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21st Annual BMO Capital Markets Global Metals & Mining Conference
 

21st Annual BMO Capital Markets Global Metals & Mining Conference

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    21st Annual BMO Capital Markets Global Metals & Mining Conference 21st Annual BMO Capital Markets Global Metals & Mining Conference Presentation Transcript

    • Building Canada’sLargest Gold Mine 21st Annual BMO Capital Markets Global Metals & Mining ConferenceProduction Early 2013 February 26-29, 2012
    • Forward Looking InformationThis presentation contains certain forward-looking information as defined in applicable securities laws (referred to herein as “forward-looking statements”). Specifically, this presentation contains forward-looking statements regarding the reserve and resourceestimates, ore grade, expected mine life, anticipated gold production, gold recovery, cash operating costs and other costs, capitalcosts, sensitivity to metal prices and other sensitivities, financial analysis of the project, commencement of operations, potentialexpansion opportunities, plans for organic growth and expected drilling activities. Forward-looking statements involve known andunknown risks, uncertainties and other factors which are beyond Detour Gold’s ability to predict or control and may cause DetourGold’s actual results, performance or achievements to be materially different from any of its future results, performance orachievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, but are notlimited to, gold price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data,increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchangerate fluctuations, general economic conditions and other risks involved in the gold exploration and development industry, as well asthose risk factors discussed in the section entitled “Risk Factors” in Detour Gold’s February 7, 2012 short form prospectus and in thecontinuous disclosure documents filed by Detour Gold on and available on SEDAR at www.sedar.com. Such forward-lookingstatements are also based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptionsabout the following: the supply and demand for gold, and the level and volatility of the price of gold; the availability of financing forexploration and development activities; the estimated timeline for the development of the Detour Lake gold project; the expectedmine life; anticipated gold production; gold recovery; the development schedule; cash operating costs and other costs; the financialanalysis for the project; capital costs; sensitivity to metal prices and other sensitivities; the accuracy of reserve and resourceestimates and the assumptions on which the reserve and resource estimates are based; the receipt of necessary permits; marketcompetition; ongoing relations with employees and impacted communities; and general business and economic conditions.Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements containedherein are made as of the date hereof, or such other date or dates specified in such statements. Detour Gold undertakes noobligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of newinformation or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-lookingstatements.© 2011 Detour Gold All Rights Reserved. 2
    • NI 43-101 DisclosureInformation Concerning Estimates of Mineral Reserves and ResourcesThe mineral reserve and resource estimates reported in this presentation were prepared in accordance with Canadian NationalInstrument 43-101Standards of Disclosure for Mineral Projects (“NI 43-101”), as required by Canadian securities regulatoryauthorities. For United States reporting purposes, the United States Securities and Exchange Commission (“SEC”) applies differentstandards in order to classify mineralization as a reserve. In particular, while the terms “measured,” “indicated” and “inferred” mineralresources are required pursuant to NI 43-101, the SEC does not recognize such terms. Canadian standards differ significantly fromthe requirements of the SEC. Investors are cautioned not to assume that any part or all of the mineral deposits in these categoriesconstitute or will ever be converted into reserves. In addition, “inferred” mineral resources have a great amount of uncertainty as totheir existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferredmineral resource will ever be upgraded to a higher category. Under Canadian securities laws, issuers must not make any disclosureof results of an economic analysis that includes inferred mineral resources, except in rare cases.On January 31, 2011, Detour Gold announced an updated mineral resource and reserve estimate. The following QPs participated inthis update: Michel Dagbert, Eng., Senior Geostatistician and André Laferrière, P. Geo., Senior Geologist of SGS Canada Inc.(mineral resources); and André Allaire, Eng., Director Mining and Metals and Patrice Live, Eng., Mining Manager of BBA Inc (mineralreserve). The NI 43-101 compliant Technical Report for this update was filed on SEDAR on March 15, 2011.On January 25, 2012, Detour Gold announced a mineral resource and reserve update. The following QPs participated in this update:Michel Dagbert, Eng., Senior Geostatistician of SGS Canada Inc (mineral resources) and Patrice Live, Eng., Mining Manager of BBAInc (mineral reserves).© 2011 Detour Gold All Rights Reserved. 3
    • Invest in Detour Gold  Focus on a world-class asset – Detour Lake  Canada’s largest pure gold play with 15.6 M oz in reserves (@ US$ 850/oz gold price)  Construction phase (52%) progressing on schedule  One of the best cash flow/share opportunities  Excellent organic growth potential (5 year plan)  Potential expansion of mill throughput  Gold production starting in 1Q 2013© 2011 Detour Gold All Rights Reserved. 4
    • Capital Structure Issued and Convertible Options & FN Share Fully Diluted: Commitments: Outstanding: + Notes: + 112.5 M 13.0 M 7.8 M = 133.3 M  Market cap: C$3.1 Billion  Cash position: C$1.0 Billion  Major shareholders: Paulson & Co. 15% Detour Lake Fidelity Mgmt 8% Detour Gold Mgmt <2% Institutions total >90%© 2011 Detour Gold All Rights Reserved. 5
    • Strong Share Performance 1100% Share Issuance vs. Performance DGC equity financings 1000% 900% 708% total return 800% since IPOJan. 2007 to Present Total Return DGC 08/11 DGC 700% 01/12 600% DGC 07/10 500% DGC 400% 04/08 Randgold DGC 300% 11/09 Osisko DGC (224%) Buenaventura 200% 07/09 Eldorado AGI 100% Aurizon IMG Newcrest CG G IPO NEM ABX Minefinders Yamana Gabriel 0% Kinross Great Basin GSC Anglo Gold Ashanti Hecla AuRico Goldfields AEM Andina Eco Oro Source: BMO, Feb. 2012 -100% 0 50 100 150 200 Jan. 2007 to Present % Change in Shares Outstanding© 2011 Detour Gold All Rights Reserved. 6
    • Successful Focused Approach DETOUR LAKE: Production RECORD TIMING FROM “DISCOVERY” 2013 TO PROJECTED PRODUCTION 6 years Development 2011-2012 Feasibility Study & Permitting 2010 Pre-feasibility Study 2009 Acquisition/ Discovery 2007© 2011 Detour Gold All Rights Reserved. 7
    • Detour Gold 2012 Objectives Mineral reserves/resources update for 2011 year-end Top up of $ 277 million to complete the project and working capital 230 Kv transmission line connection in 3Q Updated mine plan & operational forecast in 3Q Ore stockpile of 3 Mt available in 4Q for processing Mine construction completion by year-end Manpower ramp-up for operations (from 100 to 400) Delivery of 12 haul trucks and 2 cable shovels Drilling programs:  50,000 m on Block A open pit & initiate pre-feasibility study  20,000 m on targeting high-grade mineralization on the Lower Detour Lake structure © 2011 Detour Gold All Rights Reserved. 8
    • Growing Reserve/Resource Base RESOURCE GROWTH EXCEEDING 650% SINCE IPO Date Accumulative DGC Drilling Resources/Reserves (M oz) Inferred M&I 2P2005-05 1.7 Estimated by Pelangio2006-09 3.4 DGC due diligence2007-12 50,000m 7.82008-06 123,000m 13.22009-09 249,000m 8.8 22.42010-06 334,000m $850/oz 11.4 21.02011-01 430,000m $850/oz 14.9 25.62012-01 523,000m $850/oz 15.6 29.0 © 2011 Detour Gold All Rights Reserved. 9
    • Detour Lake Reserves & ResourcesAs at Dec. 31, 2011 Tonnes Grade Contained Gold@ US$850/oz (millions) (g/t) (‘000 oz)Reserves (1)Proven 101.6 1.29 4,222 DISCOVERY COSTProbable 368.4 0.96 11,351 < $15/OZ OFP&P 470.0 1.03 15,573Resources (2) RESERVESMeasured 124.5 1.36 5,424Indicated 554.3 1.00 17,836M&I 678.8 1.07 23,261Inferred 208.5 0.86 5,785 1. After a 95% mining recovery rate; Mining dilution factor of 15.5%. 2. Inclusive of mineral reserves.© 2011 Detour Gold All Rights Reserved. 10
    • Positive Economics @ US$850/oz January 2012Detour Lake updateProduction start Q1 2013OP reserves (M oz) 15.6 Open pitMill throughput (tpd) 55,000 @ 0.5 g/t cut-off 20,600EStrip ratio (waste:ore) 3.6Gold recoveries 91%Average grade (g/t) 1.03Estimated mine life (yrs) 22Avg. production (oz/yr)(1)(2) 657,000 16,500ECash costs (C$/oz)(2) 543Initial Capex (C$ B)(3) 1.45 >1.0 g/t Au 700 m 0.5 - 1.0 g/t Au1. After full commissioning in Yr 1. <0.5 g/t Au2. Based on March 2011 TR.3. Initial capex revised in November 2011. © 2011 Detour Gold All Rights Reserved. 11
    • Projected Cash Costs at Lower End G&A and Royalty $ 700 Other $19 $ 649 $37 $ 616 $ 600 $ 593 $ 543 Milling Mining $190 $297 $ 500 $ 400 Consumables 25% Maintenance 24% Operating Cash Costs Personnel 14% Junior Senior Intermediate Detour Gold Power 13% Producers Producers Producers LOM Estimate (1) C$543/oz (1) Diesel 13% G&A 7% 2012E Cash Cost Profile (US$/oz)* Royalty (2%NSR) 4%*Source: BMO Equity ResearchSeniors Producers include: Agnico-Eagle, AngloGold Ashanti, Barrick, Gold Fields, Goldcorp, Kinross, Newcrest, Newmont, Polyus and YamanaIntermediate Producers include: African Barrick, Alacer, Centamin Egypt, Centerra, Eldorado, Harmony, IAMGOLD, New Gold, Osisko, Petropavlovsk, Randgold and SEMAFOJunior Producers include: Alamos Gold, AuRico, Aurizon, Avion, Avocet, CGA Mining, Cluff Gold, Dundee Precious Metals, Golden Star, Great Basin Gold, Kingsgate, Lake Shore,Minefinders, OceanaGold, Primero, Resolute, San Gold and Teranga1. Based on March 2011 Technical Report. © 2011 Detour Gold All Rights Reserved. 12
    • Substantial Cash Flow per Share STRONG FUNDAMENTALS P / NAV Market Cap Reserves Resources 2014 2014 CF P/2014 CF 2014 CFPS $M M oz M oz Production $M 000’s oz Goldcorp 1.2x $ 41,069 87.2 142.0 3,714 $ 3,246 12.4x $ 3.90 Newmont 1.2x $ 31,013 933.5 137.6 5,803 $ 4,244 7.2x $ 8.48 Barrick 1.1x $ 49,600 158.1 283.6 8,610 $ 7,621 6.5x $ 7.61 Kinross 0.9x $ 12,919 65.0 110.6 3,397 $ 2,048 6.3x $ 1.79 Intermediate Producers (Average 1.1x) Randgold 1.7x $ 10,638 16.4 28.8 1,069 $ 823 12.9x $ 8.89 Yamana 1.2x $ 12,953 17.7 39.7 1,639 $ 1,469 8.8x $ 1.96 Eldorado 1.0x $ 10,879 28.8 44.0 1,486 $ 1,209 8.9x $ 1.70 Osisko 0.9x $ 4,929 10.7 23.2 606 $ 443 10.7x $ 1.11 IAMGOLD 0.9x $ 6,341 14.2 25.7 999 $ 691 9.1x $ 1.83 Agnico-Eagle 0.9x $ 6,376 21.8 38.3 1,456 $ 834 7.6x $ 4.89 LOM Avg. Developers (Average 0.7x)Detour Gold 0.7x $ 3,119 15.6 29.0 650 $ 400 $ 3.40 Source: Bloomberg and Company Reports, Equity Research and Thomson Financial at February 2, 2012. Note: NAV per share figures are based on equity research consensus; production, cash cost and cash flow per share figures are based on BMO Equity Research. Resources shown inclusive of reserves. Consensus for gold price is US$1,200/oz. © 2011 Detour Gold All Rights Reserved. 13
    • 1 Mine Offering Superior Cash Flows $10 Estimated Avg. CFPS Gold Price (US$) $ 1,800 $8 $ 1,600 $6 $ 1,400 $ 1,200 $4 $2 $0 Estimated Avg. Annual Gold Production (oz)800,000600,000400,000200,000 2013 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Based on 2010 Year-end Mineral Reserve Update (@ US$850/oz) Note: CFPS based on shares outstanding: 110 M shares for 2013 and 114 M shares for 2014; parity exchange rate; reported after interest & taxes; assuming that “Notes” are paid in cash. © 2011 Detour Gold All Rights Reserved. 14
    • Mine SiteConstructionProgressing on Schedule© 2011 Detour Gold All Rights Reserved. 15
    • Detour Lake Development Progress Capital Expenditures (C$ M) Spent Committed Project Control Project Control Description Dec. 31, Dec. 31, Estimate Estimate 2011 2011 (as of 06/2011) (as of 11/2011) Mining Fleet and Facilities 85 131 172 203 Crushing and Processing (P&E) 191 486 455 565 Tailings and Water Mgmt 9 49 58 65 Infrastructure and Power line 102 137 123 156 Other Indirect 133 193 271 310 EPCM 64 95 102 101 Contingency (10%) - - 100 50 Total (pre-production) 585 1,091 1,281 1,450 PROJECT CONSTRUCTION 52% COMPLETE© 2011 Detour Gold All Rights Reserved. 16
    • 2012 Operational Readiness PlanOre ready to be processed by the fourth quarter of 2012 2012 investment of $78 M for pre-strip activities 3 Mt of ore ready for process 2012 Pre-Stripping PROJECT CHANGE Feasibility PCE OF SCOPE Study (11/2011) = Overburden 16 Mt 21 Mt Waste - 10 Mt AN INVESTMENT Ore 3 Mt Ore available for Estimated Cost C$30 M C$78 M processing in 2012 © 2011 Detour Gold All Rights Reserved. 17
    • Initial Mining Fleet at Site 8 CAT 795F trucks at site Loading Units (2 supplied by CAT) 3 X Hydraulic CAT6060 (25 m3) Supply of 73 Bridgestone tires to date 2 X Electric cable shovels (45 m3) 2 CAT6060 shovels assembled Haulers 23 X CAT 795F trucks (320 t); 30-35 at peak of operation © 2011 Detour Gold All Rights Reserved. 18
    • Detour Lake Development Progress Detailed engineering is 99% complete Over 97% of major contracts are awarded Detour Lake Permanent camp construction underway 45 km Powerline Gravel (34 km) Second segment of powerline (45 km) in progress Paved road (151 km) Delivery of mill equipment at site MPEI activities started at processing plant Pre-stripping program ongoing © 2011 Detour Gold All Rights Reserved. 19
    • Detour Lake Mining Facilities© 2011 Detour Gold All Rights Reserved. Note: Open pit reserves using US$850/oz gold 20 20
    • Processing Plant Facilities Gyratory crusher Sub-stationLeach tanks(20) area SAG & Ball millsPre-detoxthickener12-02-02 © 2011 Detour Gold All Rights Reserved. 21
    • Primary and Secondary Crushers Secondary crushers Stockpile reclaim Primary (gyratory) crusher capacity of 100,000 tpd12-02-02 © 2011 Detour Gold All Rights Reserved. 22
    • Leach Tanks12-02-02 © 2011 Detour Gold All Rights Reserved. 23
    • Overview Detour Lake Facilities12-02-02 © 2011 Detour Gold All Rights Reserved. 24
    • Permanent Camp12-02-02 © 2011 Detour Gold All Rights Reserved. 25
    • Simple Process Plant Conventional gravity and CIP plant 55,000-61,000 tpd capacity 2 parallel lines (each with 1 secondary cone crusher + 1 SAG and 1 ball mill) A  Estimated gravity recovery: 30-40%  Estimated overall gold recovery: 91.0%A  Leach time 29 hours  Leach feed size 80% passing 95 μm © 2011 Detour Gold All Rights Reserved. 26
    • Planning for OrganicGrowthUnder-explored Greenstone Belt© 2011 Detour Gold All Rights Reserved. 27
    • Planning for Organic Growth 5 yr plan for successful organic growth Large prospective land position of approx. 540 km2  Land position increased with acquisition of Trade Winds properties  Two main gold structures with total strike length of >80 km  Continue focus on Detour Lake deposit extension (northern structure)  Test targets on structure south of Detour Lake Future Objectives  Grow reserve base to +20 M oz (@ US$850/oz)  Increase mill throughput to above 60,000 tpd for gold production output of +800,000 oz/yr  Find high-grade ore near-surface within trucking distance to supplement mill© 2011 Detour Gold All Rights Reserved. 28
    • 2012 Plan for Successful Organic Growth Priority #1 on Block A  Area between Block A open pit resource (M-Zone) and the underground QK Zone discovered by Placer in mid-90’s  Drilling program of 50,000 m in 1H 2012  Start pre-feasibility study for small open pit (Block A resource)  Advance exploration of QK underground zone Priority #2 on Lower Detour Deformation Zone (+40 km)  Follow up on prior high-grade gold mineralized drill hole intercepts (53 g/t Au over 3 m)  20,000 m of diamond drilling along a 5 km corridor  IP geophysical survey on the remaining belt© 2011 Detour Gold All Rights Reserved. 29
    • Planning for Organic Growth 2012 target Deposit open to the west and at depth +50,000 m of drilling for 2012 (Block A open pit above QK Zone) *Not updated with TWD Dec. 30th PR. On Dec. 1, 2011, Detour Gold announced the acquisition of TWD. © 2011 Detour Gold All Rights Reserved. 30
    • Planning for Organic Growth +80 km of favourable geology Sunday Lake Option 15.6 M oz in Reserves Existing DDH Insert- see next slide Gold occurrence (OGS) DDH intersection >1g/2m DDH intersection >1g/10m MMI Survey Coverage MMI Au Anomaly *Note: Excludes drilling around Detour Lake and M zone (Block A).© 2011 Detour Gold All Rights Reserved. 31
    • Planning for Organic Growth Current drilling© 2011 Detour Gold All Rights Reserved. 32
    • Planning for Organic Growth? ?© 2011 Detour Gold All Rights Reserved. 33
    • Evaluating Expansion Opportunities  Best scenario is throughput 2012 increase from 55,000 to 75,000 tpd @ US$1,200/oz  Start pre-feasibility on Block A  Complete feasibility study and 2013 assess technical feasibility and resultant project economics  At >US$1,000/oz and after 2014 successful commercial production is achieved, proceed with plant expansion  Complete expansion within 2 years© 2011 Detour Gold All Rights Reserved. 34
    • Invest in Detour Gold  Focus on a world-class asset – Detour Lake  Canada’s largest pure gold play with 15.6 M oz in reserves (@ US$ 850/oz gold price)  Construction phase (52%) progressing on schedule  One of the best cash flow/share opportunities  Excellent organic growth potential (5 year plan)  Potential expansion of mill throughput  Gold production starting in 1Q 2013© 2011 Detour Gold All Rights Reserved. 35
    • AdditionalInformation© 2011 Detour Gold All Rights Reserved. 36
    • Detour Lake – Surface Plan May 2010 reserves =2011 Year-end reserves 11.4 M oz = 15.6 M oz© 2011 Detour Gold All Rights Reserved. 37
    • Detour Lake – Long SectionLooking 20,070 N QK Zone© 2011 Detour Gold All Rights Reserved. 38
    • Block Model - Gold Distribution Approx. 3 M oz. between 0.3-0.5 g/t Au 1,600 OK (oz Au) ID3 (oz Au) 1,400 1,200 1,000 Ounces (000’s) 800 600 400 200 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 Cut-off BINs© 2011 Detour Gold All Rights Reserved. 39
    • Management & Directors Management  Gerald Panneton, Founder, President &  Derek Teevan, VP Aboriginal & Government CEO, Director Affairs  Michael Kenyon, Chairman  Drew Anwyll, Director of Operations  Paul Martin, CFO  Bill Snelling, Director Corporate Systems  Pierre Beaudoin, Sr. VP Capital Projects and Controls  James Mavor, VP Finance  Patrik Gillerstedt, Mine Manager  Pat Donovan, VP Corporate Development  Andrew Croal, Dir. Technical Services  Julie Galloway, VP General Counsel &  Laurie Gaborit, Dir. Investor Relations Corporate Secretary  Greg Miazga, Dir. Construction &  Rachel Pineault, VP HR & Northern Engineering Affairs  Christian Brousseau, Project Manager  James Robertson, VP Environment & Sustainability Directors Peter Crossgrove Michael Kenyon Louis Dionne Alex G. Morrison Robert E. Doyle Gerald Panneton Ron Thiessen Ingrid Hibbard Jonathan Rubenstein Graham Wozniak© 2011 Detour Gold All Rights Reserved. 40
    • Contact InformationGerald Panneton, President & CEOEmail: gpanneton@detourgold.comPh: 416 304 0800Laurie Gaborit, Director Investor RelationsEmail: lgaborit@detourgold.comPh: 416 304 0800www.detourgold.com© 2011 Detour Gold All Rights Reserved. 41