Dgc 13 02_24-27_bmo metals and mining conference


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Dgc 13 02_24-27_bmo metals and mining conference

  1. 1. CANADA’S NEXTINTERMEDIATEGOLD PRODUCER BMO Capital Markets 22nd Global Metals and Mining Conference February 24-27, 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 commissioning of the second production line, securing a $90 million credit facility, commencement of commercial production, completing a pre- feasibility study on Block A, 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, ramp-up of operations, future operating plans, 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
  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$2.5 B OUTSTANDING 117.9M MARKET CAP C$236 M FULLY DILUTED 139.7 M CASH POSITION (YR-END) OPTIONS & FN SHARE COMMITMENTS TOP SHAREHOLDERS CONVERTIBLE 8.8 M NOTES PAULSON & CO: 15% CARMIGNAC GESTION: 5% 13.0 M INSTITUTIONS TOTAL: >80% Note: Cash position at December 31, 2012 and share data at January 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  Commissioning of second production line  Securing $90 million credit facility  20,000 m drilling program targeting high-grade gold mineralization H2 2013  Achieving commercial production  Gold production target of +350,000 ounces for the year  Completing pre-feasibility study on Block A  Advancing evaluation of mine expansion scenarios  Year-end mineral resources/reserves update9
  10. 10. Corporate Responsibility Focus on health and safety of our employees, the well-being of our community and the protection of the natural environment  Hiring in the region, giving priority to local Aboriginal communities:  95% of workforce from region  25% are Aboriginals WORKFORCE ORIGIN  Scholarship and job training  Supporting local communities COCHRANE COCHRANE AREA 25%  Business opportunities 26%  Participation in municipal development NORTHERN REST OF ONTARIO  Corporate philanthropy ONTARIO 3% 43% OTHER 2%10
  11. 11. Detour Lake Mine Production Start 02/ 2013 OP reserves (M oz) 15.6 Mill throughput (tpd) 55,000 Strip ratio (waste:ore) 3.7 Gold recoveries 91% Average grade (g/t) 1.03 Estimated mine life (yrs) 21.5 Avg. production (oz/yr) 657,000 Initial capex (C$ 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 Guidance  Total production: 350,000 oz to 400,000 oz of gold  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)13
  14. 14. 2013 Ramp Up Mining  Current stockpile of 2.2 Mt @ 0.7 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 in operation  Line 2 start-up in March 2013  Optimize and improve efficiencies14
  16. 16. 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 Electrowinning16
  17. 17. 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  Evaluate Detour Lake expansion 20M oz Exploration  Large prospective land position of 14.9 15.6 566 km2 11.4  Test gold targets on structure south 10M oz 8.8 of Detour Lake: 20,000 m in H117
  18. 18. Development – Block A Block A Pre-feasibility  Block A pre-feasibility study by year-end 2013  Evaluate potential expansion options *TWD Technical Report dated July 2009.18
  19. 19. Exploration – South Structure 15.6 M oz in Reserves 20,000 m in H1 2013 Existing DDH Gold occurrence (OGS) DDH intersection >1g/2m DDH intersection >1g/10m *Note: Excludes drilling around Detour Lake and M zone (Block A).19
  20. 20. 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 capital20
  22. 22. Current Valuation vs. Peers Share of Au Reserves per Consensus P/NAV(1) EV / Reserves(1)(2) $1000(1)(3) New Gold 0.96x New Gold $642 African Barrick 8.7 AuRico 0.87x Alamos $351 Detour 6.1 Osisko 0.75x AuRico $293 Centerra 6.0 Alamos 0.74x Osisko $274 Allied Nevada 5.9 African Barrick 0.73x IAMGOLD $216 Alacer 4.9 Detour 0.65x Allied Nevada $170 Osisko 3.8 Alacer 0.62x Detour $169 IAMGOLD 3.7 Allied Nevada 0.57x Alacer $166 AuRico 2.9 IAMGOLD 0.54x Centerra $152 Alamos 2.5 Centerra 0.47x African Barrick $88 New Gold 1.6 Source: Bloomberg, company filings, select Street Research Note: Market data updated to February 14, 2013. 1. Alamos shown pro-forma Aurizon acquisition announced January 14, 2013. 2. Shown based on gold only reserves on an attributable basis. 3. Calculated as US$1,000 divided by fully diluted market capitalization multiplied by total attributable gold only reserves.22
  23. 23. Detour Lake Profile Sept. 2012 Detour Lake Mine Plan(3) Gold price (US$/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.23
  24. 24. 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. 24
  25. 25. 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.25
  26. 26. Detour Lake & Block ABlock 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 26
  27. 27. 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 Hibbard27
  28. 28. 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.com28