TORONTO (miningweekly.com) – Having operated at a close to breakeven rate in the last month of its 2014 fiscal year, TSX- and Aim-listed Kirkland Lake Gold on Wednesday reaffirmed the prospect of operating at a cash-flow positive rate from the second quarter of the new fiscal year 2015, as improvements from the mine optimisation plan and cost-cutting programmes gained traction.

The gold producer, which is focused on the Macassa gold mine, in Ontario’s historic Kirkland Lake gold camp, said fiscal year 2014 which ended in April, was a year of change for the company, positioning it to leverage increased efficiencies in the coming year.

Kirkland Lake chairperson Harry Dobson on Wednesday noted that after the appointment of George Ogilvie as CEO at the end of 2013, immediate operational changes were implemented such as a new lower-tonnage, higher-grade mine plan being put in place, along with a concurrent cost-cutting programme to reduce the cash-burn rate and lower the company’s cost an ounce on a sustainable basis.

Dobson said the effectiveness of these changes were demonstrated in the fourth-quarter results, where all-in sustaining cash costs (AISCs) were reduced to C$1 776/oz of gold, with AISCs for just the month of April lowered to C$1 466/oz.

When compared with the average realised sales price of gold in April being C$1 422/oz, the company was now operating at close to breakeven rate and expected, at current gold prices, to become consistently profitable and cash-flow positive from the second quarter of fiscal 2015 onwards.

Kirkland’s grades had also significantly improved with a calendar year-to-date grade of 13.3 g/t and average fiscal year-to-date grades of 14.4 g/t.

This placed the company on track to meet its fiscal year 2015 guidance of producing between 140 000 oz and 155 000 oz, with further reductions in the AISC and all-in cash cost (AICC) possible later in the year.

“Fiscal 2015 is poised to be a turnaround year for the company as production and grades increase, further cost reductions are realised and we advance our near-surface ounces to a preliminary economic study by the end of the calendar year,” Dobson said.

For the financial year ended in April, Kirkland reported total production of 385 837 t, at a head grade of 11.3 g/t and a recovery rate of 95%, for total gold output of 122 309 oz, an increase of 34% on the previous fiscal year.

Gold sales for the year were 125 273 oz, an increase of 37% over the previous year’s 91 771 oz. Cash operating cost a ton produced increased; however, AICC or AISC an ounce produced decreased 18% when compared with the previous fiscal year.

Kirkland Lake reported a net loss and comprehensive loss for fiscal year 2014 of C$11.1-million, or C$0.16 a share.

Revenue totalled C$173.3-million for the year, up 14% from the previous fiscal year, and was boosted by 33 503 oz more gold being sold when compared with the previous year, offset by a 16% decrease in the average sale price of gold year-on-year.

As at April 30, the company had a total of C$38.9-million cash in the bank, which should be enough to see it through to more profitable quarters later in the fiscal year.