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CANADA’S NEXTINTERMEDIATEGOLD PRODUCER    European Gold Forum 2013, Zurich    April 16-18, 20131
Forward Looking Information    This presentation contains certain forward-looking information as defined in applicable sec...
NI-43 101 Disclosure    Information Containing Estimates of Mineral Reserves and Resources    The mineral reserve and reso...
Invest in Detour Gold    Our Vision    Focus and Discipline     Leverage to gold price     Optimize operation     Organ...
Share Capital                                                                             ISSUED AND          C$2.0 B     ...
Focused on One Core Asset    Detour Lake - Ontario, Canada     Low-risk, mining friendly      jurisdiction     Large pro...
From Core to Pour            Record Timing from “Discovery” to Production                  Detour Lake in 6 years     2007...
Detour Lake Mine in 6 Years    Consistently Delivered Results     Focused on execution     Built strong management team ...
2013 Objectives    H1 2013     First gold pour in February     Securing $90 million credit facility     Commissioning o...
Corporate Responsibility     Focus on health and safety of our employees, the well-being of     our community and the prot...
Detour Lake Mine                        Production Start            02/ 2013                        OP reserves (M oz)    ...
Projected LOM Operating Costs                                                             Breakdown of 2013-14 TCC     Ope...
2013 Ramp Up     Mining      Current stockpiles:          2.3 Mt grading 0.7 g/t          1.6 Mt grading 0.4 g/t      ...
Q1 Operation Statistics                                                        Q1 2013                      Ore tonnes min...
2013 Guidance        Guidance to be revised in Q2             Total gold production: max. 350,000 oz             Post c...
Mining Production                                  NORTH WASTE       MINERALIZED                   DUMP                   ...
Grade Control             DDH Block model 40x40m drill spacing        RC GC 20X10m & 10X10m drill spacing     Bench     62...
Conventional Milling Process      Mine Trucks                 Primary Crusher                 90,000 tpd                  ...
Organic Growth Opportunities                                                       Inferred   M&I                 P&P     ...
Development – Block A      Block A pre-feasibility study underway      Evaluate potential expansion options20
Exploration – South Structure                                           15.6 M oz in Reserves                             ...
Invest in Detour Gold     Our Vision     Focus and Discipline      Leverage to gold price      Optimize operation      ...
ADDITIONALINFORMATION 23
Current Valuation vs. Peers                                                                                               ...
Detour Lake Profile                                                                    Sept. 2012     Detour Lake         ...
Gold Production/Cost/Grade Profile                                               Avg. C$749/oz                      Grade ...
Detour Lake Reserves & Resources     As at December 31, 2011                                Tonnes            Grade       ...
Detour Lake & Block ABlock A near-surface resource    2012 completed DH                            Detour Lake   DH includ...
Management & Directors     Management      Gerald Panneton               Pat Donovan                 Andrew Croal      ...
Contact Information     Gerald Panneton     President & CEO     Email: gpanneton@detourgold.com     Phone: 416.304.0800   ...
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Dgc 13 04_16-18_european gold forum

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Transcript of "Dgc 13 04_16-18_european gold forum"

  1. 1. CANADA’S NEXTINTERMEDIATEGOLD PRODUCER European Gold Forum 2013, Zurich April 16-18, 20131
  2. 2. 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 commencement of commercial production at the Detour Lake mine, 2013 guidance for gold production and total cash costs, the completion of a pre-feasibility study on Block A, reserve and resource estimates, ore grade, expected mine life, average annual gold production, gold recovery, cash operating costs and other costs , sensitivity to metal prices and other sensitivities, ramp-up of operations, mining rates reaching approximately 200,000 tpd by year-end 2013, future operating plans, potential expansion opportunities, and plans for organic growth which includes growing mineral reserves to more than 20 million ounces. 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 2012 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 availability of financing for exploration and development activities; operating and capital costs; the Company’s ability to attract and retain skilled staff; the mine development schedule; sensitivity to metal prices and other sensitivities; the supply and demand for, and the level and volatility of the price of, gold; timing of the receipt of regulatory and governmental approvals for development projects and other operations; the supply and availability of consumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; 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
  3. 3. 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
  4. 4. Invest in Detour Gold Our Vision Focus and Discipline  Leverage to gold price  Optimize operation  Organic growth  Safe jurisdiction Per Share Value Creation  Free cash flow growth  Limit share dilution  Return on capital4
  5. 5. Share Capital ISSUED AND C$2.0 B OUTSTANDING 117.9M MARKET CAP C$170 M FULLY DILUTED 139.8 M CASH POSITION OPTIONS & FN SHARE COMMITMENTS TOP SHAREHOLDERS CONVERTIBLE 8.9 M NOTES PAULSON & CO: 15% INSTITUTIONS TOTAL: >80% 13.0 M Note: Cash position and share data at March 31, 2013.5
  6. 6. Focused on One Core Asset Detour Lake - Ontario, Canada  Low-risk, mining friendly jurisdiction  Large prospective land package of 566 km2 on Abitibi Greenstone Belt  In production: Detour Lake open pit mine  15.6 M oz in reserves  In progress: Block A pre- feasibility study  Exploration: Targeting high-grade mineralization6
  7. 7. From Core to Pour Record Timing from “Discovery” to Production Detour Lake in 6 years 2007 2009 2010 2011-12 2013 PRODUCTION 2013 ACQUISITION PRE-FEASIBILITY FEASIBILITY DEVELOPMENT PRODUCTION /DISCOVERY STUDY STUDY & PERMITTING7
  8. 8. Detour Lake Mine in 6 Years Consistently Delivered Results  Focused on execution  Built strong management team with track record of success  Increased resource growth by 750% since acquisition at <$5/oz  Completed positive economic studies over a 2-year period  Raised over $2 billion while limiting share dilution  Completed mine construction within time frame (27 months)  Obtained strong community and Aboriginal support8
  9. 9. 2013 Objectives H1 2013  First gold pour in February  Securing $90 million credit facility  Commissioning of second production line  25,000 m drilling program targeting high-grade gold mineralization H2 2013  Achieving commercial production  Gold production target of max. 350,000 ounces for the year  Completing pre-feasibility study on Block A  Advancing evaluation of mine expansion scenarios  Year-end mineral resources/reserves update9
  10. 10. Corporate Responsibility Focus on health and safety of our employees, the well-being of our community and the protection of the natural environment  Hiring in the region, giving priority to local Aboriginal communities:  95% of workforce from region  28% are Aboriginals WORKFORCE ORIGIN  Scholarship and job training  Supporting local communities COCHRANE AREA COCHRANE 25%  Business opportunities 26%  Participation in municipal development NORTHERN REST OF ONTARIO  Corporate philanthropy ONTARIO 3% 44% OTHER 2%10
  11. 11. Detour Lake Mine Production Start 02/ 2013 OP reserves (M oz) 15.6 Mill throughput (tpd) 55,000 Strip ratio (waste:ore) 3.7 Gold recoveries 91% Average grade (g/t) 1.03 Estimated mine life (yrs) 21.5 Avg. production (oz/yr) 657,000 Initial capex (C$ B) 1.5 Sustaining capex (C$ B) 1.211
  12. 12. Projected 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 TCC12
  13. 13. 2013 Ramp Up Mining  Current stockpiles:  2.3 Mt grading 0.7 g/t  1.6 Mt grading 0.4 g/t  Mining rates to ~200,000 tpd by year-end  Mining fleet of 20 haul trucks & 4 shovels Processing Plant  55,000 tpd conventional gravity and CIP processing plant with two production lines  Line 1 & 2 in operation  Optimize and improve efficiencies13
  14. 14. Q1 Operation Statistics Q1 2013 Ore tonnes mined (Mt) 1.29 Tonnes milled (Mt) 1.02 Mill grade (g/t Au) 0.64 Recovery (%) 80 Availability (%) (1) 66 Gold produced (oz) (2) 16,841 (1) Quarterly period starting on January 12 with first production line and on March 9 with second production line. Availability averaged 70% for both production lines in the last week of March. (2) 7,300oz poured and 9,541 oz of plant inventory.14
  15. 15. 2013 Guidance  Guidance to be revised in Q2  Total gold production: max. 350,000 oz  Post commercial production (Q3): Total cash costs of C$800/oz to C$900/oz based on 200,000 oz to 250,000 oz sold  Sustaining capital: C$180 M (<$80 M in H1)  Commercial production target in Q3 NOTE: Commercial production to be declared after 60 consecutive days of operating at >75% of throughput (55,000 tpd x 75% = 41,250 tpd)15
  16. 16. 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
  17. 17. Grade Control DDH Block model 40x40m drill spacing RC GC 20X10m & 10X10m drill spacing Bench 6252m Block Gold Grade (g/t) < 0.3 < 0.5 < 0.8 Bench < 2.0 > = 2.0 6240m17
  18. 18. Conventional Milling Process Mine Trucks Primary Crusher 90,000 tpd To Gravity Circuit Stockpile SAG Mills (2) Ball Mills (2) Secondary Crushers (2) 55,000 tpd 55,000 tpd 67,000 tpd Pebble Crushers (2) 73,000 tpd To Gravity Circuit CIP To Leach Carbon Market Stripping Tailings Gold Gold Gold Doré Bars Furnace Electrowinning18
  19. 19. Organic Growth Opportunities Inferred M&I P&P Development 30M oz  Grow reserve base to +20 M oz  Complete Block A pre-feasibility study in 2013-14  Evaluate Detour Lake expansion 20M oz Exploration  Large prospective land position of 14.9 15.6 566 km2 11.4  Tested gold targets on structures 10M oz 8.8 south of Detour Lake: 25,000 m completed (results pending)19
  20. 20. Development – Block A  Block A pre-feasibility study underway  Evaluate potential expansion options20
  21. 21. Exploration – South Structure 15.6 M oz in Reserves 25,000 m in 2013 *Note: Excludes drilling around Detour Lake and M zone (Block A).21
  22. 22. Invest in Detour Gold Our Vision Focus and Discipline  Leverage to gold price  Optimize operation  Organic growth  Safe jurisdiction Per Share Value Creation  Free cash flow growth  Limit share dilution  Return on capital22
  23. 23. ADDITIONALINFORMATION 23
  24. 24. Current Valuation vs. Peers Share of Au Reserves per Consensus P/NAV EV / Reserves(1) $1000(2) Alacer 0.92x New Gold $585 African Barrick 13.8 New Gold 0.89x Alamos $540 Allied Nevada 8.0 Alamos 0.80x Osisko $276 Centerra 7.9 AuRico 0.79x AuRico $209 Detour 6.8 Osisko 0.73x IAMGOLD $198 Alacer 4.6 IAMGOLD 0.62x Detour $169 AuRico 4.4 Detour 0.61x Alacer $149 IAMGOLD 4.2 African Barrick 0.48x Allied Nevada $140 Osisko 3.9 Allied Nevada 0.46x Centerra $100 New Gold 1.8 Centerra 0.37x African Barrick $47 Alamos 1.3 Source: Bloomberg, company filings and select Street Research Note: Market data updated to March 28, 2013 1. Shown based on gold only reserves on an attributable basis. 2. Calculated as US$1,000 divided by fully diluted market capitalization multiplied by total attributable gold only reserves.24
  25. 25. Detour Lake Profile Sept. 2012 Detour Lake Mine Plan(3) Gold price (US$/oz) (1) 1,200 Foreign exchange rate (US$/Cdn$) 1.00 Open pit Assumptions Fuel price (US$/barrel) 100 @ 0.5 g/t cut-off 20,600E Income/mining tax rate (%) 25/10 Net Smelter Royalty (%) 2 Ore milled (Mt) 470.0 Waste mined (Mt) (4) 1,734 16,500E Mine Strip ratio (waste:ore) 3.7 Parameters Avg. gold grade (g/t) 1.03 700 m 1.0 g/t Au Total contained gold (M oz) 15.6 0.5 - 1.0 g/t Au Estimated gold recovery (%) 91.0 <0.5 g/t Au Total recovered gold (M oz) 14.1 Mine life (years) 21.5 Avg. annual gold production (oz) 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.25
  26. 26. Gold Production/Cost/Grade Profile Avg. C$749/oz Grade (g/t Au)Gold Production (‘000 oz) Avg. 657,000 oz/yr Total Cash Costs (C$/oz)800 900 1.6700 850 1.4600 800 1.2500 750 1.0400 700 0.8300 650 0.6200 600 0.4100 550 0.2 0 500 0 Note: Excludes stripping adjustments. 26
  27. 27. 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.27
  28. 28. Detour Lake & Block ABlock A near-surface resource 2012 completed 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 28
  29. 29. 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 Chief Operating Officer 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  Ingrid Hibbard  Gerald Panneton  Louis Dionne  Michael Kenyon  Jonathan Rubenstein  Robert E. Doyle  Alex G. Morrison  Graham Wozniak  Andre Falzon29
  30. 30. 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.com30
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