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 are statements that are not historical facts and are generally, but not always, identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “projects”, “potential”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation of such terms. 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; and opportunities to optimize the mine operation.
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)” , “Average realized gold price” 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.
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. Total cash costs plus total capital per gold ounce sold includes TCC as calculated above 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, as calculations may differ. Reconciliation of these measures is described in the MD&A for the second quarter ended June 30, 2014.
4. 4
Management Participants
Paul Martin
President and Chief Executive Officer
Pierre Beaudoin
Chief Operating Officer
James Mavor
Chief Financial Officer
Third Quarter 2014 Operational & Financial Results
Conference Call and Webcast
All monetary amounts are in U.S. dollars unless otherwise stated.
5. 5
Q3 2014 Highlights
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 third quarter ended September 30, 2014.
$138.8
MILLION
cash and short-term investments
$136.2
MILLION
total revenues
106,334
OZ GOLD
sales
from
$0.8
net loss
MILLION
or $nil per share
$16.5
adjusted net loss1
MILLION
or $0.10 per share
115,344
OZ GOLD
production
$941
/ OZ SOLD
total cash costs1
Mill facility exceeded design capacity of 55,000 tpd for 55 consecutive days from mid-August to mid-October
6. 6
Outlook After First 9 Months
On track to meet production and total cash cost guidance for 2014
Mill operation significantly de-risked: exit year at throughput rates of 55,000 tpd
Capital on budget
Target of $60 M in total debt repayments
1.Refer to the section on Non-IFRS Performance Measures on slide 3. Reconciliation of these measures is described in the MD&A for the third quarter ended September 30, 2014.
2.Commercial production declared on September 1, 2013. TCC reported is for the month of September 2013.
Q3’132
Q4’13
Q3’14
Q1’14
Q2’14
Gold Production (‘000 oz)
Q3’132
Q4’13
Q2’14
Q1’14
Total Cash Costs ($/oz sold)1
Q3’14
7. 7
Q3 2014 Operating Results
0
1
2
3
4
5
Q3'13
Q4'13
Q1'14
Q2'14
Q3'14
1.0
0.8
0.2
0.0
0.4
0.6
Tonnes Milled (Mt)
Q3’13
Q4’13
Q1’13
Q3’14 1’14
Q2’14
85
92
91
91
90
Mill production
Head Grade (g/t Au)
Recovery %
0.88
G/T GOLD
head grade
4.53
MILLION
tonnes milled
90
% GOLD
recovery
Q3’14 Performance:
Gold production of 115,344 ounces
4.5 Mt of ore processed: 75% direct feed and 25% ROM stockpiles
Head grade of 0.88 g/t, consistent with model projections
Recovery rates at 90%
Dilution averaged 6.7%
8. 8
Q3 2014 Operating Results - Mine
Q3’14 Performance:
Total of 18.9 Mt mined (206,000 tpd)
4.2 Mt ore mined; strip ratio 3.5
Shortfall in mining rates due to:
›Low drilling productivity and delays in explosive loading impacting shovel utilization
›Lower than planned shovel availability (81% versus 85% target)
Stockpiles = 0.9 Mt @ 0.73 g/t at Q3-end
Southwall pushback and old infrastructure removal completed
Q1-Q3’14: 16.5 Mt of overburden/till removal (+95% of 2014 program)
9. 9
Q4 2014 Focus - Mine
Plans to improve mining rates:
Improving training and QA/QC to increase drilling productivity and efficiencies
Improving delivery and loading of explosives
Increasing support in the areas of planning and maintenance for the mining fleet
De-stacking benches to the south & east to expose larger mine faces
Result is larger in-pit blasted inventory, improved shovel allocation and productivity = more tonnes mined per day
2014: total tonnage expected to range between 75 Mt and 77 Mt (versus target of 82 Mt)
10. 10
Q3 2014 Operating Results - Mill
Q3’14 Performance:
Throughput rates averaging 49,186 tpd
Availability at 81%, impacted mainly by unplanned replacement of SAG pulp lifter in early July
Plant stabilizing with modifications to 410 conveyor in mid-August:
›Average of 57,020 tpd with 91% availability over 55 days (up to mid- October planned shutdown)
Recovery rates as planned, gravity recovery at 21%
Throughput (Ktpd)
0
10
20
30
40
50
Q3'13
Q4'13
Q1'14
Q2'14
Q3'14
Availability % 1
Q3’13
Q4’13
Q1’14
Q3’14
Q2’14
Mill productivity
81
83
80
66
78
1.Availability = capital utilization.
11. 11
Q4 2014 Focus - Mill
Plans for Q4:
Final major planned shutdown took place in mid-October:
›Primary crusher bowl and mantle change
›SAG and ball mills liner change
›Pre-leach thickener inspection and by-pass system installation and test
Focus remains on improving availability
›Availability to high 80s by year-end
Exit 2014 at design rate of 55,000 tpd
Q4’14: Move to final phase of maintenance improvement plan – mobile maintenance
12. 12
$0
$2
$4
$6
$0
$4
$8
$12
Mining (C$/t mined):
Processing (C$/t milled):
G&A (C$/t milled):
Q3 2014 Operating Results - Costs
$0
$2
$4
$2.87/t
$2.87t
$2.98/t
Q3 Progress:
Higher mining costs due to
›shortfall in total tonnes mined
Lower milling costs due to
›Lower electricity charges Outlook:
Downward trend expected with throughput and production increases and increased efficiencies
$11.25/t
$11.13/t
$9.70/t
$3.46/t
$3.25/t
$3.68/t
Q3’14
Q2’14
Q1’14
13. 13
CN detox operational and 2nd oxygen plant ready in January 2015
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 progress
3
Pebble Circuit Removal
Pebbles appear to be barren
Pebble extractor prototype being designed
4
Low-grade material (not in reserves)
Segregation of fines
Heap leach
Positive test results for both
5
Increase exploration activities On 630 km2 prospective property
Planning in progress
14. 14
Near-term Opportunities (2-5 yrs)
Segregation of fines:
Positive results from first 200,000 tonnes test
›Grade of 0.60-0.65 g/t = 35-45% higher than avg. grade of SP
›Processed at 68,000 tpd
Pebble Circuit Removal:
Test results show high variability in gold content of the pebbles but a large portion are barren
Initiated design of an ON/OFF pebble extractor
Low-grade stockpile (avg. grade 0.44 g/t)
Natural segregation of fines from unloading truck
Mobile feeder
To stacker unit
15. 15
Revenues & Total Cash Costs:
Q3 2014 Financial Review
Q1’14
Q2’14
Q3’14
Gold sales
$110.0 M
$139.0 M
$135.9 M
Ounces sold
84,560 oz
107,206 oz
106,334 oz
Avg realized price1, 2
$1,301/oz
$1,293/oz
$1,278/oz
TCC/ oz sold2
$976/oz
$941/oz
$941/oz
1.These amounts exclude realized gains and losses from the Company’s gold sales risk management program which are separately disclosed in net finance income and costs.
2.Refer to the section on Non-IFRS Performance Measures on slide 3. Reconciliation of these measures is described in the MD&A for the third quarter ended September 30, 2014.
16. 16
Income Statement
($ millions, except per share amount)
Q3’14
YTD Q3’14
Revenues
$ 136.2
$ 385.2
Cost of Sales
-Production costs
-Depreciation and depletion
(100.6)
(37.3)
(281.9)
(106.1)
Earnings (Loss) from Mine Operations
$ (1.7)
$ (2.8)
Exploration and evaluation expense
(0.5)
(3.3)
Corporate and administrative expense
(5.7)
(21.0)
Loss from Operations
$ (7.9)
$ (27.1)
Net finance income (cost)
7.1
(63.6)
Earnings (Loss) for the Period
$ (0.8)
$ (90.7)
Basic Earnings (Loss) per Share
$ 0.00
$ (0.59)
Q3 2014 Financial Review
Note: Totals may not down add due to rounding.
17. 17
Adjusted net earnings (loss) per share is calculated using the weighted average number of share outstanding under the basic method of earnings (loss) per share as determined under IFRS.
($ millions, except per share amount)
Q3’14
YTD Q3’14
Net Earnings (Loss)
$ (0.8)
$ (90.7)
Adjusted for:
Fair value (gain) loss of the convertible notes
(14.6)
17.0
Foreign exchange (gain) loss
1.3
0.4
Non-cash unrealized (gain) loss on derivative instruments
(8.9)
(3.5)
Accretion on convertible notes
6.4
18.6
Unwinding of discount on decommissioning and restoration provisions
0.1
0.2
Electricity rebate
-
(3.9)
Adjusted Net Earnings (Loss)1
$ (16.5)
$ (62.0)
Adjusted Basic Earnings (Loss) per Share1
$ (0.10)
$ (0.41)
Q3 2014 Financial Review
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 third quarter ended September 30, 2014. Note: Totals may not down add due to rounding.
18. 18
Q3 2014 Financial Review
Cash Flows
($ millions)
Q3’14
Q2’14
Q1’14
Operations
$ 32.1
$ 38.8
$ 17.9
Working capital Items
15.7
7.5
(50.0)
Operating activities
$ 47.8
$ 46.3
$ (32.1)
Investing activities
(32.9)
(42.1)
(22.0)
Financing activities
(9.3)
(11.4)
110.4
Effects of exchange rate changes
(4.8)
0.1
(1.0)
Changes in cash and cash equivalents
$ 0.8
$ (7.1)
$ 56.3
Cash and cash equivalents – beginning of financial period
136.3
143.4
88.1
Cash and cash equivalents – end of financial period
$ 137.1
$ 136.3
$ 143.4
Q3’14 – First breakeven quarter since commercial production
Note: Totals may not down add due to rounding.
19. 19
Ramp-up completion by year-end
Guidance and details for 2015 to be disclosed in January
›2015 mine plan selection to be based on the improvement made in mining rates for remainder of 2014
›Upside for 2015 mine plan seen with processing of the ‘fines’ from low- grade stockpile and commissioning of the pebble extractor prototype
Review of next 5 years and LOM plan with the main objective of reducing sustaining capital.
Future Catalysts
Focus on ‘Quality’ Ounces
20. 20
ONTARIO
Toronto
DETOUR LAKE MINE
A Unique Investment Opportunity
Low-risk, safe mining jurisdiction
High-quality asset with long mine life
Production growth opportunities
Cash flow growth following ramp-up completion
Leverage to gold price & Canadian dollar
Strong exploration upside on 100% owned land package of 630 km2 on Greenstone Belt
Invest in Detour Gold
