TORONTO (miningweekly.com) – Ontario-based Kirkland Lake Gold on Tuesday said it was expecting to step up its yellow metal output over the next three years as higher-grade ores become available at its flagship Macassa gold mine, in the province’s historic Kirkland Lake gold camp.

The TSX-listed miner said as the South Mine Comlex (SMC) 5400, 5600 and 5900 levels were being opened up and mined over the coming years, so the grades would increase.

So far this financial year, up to Friday, the company reported gold output of 21 426 oz, which it said placed it on track to achieve its fiscal 2015 target of between 140 000 oz and 155 000 oz, at an average mill grade of 12.7 g/t.

For the 2016 financial year, Kirkland expected to boost output to between 150 000 oz and 170 000 oz at an average grade of 13.4 g/t, and by 2017, to between 160 000 oz/y and 180 000 oz/y at an average grade of 14 g/t.

The three-year mine plan called for steady ore tonnages of between 1 150 t/d and 1 250 t/d, which would result in decreasing operating costs per ounce in fiscal years 2016 and 2017, with the operating costs per ton remaining relatively flat, resulting in increased profitability and higher free cash flows.

After a seven-day shutdown last month, Kirkland Lake reported that it had commissioned a new ball mill with ore, running the mill on a new schedule with the throughput averaging 1 700 t/d run-of-mine ore at a better than 96% recovery. At its peak, the mill ran at 2 000 t/d. The mine was currently producing at a rate of 1 050 t/d of ore.

The company expected to take delivery of new mining equipment at the end of the year, which would drive productivity improvements. There was also currently 5 400 t of ore stockpiled in front of the mill.

Kirkland Lake said it would aim to achieve a lower all-in sustaining cost of between C$1 190/oz and C$1 250/oz over the coming three years.

Kirkland Lake in March reported that its mine optimisation plan, implemented at the end of last year, had come into full effect towards the end of its third quarter, resulting in significant operating and financial improvements in January, rising revenue, rising margins and lower costs.

It expected to return to cash-flow positive and profitable operations during the first quarter of the 2015 financial year (beginning May 2014). For the full financial year, the company expected to generate between C$15-million and C$20-million in free cash flow.

Kirkland Lake’s compliant reserve and resource base comprised 2.78-million tons, grading 17.1 g/t for 1.38-million ounces of gold in the proven and probable reserve categories, 4.15-million tons, grading 16.8 g/t for 2.05-million ounces in the measured and indicated resource categories, and 2.09-million tons at an average grade of 18.5 g/t for 1.13-million ounces.

The Macassa complex had an expected total mine life of 14 years.

Despite being down about 2.31% on Tuesday, Kirkland Lake’s TSX-listed stock had gained 23% so far this year.