Page 10 Contd on pg 12 Page 10 MLEN SPRING 2020 By Kevin V incent The year of COVID19 did not stop Kirkland Lake Gold from turning in a healthy frst quarter of 2020 and President T ony Makuch gave credit to KL Gold employees contractors and suppliers I think with the knowledge of peo ple at Kirkland Lake Gold we def nitely had a pretty solid quarter in Q1 2020 and a lot of adversity but you can see where quality people rise to the occasion And a lot of our suppliers and thirdparty con tractors as well we see there s a lot of quality people in this industry But the other thing that really hap pened is that our people did an ex cellent job protecting themselves and each other and also turned in a very solid quarter of performance in the quarter Makuch told inves tors and journalists in an early May conference call A Healthy Balance Sheet The company s frst quarter pro duction was 330864 ounces Cash costs were 440 an ounce and all in sustaining costs averaged 776 an ounce Excluding Detour the numbers av eraged 319 and 619 an ounce respectively The strong unit cost numbers are encouraging given the highly unusual circumstances in Q1 W e reported net earnings of 079 per share and 070 per share on an adjusted basis That was a 30 increase from Q1 2019 It is cash fow where our business really showed its strength in Q1 2020 Excluding non recurring transaction and restructuring costs we gener ated free cash fow of over 190 million which is a quarterly record KIRKLAND LAKE GOLD Detour Lake made a signifcant contribution to free cash fow during the quarter adding 78 million and that s in only two months of opera tions with Kirkland Lake And I think were probably the only gold producer with no debt on the balance sheet which demonstrates our industryleading fnancial strength and our extensive fnancial capabilities W e returned capital to sharehold ers W e used 330 million in the quarter to buy back almost 10 mil lion shares and doubled our divi dend W e gained about 180 mil lion of cash from Detour But I want to emphasize that we used much more than that by paying back De tour s debt closing out its head book making changes of control and other payments and incurring transaction fees related to the deal Macassa Number Four Shaft KL had total capital expenditures of about 1 10 million most of it sus taining capital In terms of growth capital the company continued to invest in projects specifcally the number four shaft project at Ma cassa W e did suspend sinking of the shaft at the end of March due to the COVID19 issue said Makuch The suspension lasted about a month with the shaft sinking resum ing near the end of April The shaft project is going very well In fact with the progress weve achieved we have now changed the scope and schedule for the shaft with completion now targeted for late 2022 over a year earlier than ini tially planned W e also expect to save on capital costs Kirkland Lake Gold W orkers Recalled Guidance Modifed The company started to recall workers at Detour Lake and Ma cassa in early May They expect it to be a slow process that may ex tend over the year KL withdrew its guidance for the year in early May due to uncertainty around COV ID19 These mines will not produce what was in the original guidance sets quarterly record for cash fow