KL Gold releases high grade results at Detour on heels of US lawsuit

Kirkland Lake Gold Ltd. today announced results from 17 holes (7,176 m) of drilling at the Detour Lake property.  Of the 17 holes, three holes (2,520 m) were drilled west of the Main Pit in the Saddle Zone area, five holes (1,860 m) were drilled at the North Pit area and nine holes (2,796 m) were drilled at the 58 North area.

Tony Makuch, President  and CEO of Kirkland Lake Gold, commented: “A key driver in our decision to acquire Detour Gold was the potential to substantially increase Mineral Reserves at Detour Lake Mine in support of future production growth and improved unit costs. Our exploration program has definitely been impacted by COVID-19, and we would like to acknowledge the hard work of our exploration team in both ramping up our drilling program and in generating encouraging results in a very short period of time.  Virtually all holes reported today intersected significant mineralization. The Saddle Zone is a high-potential target in between the Main and West pits where there has been very little previous drilling. Today’s drill results highlight the potential for significant growth in open-pit Mineral Resources at attractive grades in the gap between the two pits, and also include intervals of high-grade mineralization at depth that are supportive of a potential underground mining concept. We also succeeded in extending mineralization at the North Pit location, to the northwest of the Main Pit, another important open-pit target. At 58 N, we intersected high-grade mineralization up to 175.0 m from the current Mineral Resource. These results are very encouraging as 58 N has the potential to be a standalone underground mining operation that could significantly enhance average grades by adding high-grade Mineral Reserves to our current open-pit production profile. 

“Looking forward, exploration work continues to ramp up, with two drills currently working, with that number to increase to four drills by August and six drills by October.  Drilling is currently focused on the Saddle Zone. We plan to complete about 70,000 m of drilling between now and the end of the year, with the remainder of the exploration program to be completed in 2021. As with both our Macassa and Fosterville operations, Detour Lake has considerable exploration upside, and we are very encouraged by the potential for value creation from continued exploration success.”

The Main Pit, West Pit and North Pit are located along the Detour Mine Trend (“DMT”), immediately north of the Sunday Lake Deformation Zone (“SLDZ”). The 58 North Zone (“58 N”) is located eight kilometers to the south near the Lower Detour Deformation Zone (“LDDZ”). These holes represent the first to be drilled as part of a 250,000 m exploration program to be completed by the end of 2021, which is designed mainly to collect information for an updated and potentially expanded Mineral Reserve and mine production plan.

A key focus of the Company’s initial exploration program at the Detour Lake Mine is drilling around the Main Pit, where the Company is targeting significant growth in Mineral Reserves. Initial drilling in the Saddle Zone near the Main Pit intersected broad zones of mineralization with attractive open-pit grades as well as intervals of significantly higher grades at depth which support the potential for a future underground mining operation below the Main Pit (still to be evaluated). The Saddle Zone is situated between the Main Pit and West Pit location and is an area that is under-explored, has no current Mineral Reserves and only limited Mineral Resources. Drilling at the North Pit area, located northwest of the Main Pit, intersected attractive open-pit grades and extended known mineralization to depth and along strike of the current Mineral Resources. 58 N is an additional exploration target, which the Company is investigating as a potential future underground mining operation. New drilling at 58 N intersected high-grade mineralization up to 175.0 m west of the current Mineral Resource. 

In the meantime, earlier in the day, Kirkland Lake Gold Ltd., was sued on Monday in U.S. federal court for allegedly defrauding shareholders about its business plans before its $4.1 billion purchase of Detour Gold Corp caused its stock to tumble.

In a proposed class action filed in U.S. District Court in Manhattan, shareholder Stephen Brahms accused Toronto-based Kirkland of making false and misleading statements during 2019 about its risks and two key mining metrics, all-in sustaining costs and reserve grade. Brahms said the statements artificially inflated Kirkland’s share price prior to Nov. 25, 2019, when the Detour purchase was announced and Kirkland shares fell 17.3 per cent in Toronto and 17.2 per cent in New York.

Kirkland’s chief executive, Tony Makuch, was also named as a defendant in the lawsuit, which seeks unspecified damages for Kirkland shareholders from Jan. 8 to Nov. 25, 2019.

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