KLGOLD.COM TSX: KL OTCQX: KLGDF March 29, 2017 INVESTOR PRESENTATION TIER ONE GOLD PRODUCTION | DISTRICT SCALE EXPLORATION | VALUATION UPSIDE 1
KLGOLD.COM FORWARD LOOKING STATEMENTS TSX:KL Cautionary Note Regarding Forward-Looking Information This presentation contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of KL Gold with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and include information regarding: (i) the amount of future production over any period; (ii) assumptions relating to revenues, operating cash flow and other revenue metrics set out in the Company's disclosure materials; and (iii) future exploration plans. Specifically, this news release contains forward-looking statements regarding, among other things, forecast gold production of between 500,000 and 525,000 ounces in 2017; estimated 2017 total operating costs between $625 and $675 per ounce; estimated 2017 all-in sustaining costs of between $950 and $1,000 per ounce sold; and growth exploration expenditures between $45 million to $55 million. Investors are cautioned that forward-looking information is not based on historical facts but instead reflect KL Gold's management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although KL Gold believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the ability of KL Gold to successfully integrate the operations and employees of its Canadian and Australian operations, and realize synergies and cost savings, and to the extent, anticipated; the potential impact on exploration activities; the potential impact on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; the re-rating potential following the consummation of the merger; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; and compliance with extensive government regulation. This forward-looking information may be affected by risks and uncertainties in the business of KL Gold and market conditions. This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in filings made by Kirkland Lake Gold and Newmarket with the Canadian securities regulators, including Kirkland Lake Gold's and Newmarket'srespective annual information form, financial statements and related MD&A for the financial year ended December 31, 2015 and their interim financial reports and related MD&A for the period ended December 31, 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 informationprove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although KL Gold 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. KL Gold does not intend, and do not assume any obligation, to update this forward-looking information except as otherwise required by applicable law. All dollar amounts in this presentation are expressed in U.S. Dollars unless otherwise noted. Use of Non-GAAP Measures This Presentation refers to average realized price, operating costs, all-in sustaining costs per ounce of gold sold, free cash flow and cash costs of production because certain readers may use this information to assess the Company’s performance and also to determine the Company’s ability to generate cash flow. This data is furnished to provide additional information and are non-GAAP measures and do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) . These measures should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of operating costs presentedunder IFRS. Refer to each Company’s most recent MD&A for a reconciliationof these measures.
KLGOLD.COM WHY INVEST IN KL GOLD? TSX:KL • 2017 guidance of ~ 525,000 1 ounces from five gold mines in Canada & Australia Operating Platform in Tier • Macassa Mine ( FY/16 175koz ) & Fosterville Mine ( FY/16 151koz ) record results 1 Mining Jurisdictions • Macassa Mineral Reserve increased 37% to 2.0 million oz grading 20.8 g/t Au 2 • Fosterville Mineral Reserve increased 66% to 643,000 oz grading 9.2 g/t Au 2 • Cash Position US$235 million 3 Strong Balance Sheet • Consolidated 2016 full year operating cost US$571/oz and AISC US$923/oz and Q4/16 & Low Cost Production operating cost US$533/oz and AISC US$883/oz 4 1 • Significant discovery and expansion potential in established gold camps District Scale • +20 drill rigs in operation across Canada & Australia Exploration Potential • 2017 growth exploration budget of US$45 - $55 million Strong Value Proposition 5 8.6 $4,873 5.9 Enterprise value $2,714 2017 Price to to ounce of 2017 Cash flow production KL Gold Peer Average KL Gold Peer Average 1. Refer to Slide 2 “Forward Looking Information” 2017 estimated production guidance 500,000 – 525,000 ounces 2. Refer to appendix for NI 43-101 Disclosure and News Release dated March 27, 2017 for additional year-end 2016 Mineral Reserves and Resources detail 3.Cash position as at Dec 31, 2016, 2016 4. See Non-GAAP Measures sections in forward looking statements; Operating Cash Costs per ounce and AISC per ounce reflect an average USD to CAD exchange rate of 1.28 and a USD to AUD exchange rate of 1.28, for additional detail see Kirkland Lake Press release dated Feb 27, 2017 for additional detail. 5. Source: Company filings, FactSet and available equity research at Mar 24, 2017. Production and 3 Cash Flow are broker consensus averages exclude Kirkland Lake.
KLGOLD.COM TSX:KL OPERATING PLATFORM IN TIER 1 MINING JURISDICTIONS 600,000 542,751 oz 550,000 2016 Gold Production By Country • Canadian gold operations exceeded 2016 500,000 guidance of 270k – 290k ounces 450,000 • Australian operations exceeded 2016 350,000 production guidance of 225k – 235k ounces 400,000 295,838 oz Consolidated 2016 1 operating cost per • 300,000 350,000 ounce 2 of $571 , well below the lowest 239,724 oz 300,000 range of the operating cost guidance of 250,000 US$600-$650 250,000 200,000 • Consolidated all in sustaining cost (“AISC”) 200,000 per ounce 2 of $923 in 2016 versus guidance 150,000 150,000 of US$1,000-1,050 100,000 100,000 1 Pro Forma Consolidated Canadian Operations Australian Operations 1.Pro forma information operating results from: (i) the former Newmarket Gold Inc. (“ Newmarket ”) assets for the entire 12 -month period ended December 31, 2016 including the period from January 1, 2016 to November 29, 2016 prior to the merger with Kirkland Lake Gold Inc. (“KLG”) on November 30, 2016 (See Newmarket Press Release dated November 3, 2016); and (ii) the Holt Mine Complex for the entire 12-month period ended December 31, 2016, i ncluding the period of January 1, 2016 to January 25, 2016 prior to the acquisition of St Andrew Goldfields Ltd. (“SAS”) by K LG on January 26, 2016 (See KLG press release dated May 12, 2016). See Press Releases dated January 9, 2017 and February 27, 2017 filed on the SEDAR profile of the Company 4
KLGOLD.COM STRONG FINANCIAL POSITION TSX:KL STRONG BALANCE SHEET (as at December 31, 2016) CAPITAL STRUCTURE & OWNERSHIP (as at December 31, 2016) 1, 2 Cash US$235 million Issued & Outstanding 203 million Convertible Debentures US$85 million Market Capitalization (TSX) +CAD$ 1.9 billion (March 1, 2017) KGI.DB: 6% C$15.00 Conv. Price C$56.8M mature June 2017 KGI.DB.A: 7.5% C$13.70 Conv. Price C$62.0M mature Dec 2017 Daily Avg. Volume – 50 day 1.2 million shares (February 15, 2017) Net Cash US$150 million Insider Ownership ~10% (Eric Sprott) DIVIDEND POLICY INITIATED ✓ Change in reporting currently to US$ for December 31, 2016 year end financial results Quarterly dividend of C$0.01 per common share ✓ No gold hedging in place Payable on July 14, 2017 to shareholders of record on June 30, 2017 Fosterville Gold Mine, Australia Macassa Gold Mine, Canada 1 Cash position is as at December 31, 2016 News Release dated March 29, 2017 2 Non- GAAP measures, refer to slide 2 “Cautionary Language”, Canadian: US Dollar exchange $0.75 5
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