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CIBC Whistler Institutional Investment Conference Corporate Presentation
 

CIBC Whistler Institutional Investment Conference Corporate Presentation

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    CIBC Whistler Institutional Investment Conference Corporate Presentation CIBC Whistler Institutional Investment Conference Corporate Presentation Presentation Transcript

    • CANADA’S NEXTINTERMEDIATEGOLD PRODUCER CIBC Whistler Institutional Investment Conference January 23-25, 20131
    • Forward Looking Information This 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 resource estimates, ore grade, expected mine life, anticipated gold production, gold recovery, cash operating costs and other costs, capital costs, sensitivity to metal prices and other sensitivities, financial analysis of the project, commencement of operations, potential expansion opportunities, and plans for organic growth. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Detour Gold’s ability to predict or control and may cause Detour Gold’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, but are not limited 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 exchange rate fluctuations, general economic conditions and other risks involved in the gold exploration and development industry, as well as those risk factors discussed in the section entitled “Description of Business - Risk Factors” in Detour Gold’s 2011 AIF and in the continuous disclosure documents filed by Detour Gold on and available on SEDAR at www.sedar.com. Such forward-looking statements are also based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the following: the supply and demand for gold, and the level and volatility of the price of gold; the availability of financing for exploration and development activities; the estimated timeline for the development of the Detour Lake gold project; the expected mine life; anticipated gold production; gold recovery; the development schedule; cash operating costs and other costs; the financial analysis for the project; capital costs; sensitivity to metal prices and other sensitivities; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; the receipt of necessary permits; market competition; 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 contained herein are made as of the date hereof, or such other date or dates specified in such statements. Detour Gold undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information 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-looking statements.2
    • NI-43 101 Disclosure Information Containing Estimates of Mineral Reserves and Resources The mineral reserve and resource estimates reported in this presentation were prepared in accordance with Canadian National Instrument 43-101Standards of Disclosure for Mineral Projects (“NI 43-101”), as required by Canadian securities regulatory authorities. For United States reporting purposes, the United States Securities and Exchange Commission (“SEC”) applies different standards in order to classify mineralization as a reserve. In particular, while the terms “measured,” “indicated” and “inferred” mineral resources are required pursuant to NI 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories constitute or will ever be converted into reserves. In addition, “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws, issuers must not make any disclosure of results of an economic analysis that includes inferred mineral resources, except in rare cases. On September 4, 2012, Detour Gold announced an updated mine production plan for the Detour Lake project. The NI 43-101 compliant Technical Report for this update was filed on SEDAR on October 18, 2012. The following QPs participated in this update: BBA Inc., under the direction of André Allaire, Eng., Vice-President, Markets – Mining and Metals and Patrice Live, Eng., Mining Manager; SGS Canada Inc., under the direction of Michel Dagbert, Eng., Senior Geostatistician and Maxime Dupéré, P.Geo., Senior Geologist; and AMEC Environment & Infrastructure, a Division of AMEC Americas Limited, David G. Ritchie M.Eng., P.Eng, Senior Associate Geotechnical Engineer.3
    • Invest in Detour Gold Our Vision  Focus on a world-class asset – Detour Lake  Canada’s largest pure gold play with 15.6 M oz in reserves  Gold processing initiated in January 2013  One of the best cash flow/share opportunities  Average annual gold production of 657,000 oz  Excellent organic growth potential (5 year plan)  Potential expansion of mill throughput4
    • Share Capital OPTIONS & FN SHARE COMMITMENTS ISSUED AND 8.9 M OUTSTANDING FULLY DILUTED CONVERTIBLE 117.6M 139.5 M NOTES 13.0 M  Market cap: C$2.8 billion  Cash position: C$236 million  Major shareholders:  Paulson & Co. 15%  Carmignac Gestion 5%  Detour Gold Mgmt <2%  Institutions total >90% Note: Cash position and share data at December 31, 2012. An additional 0.3 M shares were issued in January 2013 following partial exercise of the over- allotment option.5
    • Share Capital 1000% Share Issuance vs. Performance 900% 800% 580% total DGC DGC 08/11 01/12 DGC return since IPO Jan. 2007 to Present Total Return 700% 11/12 DGC 600% 07/10 500% DGC 04/08 400% Randgold DGC 300% 11/09 DGC 200% 07/09 AGI Eldorado Osisko Buenaventura 100% (239%) Aurizon Yamana Newcrest IMG NEM G IPO ABX AEM 0% Anglo Gold Ashanti Hecla AuRico CG Goldfields Kinross Great Basin GSC Gabriel Eco Oro (209%) Andina -100% 0 50 100 150 200 Jan. 2007 to Present % Change in Shares Outstanding Source: BMO, Nov. 2012 Note: Date of DGC equity financings6
    • Successful Focused Approach Record Timing from “Discovery” to Projected Production Detour Lake in 6 years 2007 2009 2010 2011-12 2013 PRODUCTION 2013 ACQUISITION PRE-FEASIBILITY FEASIBILITY DEVELOPMENT PRODUCTION /DISCOVERY STUDY STUDY & PERMITTING7
    • 2013 Objectives H1 2013  First gold pour  Commissioning of second production line  Securing $90 million credit facility  20,000 m drilling program targeting high-grade gold mineralization H2 2013  Declaring commercial production  Gold production target of +350,000 ounces for the year  Completing pre-feasibility study on Block A  Advancing evaluation of mine expansion scenarios  Revising block model for Detour Lake8
    • Detour Lake Profile September 2012 Detour Lake Mine Plan(1) Open pit Production Start Q1 2013 @ 0.5 g/t cut-off 20,600E OP Reserves (M oz) 15.6 Mill throughput (tpd) 55,000 Strip Ratio (waste:ore) 3.7 Gold recoveries 91% 16,500E Average grade (g/t) 1.03 Estimated mine life (yrs) 21.5700 m 1.0 g/t Au Avg. Production (oz/yr) 657,000 0.5 - 1.0 g/t Au Cash operating costs (C$/oz) $710 <0.5 g/t Au Total cash costs (C$/oz) $749 Initial Capex (C$ B)(2) 1.45 (1) Gold price assumptions: US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015. (2) Revised to approx. C$1.5 B in news release dated November 8, 2012. 9
    • Updated LOM Gold ProductionGold Production (‘000 oz) Grade (g/t Au)800 1.6 Avg. 657,000 oz/yr700 1.4600 1.2500 1.0400 0.8300 0.6200 0.4100 0.2 0 010
    • Updated LOM Operating Costs Breakdown of 2013-14 TCC Operating Costs (LOM) C$/t milled C$/t mined C$/oz Mining costs 11.65 2.49 388 LABOUR Processing cost 7.83 -- 260 18% POWER G&A 1.86 -- 62 12% DIESEL Cash operating costs 21.34 -- 710 MAINTENANCE 8% Royalty (2%) and other 1.26 -- 42 22% G&A Refining 0.12 -- 4 5% Silver credit (0.20) -- (7) CONSUMABLES ROYALTY+ OTHER Total cash costs (TCC) 22.52 -- 749 29% (2% NSR) 6% A 10% change in: Diesel or power costs = $9/oz change in TCC Cdn$ FX rate = $63/oz in TCC11
    • Financial Analysis Base Case Assumptions  Gold - US$1,200/oz (1)  Power Cdn $0.065/kwh  F/X - $Cdn/$US = 1.00  Diesel US$100/barrel (WTI) Base Case (1) US$ Billions Undiscounted (0%) 5.0% Pre-tax cash flow 4.3 1.7 Net cash flow after tax 3.0 1.1 Pre-tax IRR 14.4% 1. Gold price US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015. @ US$1,600/oz 12-12-23 US$ Billions Undiscounted (0%) 5.0% Pre-tax cash flow 9.4 4.4 Net cash flow after tax 6.6 3.0 Pre-tax IRR 24.6%12 49
    • DETOUR LAKE MINESTART UP13
    • 2013 Forecast Guidance  350,000 oz to 400,000 oz of gold  Total cash costs between C$800/oz and C$900/oz (on commercial production of 200,000 oz to 250,000 oz sold)  Estimated LOM sustaining capital of C$1.2 B:  2013 = C$180 M (<$80 M in H1)  2014 = C$140 M NOTE: Commercial production to be declared after 60 consecutive days of operating at >75% of throughput (55,000 tpd x 75% = 41,250 tpd)14
    • Mining Production Status 2012 Pre-Stripping (Year-end 2012) Overburden/Till 15.1 Mt Waste 7.7 Mt Low Grade (0.3-0.5 g/t) 1.1 Mt Ore 2.2 Mt Total 26.1 Mt  2.2 Mt ore inventory on ROMs and short-term stockpiles (reconciled average grade of approx. 0.7 g/t) (till dilution on first bench)  Average mining rates of +115,000 tpd in December 2012  Mining operation on 24 hrs/day, 365 days/yr15
    • Mining Production NORTH WASTE MINERALIZED DUMP PLANT SITE ZONE CAMPBELL PIT CURRENT PIT SHAPE APPROX. PIT SHELL AT END OF LOM Satellite image dated July 201216
    • Detour Lake Open Pit Mine 12-10-2217
    • DETOUR LAKE18 SITE
    • Overview Detour Lake Facilities SECONDARY CRUSHERS STOCKPILE RECLAIM GEODESIC DOME PRIMARY CRUSHER 12-10-2219
    • Primary Crusher (100,000 tpd capacity) 12-10-02 Gyro is 9 m high 35 m to surface20
    • Stockpile Reclaim (2 days capacity) 12-12-02 12-12-23 12-12-2321
    • Processing Plant  Conventional gravity and CIP plant  55,000 tpd (=92% availability of 60,000 tpd capacity)  2 parallel lines (each with 1 secondary cone crusher + 1 SAG & 1 ball mill)  Estimated gravity recovery: 30-40%  Estimated overall gold recovery: 91.0%  Leach time 29 hours; leach feed size 80% passing 95 μm 12-12-2322
    • Simple Process Plant @ 92% Availability StockpileGyratory 12 h live capacitycrusher:60” x 113”90,000 tpd Secondary crushers: 2 X XL-1100 Ball mills: SAG mills: 2 X 26’ x 40’6’’, 15MW 67,000 tpd 2 X 36’ x 20’, 15MW 55,000 tpd Pebble crushers: 55,000 tpd 2 X XL-1100 To 73,000 tpd leaching circuit To gravity circuit Circ. load Circ. load From 28 % Leach circuit: 250 % gravity circuit  55,000 tpd + 15% contingency in piping capacity 23
    • Tailings Management Area (TMA)  High environmental standard design  3-cell containment system for natural degradation  2013: Cell #1 ready for production  2014: Building additional capacity in Cell #1 and footprint for Cell #2 12-10-2224
    • DGC Workforce: Hiring Local First  423 employees at year-end* DIVISION OF (25% are Aboriginal) LABOUR FRONT LINE  Continuing focus on hiring local and 81% • Professional includes: MGMT, Eng., Geo., Supt. regional • Front Line includes: PROFESSIONAL Operators, Admin, 19% Support WORKFORCE COCHRANE ORIGIN AREA COCHRANE 26% 25% NORTHERN REST OF ONTARIO ONTARIO 3% 43% OTHER  Work rotation: 1 week in/out 2%  Modern camp facility with 400 * Excludes Corporate office. en-suite rooms25
    • PLANNING FOR26 ORGANIC GROWTH Under-Explored Greenstone Belt
    • Planning for Organic Growth 5 Year Plan for Successful Organic Growth Large prospective land position of approx. 566 km2 • Two main gold structures with total strike length of >80km • Continue focus on Detour Lake deposit extension (northern structure i.e. Block A) • 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 75,000 tpd for gold production output of +800,000 oz/yr  Find high-grade ore near-surface within trucking distance to supplement mill27
    • Successful Growth of Resources Resource Growth Exceeding 750% Since IPO Date Accumulative Resources/Reserves (M oz) DGC Drilling Inferred M&I 2P 10M 20M 30M 2005-05 Estimated by Pelangio 2006-09 DGC due diligence 2007-12 50,000m 2008-06 123,000m 2009-09 249,000m 8.8 2010-06 334,000m $850/oz 11.4 2011-01 430,000m $850/oz 14.9 2012-01 523,000m $850/oz 15.628
    • Priority #1 – Block A Target Block A Pre-feasibility  Block A pre-feasibility study by year-end 2013  Evaluate potential expansion options *Not updated with TWD Dec. 30th PR. On Dec. 1, 2011, Detour Gold announced the acquisition of TWD.29
    • Priority #1 – Block A TargetBlock A near-surface resource 2012 DH 2012 extension DH Detour Lake DH included in 2011 year-end 2011 year-end reserves = 15.6 M oz reserves DH not included in 2011 year-end reserves Historical DH 30
    • Priority #2 – South Structure 15.6 M oz in Reserves 20,000 m in H1 2013 MMI Survey Coverage MMI Au Anomaly Existing DDH Gold occurrence (OGS) DDH intersection >1g/2m DDH intersection >1g/10m *Note: Excludes drilling around Detour Lake and M zone (Block A).31
    • Invest in Detour Gold Our Vision  Focus on a world-class asset – Detour Lake  Canada’s largest pure gold play with 15.6 M oz in reserves  Gold processing initiated in January 2013  One of the best cash flow/share opportunities  Average annual gold production of 657,000 oz  Excellent organic growth potential (5 year plan)  Potential expansion of mill throughput32
    • ADDITIONALINFORMATION 33
    • Detour Lake Profile January 2011 September 2012 Detour Lake Update (2) Mine Plan(3) Gold price (US$/oz) (1) 850 1,200 Foreign exchange rate (US$/Cdn$) 1.10 1.00 Assumptions Fuel price (US$/barrel) 80 100 Income/mining tax rate (%) 25/10 25/10 Net Smelter Royalty (%) 2 2 Ore milled (Mt) 449.6 470.0 Waste mined (Mt) (4) 1,654 1,734 Mine Strip ratio (waste:ore) 3.9 3.7 Parameters Average gold grade (g/t) 1.03 1.03 Total contained gold (M oz) 14.9 15.6 Estimated gold recovery (%) 91.0 91.0 Total recovered gold (M oz) 13.5 14.1 Mine life (years) 21 21.5 Average annual gold production (oz) 657,000 657,000 1. US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015. 2. Press release Jan. 31, 2011 with Technical Report dated Mar. 15, 2011. 3. Press release Sept. 4, 2012 with Technical Report dated Oct. 18, 2012. 4. Includes low-grade stockpile.34
    • Gold Production/Cost ProfileGold Production (‘000 oz) Total Cash Costs (C$/oz)800 Avg. C$749/oz 900700 850600 800500 750400 700300 650200 600100 550 0 500 Note: Excludes stripping adjustments.35
    • Detour Lake Reserves & Resources As at December 31, 2011 Tonnes Grade Contained Gold @ US$850/oz (millions) (g/t) (‘000 oz) Reserves (1) Proven 101.6 1.29 4,222 Probable 368.4 0.96 11,351 P&P 470.0 1.03 15,573 Resources (2) Measured 124.5 1.36 5,424 Indicated 554.3 1.00 17,836 M&I 678.8 1.07 23,261 Inferred 208.5 0.86 5,785 1. After a 95% mining recovery rate; Mining dilution factor of 15.5%. 2. Inclusive of mineral reserves.36
    • Block Model – Gold Distribution Approx. 3 M oz between 0.3-0.5 g/t Au 1,600 Stockpile over LOM OK (oz Au) 0.3-0.5 g/t material ID3 (oz Au) 1,400 1,200 Ounces (000’s) 1,000 800 600 400 200 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 BINs37
    • Grade Control: First 2 Benches DDH Block model 40x40m drill spacing RC Grade Control 20x10m drill spacing Bench 6264m DDH Block model 40x40m drill spacing RC Grade Control 20x10m drill spacing Bench 6252m38
    • Management & Directors Management  Gerald Panneton  Pat Donovan  Andrew Croal Founder, President & CEO VP Corporate Development Director Technical Services Director  James Mavor  Laurie Gaborit  Michael Kenyon VP Finance Director Investor Relations Executive Chairman  Rachel Pineault  Jean-Francois Metail  Paul Martin VP HR & Northern Affairs Director Reserves and Resources CFO  James Robertson  Greg Miazga  Pierre Beaudoin VP Environment & Director Construction & Engineering Sr VP Capital Projects Sustainability  Bill Snelling  Julie Galloway  Eric Josipovic Director Corporate Systems & Controls Sr VP General Counsel & Controller  Christian Brousseau Corporate Secretary  Drew Anwyll Project Manager  Derek Teevan Director of Operations Sr VP External &  Patrik Gillerstedt Aboriginal Affairs Mine Manager Directors  Peter Crossgrove  Michael Kenyon  Jonathan Rubenstein  Louis Dionne  Alex G. Morrison  Graham Wozniak  Robert E. Doyle  Gerald Panneton  Ingrid Hibbard39
    • Contact Information Gerald Panneton President & CEO Email: gpanneton@detourgold.com Phone: 416.304.0800 Laurie Gaborit Director Investor Relations Email: lgaborit@detourgold.com Phone: 416.304.0800 www.detourgold.com40