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Dgc 13 05_14-16_bo_aml conference Presentation Transcript

  • 1. 1CANADA’S NEXTINTERMEDIATEGOLD PRODUCER2013 Global Metals, Mining & Steel ConferenceBank of America Merrill LynchMay 14-16, 2013, Barcelona
  • 2. 2Forward 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 thecommencement of commercial production at the Detour Lake mine, 2013 guidance for gold production and total cash costs,reserve and resource estimates, ore grade, expected mine life, average annual gold production, gold recovery, cash operatingcosts and other costs, sensitivity to metal prices and other sensitivities, ramp-up of operations, mining rates reachingapproximately 200,000 tpd by year-end 2013, future operating plans, potential expansion opportunities, and plans for organicgrowth which includes growing mineral reserves to more than 20 million ounces. Forward-looking statements involve knownand unknown risks, uncertainties and other factors which are beyond Detour Gold’s ability to predict or control and may causeDetour Gold’s actual results, performance or achievements to be materially different from any of its future results, performanceor achievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, butare not limited to, gold price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geologicaldata, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate andexchange rate fluctuations, general economic conditions and other risks involved in the gold exploration and developmentindustry, as well as those risk factors discussed in the section entitled “Description of Business - Risk Factors” in Detour Gold’s2012 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, butnot 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; sensitivityto metal prices and other sensitivities; the supply and demand for, and the level and volatility of the price of, gold; timing of thereceipt of regulatory and governmental approvals for development projects and other operations; the supply and availability ofconsumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; the accuracy ofreserve and resource estimates and the assumptions on which the reserve and resource estimates are based; 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 statementscontained herein are made as of the date hereof, or such other date or dates specified in such statements. Detour Goldundertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as aresult of new information or future events or otherwise, except as may be required by law. If the Company does update one ormore forward-looking statements, no inference should be drawn that it will make additional updates with respect to those orother forward-looking statements.
  • 3. 3The mineral reserve and resource estimates reported in this presentation were prepared in accordance with CanadianNational Instrument 43-101Standards of Disclosure for Mineral Projects (“NI 43-101”), as required by Canadian securitiesregulatory 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. Canadianstandards differ significantly from the requirements of the SEC. Investors are cautioned not to assume that any part or all ofthe mineral deposits in these categories constitute or will ever be converted into reserves. In addition, “inferred” mineralresources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legalfeasibility. 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 includesinferred 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 43-101compliant Technical Report for this update was filed on SEDAR on October 18, 2012. The following QPs participated in thisupdate: 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 MaximeDupéré, 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.NI-43 101 DisclosureInformation Containing Estimates of Mineral Reserves and Resources
  • 4. 4Focus and Discipline Leverage to gold price Optimize operation Organic growth Safe jurisdictionPer Share Value Creation Free cash flow growth Limit share dilution Return on capitalInvest in Detour GoldOur VisionBecome a leading intermediate gold producer andpremier investment opportunity
  • 5. 5Note: Cash position and share data at April 30, 2013. Conversion price for the Notes isUS$38.50.Share CapitalFULLY DILUTED139.9 MOPTIONS & FN SHARECOMMITMENTS9.0 MCONVERTIBLENOTES13.0 MISSUED ANDOUTSTANDING117.9MC$1.4 BC$128 MTOPSHAREHOLDERSMARKET CAPCASH POSITIONPAULSON & CO: 15%INSTITUTIONS TOTAL: >80%
  • 6. 6Focused on One Core AssetDetour Lake - Ontario, Canada Low-risk, safe mining jurisdiction Large prospective land package of 566 km2 on Abitibi Greenstone Belt› Detour Lake open pit mine – 15.6 M oz in reserves› Significant potential to expand mineral resources› Exploration upside
  • 7. 7PRODUCTION2013Record Timing from “Discovery” to ProductionDetour Lake in 6 yearsACQUISITION/DISCOVERYPRE-FEASIBILITYSTUDYFEASIBILITYSTUDY &PERMITTINGDEVELOPMENT PRODUCTION2007 2009 2010 2011-12 2013From Core to Pour
  • 8. 8Scorecard Highlights Delivered results in timely manner over last 6 years Built strong management team with track record of success Increased mineral resources by 750% since acquisition at <$5/oz Completed positive economic studies over a 2-year period Raised over $2 billion (equity + debt) Completed mine construction on time (27 months) Obtained strong community and Aboriginal support Started gold production in Q1 2013FocusQ3 Q4Strategy: ExecutionDiscipline
  • 9. 9H1 2013First gold pour in FebruarySecured $90 million credit facilityCommissioned second production line25,000 m drilling program targeting high-gradegold mineralizationH2 2013 Achieving commercial production in Q3 Gold production target of between 260,000 and320,000 ounces for the year Year-end mineral resources/reserves update2013 Objectives
  • 10. 10Focus on health and safety of our employees, the well-being ofour community and the protection of the natural environment Hiring in the region, giving priority to local Aboriginal communities: 95% of workforce from region 28% are Aboriginals Scholarship and job training Supporting local communities Business opportunities Participation in municipal development Corporate philanthropyNORTHERNONTARIO44%COCHRANE25%COCHRANEAREA26%REST OFONTARIO3%2%OTHERCorporate ResponsibilityWORKFORCE ORIGIN
  • 11. 11OP reserves (M oz) 15.6Mill throughput (tpd) 55,000Strip ratio (waste:ore) 3.7Gold recoveries 91%Average grade (g/t) 1.03Estimated mine life (yrs) 21.5Avg. production (oz/yr) 657,000Initial capex (C$ B) 1.5Sustaining capex (C$ B) 1.2Detour Lake Mine at a GlanceGold production started in February 2013
  • 12. 12MAINTENANCELABOURPOWERDIESELG&AROYALTY+OTHER(2% NSR)CONSUMABLES29%22%18%12%8%5%6%Breakdown of 2013-14 TCCOperating Costs (LOM) C$/t milled C$/t mined C$/ozMining costs 11.65 2.49 388Processing cost 7.83 -- 260G&A 1.86 -- 62Cash operating costs 21.34 -- 710Royalty (2%) and other 1.26 -- 42Refining 0.12 -- 4Silver credit (0.20) -- (7)Total cash costs (TCC) 22.52 -- 749A 10% change in:Diesel or power costs = $9/oz change in TCCCdn$ FX rate = $63/oz in TCCProjected LOM Operating Costs
  • 13. 132013 Ramp UpMining Current stockpiles: 2.6 Mt grading 0.7 g/t 1.6 Mt grading 0.4 g/t Mining rates to ~200,000 tpd byyear-end Mining fleet of 20 haul trucks &4 shovelsProcessing Plant 55,000 tpd conventional gravity andCIP processing plant with twoproduction lines Line 1 & 2 in operation Optimize and improve efficiencies
  • 14. 14PLANT SITECAMPBELLPITAPPROX. PIT SHELLAT END OF LOMCURRENTPIT SHAPEMINERALIZEDZONESatellite image dated July 2012NORTH WASTEDUMPMining Production
  • 15. 15Bench6252mBench6240mGrade ControlDDH Block model 40x40m drill spacing RC GC 20X10m & 10X10m drill spacingBlock Gold Grade(g/t)< 0.3< 0.5< 0.8< 2.0> = 2.0
  • 16. 16Q1 2013Ore tonnes mined (Mt) 1.29Tonnes milled (Mt) 1.02Mill grade (g/t Au) 0.64Recovery (%) 80Availability (%) (1) 66Gold produced (oz) (2) 16,841Q1 Operation Statistics(1) Quarterly period starting on January 12 withfirst production line and on March 9 with secondproduction line. Availability averaged 70% forboth production lines in the last week of March.(2) 7,300 oz poured and 9,541 oz of plantinventory.
  • 17. 172013 Guidance 2013 Revised Guidance Total gold production of 260,000 to320,000 oz Post commercial production (Q3):Total cash costs of C$800 toC$1,000/oz Sustaining capital: C$180 M($45 M incurred in Q1) Commercial production target in Q3NOTE: Commercial production to be declared after 60consecutive days of operating at >75% of throughput(55,000 tpd x 75% = 41,250 tpd)
  • 18. 18Conventional Milling ProcessPrimary Crusher90,000 tpdMine TrucksSecondary Crushers (2)67,000 tpdPebble Crushers (2)73,000 tpdToMarketGoldDoré BarsGoldFurnaceGoldElectrowinningCarbonStrippingToGravityCircuitToGravityCircuitStockpile SAG Mills (2)55,000 tpdBall Mills (2)55,000 tpdCIPLeachTailings
  • 19. 19 Grow reserve base to +20 M oz Reserve/resource update forDetour Lake mine Evaluate Detour Lake mineexpansion and Block A Large prospective land position of566 km2 Tested gold targets on structuressouth of Detour Lake: 25,000 mcompleted (partial results received)Inferred M&I P&P10M oz20M oz30M oz15.614.911.48.8Organic Growth Opportunities
  • 20. 20*Note: Excludes drilling around Detour Lake and M zone (Block A).25,000 min 201315.6 M oz in ReservesOrganic Growth OpportunitiesExplorationSouth Structure
  • 21. 21Near-term objectives (1-3 years): Detour Lake reserve/resource update (open pit west expansion) Evaluation of potential expansion optionsOrganic Growth Opportunities
  • 22. 2225,000 min 201315.6 M oz in Reserves20.1g/t/4.5mOrganic Growth OpportunitiesExplorationSouth Structure
  • 23. 23Focus and Discipline Leverage to gold price Optimize operation Organic growth Safe jurisdictionPer Share Value Creation Free cash flow growth Limit share dilution Return on capitalInvest in Detour GoldOur VisionBecome a leading intermediate gold producer andpremier investment opportunity
  • 24. 24ADDITIONALINFORMATION
  • 25. 25Detour Lake ProfileDetour LakeSept. 2012Mine Plan(3)Gold price (US$/oz) (1) 1,200Foreign exchange rate (US$/Cdn$) 1.00Assumptions Fuel price (US$/barrel) 100Income/mining tax rate (%) 25/10Net Smelter Royalty (%) 2Ore milled (Mt) 470.0Waste mined (Mt) (4) 1,734Mine Strip ratio (waste:ore) 3.7Parameters Avg. gold grade (g/t) 1.03Total contained gold (M oz) 15.6Estimated gold recovery (%) 91.0Total recovered gold (M oz) 14.1Mine life (years) 21.5Avg. annual gold production (oz) 657,0001. US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015.2. Press release Jan. 31, 2011 with Technical Report dated Mar. 15, 2011.3. Press release Sept. 4, 2012 with Technical Report dated Oct. 18, 2012.4. Includes low-grade stockpile.1.0 g/t Au0.5 - 1.0 g/t Au<0.5 g/t Au20,600E16,500E700 mOpen pit@ 0.5 g/t cut-off
  • 26. 268007006005004003002001000Gold Production (‘000 oz)900850800750700650600550500Total Cash Costs (C$/oz)Gold Production/Cost/Grade ProfileNote: Excludes stripping adjustments.Avg. C$749/oz1.61.41.21.00.80.60.40.20Grade (g/t Au)Avg. 657,000 oz/yr
  • 27. 27@ US$850/ozTonnes(millions)Grade(g/t)Contained Gold(‘000 oz)Reserves (1)Proven 101.6 1.29 4,222Probable 368.4 0.96 11,351P&P 470.0 1.03 15,573Resources (2)Measured 124.5 1.36 5,424Indicated 554.3 1.00 17,836M&I 678.8 1.07 23,261Inferred 208.5 0.86 5,7851. After a 95% mining recovery rate; Mining dilution factor of 15.5%.2. Inclusive of mineral reserves.Detour Lake Reserves & ResourcesAs at December 31, 2011
  • 28. 282012 completed DHHistorical DHBlock A near-surface resourceDetour Lake2011 year-end reserves = 15.6 M ozDH included in 2011 year-endreservesDH not included in 2011 year-endreservesDetour Lake & Block A
  • 29. 29 Gerald PannetonFounder, President & CEODirector Michael KenyonExecutive Chairman Paul MartinCFO Pierre BeaudoinChief Operating Officer Julie GallowaySr VP General Counsel &Corporate Secretary Derek TeevanSr VP Corporate &Aboriginal Affairs Pat DonovanVP Corporate Development James MavorVP Finance Rachel PineaultVP HR & Northern Affairs James RobertsonVP Environment &Sustainability Eric JosipovicController Drew AnwyllMGM/Director of Operations Andrew CroalDirector Technical Services Laurie GaboritDirector Investor Relations Jean-Francois MetailDirector Reserves and Resources Greg MiazgaDirector Construction & Engineering Bill SnellingDirector Corporate Systems & Controls Christian BrousseauProcess Plant Construction Manager Charles HennesseyDeputy General Manager/ProcessPlant Manager Patrik GillerstedtMine Manager Peter Crossgrove Louis Dionne Robert E. Doyle André Falzon Gerald Panneton Jonathan Rubenstein Graham Wozniak Ingrid Hibbard Michael Kenyon Alex G. MorrisonManagement & DirectorsManagementDirectors
  • 30. 30Gerald PannetonPresident & CEOEmail: gpanneton@detourgold.comPhone: 416.304.0800Laurie GaboritDirector Investor RelationsEmail: lgaborit@detourgold.comPhone: 416.304.0800www.detourgold.comContact Information