Kirkland Lake Gold Reports Strong Earnings for the Second Quarter of 2016 and Free Cash Flow Generation of $31.9 Million

• Pre-released gold production of 130,613 ounces (68,338 in Q2/16);
• Sold 141,453 ounces of gold (72,144 ounces in Q2/16);
• Realized an average price per ounce of gold sold of US$1,211 (US$1,271 in Q2/16);
• Operating costs per ounce of gold sold⁽¹⁾ of US$641 (based on total production expenses⁽¹⁾ of C$159,482) (US$667 based on total production expenses⁽¹⁾ of C$81,740 during Q2/16);
• All-in sustaining costs per ounce of gold sold⁽¹⁾ (“AISC”) of US$925 (US$990 in Q2/16);
• Generated $227.9 million in revenue ($118.1 million in Q2/16);
• Realized net and comprehensive income of $26.3 million ($13.8 million in Q2/16) and $26.6million ($14.0 million in Q2/16) respectively, or $0.24 per share ($0.12 per share in Q2/16);
• Generated free cash flow⁽¹⁾ of $57.3 million ($31.9 million in Q2/16);
• Ended the quarter with a cash balance of $157.5 million;
• Subsequent to quarter end, closed a flow-through financing for proceeds of $15 million;
• The Company remains on track to meet its production guidance of between 270,000 to 290,000 ounces for 2016.

Kirkland Lake Gold Inc. (“Kirkland Lake Gold” or the “Company“), an intermediate gold producer with operations in Ontario, Canada, today announces second quarter financial results for the three (“Q2/16”) and six months (“H1/16”) ended June 30, 2016. All figures in this release are in Canadian dollars unless stated otherwise.
“Kirkland Lake delivered another quarter with positive earnings, free cash flow and a strengthened balance sheet,” said Anthony Makuch, President & CEO. “With the recently closed flow-through financing of $15 million, we will become more aggressive in exploring our highly prospective land position in both the Kirkland Lake camp and along the Porcupine-Destor Fault Zone. We look forward to providing an update on our exploration programs as they become available.”
Financial Summary
The Company changed its fiscal year from an April 30^th year-end to a December 31^st calendar year end effective January 1, 2016. As such, for comparative purposes, the current quarter results will be compared to a similar period in the previous year (see table below). The Company also reminds readers that since Q1/16, all measurements are in metric as opposed to its previous form of imperial measurements. The conversions are 1 short ton = 0.9072 tonnes; and 1 troy ounce per ton = 34.2857 grams per metric tonne (“g/t”).
The following abbreviations are used to describe the periods under review throughout this press release.

The Company reported net and comprehensive income for the quarter of approximately $13.8 million and $14.0 million respectively, or $0.12 per share compared to $4.2 million or $0.05 per share for the quarter ended July 31, 2015 (Q1/SY15).
Free cash flow for the quarter was $31.9 million compared to $3.1 million during Q1/SY15, reflecting higher realized gold prices, lower AISC, and increased production and sales subject to the additional production from the Holt-Holloway and Taylor mines. With the free cash flow generation during the quarter, the Company had $157.5 million in cash and cash equivalents at quarter end compared to $81.14 million at July 31, 2015 (Q1/SY15).
*Comparative figures and consolidated results do not include results from the Holloway-Holt and Taylor mines prior to close of the transaction with St Andrew Goldfields Ltd. (“St Andrew”), on January 26, 2016.

Operations Overview
Kirkland Lake Gold pre-released production results with a total of 68,338 ounces of gold production In Q2/16 and a total of 130,613 ounces for H1/16. The operations performed well during the quarter with grades, recoveries, and throughput all in line with expectations.
The cost per tonne of $208 achieved during the quarter was positively impacted by higher throughput which was mainly driven by the contribution of the Holt-Holloway and Taylor mines and higher tonnes from Macassa, as well as additional tonnes from the low grade stockpiles. As such, the cost per tonne was substantially lower when compared to a cost per tonne of $407 for the similar period in the previous year (Q1/SY15). The operating cost per ounce sold of US$667 was lower in Q2/16 when compared to an operating cost per ounce sold of US$691 in Q1/SY15 as a result of the Holt-Holloway and Taylor mines contribution.
For H1/16, the operating costs were slightly higher than the top end of guidance, but are expected to decrease in the second half of the year as production at Macassa moves into higher grade stopes, and throughput continues to increase at both Holt and Taylor.
A breakdown of operational performance at each operation is summarized in the table below.
*H1/16 results do not include results from the Holloway-Holt and Taylor mines prior to close of the transaction with St Andrew Goldfields Ltd. (“St Andrew”), on January 26, 2016.

Exploration
During Q2/16 exploration programs continued to focus on underground drilling at the Macassa Mine Complex, regional surface drilling testing the easterly strike extension of the South Mine Complex (“SMC”), as well as underground drilling from the 4250′ Level testing the up-dip extension of the ’04 Break mineralization.
The Company released results from underground drilling from the 5300′ Level exploration drift testing the SMC further to the south, which expanded the known zone of mineralization. Infill drilling was able to join two previous zones (the Hanging Wall Zone and the New South Zone) with three new intersections which returned similar grades and widths (see press release dated May 24, 2016, available on the Company website www.klgold.com).
Exploration drilling commenced at the Taylor and Holloway mines during the quarter. At Taylor drilling targeted both the easterly and westerly strike extension of the West Porphyry Zone (which includes the 1004 lens; the area currently being mined). At Holloway drilling commenced west of the mine property, which will test for mineral potential associated with the mafic volcanic / ultramafic contact. A second drill is active on the Holloway property to test the easterly strike extension of the Deep Thunder Zone, which lies approximately 1 kilometre east of the Smoke Deep Zone.
Subsequent to quarter end, the Company closed a non-brokered flow-through financing for proceeds of approximately $15 million, to be spent before December 31, 2017. As such, the Company plans to increase its previous budget of $18 million to $24 million, which will include $6 million flow-through dollars. The focus will be to increase the Company’s efforts on the regional exploration program in the Kirkland Lake Camp, and to drill test targets along the Porcupine-Destor Fault Zone.
H1/16 Key Performance Indicators
The 2016 guidance metrics issued on April 14, 2016, are summarized against the results for the six months ended June 30, 2016. The AISC⁽¹⁾ have been positively affected in Q2/16 due to the lower spend on Property, Plant & Equipment (“PP&E”) which is attributable to the timing in the delivery of equipment. As such, the AISC⁽¹⁾ is expected to be higher over the next two quarters.

For a description of risk factors affecting the Company and ‘Forward Looking Information’, see the Company’s Annual Information Form for the year ended December 31, 2015, and the Company’s MD&A for the period ended June 30, 2016, filed with certain securities regulatory authorities in Canada and available on SEDAR at www.sedar.com. For a description and reconciliation of Non-GAAP measures please see below and refer to Appendix B of the Company’s MD&A for period ended June 30, 2016, as filed on SEDAR at www.sedar.com, or at the end of this release.
Q2/16 Earnings Call and Webcast (August 5, 2016)
The Company will hold a conference call to discuss these results tomorrow, Friday August 5, 2016, at 11:00am EDT. The Company invites you to participate via teleconference, the details of which are outlined below and are available on the Company’s website at www.klgold.com.
Participant Dial-In Numbers
Toll-Free North America: +1 (877) 201-0168; Local and International: +1 (647) 788-4901
Conference ID: 56310259
Replay Dial-In Numbers
Local and International: +1 (404) 537-3406
Toll Free North America: +1 (855) 859-2056 / +1 (800) 585-8367
Conference ID: 93207658
Replay Available Until: November 5, 2016 at 11:59PM ET
Qualified Persons
Production at the various operations and processing at the Company’s milling facilities are under the supervision of Mr. Chris Stewart, P.Eng, the Vice President of Operations. The Company’s exploration programs are under the supervision of Mr. Doug Cater, P.Geo, the Vice President of Exploration.
Messrs. Stewart and Cater are ‘qualified persons’ for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects, of the Canadian Securities Administrators, and have reviewed and approved this news release. As the Vice President of Operations and Vice President of Exploration, Messrs. Stewart and Cater are not considered independent.
Selected Financial Information & Review of Overall Performance
*Comparative figures and consolidated results do not include results from the Holloway-Holt and Taylor mines prior to close of the transaction with St Andrew Goldfields Ltd. (“St Andrew”), on January 26, 2016.

Non-GAAP Financial Measures
The Company has included non-GAAP performance measures throughout this document. These include: cash inflows from operations per share, free cash flow, free cash flow per share, operating cost per tonne of ore produced, operating cost and AISC per ounce of gold sold, average realized sales price and working capital. Operating cost per tonne of ore produced and operating cost and AISC per ounce of gold sold are common performance measures in the mining industry but do not have any standardized meaning. The guidance provided by the World Gold Council for calculating AISC was reviewed and followed. Total operating costs include mine site operating costs (mining, processing and refining, in-mine drilling expenditures, administration, and production taxes), but are exclusive of other costs (royalties, depreciation and depletion, off-site corporate costs, reclamation, capital, long-term development and exploration). The Company considers all capital spending to be sustaining in nature with the exception of development towards the Ghost zone at the Holt mine. During Q2/16, $1.0 million in development costs ($1.1 million in H1/16) were related to development towards Ghost and as such have been removed from AISC. These measures, along with sales, are considered by the Company to be indicators of the Company’s ability to generate operating earnings and free cash flows from its mining operations. The Company believes that certain investors use this information to evaluate the Company’s performance and ability to generate cash flows. These should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of production costs presented under IFRS. The following tables provide reconciliation of such costs to the Company’s financial statements for the periods as noted:

About the Company
Kirkland Lake Gold Inc. is a Canadian focused, intermediate gold producer with assets in the historic Kirkland Lake gold camp, and east of the Timmins gold camp along the Porcupine-Destor Fault Zone, both in northeastern Ontario. The Company is currently targeting annual gold production of between 270,000 to 290,000 ounces from its cornerstone asset, the Macassa Mine Complex and the recently acquired East Timmins Operations.
The Company is committed to building a sustainable mining company that is recognized as a safe and responsible gold producer with quality assets in safe mining jurisdictions.
The Toronto Stock Exchange has neither reviewed nor accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward-Looking Statements
This Press Release contains statements which constitute “forward-looking statements” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to the future business activities and operating performance of the Company. The words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to the Company, are intended to identify such forward-looking statements. Investors are cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made such as, without limitation, opinion, assumptions and estimates of management regarding the Company’s business, including but not limited to; the continued development of the operations (Macassa, Holt-Holloway and Taylor) and the anticipated timing thereof, estimated production results including ounces and head grade, the ability to lower costs and gradually increase production across all the operations; and the anticipated timing and commencement of exploration programs along the Porcupine-Destor Fault Zone. Such opinions, assumptions and estimates, are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.
These factors include the Company’s expectations in connection with the projects and exploration programs being met, the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating gold prices, currency exchange rates (such as the Canadian dollar versus the United States Dollar), possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company’s corporate mineral reserves and resources, changes in project parameters as plans continue to be refined, changes in project development, construction, production and commissioning time frames, the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, unexpected changes in mine life, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, and limitations on insurance, as well as those risk factors discussed or referred to in the Company’s annual Management’s Discussion and Analysis and Annual Information Form for the year ended December 31, 2015, and the Company’s Management’s Discussion and Analysis for the interim period ended June 30, 2016, 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 statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company 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. The Company does not intend, and does not assume any obligation, to update these forward-looking statements except as otherwise required by applicable law.
⁽¹⁾ The Company has included the following non-GAAP performance measures in this press release; average realized price per ounce of gold sold, operating cost per tonne and operating cost per ounce sold, AISC per ounce sold, and free cash flow. These are common performance measures in the mining industry but do not have any standardized meaning. Refer to the end of this press release or Appendix B of the MD&A for a reconciliation of these measures to the accompanying financial statements.