Kirkland Lake Gold Approves Shareholder Rights Plan

TORONTO, ONTARIO--(Marketwired - Jan. 13, 2014) - Kirkland Lake Gold Inc. ("Kirkland" or the "Company") (TSX:KGI) (AIM:KGI) today announced that its board of directors (the "Board") has approved the adoption of a shareholder rights plan (the "Rights Plan") in the normal course as part of its previously announced ongoing strategic review and short-term mine optimization plan.

The Special Committee of the Board is continuing, with the assistance of National Bank Financial, to carefully evaluate all options available to the Company from continuing on a stand-alone basis up to and including a potential sale of the Company's shares or assets. In parallel, the Company's new Chief Executive Officer, George Ogilvie, has been implementing the short-term mine optimization plan that is expected to drive improved returns and value creation. As announced on December 20, 2013, Mr. Ogilvie has implemented a number of changes to the Company, including a hiring freeze, reduced capital and operating expenditures, shut down of lower-grade slopes, and reductions in discretionary spending.

The Rights Plan will help ensure that the board and management is well positioned to complete the strategic and mine-plan reviews, by reducing the likelihood of any person or group gaining or increasing their control of Kirkland at this time.

The Rights Plan was not adopted in response to a takeover bid or other proposal to acquire control of the Company.

Once adopted, in accordance with the terms of the Rights Plan, one right will be issued in respect of each common share of the Company outstanding and each common share issued thereafter. The rights will become exercisable following any transaction in which a person, together with its affiliates, associates and joint actors, acquires beneficial ownership of common shares of Kirkland which, when aggregated with its holdings and the holdings of its affiliates, associates and joint actors, total 15% or more of the outstanding common shares of the Company (determined in the manner set out in the Rights Plan). Following the acquisition of 15% or more of the Company's outstanding common shares, each right held by a person other than the acquiring person and its affiliates, associates and joint actors would, upon exercise, entitle the holder to purchase common shares at a substantial discount to the market price of the common shares at that time. Rights held by a person, together with its affiliates, associates and joint actors whose actions trigger the Rights Plan would become void and not be exercisable. The Board has the discretion to defer the time at which the rights become exercisable and to waive the application of the Rights Plan.

The Board considers a 15% triggering threshold to be appropriate in the circumstances and is intended to ensure stability and protect the interests of all shareholders while the Company completes its strategic review process.

The Rights Plan will be required to be ratified by the shareholders of the Company within six-months of its adoption. If the Rights Plan is not ratified by the shareholders, the Rights Plan and any rights issued pursuant to it will terminate. If the Rights Plan is put to a vote and ratified, it will continue in effect until the third annual meeting of shareholders thereafter. The Rights Plan is subject to acceptance by the Toronto Stock Exchange. A copy of the Rights Plan will be available on SEDAR at www.sedar.com.

About the Company

Kirkland Lake Gold's corporate goal is to create a self sustaining and long lived intermediate gold mining company based in the historic Kirkland Lake Gold Camp. The Company plans to do this by increasing production capacity to 2,200 tons of ore per day in several stages, and by decreasing production costs by realizing the economies of scale associated with that higher production capacity. At the same time, the Company is committed to maintaining a significant exploration program aimed at developing and maintaining a property wide reserve and resource base sufficient to sustain a mine life of more than ten years for as long as practicable.

Over the last several years the Company has invested significant capital to improve the infrastructure of the business including upgrading the production hoist, skips, mill, underground mobile equipment and capital development.

From initial discovery to present day there have been over 24 million ounces of gold mined from the Kirkland Lake camp while the current reserve and resource provides for potentially 10 years of mining with significant exploration upside.

Cautionary Note Regarding Forward Looking Statements

This Press Release contains statements which constitute "forward-looking statements", 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", "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, and 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 outcome of the strategic review process the Board has implemented, 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 resources, changes in project parameters as plans continue to be refined, changes in project development, construction, production and commissioning time frames, risks related to joint venture operations, 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 April 30, 2013 and the Company's Management's Discussion and Analysis for the interim period ended October 31, 2013 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 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.