2. 2
Forward Looking Information
This presentation contains certain forward-looking information and statements as defined in applicable securities law (referred to herein as “forward-looking statements”). Forward-looking statements include, but are not limited to, statements with respect to Detour Gold’s future financial or operating performance; guidance for production, total cash costs, capital costs, exploration costs; expected throughput, mining and recovery rates; expected future production and mining activities; opportunities to optimize the mine operation; the updated mine plan and economic analysis of the Detour Lake mine including, but not limited to, the life of mine plan, the waste to ore ratio, processing and production rates, grades, metallurgical recovery rates, operating and sustaining capital costs, and the projected life of mine, opportunities to optimize the mine operation; the success and continuation of exploration activities, the future price of gold, reclamation obligations, government regulations and environmental risks.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause 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, assumptions and parameters underlying the life of mine update not being realized, a decrease in the future gold price, discrepancies between actual and estimated production, changes in costs (including labour, supplies, fuel and equipment), changes to tax rates; environmental compliance and changes in environmental legislation and regulation, 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 2013 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 sustaining capital costs; the Company’s ability to attract and retain skilled staff; sensitivity to metal prices and other sensitivities; the supply and demand for, and the level and volatility of the price of, gold; 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.
All forward-looking statements in this presentation are necessarily based on opinions and estimates made as of the date such statements are made and are subject to important risk factors and uncertainties, many of which cannot be controlled or predicted. Detour Gold and the Qualified Persons who authored the associated Technical Report undertake 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.
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 February 4, 2014, Detour Gold announced an updated life of mine plan for the Detour Lake mine. The NI 43-101 compliant Technical Report for this update was filed on SEDAR on February 4, 2014. The following QPs participated in this update: BBA Inc., under the direction of André Allaire, Eng., Acting President and CEO and Patrice Live, Eng., Director Mining; SGS Canada Inc., under the direction of Yann Camus, Eng., Project Engineer, 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 and Geotechnical Engineering Group Manager.
The scientific and technical content of this presentation has been reviewed, verified and approved by Drew Anwyll, P.Eng., Vice President of Operations, a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects”.
Information Containing Estimates of Mineral Reserves and Resources
Non-IFRS Financial Performance Measures
The Company has included “Total cash cost per gold ounce sold (TCC)” and “Adjusted net loss” in this presentation which are non-IFRS measures. The Company believes that these measures, in addition to conventional measures prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company and its ability to generate operating earnings and cash flow from its mining operations. Refer to the MD&A of June 30, 2014 or relevant period for reconciliation of these measures.
Detour Gold reports total cash costs on a sales basis. Total cash costs per gold ounce sold include production costs such as mining, processing, refining, site administration, costs associated with providing royalty in-kind ounces, and costs for agreements with Aboriginal communities, but are exclusive of depreciation and depletion, reclamation, non-cash share-based compensation and deferred stripping. Total cash costs are reduced by silver sales and divided by gold ounces sold to arrive at total cash costs per gold ounce sold. Further details regarding total cash costs per gold ounce sold and a reconciliation to the nearest IFRS measures are provided in our MD&A accompanying our financial statements filed on www.sedar.com. Total cash costs plus capex per gold ounce sold includes TCC plus sustaining capital and deferred stripping divided by gold ounces sold. These non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. Other companies may calculate this measure differently.
4. 4
Low-risk, safe mining jurisdiction
Large reserve base, long mine life
Annual production of +600,000 oz for next 10 years
Strong cash flow growth following ramp-up completion
Production growth opportunities
Unique Investment Opportunity
15.5
M OZ GOLD
in reserves
21
+
YEAR
mine life
Intermediate Canadian Gold Producer
5. 5
2014 Key Focus
22%
Complete ramp-up of Detour Lake
›Reach mill design capacity
›Further increase mine output
Improve balance sheet
›Increase flexibility of short-term debt
›Price protection during ramp-up (100,000 oz of gold hedged @ US$1,287/oz)
›Debt reduction
›Cash position of min. US$100 M
Start evaluation of ‘next’ production growth opportunities
6. 6
H1 2014 Scorecard
H1 2014 Scorecard:
Higher end of gold production achieved
Lower mining and milling rates than planned
Total cash cost per ounce trend decreasing
High grade gold intersections reported at Lower Detour
Received initial electricity rebate of US$16 M for half of 2013 and 2014
Obtained flexibility on CAT lease and credit facility
$1,214
$1,174
$976
$941
■Total Cash Costs (US$/oz sold)1
■Gold Production (K oz)
Q3’132
Q4’13
Q2’14
Q1’14
117
82
107
78
1.Refer to the section on Non-IFRS Performance Measures on slide 3. Reconciliation of these measures is described in the MD&A for the corresponding period.
2.Commercial production declared on September 1, 2013. TCC reported is for the month of September 2013.
7. 7
Mill Production
Q2 2014 Operating Results
0
1
2
3
4
5
Q2'13
Q3'13
Q4'13
Q1'14
Q2'14
1.0
0.8
0.2
0.0
0.4
0.6
Tonnes Milled (Mt)
Q2’13
Q3’13
Q4’13
Q2’14 1’14
Q1’14
31
42
37
45
Head Grade (g/t Au)
49
Throughput Rates (Ktpd)
Q2’14 Performance:
Gold production of 117,366 ounces
Dilution reduced to <3%, well below 2014 budget of 7%
ROM stockpiles total 1.3 Mt @ 0.76 g/t at end of Q2
Plant throughput rates averaging 48,569 tpd
Availability of 83%
0.91
G/T GOLD
head grade
4.42
MILLION
tonnes milled
91
% GOLD
recovery
8. 8
Mill Operational Progress
Mill Operation Significantly De- risked in 2014
Plant now stabilizing with recent modifications to secondary crushers (Q2) and 410 conveyor (Q3)
Consistently reaching design rates of 2,500 tpoh
Focus remains on improving availability
›External maintenance reviews
›Better understanding of wearability and bottlenecks
Exit 2014 at design capacity of 55,000 tpd
Q4’14: Step-up phase with availability expected to ramp-up to 89% by year-end
9. 9
Mine Operational Progress
2014 Focus: Increased Efforts in Pit Development
Focus on accelerating overburden and till removal
›+90% completed to date = 15.5 Mt
Southwall pushback is now completed (allowing gradual de- stacking of benches)
Old infrastructure removal is near completion at Campbell pit
Q1’13
Q2’13
Q3’13
Q1’14
Q4’13
Q1-Q3’2014: Accelerated pit development has contributed to reduced mining rates
Q1-Q3 mining rates at steady state of approx. 210,000 tpd
10. 10
Mine Operational Focus
#1 Focus: Increasing mining rates
Increase support in the areas of planning and maintenance
Improve drilling productivity
Increase shovel availability from 80% to 85%
Result is larger in-pit blasted inventory, improved shovel allocation and productivity = more tonnes mined per day
Q4’14: Working towards a step-up phase to improve mining rates
11. 11
Mine Operational Focus
Q4’14: Working towards a step-up phase to improve mining rates
12. 12
2014 Outlook
H1 A
2014 Guidance
Gold production (oz)
224,520
450,000-480,000
TCC (US$/oz sold)1
$956
$900-975
Sustaining capital (US$ M)
$45
$95-100
Deferred stripping (US$ M)
$15
$30-35
1.Refer to the section on Non-IFRS Performance Measures on slide 3. Reconciliation of these measures is described in the MD&A for the corresponding period.
second year of operation
2014
RAMP-UP COMPLETION OF DETOUR LAKE MINE
13. 13
2014 Capital Expenditures
Mine
US$33 M
TMA
US$40 M
Deferred Stripping
US$30-35 M
2014 CAPITAL:
US$125-135 M
Other
Mill
US$18 M
US$5 M
(US$ M)
Q2’14
H1’14
Tailings facility (TMA)
$ 6.2
$ 11.4
Mill
2.4
2.9
Mine
16.0
27.5
Other
2.5
2.7
Sustaining expenditures1
$ 27.1
$ 44.5
Deferred stripping
$ 15.1
$ 15.1
1.$19.4 M incurred in 2013 (including 6060 shovel and two 795F haulage trucks received in 2013) and includes payment of $2.5 M to NAC.
Initial budget holding
TMA construction on schedule
14. 14
CN detox to be completed in Q3 and 2nd oxygen plant in Q4
Current Status
Near-term Opportunities (2-5 yrs)
1
Increase throughput to 61,000 tpd for 2017
Starts in 2014 with installation of 1 cyanide (CN) detox tank and 1 additional oxygen plant
2
Block A Project
Bring to pre-feasibility study for reserve definition in Q1 2015
In progress
3
Pebble Circuit Removal
Pebbles appear to be barren
Testing continuing
4
Low-grade material (not in reserves)
Heap leach Segregation of fines
Heap leach test underway
5
Increase exploration activities On 630 km2 prospective property
Planning in progress
15. 15
US$1,000/oz
US$1,200/oz
15.5 Moz @ 1.02 g/t Au
P+P
2.0 Moz @ 1.15 g/t Au
M+I
~5.5 km
Near-term Opportunities: 2 & 3
Pebble Circuit Removal & Block A
Pebbles appear to be barren
Producing 700-800 tpoh of pebbles
Reject pebbles and replace with new feed from Block A?
Evaluate comingling options with Detour Lake
›Phase 1: Block A reserve estimate in Q1 2015
16. 16
Near-term Opportunities: 4 & 5
Low-grade Material
Currently stockpiling 0.4-0.5 g/t mineralized material:
Extra 1.5 M oz not accounted for in LOM plan
Potential to process at end of LOM
Evaluate potential for heap leach and gold concentration by natural segregation of fines
›Results of first bottle roll tests in Q4
OR
High-grade Exploration Focus
High-grade gold intersections reported at Lower Detour:
Continue exploration drilling program in winter 2015
Geophysical surveys planned to cover eastern extension of mineralized trend
Compilation work ongoing
17. 17
Positioning for growth
Operational step-up plan in Q4
›Ramp-up completion
›100% of mill throughput design capacity by year-end
Targeting cash flow positive operations in 2015
Update on first preliminary test results for pebble circuit removal and heap leach by year-end
Reserve estimate for Block A in Q1 2015 (pre-feasibility study)
Future Catalysts
19. 19
Initiating Research
Firm
Analyst
Target at September 24, 2014
07.06.11
Haywood
Kerry Smith
$15.50
07.07.09
Paradigm
Don Blyth/Don MacLean
$14.50
07.08.07
Raymond James
Phil Russo
$18.00
07.11.26
National Bank
Steve Parsons
$15.00
07.12.20
Macquarie
Mike Siperco
$18.00
08.01.14
Canaccord
Rahul Paul
$15.00
08.07.14
TD
Dan Earle
$18.50
08.09.04
RBC
Dan Rollins
$16.00
08.11.06
BMO NB
Brian Quast
$17.25
09.06.17
Laurentian
Eric Lemieux (left firm)
Under review
10.05.19
CIBC World Markets
Cosmos Chiu
$18.00
10.07.22
Credit Suisse
Anita Soni
$11.25
13.04.16
Scotiabank
Trevor Turnbull
$18.00
13.08.14
Desjardins
Michael Parkin
$12.50
13.11.12
Beacon Securities
Michael Curran
$15.25
13.12.09
GMP Securities
Ian Parkinson
$13.50
14.02.06
Cormark Securities
Richard Gray
$23.50
14.04.22
Goldman Sachs
Andrew Quail
$11.50
14.06.17
Dundee Capital Markets
Joseph Fazzini
$15.00
14.09.03
Morgan Stanley
Brad Humphrey
$15.50
Average target
$15.88
Analyst Coverage (20)
20. 20
Shareholder Information
Paulson & Co.
>80%
INSTITUTIONS TOTAL
10.5 M
Share options
13.0 M
Convertible notes 1
181.3 M
FULLY DILUTED
157.8 M
Issued & outstanding
Share Structure (03/31/2014)
Top Shareholders
1. Conversion price for the Notes is US$38.50. 2. Cash and short-term investments at June 30, 2014.
14%
C$1.5
BILLION
market cap
US$138.2
MILLION
cash position2
Share Structure (August 31, 2014)
Top Shareholders
21. 21
Q2 2014 Financial Results
Key Financial Statistics (US$ M, unless noted)
Q2’14
Revenues
$139.0
Production costs
$98.1
Depreciation & depletion
$38.3
Loss from mine operations
$2.6
Cash provided by operations
$46.3
Net loss/Adjusted net loss1
$35.0 / $17.4
Net loss & Adjusted net loss per share1
$0.23 / $0.12
Cash & short-term investments
$138.2
1.Refer to the section on Non-IFRS Financial Performance Measures on slide 3 of this presentation.
Price protection during ramp-up
At end of July 2014: 100,000 oz of gold hedged at an average price of US$1,287/oz for gold sales from August to December 2014
22. 22
Q2 2014 Operating Costs
Q1’14
Q2’14
Gold oz sold
84,560 oz
107,206 oz
TCC /oz sold1
US$976/oz
US$941/oz
1.Refer to the section on Non-IFRS Financial Performance Measures on slide 3 of this presentation. Reconciliation of these measures is described in the MD&A for the corresponding period.
Unit Costs
Q4’13
Q1’14
Q2’14
Mining (C$/t mined)
$2.60
$2.87
$2.87
Processing (C$/t milled)
$11.75
$11.13
$11.25
G&A (C$/t milled)
$4.13
$3.68
$3.46
Q2 Progress:
Higher mining costs due to:
›Shortfall in total tonnes mined
›Higher equipment maintenance costs
Higher milling costs due to:
›Higher maintenance costs and lower mill throughput
›Partially offset by lower consumables and reagent consumption
23. 23
Priority Target: Lower Detour area
Lower Detour area approx. 6-7 km south of mill
Structural complexity: number of shear zones sub-parallel and splaying from LDDZ
Several gold mineralization styles encountered
2014 exploration program results:
Mineralization extends for 450 metres
High-grade gold intercepts in altered feldspar porphyry intrusive containing quartz and/or quartz/tourmaline veins
Results suggest that grade and continuity may improve at depth
Near-term Opportunities: Exploration
24. 24
Lower Detour Area
15.5 M oz in Reserves
630 km2
Exploration Focus: Lower Detour
2.0 M oz in Block A Resource
25. 25
Lower Detour Area: 14,874 m of drilling completed in 2014
A
B
C
A’
B’
C’
Exploration Focus: Lower Detour
26. 26
Focus on health and safety of our employees, the well-being of our community and the protection of the natural environment
Hiring in the region, giving priority to local Aboriginal communities:
700 full-time employees*
92% of workforce from region
24% are Aboriginals
Scholarship and job training
Supporting local communities
Business opportunities
Corporate philanthropy
Participation in municipal development
Northern Ontario
41%
Cochrane
21%
Cochrane Area
30%
Rest of Ontario
5%
3%
Other
Corporate Responsibility
WORKFORCE ORIGIN
* At August 31, 2014. Excludes corporate office at 31 full-time employees.
27. 27
LOM Plan1
02/2014 Update
Proven & Probable Reserves (M oz)2
15.5
Gold grade (g/t)
1.02
Strip ratio (waste:ore)
3.5
Estimated gold recovery (%)
92
Mine life (years)
21.7
Annual gold production (oz)
660,000
Total cash costs (TCC) (C$/oz sold)3
$723
Sustaining capital (C$ billion)
$1.14
TCC3+ capex (C$/oz sold)
$848
LOM Summary
Main objective: Optimize first 5 years
1.As per NI 43-101 compliant Technical Report dated February 4, 2014.
2.Estimated using a gold price of US$1,000/oz. Includes stockpiles as of December 31, 2013.
3.Refer to the section on Non-IFRS Performance Measures on slide 3. Capex = sustaining capital expenditures + deferred stripping.
28. 28
TCC1 (C$/oz sold)
800
700
600
500
400
300
200
100
0
Gold Production
(‘000 oz)
LOM Gold Production/Cost Profile
900
850
800
750
700
650
600
550
500
598,000 oz C$759/oz
0.96 g/t
596,000 oz C$762/oz 0.91 g/t
659,000 oz C$778/oz
1.00 g/t
765,000 oz C$639/oz
1.16 g/t
1.Refer to the section on Non-IFRS Financial Performance Measures on slide 3 of this presentation.
2014 Guidance
450,000-480,000 oz
US$900-975/oz sold1
29. 29
LOM Operating Costs1
C$/t milled
C$/t mined
C$/oz sold 2
Mining costs
11.55
2.56
392
Processing costs
7.82
266
G&A
2.44
83
Total cash operating costs
21.81
741
Other adjustments 3
(18)
Total cash costs
723
29
LOM Operating Costs & Capex
1.As per NI 43-101 compliant Technical Report dated February 4, 2014.
2.Refer to the section on Non-IFRS Financial Performance Measures on slide 3 of this presentation.
3.Other adjustments include costs for deferred stripping, agreements with Aboriginal communities, refining charges and are net of silver by-product credits.
Capex1 (C$ M)
5 yrs: 2014 -2018
LOM
Mining
168
535
Process Plant
71
126
TMA
203
454
G&A
14
28
Total
456
1,143
Deferred Stripping
225
614
Mine Closure
70
Higher capital in first 5 years:
Ramp-up to 38 trucks
Complete plant de- bottlenecking exercise
Prepare TMA foundation for 2nd and 3rd cell
30. 30
Debt Repayment Schedule
At June 30, 2014
Revolving Credit Facility (1)
CAT Finance Lease
Convertible Notes
Face Value
US$30 M (1)
US$150 M
US$500 M
Maturity
March 2016
Jan 2017-Dec 2018 (2)
November 30, 2017
Interest Rate
LIBOR + 3%
LIBOR + 4%
5.5%
Payable
Monthly
Quarterly
Semi-annually
Conversion Price
n/a
n/a
$38.50
Payment schedule
Principal
Principal + Interest
Principal
Interest
Total (US$ M)
2014
-
$9.9
-
$27.5
$37.4
2015
-
$34.6
-
$27.5
$62.1
2016
$30
$32.7
-
$27.5
$90.2
2017
-
$35.8
$500
$27.5
$563.3
Thereafter
-
$7.2
-
-
$7.2
Total
$30
$120.2
$500
$110.0
$760.2
1.The Revolving Credit Facility provides for borrowings of up to C$90 M and is subject to a completion test prior to May 31, 2015. The Company intends to repay the Revolving Credit Facility within the next 12 months.
2.Includes multiple leases with maturities of 5 yrs from lease date.
31. 31
Michael Kenyon Executive Chairman
Paul Martin President and CEO
Pierre Beaudoin COO
James Mavor CFO
Julie Galloway Sr VP General Counsel & Corporate Secretary
Derek Teevan Sr VP Corporate & Aboriginal Affairs
Drew Anwyll VP Operations
Pat Donovan VP Corporate Development
Jean-Francois Metail VP Reserves and Resources
Rachel Pineault VP HR & Aboriginal Affairs
James Robertson VP Environment & Sustainability
Charles Hennessey General Manager Operations
Andrew Croal Director Technical Services
Laurie Gaborit Director Investor Relations
Alberto Heredia Controller
Bill Snelling Director Corporate Systems & Controls
Rickardo Welyhorsky Director Mineral Processing
Peter Crossgrove
Lisa Colnett
Louis Dionne
Robert E. Doyle
Alex G. Morrison
Jonathan Rubenstein
Graham Wozniak
André Falzon
Ingrid Hibbard
Michael Kenyon
Paul Martin
Management & Directors
Management
Directors
32. 32
Laurie Gaborit Director Investor Relations Email: lgaborit@detourgold.com Phone: 416.304.0581
Paul Martin President and Chief Executive Officer Email: pmartin@detourgold.com Phone: 416.304.0800
www.detourgold.com
Contact Information
