.5
YTD 2018 YTD 2019
$424
$301
YTD 2018 YTD 2019
$793
$597
YTD 2018 YTD 2019
STRONG YTD 2019 RESULTS (TO JUNE 30, 2019)
PRODUCTION (kozs) OPERATING CASH COSTS ($/oz) 1 AISC ($/oz) 1
1. See Non-IFRS Measures section in forward-looking statements slide. 8
43% Increase 29% Improvement 25% Improvement
570
769
918 883930
1,003
Kirkland Lake Gold Newcrest Agnico Eagle Barrick Newmont Kinross
2019 All-In Sustaining Cost/Oz Consensus Analyst Estimate 1,2
SUPERIOR UNIT COST PERFORMANCE
1. See Non-IFRS Measures section in forward-looking statements slide.2. Definitions of AISC may vary (KL has no byproduct credits).
Source: CIBC
9
$111.5$0.53/share
$214.3$1.02/share
YT D 2018 YT D 2019
$61.5$0.29/share
$104.2$0.50/share
Q2 2018 Q2 2019
2019 NET EARNINGSQ2 2019 NET EARNINGS ($ MILLIONS)
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Key Drivers of 2019 Profitability vs. 2018
Strong revenue growthImproved unit cost
69% growth from Q2 2018
92% growth from YTD 2018
YTD 2019 NET EARNINGS ($ MILLIONS)
KL: INDUSTRY-LEADING PROFITABILITY
1. See Non-IFRS Measures section in forward-looking statements slide.2. Mid-point used in cases where guidance ranges provided. 11
$1.04
$0.42 $0.41
$0.23 $0.19 $0.13
Kirkland Lake Gold Newcrest Newmont Agnico Eagle Barrick Kinross
YTD 2019 Adjusted Earnings Per Share (For Six Months Ended June 30, 2019)
Source: Bloomberg and company reports
257
332
469
416
SEP. 30/18 DEC. 31/18 MAR. 31/19 JUN . 30/19
STRONG GROWTH IN CASH POSITION
CASH POSITION ($ MILLIONS)
$52.2M in Q3 2018$86.4M in Q4 2018$93.1M in Q1 2019$53.0M in Q2 2019
Growing Free Cash Flow
Cash increased $137M or 41% in YTD 2019
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KL: STRONG FINANCIAL POSITION
13
$450
-$395
-$1,466 -$1,606
-$3,654
-$5,066-$5,500
-$4,500
-$3,500
-$2,500
-$1,500
-$500
$500
Kirkland Lake Gold Newcrest Kinross Agnico Eagle Barrick Newmont
Cash Less Total Debt (At June 30, 2019)
Source: Bloomberg
$332
--
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
2018A 2019E 2020E 2021E
Projected Cash Balance
• ORGANIC GROWTH• EXPLORATION• VALUE FOR SHAREHOLDERS
• Q2 2019 dividend increased to $0.04/share (US dollars)
• Conversion to US dollar dividend increased value of dividend ~34%
CASH OUTLOOK BASED ON IMPROVED GUIDANCE
Note: Assumes gold price of US$1,400/oz, USD:CAD of 1.32, USD:AUD of 1.43
TOP PRIORITIES
14
$469M1
(Jun. 30/19)
1. Cash and cash equivalents at June 30, 2019.
TRACK RECORD OF DIVIDEND GROWTH
KL QUARTERLY DIVIDEND ($ PER SHARE)
15
Background on KL Quarterly Dividend
Dividend policy adopted Mar. 2017First payment C$0.01/share Q2 2017Four dividend increases to dateDividend to be reviewed regularly as cash balance increases
C$0.01 C$0.01
C$0.02 C$0.02C$0.03
C$0.03
C$0.04 C$0.04
US$0.04
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
500% increase in dividend since Q2 2017~34% increase with payment in US dollars
C$0.06Equivalent
FOSTERVILLE MINE: BENDIGO, VICTORIA, AUSTRALIA
FOSTERVILLE: AN EMERGING WORLD LEADER IN GOLD PRODUCTION
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98.4 105.3123.1
151.2
263.8
356.2
570–610 550-610 570-610
2 0 1 3 ( A ) 2 0 1 4 ( A ) 2 0 1 5 ( A ) 2 0 1 6 ( A ) 2 0 1 7 ( A ) 2 0 1 8 ( A ) 2 0 1 9 ( F ) 2 0 2 0 ( F ) 2 0 2 1 ( F )
FOSTERVILLE – GROWING TO 600,000 OZS/YEAR
FOSTERVILLE GOLD PRODUCTION (KOZS)
December 11, 2018 three-year guidance
February 21, 2019 improved three-year guidance
390-430
500-540
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(A) Actual.(F) Forecast.
550 - 610May 7, 2019 revision to 2019 guidance
FOSTERVILLE’S TRANSFORMATION DRIVEN BY GRADE
Change in Mineralization
Quartz veins with visible gold key to increase reserve ounces and grade
Significant Growth in Mineral Reserve
2.7M ozs @ 31.0 g/t (Dec.31/18)1.7M ozs @ 23.1 g/t (Dec. 31/17)
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5.2 5.67.0
9.8
17.9
23.1
31.0
0
5
10
15
20
25
30
35
0
500
1,000
1,500
2,000
2,500
3,000
Dec. 31/13 Dec. 31/14 Dec. 31/15 Dec. 31/16 Jun. 30/17 Dec. 31/17 Dec. 31/18
Gram
s pe
r ton
ne
Thou
sand
s of O
unce
s
Fosterville Mineral Reserves
Ounces Grade
231
182
244
491
1,030
1,700
2,700
FOSTERVILLE – RECORD PRODUCTION IN Q2 2019Q2 2019 Production
140.7 kozs (82% growth from Q2 2018, 10% higher than 128.4 kozs in Q1 2019)Strong Unit Cost Performance in Q2 2019
Op. cash costs: $1201/oz; AISC: $318/oz1
Q2 2019 Capital Expenditures
Sustaining: $22.9 millionGrowth: $14.1 million2
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Q2 2019Tonnes: 111,280 Grade: 39.9 g/t Recovery: 98.7%Recovered: 140.7 kozs
Q2 2019 Earnings from Operations
$140.1 million
1. See Non-IFRS Measures section in forward-looking statements slide2. Excludes capitalized exploration expenditures
Q1 2019Tonnes: 140,184 Grade: 29.0 g/t Recovery: 98.3%Recovered: 128.4 kozs
FOSTERVILLE Q2 2019 MINE PLAN
FOSTERVILLE – ON TRACK TO ACHIEVE GUIDANCE
Production: 570 – 610 kozsOp. cash costs: $130 – $150/oz
Full-Year 2019 Guidance
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YTD 2019 Production
269.1 kozs (90% growth from YTD 2018)
Strong Unit Cost Performance for YTD 2019
Op. cash costs: $1321/oz; AISC: $316/oz1
Significant production growth planned in Q3 & Q4 2019
1. See Non-IFRS Measures section in forward-looking statements slide
2019 MINE PLAN
FOSTERVILLE – SIGNIFICANT EXPLORATION POTENTIALKey Points:
Extensive commitment to continued growthSignificant growth in Mineral Reserves achieved, more to comeMultiple targets with quartz veining & visible gold detectedLODE program provides camp potential
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LARGE ORE DEPOSIT EXPLORATION (“LODE”) PROGRAM: POTENTIAL FOR A NEW GOLD CAMP
FOSTERVILLE – IN-MINE TARGETS
22
9 KMSSTRIKE
HARRIER SOUTHHigh-potential target
Drilling commenced Q4 2018
SWANGrowing reserves
Identifying new targets
ROBBIN’S HILLHigh-potential target3 surface drills active
QUARTZ VEINS WITH VISIBLE GOLD
QUARTZ VEINS WITH VISIBLE GOLD
QUARTZ VEINS WITH VISIBLE GOLD
TOTAL RESERVE: 2.7 MILLION OUNCES @ 31.0 G/T (AS AT DECEMBER 31, 2018)
FOSTERVILLE – EXPLORATION MOVING FORWARD
Drilling extending mineralization along strikeVisible-gold intersected in drill core
HARRIER DEEP DRILLING – PLANNED FOR AUGUST TO END OF 2019
Robbin’s Hill
23
Lower Phoenix
Drilling extending mineralization to depthCygnet
Visible gold intersected in drill core
Harrier Deep
200 m exploration drift extension completedDrilling of deep anticline targets commencing
CANADIAN OPERATIONS IN NORTHERN ONTARIOCANADIAN OPERATIONS: THREE OPERATING MINES WITH TOTAL PRODUCTION OF ~8 MOZS OF GOLD
24
MACASSA – 5 MILLION OZS SINCE 1933
World Leader in Use of Battery-Powered Equipment
• Growing to over 400,000 ounces per year
25
• Mineral Reserves of 2.25 mozs @ 21.9 g/t
One of the lowest GHG emitters in the world
122.3155.2
175.2194.2
240.1
230-240
230-240245-255
+/- 400
2 01 4(A) 2015(A) 2016(A) 2017(A) 2018(A) 2019(F) 2020(F) 2021(F) 2022(F)
240-250
December 11, 2018 three-year guidance
May 7, 2019 revision to 2019 guidance
MACASSA – GROWING TO 400,000 OZS/YEAR
MACASSA GOLD PRODUCTION (KOZS)
26
(A) Actual.(F) Forecast.
MACASSA – YTD 2019 PRODUCTION OF 122.0 KOZS
27
YTD 2019 Production
49.2 kozs vs. 60.6 kozs in Q2 2018 and record production of 72.8 kozs in Q1 2019
YTD 2019 Unit Cost Performance
YTD 2019 Capital Expenditures
Sustaining: $32.1MGrowth: $58.8M
YTD 2019 Earnings from operations
$85.9M
1. See Non-IFRS Measures section in forward-looking statements slide
YTD production of 122.0 kozs, 6% higher than 114.6 kozs for YTD 2018
YTD: Op. cash costs: $384/oz1; AISC: $686/oz1
Q2 2019Tonnes: 72,681 Grade: 21.5 g/t Recovery: 97.9%Recovered: 49.2 kozs
Q1 2019Tonnes: 77,990 Grade: 29.6 g/t Recovery: 98.2%Recovered: 72.8 kozs
MACASSA – #4 SHAFT PROJECTKey Facts:
7,000 ft, 21.5 ft diameter concrete-lined shaftHosting capacity of 4,000 tpdTotal capital $320M:
Phase 1 $240MPhase 2 $80M
YTD 2019 capital expenditures: $42M
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Benefits
De-risks operationsUnlocks exploration potentialImproved working conditionsDoubles production (well over 400 kozs/year)Lowers unit costs
MACASSA – SIGNIFICANT EXPLORATION POTENTIAL
Key Facts: Main/’04 Break accounts for most of 25M ounces of gold produced in Kirkland LakeAmalgamated Break largely unexplored
29
MACASSA: KEY EXPLORATION TARGETS
30
MACASSA: LONG-TERM EXPLORATION POTENTIAL
31
#4 Shaft completion commences new phase of exploration in Kirkland Lake
Key Points:
KL: SUPERIOR PERFORMANCE – STRONG VALUE CREATION
1. See Non-IFRS Measures section in forward-looking statements slide 32
Growing low-cost production
Industry-leading unit costs, earnings and cash flow
Significant exploration potential to drive future growth
Building cash position while internally funding growth
Increasing dividends, buying-back shares
Share price increased 62% YTD 2019 (TSX)
APPENDIX
33
KL: DELIVERING SUPERIOR SHAREHOLDER RETURNS
34
2017175% Increase
201885% Increase
2019+62% YTD
TSX:KL
GDXJ
GDX
Market Information
Stock Symbols: TSX,NYSE: KL, ASX: KLAMarket Capitalization: $12.4BCommon Shares O/S $210.2MAv. Daily Volume 2.5M sharesQuarterly Dividend $0.04/share
NORTHERN TERRITORYACCELERATING ADVANCED EXPLORATION
Drilling commenced in Q2 2019Pine Creek
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Lantern and Cosmo
Drilling and development continuingResource model update continuingTest mining planned Union Reefs North/Prospect
Permitting for Prospect decline continuing
Development of Lantern Deposit in support of planned test mining
Lantern Deposit
Union Reefs South/Millars
Drilling in progress
HOLT COMPLEX HOLT, HOLLOWAY & TAYLOR MINES, HOLT MILL – POTENTIAL FOR GROWTH
36
Three mines and milling facility
Holloway mine resumed operations in early 2019 (on care and maintenance since Dec. 2016)
3,000 tpd processing capacity• Conventional CIL milling facility• 3 mill grinding circuit• Mill feed from Holt and Taylor mines
Production to increase• 24.7 Kozs Q2 2019• 55.4 kozs YTD 2019
Unit costs to improve as Holloway ramps up
Holt royalty structure impacts economics, Holloway royalty revised and amended
Attractive growth potential with improved economic structure
Gold Production (kozs)
Dec. 31/18 Dec. 31/17TONNES(000’S)
GRADE(g/t)
OUNCES (kozs)
TONNES(000’S)
GRADE(g/t)
OUNCES(kozs)
Reserves 4,588 4.4 644 4,744 4.3 663Resources1
(M&I)9,664 4.1 1,279 9,710 4.7 1,460
Resources (Inferred)
15,820 4.6 2,329 13,280 4.9 2,110
1. Mineral Resources are reported exclusive of Mineral Reserves. See Mineral Reserve and Mineral Resource disclosures at the end of the presentation.
MINERAL RESERVES AND MINERAL RESOURCES
HOLT MILL
56.4 55.4
YTD 2018 YTD 2019
Q2 2019 – SOLID EARNINGS AND CASH FLOW
1. See Non-IFRS Measures section in forward-looking statements slide2. Before changes in working capital 37
Solid production: 214.6 kozs
Low unit costs: op. cash costs $312/oz1, record AISC $638/oz1
Net earnings of $104.2 million ($0.50/share)• Adjusted net earnings $105.5 million ($0.50/share)1
Strong operating cash flow of $178.4 million ($0.88/share)2
Building financial strength while internally funding growth project• Cash increased $53.3 million or 13% to $469.4 million
YTD 2019 – RECORD HALF-YEAR
1. See Non-IFRS Measures section in forward-looking statements slide 38
Production: 446.5 kozs
Op. cash costs $301/oz1, record AISC $597/oz1
Net earnings of $214.3 million ($1.02/share)• Adjusted net earnings $217.7 million ($1.04/share)
Operating cash flow of $352.7 million ($1.68/share)
Free cash flow1 totalling $146.1 million
Strong growth in cash position• Cash increased $137.2 million or 41%
164.7180.2
231.2 231.9
0
50
100
150
200
250
Q 2 2 0 1 8 Q 3 2 0 1 8 Q 4 2 0 1 8 Q 1 2 0 1 9 Q 2 2 0 1 9
Q2 2019 – PRODUCTION
RECORD PRODUCTION AT FOSTERVILLE IN Q2 2019
FOSTERVILLE
MACASSA
HOLT COMPLEX
214.6
39
Q2 2019: 140.7 kozsQ1 2019: 128.4 kozsQ2 2018: 77.5 kozs
Q2 2019: 49.2 kozsQ1 2019: 72.8 kozsQ2 2018: 60.6 kozs
Q2 2019: 24.7 kozsQ1 2019: 30.7 kozsQ2 2018: 26.7 kozs
30% production growth from Q2 2018
YTD 2019 – PERFORMANCE AGAINST GUIDANCE
1. See Non-IFRS Measures section in forward-looking statements slide2. Includes general and administrative costs and severance payments. Excludes non-cash share-based payment expense 40
$ million unless otherwise states
2019 Guidance
YTD 2019 Actuals
AISC ($/oz)1 $520 – $560 $597
Operating cash costs1 $290 – $300 $133.7
Royalty expense $25 – $30 $15.0
Sustaining capital1 $150 – $170 $91.7
Growth capital1 $155 – $165 $88.3
Exploration $100 – $120 $72.3
Corporate G & A2 $26 – $28 $18.4
Macassa Holt Complex Fosterville 2019
GuidanceYTD 2019 Actuals
Production – 2019 guidance (kozs) 240 – 250 140 – 150 570 – 610 950 – 1,000
Production – YTD 2019 (ozs) 122.0 55.4 269.1 446.5
Op. cash costs ($/oz)1 $400 – $420 $660 – $680 $130 – $150 $285 – $305
Op. cash costs – YTD 2019 ($/oz) 1 $384 $906 $132 $301
Second-Half 2019 Outlook Production at Fosterville to increase Unit costs to improve Holt Complex production to increase,
costs to improve Macassa on track to achieve guidance
MINERAL RESERVES – DECEMBER 31, 2018
1. See Slide 43 and 44 for disclosures related to Mineral Reserves and Mineral Resources. 41
Mineral Reserves December 31, 2018 December 31, 2017Tonnes (000's)
Grade (g/t)
Gold Ozs(000’s)
Depleted Oz2017 (000’s)
Tonnes (000's)
Grade(g/t)
Gold Ozs (000’s)
Macassa 3,190 21.9 2,250 244 3,010 21.0 2,030Taylor 751 4.9 117 64 1,090 4.8 167Holt 3,580 4.3 491 75 3,600 4.2 486Hislop(1) 176 5.8 33 0 176 5.8 33Holloway(1) 257 4.3 36 1 54 5.8 10Total CDN Operations 7,950 11.4 2,920 384 7,930 10.7 2,730Fosterville 2,720 31.0 2,720 366 2,290 23.1 1,700Northern Territory(1) 666 5.0 107 0 2,800 2.4 215Total AUS Operations 3,390 25.9 2,820 366 5,090 11.7 1,910Total 11,340 15.8 5,750 750 13,020 11.1 4,640
MINERAL RESOURCES – DECEMBER 31, 2018
42
Measured & Indicated December 31, 2018 December 31, 2017Tonnes (000's)
Grade (g/t)
Gold Ozs (000’s)
Tonnes (000's)
Grade(g/t)
Gold Ozs (000’s)
Macassa 1,787 17.1 982 3,800 17.1 2,090Taylor 826 5.0 133 1,830 6.2 370
Holt 6,883 4.0 895 6,510 4.1 860Aquarius 22,300 1.3 926 22,300 1.3 930Holloway 1,955 4.0 251 1,370 5.3 230
Hislop 1,147 3.6 132 1,150 3.6 130Ludgate 522 4.1 68 520 4.1 70Canamax 240 5.1 39 240 5.1 40Total CDN Operations 35,660 3.0 3,426 37,720 3.9 4,720
December 31, 2018 December 31, 2017Fosterville 14,800 4.4 2,110 13,900 4.8 2,150Northern Territory 22,200 2.5 1,750 24,100 2.3 1,810
Total AUS Operations 36,900 3.3 3,860 38,000 3.2 3,960
1. See Slide 43 and 44 for disclosures related to Mineral Reserves and Mineral Resources.
MINERAL RESOURCES – DECEMBER 31, 2018
43
Inferred December 31, 2018 December 31, 2017Tonnes (000's)
Grade (g/t)
Gold Ozs (000’s)
Tonnes (000's)
Grade(g/t)
Gold Ozs (000’s)
Macassa 610 16.7 328 1,920 22.2 1,370Taylor 1,988 5.3 337 2,570 5.2 430Holt 8,523 4.7 1,286 8,000 4.8 1,220Holloway 5,309 4.1 706 2,710 5.2 460Hislop 797 3.7 95 800 3.7 100Ludgate 1,396 3.6 162 1,400 3.6 160Card 238 3.3 25 240 3.3 30Canamax 170 4.3 23 170 4.3 20Runway 213 3.7 25 210 3.7 20Total CDN Operations 19,253 4.8 2,987 18,020 6.6 3,810
Fosterville 10,300 5.5 1,830 8,280 7.1 1,900
Northern Territory 18,100 2.6 1,490 16,300 2.5 1,280
Total AUS Operations 28,400 3.6 3,320 24,580 4.0 3,180
1. See Slide 43 and 44 for disclosures related to Mineral Reserves and Mineral Resources.
FOOTNOTES TO MINERAL RESERVES AND MINERAL RESOURCES
44
Footnotes related to Mineral Reserve Estimates (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the calculation of Mineral Reserves.(2) Mineral Reserves were estimated using a long-term gold price of US$1,230/oz (C$1,635/oz; A$1,710/oz).(3) Cut-off grades for Canadian Assets were calculated for each stope, including the costs of: mining, milling, General and
Administration, royalties and capital expenditures and other modifying factors (e.g. dilution, mining extraction, mill recovery).(4) Cut-off grades for Australian Assets from 0.4 g/t Au to 3.0 g/t Au, depending upon width, mining method and ground
conditions; dilution and mining recovery factors varied by property.(5) Mineral Reserves estimates for the Canadian Assets were prepared under the supervision of Pierre Rocque, P. Eng.(6) Mineral Reserves estimates for the Fosterville property were prepared under the supervision of Ion Hann, FAusIMM.(7) Mineral Reserves estimates for the Northern Territory property were prepared under the supervision of Pierre Rocque, P.Eng.(8) Mineral Reserves for Fosterville relate to Underground Mineral Reserves and do not include 649,000 tonnes at an average of
7.7 g/t for 160,000 ounces of Carbon-In-Leach Residues - 25% recovery is expected based on operating performances.(9) Totals may not add exactly due to rounding.
Footnotes related to Mineral Resource Estimates for Canadian Assets (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the calculation of Mineral Resource.(2) Mineral Resources are reported Exclusive of Mineral Reserves. Mineral Resources were calculated according to KL Gold’s Mineral
Resource Estimation guidelines.(3) Mineral Resource estimates were prepared under the supervision of Eric Kallio, P. Geo. Senior Vice President, Exploration.(4) Mineral Resources are estimated using a long-term gold price of US$1,230/oz (C$1,635/oz).(5) Mineral Resources were estimated using a 8.6 g/t cut-off grade for Macassa, a 2.9 g/t cut-off grade for Holt, and a 2.6 g/t cut-off
grade for Taylor, a 3.9 g/t cut-off grade (Holloway), a 2.5 g/t cut-off grade for Canamax, Card, Runway and Ludgate, a 2.2 g/t cut-off grade for Hislop and 0 g/t cut-off grade for Aquarius.
(6) Totals may not add up due to rounding.
Footnotes related to Mineral Resource Estimates for Australian Assets (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the estimation of Mineral Resource.(2) Mineral Resources are estimated using a long-term gold price of US$1,230/oz (A$1,710/oz)(3) Mineral Resources for the Australian assets are reported exclusive of Mineral Reserves.(4) Mineral Resources at Fosterville were estimated using cut-off grades 0.7 g/t Au for oxide and 1.0 g/t Au for sulfide
mineralization to potentially open-pitable depths of approximately 100m, below which a cut-off grade of 3.0 g/t Au was used.(5) Mineral Resources in the Northern Territory were estimated using a cut-off grade of 0.5 g/t Au for potentially open pit
mineralization and cut-offs of 1.0 to 2.0g/t Au for underground mineralization.(6) Mineral Resource estimates for the Fosterville property were prepared under the supervision of Troy Fuller, MAIG.(7) Mineral Resource estimates for the Northern Territory properties were prepared under the supervision of Owen Greenberger,
MAIG.(8) Totals may not add up due to rounding.
MINERAL RESERVES AND MINERAL RESOURCES
Cautionary Note to U.S. Investors - Mineral Reserve and Resource Estimates
All resource and reserve estimates included in this news release or documents referenced in this news release have been prepared inaccordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Instituteof Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIMCouncil, as amended (the "CIM Standards"). NI 43-101 is a rule developed by the Canadian Securities Administrators, which establishedstandards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. The terms "mineralreserve", "proven mineral reserve" and "probable mineral reserve" are Canadian mining terms as defined in accordance with NI 43-101 and theCIM Standards. These definitions differ materially from the definitions in SEC Industry Guide 7 ("SEC Industry Guide 7") under the United StatesSecurities Act of 1933, as amended, and the Exchange Act.
In addition, the terms "Mineral Resource", "measured Mineral Resource", "indicated Mineral Resource" and "Inferred Mineral Resource" aredefined in and required to be disclosed by NI 43-101 and the CIM Standards; however, these terms are not defined terms under SEC IndustryGuide 7 and are normally not permitted to be used in reports and registration statements filed with the U.S. Securities and ExchangeCommission (the "SEC"). Investors are cautioned not to assume that all or any part of mineral deposits in these categories will ever beconverted into reserves. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and great uncertainty as totheir economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a highercategory. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, exceptin very limited circumstances. Investors are cautioned not to assume that all or any part of a Mineral Resource exists, will ever be convertedinto a Mineral Reserve or is or will ever be economically or legally mineable or recovered.
Qualified Persons
Natasha Vaz, P. Eng., Vice President, Technical Services is a “qualified person” as such term is defined in NI 43-101 and has reviewed and approved the technical information in this presentation.
45
FOOTNOTES TO MINERAL RESERVES AND MINERAL RESOURCES
46
Footnotes related to Mineral Reserve Estimates (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the calculation of Mineral Reserves.(2) Mineral Reserves were estimated using a long-term gold price of US$1,230/oz (C$1,635/oz; A$1,710/oz).(3) Cut-off grades for Canadian Assets were calculated for each stope, including the costs of: mining, milling, General and
Administration, royalties and capital expenditures and other modifying factors (e.g. dilution, mining extraction, mill recovery).(4) Cut-off grades for Australian Assets from 0.4 g/t Au to 3.0 g/t Au, depending upon width, mining method and ground
conditions; dilution and mining recovery factors varied by property.(5) Mineral Reserves estimates for the Canadian Assets were prepared under the supervision of Pierre Rocque, P. Eng.(6) Mineral Reserves estimates for the Fosterville property were prepared under the supervision of Ion Hann, FAusIMM.(7) Mineral Reserves estimates for the Northern Territory property were prepared under the supervision of Pierre Rocque, P.Eng.(8) Mineral Reserves for Fosterville relate to Underground Mineral Reserves and do not include 649,000 tonnes at an average of
7.7 g/t for 160,000 ounces of Carbon-In-Leach Residues - 25% recovery is expected based on operating performances.(9) Totals may not add exactly due to rounding.
Footnotes related to Mineral Resource Estimates for Canadian Assets (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the calculation of Mineral Resource.(2) Mineral Resources are reported Exclusive of Mineral Reserves. Mineral Resources were calculated according to KL Gold’s Mineral
Resource Estimation guidelines.(3) Mineral Resource estimates were prepared under the supervision of Eric Kallio, P. Geo. Senior Vice President, Exploration.(4) Mineral Resources are estimated using a long-term gold price of US$1,230/oz (C$1,635/oz).(5) Mineral Resources were estimated using a 8.6 g/t cut-off grade for Macassa, a 2.9 g/t cut-off grade for Holt, and a 2.6 g/t cut-off
grade for Taylor, a 3.9 g/t cut-off grade (Holloway), a 2.5 g/t cut-off grade for Canamax, Card, Runway and Ludgate, a 2.2 g/t cut-off grade for Hislop and 0 g/t cut-off grade for Aquarius.
(6) Totals may not add up due to rounding.
Footnotes related to Mineral Resource Estimates for Australian Assets (dated December 31, 2018)
(1) CIM definitions (2014) were followed in the estimation of Mineral Resource.(2) Mineral Resources are estimated using a long-term gold price of US$1,230/oz (A$1,710/oz)(3) Mineral Resources for the Australian assets are reported exclusive of Mineral Reserves.(4) Mineral Resources at Fosterville were estimated using cut-off grades 0.7 g/t Au for oxide and 1.0 g/t Au for sulfide
mineralization to potentially open-pitable depths of approximately 100m, below which a cut-off grade of 3.0 g/t Au was used.(5) Mineral Resources in the Northern Territory were estimated using a cut-off grade of 0.5 g/t Au for potentially open pit
mineralization and cut-offs of 1.0 to 2.0g/t Au for underground mineralization.(6) Mineral Resource estimates for the Fosterville property were prepared under the supervision of Troy Fuller, MAIG.(7) Mineral Resource estimates for the Northern Territory properties were prepared under the supervision of Owen Greenberger,
MAIG.(8) Totals may not add up due to rounding.