Kirkland Lake Gold (TSX, NYSE:KL; ASX:KLA) announced that its Fosterville Mine is expected to break its own record quarterly production in the fourth quarter of 2018. Full-year production is now forecasted at 330,000 ounces. Previously reported guidance was established at 300,000-310,000 ounces.
In a press release, Kirkland Lake Gold said Fosterville's strong Q4 2018 performance reflects higher than expected grades and the advancement of two additional stopes from the high-grade Swan Zone into the mine's Q4 2018 production plan.
Fosterville is located near Bendigo in Australia's southeastern Victoria state. It is a high-grade, low-cost underground gold mine that started operations in 2005. Mineral reserves have been estimated in 1.70 million ounces at an average grade of 23.1 g/t Au, including 1.16 million ounces of mineral reserves in the Swan Zone at an average grade of 61.2 g/t Au.
On a quarter-to-date basis, the Toronto-based miner reported that the mill grade at Fosterville in Q4 2018 averaged over 35.0 grams per tonne, well above target levels for the quarter. The outperformance largely relates to increased operating development activity around the Swan Zone and higher than planned grades from development tonnes processed.
Based on the improved outlook for the Aussie operation, the company now anticipates that its full-year 2018 consolidated production will exceed the current target range of 655,000 - 670,000 ounces.
"Fosterville is clearly firing on all cylinders heading towards the end of the year, with Q4 2018 production on track to easily beat the current production record of 90,618 ounces, achieved last quarter," Tony Makuch, President and CEO of Kirkland Lake Gold, said in the media statement. "The higher than expected grades from both development and run-of-mine production, along with the exceptionally high grades reported from recent drilling results, provide confirmation that the presence of high-grade quartz veins with visible gold is more prolific than estimated in the current block model. Higher than planned grades are leading to increased levels of production in 2018 and are expected to favourably impact production levels in both 2019 and 2020," he added.