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1
CANADA’S INTERMEDIATE
GOLD PRODUCER
21st Annual Canada Mining Conference
Bank of America Merrill Lynch
Toronto – September 10-11, 2015
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 2015 guidance for
production, total cash costs, all-in sustaining costs, capital costs, deferred stripping costs, and exploration costs; expected throughput,
mining and recovery rates; expected future production and mining activities; opportunities to optimize the mine operation; timeline for the
life of mine plan update, and exploration program; 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 2014 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.
All monetary amounts are in U.S. dollars unless otherwise stated.
3
Notes to Investors
The scientific and technical content of this presentation was reviewed, verified and approved by Drew Anwyll, P.Eng., Senior Vice President Technical
Services, and exploration results was reviewed, verified and approved by Guy MacGillivray, P.Geo., Exploration Manager , both Qualified Person as
defined by Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects”.
Qualified Persons
Non-IFRS Financial Performance Measures
The Company has included non-IFRS measures in this presentation: total cash costs, all-in sustaining costs, adjusted net loss and adjusted net loss per
share. 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. The 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 these measure differently.
Detour Gold reports total cash costs on a sales basis. Total cash costs include production costs such as mining, processing, refining and site
administration, less non-cash share-based compensation and net of silver sales divided by gold ounces sold to arrive at total cash costs per gold ounce
sold. The measure also includes other mine related costs incurred such as mine standby costs and current inventory write downs. Production costs are
exclusive of depreciation and depletion. Production costs include the costs associated with providing the royalty in kind ounces.
Commencing in 2015, the Company adopted all-in sustaining costs on a prospective basis. The Company believes this measure more fully defines the total
costs associated with producing gold. The Company calculates all-in sustaining costs as the sum of total cash costs (as described above), share-based
compensation, corporate general and administrative expense, exploration and evaluation expenses that are sustaining in nature, reclamation cost
accretion, sustaining capital including deferred stripping, and realized gains and losses on hedges due to operating and capital costs, all divided by the gold
ounces sold to arrive at a per ounce figure.
Costs excluded from all-in sustaining costs are non-sustaining capital expenditures and exploration costs that are expected to materially increase
production, financing costs and tax expense. Consequently, this measure is not representative of all of the Company’s cash expenditures. In addition, the
calculation of all-in sustaining costs does not include depreciation and depletion expense as it does not reflect the impact of expenditures incurred in prior
periods.
Adjusted net earnings (loss) and adjusted basic earnings (loss) per share are used by management and investors to measure the underlying operating
performance of the Company. Presenting these measures from period to period helps management and investors evaluate earnings trends more readily in
comparison with results from prior periods. Adjusted net earnings (loss) is defined as net earnings (loss) adjusted to exclude specific items that are
significant, but not reflective of the underlying operations of the Company, including: fair value change of the convertible notes, the impact of foreign
exchange gains and losses, including the foreign exchange on deferred income and mining taxes, non-cash unrealized gains and losses on derivative
instruments, accretion on convertible notes, unwinding of discount on decommissioning and restoration provisions, impairment provisions and reversals
thereof, and other non-recurring items. Adjusted basic net earnings (loss) per share is calculated using the weighted average number of shares outstanding
under the basic method of loss per share as determined under IFRS.
4
Unique Investment Opportunity
GROWING
CASH FLOW
ATTRACTIVE
VALUE
PROPOSITION
SIGNIFICANT
PRODUCTION
GROWTH
5
2015 Production Guidance (Koz)
#2 in Production and #1 in Reserves
DGC
Detour Lake
AEM/YRI
Canadian
Malartic
AEM
Meadowbank
G
Red Lake
Canadian Intermediate Gold Producer
400-
425
560
475-
525
400
Gold Reserves (Moz)
DGC
Detour Lake
AEM/YRI
Canadian
Malartic
AEM
Meadowbank
G
Red Lake
2.1
15.0
8.7
1.2
6
VALUE ENHANCEMENTS
 Plant optimization
 Development of Block A
 Exploration potential
 Increase gold production
 Strengthen our balance sheet
EXECUTION OF PLAN
 Significant leverage to gold
price and CDN dollar
 Low power and favourable
diesel costs
ADDED BENEFITS
2015 Drivers to Success
7
2015 Guidance1
TCC2
$780-
$850
AISC/oz sold2
$1,050-$1,150
Capital Expenditures
 Sustaining capital: $90-100 M
475,000 -
525,000
Gold ounces
ESTIMATED
COSTS
ESTIMATED
PRODUCTION
 Deferred stripping: $20-25 M
1. Cost assumptions (US$): Gold price of $1,200/oz, diesel fuel price of $0.82 per litre; power cost of $0.04 per kilowatt hour; and
exchange rate of $1.00US:$1.15Cdn.
2. Refer to the section on Non-IFRS Performance Measures on slide 3 of this presentation.
2015
third year
of operation
8
H1 2015 – Solid Progress
106 125
$1,321
$1,030
$750
$850
$950
$1,050
$1,150
$1,250
$1,350
0
20
40
60
80
100
120
140
H1 2015: Detour Lake Mine
■ AISC (US$/oz sold)1
■ Gold Production (k oz)
Q1 Q2
1. Refer to the section on Non-IFRS Performance Measures on slide 3 of this presentation. Reconciliation and adjustment of this measure
is described in the MD&A for Q2’15.
H1 2015 Highlights
 Gold production of 230,920 oz at TCC
of $828/oz sold and AISC of $1,163/oz
sold
 Break-even cash flow position
 Positive amendments to credit facility
of C$135 M
 Cash position of $133 M at June 30
H2 2015 Expectations
 Stronger operational performance
 Encouraging results from Lower Detour
30,000 m drilling program
9
 Continued positive progress on drilling rates, blasted inventory,
and shovel productivity
 Mining rates averaged 280,000 tpd, exceeding budget by 18%
220
280
170
190
210
230
250
270
290
310
Q1A Q2A H2EQ1 Q2Mining Rates (k tpd)
Q2 2015 Operating Results – Mine
H1 Achieved H2 Target:
250-290 k tpd
H
L
10
Successful re-build of ROM stockpiles
at Q2 end (1.7 Mt @ 0.71 g/t) provides
operational flexibility for H2 2015:
 Focus on delivering higher grade to mill
 Accelerate Phase 2 pre-stripping
 On target for east end pit access to
higher grade (former Campbell pit area)
 Maximize TMA placement efficiency
(using CAT795 trucks)
H2 2015 Mine Plan Focus
Targeting 250,000
to 290,000 tpd for
remainder of 2015
11
 Throughput rate of 57,015 tpd
 At design capacity since March
 Milling rates at 2,712 tpoh with operating time improving to 88%
 Exceeding design of 2,500 tpoh
48
57
55*
30
40
50
60
Q1'15 Q2'15 H2E
Q2 2015 Operating Results - Mill
2015 Mill Throughput (k tpd)
MT
ore milled
0.82 G/T AU
head grade
%
gold recovery
5.2
91
Q2’15 Performance
Q1 Q2
*Excluding the processing of fines
12
H2 2015 Focus – Mill
H2 Focus
 Continue plant optimization efforts
 Assess robustness of 410-conveyor
 Increase operating time to >90%
 Increase milling rate to 2,800 tpoh
with ‘fines’
 Processing of fines in month of July;
test to continue in Q4
 Targeting average throughput rate of
55,000 tpd for H2 2015
MT
ore milled
0.86 G/T AU
head grade
%
gold recovery
19.7
91.5
2015 Mine Plan Targets
13
 Significant cost reduction
per ounce & tonne due to
economies of scale
 Continued reduction of
plant consumables $954 $955
$886
$939
$734
Q2'14 Q3'14 Q4'14 Q1'15 Q2'15
Q2 2015 Operating Costs
TCC & AISC1 ($/oz sold)
Q2’15
$1,321
$1,030
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
relevant periods. Calculation includes electricity adjustment (refer to MD&A for Q2’15).
 Total Cash Costs1
 Other (Sustaining capital, G&A and exploration)
14
 Purchasing diesel product
(~6 M litres) at effective hedge
price of $0.46/litre
HEDGE ~50% OF NEXT
3 MTHS DIESEL USE
Prudent Financial Management
 Forward sales on 35,000 oz
@ $1,276/oz
 Zero-cost collars for $40 M
with a ceiling of 1.21;
Forward contracts for $40 M
at average 1.26
CURRENCY EXCHANGE
CONTRACTS
HEDGE UP TO 50% OF
2015 GOLD PRODUCTION
Mark-to-market
value of $3 M at Q2 end
15
 Block A (2 Moz M&I resource)1
 Processing of fines
INCLUDE NEW
OPPORTUNITIES
 Evaluate production ranging
from 110 to 140 Mt/yr
 Maximize returns for next
5-10 yrs
 Based on current operational
experience
REVIEW OF COST
ESTIMATES
Optimizing Economic Returns
CAPITAL VS MINE OUTPUT
1. Refer to February 2014 Technical Report: Measured: 1.5 Mt @ 1.21 g/t (57,000 oz);
Indicated: 52.5 Mt @ 1.15 g/t (1.93 M oz).
LOM PLAN
UPDATE
16
 Further targets identified from
geophysical surveys
REGIONAL POTENTIAL
H2’15 DRILLING PROGRAM
Promising Exploration on 630 km2
 Over 50% of 30,000 m
completed at Lower Detour
 Majority of holes encountered
visible gold
GROWTH
FROM THE
DRILL BIT
17
PRODUCTION GROWTH /
DECLINING UNIT COSTS
REALIZE VALUE-ENHANCING
OPPORTUNITIES
MATERIAL INPUTS TRENDING
FAVOURABLY
GROWING CASH FLOW
A GREAT TIME TO BE A
GOLD PRODUCER!
18
James Mavor
Chief Financial Officer
Email: jmavor@detourgold.com
Phone: 416.304.0800
Paul Martin
President and Chief Executive Officer
Email: pmartin@detourgold.com
Phone: 416.304.0800
www.detourgold.com
Contact Information

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Dgc 15 09_10-11 - corporate presentation_bo_aml

  • 1. 1 CANADA’S INTERMEDIATE GOLD PRODUCER 21st Annual Canada Mining Conference Bank of America Merrill Lynch Toronto – September 10-11, 2015
  • 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 2015 guidance for production, total cash costs, all-in sustaining costs, capital costs, deferred stripping costs, and exploration costs; expected throughput, mining and recovery rates; expected future production and mining activities; opportunities to optimize the mine operation; timeline for the life of mine plan update, and exploration program; 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 2014 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. All monetary amounts are in U.S. dollars unless otherwise stated.
  • 3. 3 Notes to Investors The scientific and technical content of this presentation was reviewed, verified and approved by Drew Anwyll, P.Eng., Senior Vice President Technical Services, and exploration results was reviewed, verified and approved by Guy MacGillivray, P.Geo., Exploration Manager , both Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects”. Qualified Persons Non-IFRS Financial Performance Measures The Company has included non-IFRS measures in this presentation: total cash costs, all-in sustaining costs, adjusted net loss and adjusted net loss per share. 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. The 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 these measure differently. Detour Gold reports total cash costs on a sales basis. Total cash costs include production costs such as mining, processing, refining and site administration, less non-cash share-based compensation and net of silver sales divided by gold ounces sold to arrive at total cash costs per gold ounce sold. The measure also includes other mine related costs incurred such as mine standby costs and current inventory write downs. Production costs are exclusive of depreciation and depletion. Production costs include the costs associated with providing the royalty in kind ounces. Commencing in 2015, the Company adopted all-in sustaining costs on a prospective basis. The Company believes this measure more fully defines the total costs associated with producing gold. The Company calculates all-in sustaining costs as the sum of total cash costs (as described above), share-based compensation, corporate general and administrative expense, exploration and evaluation expenses that are sustaining in nature, reclamation cost accretion, sustaining capital including deferred stripping, and realized gains and losses on hedges due to operating and capital costs, all divided by the gold ounces sold to arrive at a per ounce figure. Costs excluded from all-in sustaining costs are non-sustaining capital expenditures and exploration costs that are expected to materially increase production, financing costs and tax expense. Consequently, this measure is not representative of all of the Company’s cash expenditures. In addition, the calculation of all-in sustaining costs does not include depreciation and depletion expense as it does not reflect the impact of expenditures incurred in prior periods. Adjusted net earnings (loss) and adjusted basic earnings (loss) per share are used by management and investors to measure the underlying operating performance of the Company. Presenting these measures from period to period helps management and investors evaluate earnings trends more readily in comparison with results from prior periods. Adjusted net earnings (loss) is defined as net earnings (loss) adjusted to exclude specific items that are significant, but not reflective of the underlying operations of the Company, including: fair value change of the convertible notes, the impact of foreign exchange gains and losses, including the foreign exchange on deferred income and mining taxes, non-cash unrealized gains and losses on derivative instruments, accretion on convertible notes, unwinding of discount on decommissioning and restoration provisions, impairment provisions and reversals thereof, and other non-recurring items. Adjusted basic net earnings (loss) per share is calculated using the weighted average number of shares outstanding under the basic method of loss per share as determined under IFRS.
  • 4. 4 Unique Investment Opportunity GROWING CASH FLOW ATTRACTIVE VALUE PROPOSITION SIGNIFICANT PRODUCTION GROWTH
  • 5. 5 2015 Production Guidance (Koz) #2 in Production and #1 in Reserves DGC Detour Lake AEM/YRI Canadian Malartic AEM Meadowbank G Red Lake Canadian Intermediate Gold Producer 400- 425 560 475- 525 400 Gold Reserves (Moz) DGC Detour Lake AEM/YRI Canadian Malartic AEM Meadowbank G Red Lake 2.1 15.0 8.7 1.2
  • 6. 6 VALUE ENHANCEMENTS  Plant optimization  Development of Block A  Exploration potential  Increase gold production  Strengthen our balance sheet EXECUTION OF PLAN  Significant leverage to gold price and CDN dollar  Low power and favourable diesel costs ADDED BENEFITS 2015 Drivers to Success
  • 7. 7 2015 Guidance1 TCC2 $780- $850 AISC/oz sold2 $1,050-$1,150 Capital Expenditures  Sustaining capital: $90-100 M 475,000 - 525,000 Gold ounces ESTIMATED COSTS ESTIMATED PRODUCTION  Deferred stripping: $20-25 M 1. Cost assumptions (US$): Gold price of $1,200/oz, diesel fuel price of $0.82 per litre; power cost of $0.04 per kilowatt hour; and exchange rate of $1.00US:$1.15Cdn. 2. Refer to the section on Non-IFRS Performance Measures on slide 3 of this presentation. 2015 third year of operation
  • 8. 8 H1 2015 – Solid Progress 106 125 $1,321 $1,030 $750 $850 $950 $1,050 $1,150 $1,250 $1,350 0 20 40 60 80 100 120 140 H1 2015: Detour Lake Mine ■ AISC (US$/oz sold)1 ■ Gold Production (k oz) Q1 Q2 1. Refer to the section on Non-IFRS Performance Measures on slide 3 of this presentation. Reconciliation and adjustment of this measure is described in the MD&A for Q2’15. H1 2015 Highlights  Gold production of 230,920 oz at TCC of $828/oz sold and AISC of $1,163/oz sold  Break-even cash flow position  Positive amendments to credit facility of C$135 M  Cash position of $133 M at June 30 H2 2015 Expectations  Stronger operational performance  Encouraging results from Lower Detour 30,000 m drilling program
  • 9. 9  Continued positive progress on drilling rates, blasted inventory, and shovel productivity  Mining rates averaged 280,000 tpd, exceeding budget by 18% 220 280 170 190 210 230 250 270 290 310 Q1A Q2A H2EQ1 Q2Mining Rates (k tpd) Q2 2015 Operating Results – Mine H1 Achieved H2 Target: 250-290 k tpd H L
  • 10. 10 Successful re-build of ROM stockpiles at Q2 end (1.7 Mt @ 0.71 g/t) provides operational flexibility for H2 2015:  Focus on delivering higher grade to mill  Accelerate Phase 2 pre-stripping  On target for east end pit access to higher grade (former Campbell pit area)  Maximize TMA placement efficiency (using CAT795 trucks) H2 2015 Mine Plan Focus Targeting 250,000 to 290,000 tpd for remainder of 2015
  • 11. 11  Throughput rate of 57,015 tpd  At design capacity since March  Milling rates at 2,712 tpoh with operating time improving to 88%  Exceeding design of 2,500 tpoh 48 57 55* 30 40 50 60 Q1'15 Q2'15 H2E Q2 2015 Operating Results - Mill 2015 Mill Throughput (k tpd) MT ore milled 0.82 G/T AU head grade % gold recovery 5.2 91 Q2’15 Performance Q1 Q2 *Excluding the processing of fines
  • 12. 12 H2 2015 Focus – Mill H2 Focus  Continue plant optimization efforts  Assess robustness of 410-conveyor  Increase operating time to >90%  Increase milling rate to 2,800 tpoh with ‘fines’  Processing of fines in month of July; test to continue in Q4  Targeting average throughput rate of 55,000 tpd for H2 2015 MT ore milled 0.86 G/T AU head grade % gold recovery 19.7 91.5 2015 Mine Plan Targets
  • 13. 13  Significant cost reduction per ounce & tonne due to economies of scale  Continued reduction of plant consumables $954 $955 $886 $939 $734 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q2 2015 Operating Costs TCC & AISC1 ($/oz sold) Q2’15 $1,321 $1,030 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 relevant periods. Calculation includes electricity adjustment (refer to MD&A for Q2’15).  Total Cash Costs1  Other (Sustaining capital, G&A and exploration)
  • 14. 14  Purchasing diesel product (~6 M litres) at effective hedge price of $0.46/litre HEDGE ~50% OF NEXT 3 MTHS DIESEL USE Prudent Financial Management  Forward sales on 35,000 oz @ $1,276/oz  Zero-cost collars for $40 M with a ceiling of 1.21; Forward contracts for $40 M at average 1.26 CURRENCY EXCHANGE CONTRACTS HEDGE UP TO 50% OF 2015 GOLD PRODUCTION Mark-to-market value of $3 M at Q2 end
  • 15. 15  Block A (2 Moz M&I resource)1  Processing of fines INCLUDE NEW OPPORTUNITIES  Evaluate production ranging from 110 to 140 Mt/yr  Maximize returns for next 5-10 yrs  Based on current operational experience REVIEW OF COST ESTIMATES Optimizing Economic Returns CAPITAL VS MINE OUTPUT 1. Refer to February 2014 Technical Report: Measured: 1.5 Mt @ 1.21 g/t (57,000 oz); Indicated: 52.5 Mt @ 1.15 g/t (1.93 M oz). LOM PLAN UPDATE
  • 16. 16  Further targets identified from geophysical surveys REGIONAL POTENTIAL H2’15 DRILLING PROGRAM Promising Exploration on 630 km2  Over 50% of 30,000 m completed at Lower Detour  Majority of holes encountered visible gold GROWTH FROM THE DRILL BIT
  • 17. 17 PRODUCTION GROWTH / DECLINING UNIT COSTS REALIZE VALUE-ENHANCING OPPORTUNITIES MATERIAL INPUTS TRENDING FAVOURABLY GROWING CASH FLOW A GREAT TIME TO BE A GOLD PRODUCER!
  • 18. 18 James Mavor Chief Financial Officer Email: jmavor@detourgold.com Phone: 416.304.0800 Paul Martin President and Chief Executive Officer Email: pmartin@detourgold.com Phone: 416.304.0800 www.detourgold.com Contact Information