Mr. Anthony Makuch reports
KIRKLAND LAKE GOLD IDENTIFIES POTENTIAL NEW SOURCE OF GOLD PRODUCTION IN NORTHERN TERRITORY OF AUSTRALIA
Kirkland Lake Gold Ltd. has released positive drill results at Union Reefs, where the company's processing plant in the Northern Territory is located. The company's Northern Territory operations, including the Union Reefs mill and Cosmo mine, have been on care and maintenance since June 30, 2017.Four holes for 4,287 metres were drilled from surface to test the potential of the Prospect deposit, Crosscourse depositand the Lady Alice deposit, all related to historical open-pit mining activities at Union Reefs. The results indicate the continuation of gold mineralization at the three deposits below known mineral resources, and highlight the potential for mineral resource expansion at each location within the Union Reefs gold trends.
Drilling at Union Reefs is being conducted as part of a multilocation exploration program intended to establish economic deposits that may warrant the resumption of operations in the Northern Territory. Another key component of the program is exploration drilling and development at the Lantern deposit, located at the Cosmo mine site approximately 70 kilometres from Union Reefs. In December, 2017, the company announced drill results that significantly expanded the size of the Lantern deposit, and included the highest-grade intersection ever identified at Cosmo (4,750 grams per tonne gold over 0.3 metre, with an estimated true width (ETW) of 0.2 m), located approximately 250 m north of the known Lantern mineralization (see Kirkland Lake Gold news release dated Dec. 19, 2017). Underground development into the Lantern deposit from the existing Cosmo ramp commenced in early April, 2018, with total development to date of 120 m. In total, two exploration drifts are currently being developed to expose the Lantern mineralization and support underground drilling, mapping and sampling as the company works toward bringing the Lantern deposit into production.
Tony Makuch, president and chief executive officer of Kirkland Lake Gold, commented: "The potential to resume operations in the Northern Territory represents a significant opportunity to generate value for Kirkland Lake Gold. The success that we are having with the Lantern deposit at Cosmo, and now at Union Reefs, increases our confidence that we can establish an attractive five-year mine plan in the Northern Territory that will lead to profitable gold production that generates free cash flow. For some time, we have thought that establishing an operation that meets our key objectives of around 100,000 ounces of annual production at operating cash costs of under $650 per ounce and all-in sustaining costs of better than $950 per ounce would involve feeding the Union Reefs mill from multiple locations. The Lantern deposit is quickly advancing towards becoming an economic orebody, with progress expected to accelerate once we have completed our two exploration drifts. Today's results from Union Reefs represent a substantial extension of known mineralization, and highlight the potential that exists to identify additional economic deposits within our Northern Territory land position. Drilling is continuing at Union Reefs, following up on the latest results, including infill drilling, and exploring for new mineralized zones. With continued exploration success, we are increasingly confident that a decision to resume operations in the Northern Territory can be made."
Drilling highlights within Prospect, Crosscourse and Lady Alice at Union Reefs
Drill results reported today include four drill holes for a total of 4,287 m, which lie about 500 m north of the Union Reefs processing plant. The drilling was completed late in 2017 as part of the Northern Territory large ore deposit exploration (LODE) program, targeting existing mineral deposits at depth.It represents a successful program of large-scale, step-below drilling with results demonstrating the significant high-grade potential of Prospect, Crosscourse and Lady Alice.
Key intercepts are listed herein, with further details provided in the commentary that follows.
95.0 grams per tonne gold over 1.1 metres (ETW 1.0 m), including 161 g/t Au over 0.6 m (ETW 0.5 m) in hole URNDD0097 (Crosscourse); 10.8 g/t Au over 3.0 m (ETW 1.9 m), in hole URNDD0096W1 (Prospect); 22.2 g/t Au over 1.0 m (ETW 0.7 m) in hole URNDD0097W1 (Crosscourse); 25.6 g/t Au over 0.85 m (ETW 0.5 m) in hole URNDD0096W1 (Crosscourse); 20.5 g/t Au over 0.95 m (ETW 0.7 m) in hole URNDD0097W1 (Prospect); 15.6 g/t Au over 0.90 m (ETW 0.5 m) in hole URNDD0096 (Prospect); 7.3 g/t Au over 1.7 m (ETW 1.2 m) in hole URNDD0097W1 (Lady Alice).
Drill results are presented in the attached table.
All drill holes intersected significant mineralization for the Prospect and Crosscourse targets, with drill hole URNDD0097W1 extended farther east to also intersect the parallel Lady Alice target. The intersected mineralization occurs within large quartz-carbonate-chlorite veins (Prospect andLady Alice) or within stockwork vein systems (Crosscourse). Weak sericite alteration affects the metasedimentary host rocks adjacent to the veins, which have modest sulphides present, dominated by arsenopyrite and pyrite. The mineralization is also anomalous in base metals, as galena and sphalerite. Small amounts of visible gold have been observed in the drilling.
The drilling intercepts confirm that mineralization extends to over 1,000 m below surface. Past open-pit mining in the late 1990s and early 2000s was restricted to a 240-metre maximum depth from surface with no underground mining having occurred at Union Reefs since the late 1800s. The Prospect intercepts increase the mineralization footprint to over 500 m below existing measured and indicated and inferred mineral resources. The Crosscourse plunge extent is now extended by approximately 800 m below existing measured and indicated and inferred mineral resources. The Lady Alice drilling intercept occurs 800 m vertically below existing inferred mineral resources. Based on current drill data, the company believes that considerable potential exists for continued expansion of the Union Reefs mineral resources, both along strike and down plunge of all historical and present deposits. More information about existing mineral resources at Union Reefs is provided in the technical report, entitled, "Report on the Mineral Resources & Mineral Reserves of the Northern Territory Operations," effective Dec. 31, 2015, and dated March 21, 2016, available on SEDAR and on the company's website.
There are currently two surface diamond drill rigs operating in the Union Reefs region, testing areas around the existing deep intersections, as well as investigating the potential for additional deep mineralized structures.
Commencement of underground exploration development mining into Lantern
Underground development, to provide locations for drilling and underground exposures of Lantern mineralization, commenced in early April, with 120 m completed as at April 22, 2018. Development has focused on the upper 920-metre-level drill drive and will eventually expose Lantern mineralization for mapping and sampling to strengthen geological interpretations and enhance the understanding of gold grade distribution within the deposit.
Underground development is also progressing on the 610-metre-level drill drive, which will crosscut a lower portion of the Lantern mineralization, and be advanced farther westward to establish locations for drilling.Drilling from such locations will support potential expansion of the Lantern mineral resource at depth.The development is positioned to crosscut through Lantern mineralization down plunge of the high-grade drill intercept 1,624 g/t Au over 0.91 m (ETW 0.6 m) in hole LU73020, as previously reported (see press release dated Dec. 19, 2017, filed on SEDAR).
Union Reefs region -- background
Union Reefs is hosted in the regionally significant Pine Creek shear zone, as a northwest-trending strongly gold-mineralized structure. Gold mineralization at Union Reefs is focused within two subparallel quartz reef and shear zone systems, known as the Lady Alice line (eastern line) and the Union line (western line). Both lines have extensive gold mineralization that trends north-northwest through tightly folded siliciclastic rocks of the Burrell Creek formation.
Gold mineralization along the Lady Alice line is hosted within subvertical axial, planar shear zones along the western limb of the Lady Alice anticline. Important gold deposits along the Lady Alice line include Millar's, Ping Que, Big Tree and Lady Alice. The Union line dips steeply east and hosts several significant gold deposits, including Union South, Prospect, Union North and Alta.Crosscourse, the largest known deposit at Union Reefs, occurs between the Union and Lady Alice lines.A crosscutting mineralized shear zone and complex vein system link the locally shorter distance between the Union and Lady Alice lines at Crosscourse, creating a large dilatational damage zone exploited by mineralizing fluids.
The Union Reefs region was a centre of significant gold mining between 1994 and 2004, with approximately one million ounces of gold extracted from 11 open pits.Mining was generally from shallow oxide pits (less than 80 m), with the exception of the Crosscourse pit, which was mined to a depth of approximately 240 m and produced approximately 880,000 ounces of gold.Mining has not occurred at Union Reefs since 2004; however, the processing facility at the site continued operation until the Cosmo mine was placed on care and maintenance, effective June 30, 2017.
Qualified person
Mark Edwards, FAusIMM (CP), MAIG, project director, NT operations, is a qualified person as such term is defined in National Instrument 43-101 and has reviewed and approved the technical information and data included in this news release.
Drilling and assay quality assurance/quality control
Kirkland Lake Gold has in place quality control systems to ensure best practice in drilling, sampling and analysis of drill core. All diamond drill hole collarsare accurately surveyed using a Leica total stations instrument, and downhole deviations are measured using a downhole Gyro instrument.
All reported drill intercepts are from NQ2- or HQ3-sized diamond drill core that was sampled from core cut longitudinally in half with a diamond saw. One-half of the drill core was sent for assay, and the other half retained for reference. Drill core sample intervals vary between 0.15 and 1.4 m in length, were determined from logging of sulphide and visible gold, and conform to logged lithological and alteration boundaries.
Assay results are based on 25-gram-charge fire assay. Intercepts are calculated based on a two-gram-per-tonne-gold cut-off and having a maximum two-metre internal dilution with a minimum width of 0.3 m. No upper gold grade cap has been applied to the data. However, during any future mineral resource work, the requirement for capping assay grades will be assessed.
Drill samples from the Union Reefs are routinely assayed at North Australian Laboratories Pty. Ltd., an independent laboratory in Pine Creek, Northern Territory. Site audits and reviews of the laboratory are conducted from time to time, as well as routine assessment of intralaboratory analyses to ensure quality of reported results.
With the identification of significant, consistent high grades intersected in the drilling, testwork will be completed to ensure the suitability of sampling, assaying and QA/QC methods in the preparation and analysis of samples from all Union Reefs and Cosmo drill core.
About Kirkland Lake Gold Ltd.
Kirkland Lake Gold is a mid-tier gold producer with 2018 production targeted at over 620,000 ounces of gold from mines in Canada and Australia. The production profile of the company is anchored by two high-grade, low-cost operations, including the Macassa mine, located in Northeastern Ontario, and the Fosterville mine, located in the state of Victoria, Australia. Kirkland Lake Gold's solid base of quality assets is complemented by district-scale exploration potential, supported by a strong financial position with extensive management and operational expertise.
DRILLING INTERCEPTS FOR SURFACE DIAMOND DRILLING AT UNION REEFS Hole ID From (m)To (m) Downhole interval (m)Gold grade (g/t Au) Estimated true width (m)Crosscourse lodeURNDD0096 773.5774.55 1.04.20.8and 849.8 852.4 2.62.72.0and 858 861.5 3.52.12.7URNDD0096W1 723.7 724.5 0.87.70.6and 733.3 734.9 1.65.11.1and 739.5 742.5 3.02.91.9URNDD0096W1754.55 755.4 0.9 25.60.5and 765 772 7.02.84.5URNDD0097 1,129.1 1,132.2 3.13.12.7and 1,196.6 1,201.2 4.63.84.0and 1,208.0 1,211.0 3.02.82.6and 1,224.9 1,226.0 1.1 95.01.0including 1,225.4 1,226.0 0.61610.5URNDD0097W1 1,116.0 1,117.0 1.0 22.20.7and1,149.15 1,150.5 1.35.41.0and 1,153.81,156.75 3.02.22.1Lady Alice lodeURNDD0096 929.9930.750.85 10.40.7and 934.3 935.3 1.05.40.8URNDD0097W1 1,260.6 1,262.3 1.77.31.2Prospect areaURNDD0096537.95538.85 0.9 15.60.5and602.65602.95 0.3 16.10.2URNDD0096W1 642.5 645.5 3.0 10.81.9URNDD00971,063.25 1,065.1 1.82.91.6and 1,071.1 1,071.6 0.5 15.60.4and1,117.35 1,117.80.45 18.20.4URNDD0097W1 964.9965.850.95 20.50.7and 976.3 978 1.74.01.2
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