Kirkland Lake unveils Macassa underground drill results

Kirkland Lake Gold’s Macassa Mine in northeastern Ontario. Source: Kirkland Lake Gold Ltd.

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Kirkland Lake Gold’s Macassa Mine in northeastern Ontario. Source: Kirkland Lake Gold Ltd.

Kirkland Lake Gold Ltd. [KL-TSX, NYSE, KLA-ASX] on Friday July 6 reported results from the latest round of underground drilling at the Macassa Mine in northeastern Ontario, where the company is targeting upgrades and expansions to the current resources.

A number of high-grade intervals were reported, including 241 g/t gold over 1.1 metres (true width), 24.3 g/t over 1.4 metres (true width) and 54.2 g/t gold over 2.3 metres (true width).

Those results are from drill holes located southeast of the #4 Shaft, which is planned for completion in early 2022.

A total of 20 holes (7,560 metres) of underground drilling from the 5300 east exploration shaft were released on Friday.

High-grade results are located within the 259-metre eastern extension of the South Mine Complex. Also notable are a number of footwall intersections related to the South Mine Complex.

On Friday, Kirkland Lake shares advanced 1.9% or $0.55 to $29.44. The 52-week range is $29.74 and $11.17.

Kirkland Lake Gold is a mid-tier gold producer with 2018 production target of over 620,000 ounces of gold from mines in Canada and Australia. Its production profile is anchored by two high-grade, low cost operations, including the Macassa Mine and Fosterville Mine in Victoria, Australia.

At the end of 2017, the Macassa Mine deposit hosted reserves of 3 million tonnes, grading 21 g/t gold, or 2 million ounces. Kirkland Lake is spending $240 million for the Macassa shaft #4 in order to double the production at the mine.

“We view today’s exploration results positively, as in our view, they further reinforce the capex decision for the #4 shaft,” Scotiabank wrote in a research report.

Kirkland Lake recently said it has expanded a new high-grade gold zone below its Taylor Mine in northeast Ontario on the fabled Porcupine Destor Fault.

The Taylor Mine, located in Matheson, is expected to produce between 60,000 and 70,000 ounces of gold this year, according to the company’s production guidance.

The company said recent drilling occurred at depth below both the East and West Porphyry deposits; at a prospective target area situated down-dip from the Shaft Deposit and east of the West Porphyry Deposit, and on strike to the east along the hanging wall of the Porcupine Destor Fault (PDF).

Results announced in an April 25, 2018 press release include 60 holes or 26,257 metres of surface drilling and 31 holes, or 5,512 metres of underground drilling. This program was completed in late 2017 and early 2018.

Kirkland Lake said the drill intersections provide significant results at all three of the company’s key exploration targets at Taylor Mine. At the West Porphyry Deposit, the results of surface drilling include a 150 metre extension of the new high-grade zone first reported last December (2017)

The zone has now been identified over an area between 350 metres and 500 metres below existing mining (780 metres and 930 metres below surface).

“Included in our plan to increase Kirkland Lake Gold’s annual production to a million ounces within five to seven years is growth in both production levels and mine life at Taylor mine,” said Kirkland Lake President and CEO Tony Makuch.

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