Kirkland Lake Gold Inc. ("Kirkland Lake" or "the Company") (TSX:KGI) (AIM:KGI), an operating and exploration gold mining company, is pleased to announce that it has closed its previously announced transaction to raise US$50 million by the sale to Franco-Nevada Corporation (TSX:FNV) ("Franco-Nevada") of a 2.5% net smelter return royalty ("NSR") on Kirkland Lake's properties including the Macassa Gold Mine.

Transaction Summary

Under the terms of the royalty agreement, Kirkland Lake received US$50 million for a 2.5% NSR royalty on production from the Company's properties including the Macassa Gold Mine. The NSR agreement provides, amongst other things, that: (i) Kirkland Lake has a 3 year option to buy back 1% of the NSR, for total consideration of US$36 million, less the royalty proceeds attributable to the buy back portion of the NSR that has been paid to Franco-Nevada prior to the date of the buy back; (ii) Franco-Nevada has a right of first refusal on any future royalty or stream interests from the Company's properties; and (iii) Franco-Nevada has the option to receive NSR payments in either gold bullion or cash.

National Bank Financial Inc. acted as financial advisor and Stikeman Elliott LLP acted as legal counsel to Kirkland Lake in respect of this transaction.