Dgc 13 08_13_corporate


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Dgc 13 08_13_corporate

  1. 1. 1 CANADA’S NEXT INTERMEDIATE GOLD PRODUCER Corporate Presentation August 14, 2013
  2. 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 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 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.
  3. 3. 3 Notes to Investors 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. Information Containing Estimates of Mineral Reserves and Resources Note Regarding Certain Measures of Performance This presentation presents estimates of future “cash operating costs per tonne milled”, “cash operating costs per ounce of gold produced”, “total cash costs per tonne milled” and “total cash costs per ounce of gold produced” which are not recognized financial measures under GAAP. These non-GAAP financial measures are intended to provide additional information to investors. However, they do not have a standardized meaning under GAAP and may not be comparable to similar measures presented by other gold producers. The estimates of future cash operating costs per tonne milled and future cash operating costs per ounce of gold produced include estimated mining, processing and site administration costs divided by estimated tonnes milled or gold ounces produced, respectively. The estimates of future total cash costs per tonne milled and future total cash costs per ounce of gold produced include estimated mining, processing, site administration, royalty and refining costs net of estimated silver by-product credits divided by estimated tonnes milled or gold ounces produced, respectively. These future estimates are based upon the cash operating costs per tonne milled, the cash operating costs per ounce of gold produced, the total cash costs per tonne milled and the total cash costs per ounce of gold produced that the Company expects to incur to mine gold at the Detour Lake mine. Since the Detour Lake mine has not yet reached commercial production, there is no reconciliation to actual GAAP measures provided as it is not practicable to reconcile these forward-looking non-GAAP financial measures to the most comparable GAAP measures.
  4. 4. 4 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 capital Invest in Detour Gold Our Vision Become a leading intermediate gold producer and premier investment opportunity
  5. 5. 5 Note: Cash position at June 30, 2013 and share data at August 12, 2013. Conversion price for the Notes is US$38.50. Share Capital FULLY DILUTED 161.7 M OPTIONS & FN SHARE COMMITMENTS 10.7 M CONVERTIBLE NOTES 13.0 M ISSUED AND OUTSTANDING 138.0 M C$1.4 B C$207 M TOPSHAREHOLDERS MARKET CAP CASH POSITION PAULSON & CO: 15% INSTITUTIONS TOTAL: >80%
  6. 6. 6 Focused on One Core Asset Detour 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. 7. 7 PRODUCTION 2013 Record Timing from “Discovery” to Production Detour Lake in 6 years ACQUISITION /DISCOVERY PRE-FEASIBILITY STUDY FEASIBILITY STUDY & PERMITTING DEVELOPMENT PRODUCTION 2007 2009 2010 2011-12 2013 From Core to Pour
  8. 8. 8 Scorecard 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 $2.5 billion (equity + debt)  Completed mine construction on time (27 months)  Obtained strong community and Aboriginal support  Started gold production in Q1 2013  Reached commercial production in August 2013 on schedule Focus Q3 Q4 Strategy: ExecutionDiscipline
  9. 9. 9 H1 2013 First gold pour in February Secured $90 million credit facility Commissioned second production line 25,000 m drilling program targeting high-grade gold mineralization Produced 74,738 ounces of gold in H1 H2 2013 Reached commercial production in August  Gold production target of 270,000 ounces for the year  Year-end mineral resources/reserves update 2013 Objectives
  10. 10. 10 Focus on health and safety of our employees, the well-being of our community and the protection of the natural environment  Hiring in the region, giving priority to local Aboriginal communities:  92% of workforce from region  25% are Aboriginals  Scholarship and job training  Supporting local communities  Business opportunities  Participation in municipal development  Corporate philanthropy NORTHERN ONTARIO 39% COCHRANE 24% COCHRANE AREA 29% REST OF ONTARIO 5% 3% OTHER Corporate Responsibility WORKFORCE ORIGIN
  11. 11. 11 OP reserves (M oz) 15.6 Mill throughput (tpd) 55,000 Strip ratio (waste:ore) 3.7 Gold recoveries 91% Average grade (g/t) 1.03 Estimated mine life (yrs) 21.5 Avg. production (oz/yr) 657,000 Initial capex (C$ B) 1.5 Sustaining capex (C$ B) 1.2 Detour Lake Mine at a Glance Gold production started in February 2013
  12. 12. 12 MAINTENANCE LABOUR POWER DIESEL G&A ROYALTY+ OTHER (2% NSR) CONSUMABLES 29% 22% 18% 12% 8% 5% 6% Breakdown of 2013-14 TCC Operating Costs (LOM) C$/t milled C$/t mined C$/oz Mining costs 11.65 2.49 388 Processing cost 7.83 -- 260 G&A 1.86 -- 62 Cash operating costs 21.34 -- 710 Royalty (2%) and other 1.26 -- 42 Refining 0.12 -- 4 Silver credit (0.20) -- (7) Total cash costs (TCC) 22.52 -- 749 A 10% change in: Diesel or power costs = $9/oz change in TCC Cdn$ FX rate = $63/oz in TCC Projected LOM Operating Costs
  13. 13. 13 2013 Ramp Up Mining  Current stockpiles:  1.8 Mt grading 0.7 g/t  2.4 Mt grading 0.4 g/t  Mining rates to ~200,000 tpd by year-end  Mining fleet of 20 haul trucks & 5 shovels Processing Plant  55,000 tpd conventional gravity and CIP processing plant with two production lines  Line 1 & 2 in operation  Optimize and improve efficiencies
  15. 15. 15 Bench 6252m Bench 6240m Grade Control DDH Block model 40x40m drill spacing RC GC 20X10m & 10X10m drill spacing Block Gold Grade (g/t) < 0.3 < 0.5 < 0.8 < 2.0 > = 2.0
  16. 16. 16 2013 Q1 Q2 Ore tonnes mined (Mt) 1.29 2.70 Tonnes milled (Mt) 1.02 2.87 Mill grade (g/t Au) 0.64 0.76 Recovery (%) 80 83 Availability (%) 66 68 Gold produced (oz) (1) 16,841 57,897 Q2 Operation Statistics (1) Q2 = 44,447 oz poured and 23,189 oz of plant inventory.
  17. 17. 17 2013 Ramp-up Guidance  2013 revised ramp-up guidance  Total gold production of 270,000 oz  Post commercial production: Total cash costs of US$1,100/oz  Sustaining capital: C$180 M (C$112 M incurred up to June 30)  Commercial production reached on Aug. 12 (to be declared on Sept. 1) Note: Following the post ramp-up phase at Detour Lake, both productivity and production are to increase and drive operating costs down.
  18. 18. 18 Conventional Milling Process Primary Crusher 90,000 tpd Mine Trucks Secondary Crushers (2) 67,000 tpd Pebble Crushers (2) 73,000 tpd To Market Gold Doré Bars Gold Furnace Gold Electrowinning Carbon Stripping To Gravity Circuit To Gravity Circuit Stockpile SAG Mills (2) 55,000 tpd Ball Mills (2) 55,000 tpd CIP Leach Tailings
  19. 19. 19  Grow reserve base to +20 M oz  Reserve/resource update for Detour Lake mine  Evaluate Detour Lake mine expansion and Block A  Large prospective land position of 630 km2  Tested gold targets on structures south of Detour Lake: 25,000 m completed (all results received) Inferred M&I P&P 10M oz 20M oz 30M oz 15.6 14.9 11.4 8.8 Organic Growth Opportunities
  20. 20. 20 *Note: Excludes drilling around Detour Lake and M zone (Block A). 25,000 m in 2013 15.6 M oz in Reserves Organic Growth Opportunities 630 km2
  21. 21. 21 Near-term objectives (1-3 years):  Detour Lake reserve/resource update (open pit west expansion)  Evaluation of potential expansion options Organic Growth Opportunities
  22. 22. 22 Organic Growth Opportunities
  23. 23. 23 Focus and Discipline  Leverage to gold price  Optimize operation  Organic growth  Safe jurisdiction Per Share Value Creation  Free cash flow growth  Limit share dilution  Return on capital Invest in Detour Gold Our Vision Become a leading intermediate gold producer and premier investment opportunity
  25. 25. 25 Detour Lake Profile Detour Lake Sept. 2012 Mine Plan(3) Gold price (US$/oz) (1) 1,200 Foreign exchange rate (US$/Cdn$) 1.00 Assumptions Fuel price (US$/barrel) 100 Income/mining tax rate (%) 25/10 Net Smelter Royalty (%) 2 Ore milled (Mt) 470.0 Waste mined (Mt) (4) 1,734 Mine Strip ratio (waste:ore) 3.7 Parameters Avg. gold grade (g/t) 1.03 Total contained gold (M oz) 15.6 Estimated gold recovery (%) 91.0 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. 1.0 g/t Au 0.5 - 1.0 g/t Au <0.5 g/t Au 20,600E 16,500E 700 m Open pit @ 0.5 g/t cut-off
  26. 26. 26 Gold Production/Cost/Grade Profile Note: Excludes stripping adjustments. 800 700 600 500 400 300 200 100 0 Gold Production (‘000 oz) LOM Avg. C$749/oz 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0 1.8 Grade (g/t Au) LOM Avg. 657,000 oz/yr 900 850 800 750 700 650 600 550 Total Cash Costs (C$/oz) 950 1000 900 Based on September 2012 Mine Production Plan
  27. 27. 27 @ US$850/oz Tonnes (millions) Grade (g/t) Contained Gold (‘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. Detour Lake Reserves & Resources As at December 31, 2011
  28. 28. 28 2012 completed DH Historical DH Block A near-surface resource Detour Lake 2011 year-end reserves = 15.6 M ozDH included in 2011 year-end reserves DH not included in 2011 year-end reserves Detour Lake & Block A
  29. 29. 29  Gerald Panneton Founder, President & CEO  Michael Kenyon Executive Chairman  Paul Martin CFO  Pierre Beaudoin Chief Operating Officer  Julie Galloway Sr VP General Counsel & Corporate Secretary  Derek Teevan Sr VP Corporate & Aboriginal Affairs  Pat Donovan VP Corporate Development  James Mavor VP Finance  Rachel Pineault VP HR & Aboriginal Affairs  James Robertson VP Environment & Sustainability  Eric Josipovic Controller  Drew Anwyll MGM/Director of Operations  Andrew Croal Director Technical Services  Laurie Gaborit Director Investor Relations  Jean-Francois Metail Director Reserves and Resources  Charles Hennessey Deputy General Manager/Process Plant Manager  Patrik Gillerstedt Mine Manager  Joshua Hurrell Chief Geologist  Bill Snelling Director Corporate Systems & Controls  Rickardo Welyhorski Director Mineral Processing  Mike Papadakis Process Plant Manager  Peter Crossgrove  Louis Dionne  Robert E. Doyle  André Falzon  Gerald Panneton  Jonathan Rubenstein  Graham Wozniak  Ingrid Hibbard  Michael Kenyon  Alex G. Morrison Management & Directors Management Directors
  30. 30. 30 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.com Contact Information