Corporate Presentation
-
Upload
detourgold -
Category
Documents
-
view
1.538 -
download
0
Transcript of Corporate Presentation
1
CANADA’S NEXT INTERMEDIATE GOLD PRODUCER
Corporate Presentation
January 16, 2013
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 the 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, financial analysis of the project, commencement of
operations, 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.
3
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.
NI-43 101 Disclosure
Information Containing Estimates of Mineral Reserves and Resources
4
Focus on a world-class asset – Detour Lake
Canada’s largest pure gold play with 15.6 M oz in reserves
Gold processing initiated in January 2013
One of the best cash flow/share opportunities
Average annual gold production of 657,000 oz
Excellent organic growth potential (5 year plan)
Potential expansion of mill throughput
Invest in Detour Gold
Our Vision
5
Market cap: C$2.8 billion
Cash position: C$236 million
Major shareholders: Paulson & Co. 15%
Carmignac Gestion 5%
Detour Gold Mgmt <2%
Institutions total >90%
Note: Cash position and share data at December 31, 2012. An additional 0.3 M
shares were issued in January 2013 following partial exercise of the over-
allotment option.
Share Capital
FULLY DILUTED
139.5 M
OPTIONS & FN SHARE
COMMITMENTS
8.9 M
CONVERTIBLE
NOTES
13.0 M
ISSUED AND
OUTSTANDING
117.6M
6
ABX NEM
Gabriel
Anglo Gold Ashanti AEM
GSC Eco Oro Andina
Osisko
(239%) Yamana
Randgold
Eldorado Buenaventura
Newcrest IMG
Kinross Hecla
Goldfields CG
AGI
Aurizon G
Jan. 2007 to Present % Change in Shares Outstanding
100 150 0 50 200
Share Issuance vs. Performance
Source: BMO, Nov. 2012
Ja
n. 2
00
7 t
o P
res
en
t To
tal
Retu
rn
400%
300%
200%
100%
0%
-100%
500%
600%
700%
800%
900%
1000%
AuRico Great Basin
(209%)
DGC
01/12
DGC
08/11
DGC
07/10
DGC
11/09
DGC
04/08
DGC
07/09
IPO
580% total
return since IPO
Share Capital
Note: Date of DGC equity financings
DGC
11/12
7
PRODUCTION 2013
Record Timing from “Discovery” to Projected Production
Detour Lake in 6 years
ACQUISITION /DISCOVERY
PRE-FEASIBILITY STUDY
FEASIBILITY STUDY & PERMITTING
DEVELOPMENT PRODUCTION
2007 2009 2010 2011-12 2013
Successful Focused Approach
8
H1 2013
First gold pour
Commissioning of second production line
Securing $90 million credit facility
20,000 m drilling program targeting high-grade gold mineralization
H2 2013
Declaring commercial production
Gold production target of +350,000 ounces for the year
Completing pre-feasibility study on Block A
Advancing evaluation of mine expansion scenarios
Revising block model for Detour Lake
2013 Objectives
9
1.0 g/t Au
0.5 - 1.0 g/t Au
<0.5 g/t Au
20,600E
16,500E
700 m
Open pit
@ 0.5 g/t cut-off
Detour Lake September 2012
Mine Plan(1)
Production Start Q1 2013
OP Reserves (M oz) 15.6
Mill throughput (tpd) 55,000
Strip Ratio (waste:ore) 3.7
Gold recoveries 91%
Average grade (g/t) 1.03
Estimated mine life (yrs) 21.5
Avg. Production (oz/yr) 657,000
Cash operating costs (C$/oz) $710
Total cash costs (C$/oz) $749
Initial Capex (C$ B)(2) 1.45
Detour Lake Profile
(1) Gold price assumptions: US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015.
(2) Revised to approx. C$1.5 B in news release dated November 8, 2012.
10
800
700
600
500
400
300
200
100
0
Gold Production (‘000 oz)
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
Grade (g/t Au)
Updated LOM Gold Production
Avg. 657,000 oz/yr
11
MAINTENANCE
LABOUR POWER
DIESEL
G&A
ROYALTY+
OTHER
(2% NSR)
CONSUMABLES
29%
22%
18% 12%
8%
5%
6%
Breakdown of 2013-14 TCC
Operating Costs (LOM) C$/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
Updated LOM Operating Costs
12
Gold - US$1,200/oz (1)
F/X - $Cdn/$US = 1.00
Base Case (1)
US$ Billions Undiscounted (0%) 5.0%
Pre-tax cash flow 4.3 1.7
Net cash flow after tax 3.0 1.1
Pre-tax IRR 14.4%
49
Power Cdn $0.065/kwh
Diesel US$100/barrel (WTI)
Financial Analysis
Base Case Assumptions
1. Gold price US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015.
@ US$1,600/oz
US$ Billions Undiscounted (0%) 5.0%
Pre-tax cash flow 9.4 4.4
Net cash flow after tax 6.6 3.0
Pre-tax IRR 24.6%
12-12-23
13
DETOUR LAKE MINE START UP
14
2013 Forecast
Guidance
350,000 oz to 400,000 oz of gold
Total cash costs between C$800/oz and C$900/oz (on
commercial production of 200,000 oz to 250,000 oz sold)
Estimated LOM sustaining capital of C$1.2 B:
2013 = C$180 M (<$80 M in H1)
2014 = C$140 M
15
2012 Pre-Stripping Status
(Year-end 2012)
Overburden/Till 15.1 Mt
Waste 7.7 Mt
Low Grade (0.3-0.5 g/t) 1.1 Mt
Ore 2.2 Mt
Total 26.1 Mt
Mining Production
2.2 Mt ore inventory on ROMs and short-term stockpiles (reconciled
average grade of approx. 0.7 g/t) (till dilution on first bench)
Average mining rates of +115,000 tpd in December 2012
Mining operation on 24 hrs/day, 365 days/yr
16
PLANT SITE
CAMPBELL
PIT
APPROX. PIT SHELL
AT END OF LOM
CURRENT
PIT SHAPE
MINERALIZED
ZONE
Satellite image dated July 2012
NORTH WASTE
DUMP
Mining Production
17
12-10-22
Detour Lake Open Pit Mine
18
DETOUR LAKE SITE
19
Overview Detour Lake Facilities
SECONDARY
CRUSHERS
GEODESIC
DOME
STOCKPILE
RECLAIM
PRIMARY
CRUSHER
12-10-22
20
35 m to surface
Gyro is
9 m high 12-10-02
Primary Crusher (100,000 tpd capacity)
21
Stockpile Reclaim (2 days capacity)
12-12-02
12-12-23
12-12-23
22
Processing Plant
Conventional gravity and CIP plant
55,000 tpd (=92% availability of 60,000 tpd capacity)
2 parallel lines (each with 1 secondary cone crusher + 1 SAG & 1 ball mill)
Estimated gravity recovery: 30-40%
Estimated overall gold recovery: 91.0%
Leach time 29 hours; leach feed size 80% passing 95 μm
12-12-23
23
Gyratory
crusher:
60” x 113”
90,000 tpd
SAG mills:
2 X 36’ x 20’, 15MW
55,000 tpd To
leaching
circuit
To
gravity
circuit
Secondary crushers:
2 X XL-1100
67,000 tpd
Pebble crushers:
2 X XL-1100
73,000 tpd
Circ. load
28 % Circ. load
250 % From
gravity
circuit
Stockpile
12 h live capacity
Ball mills:
2 X 26’ x 40’6’’, 15MW
55,000 tpd
Leach circuit:
55,000 tpd + 15% contingency in piping capacity
Simple Process Plant @ 92% Availability
24
Tailings Management Area (TMA)
12-10-22
25
FRONT LINE
81%
PROFESSIONAL
19%
Professional are: MGMT, Eng., Geo., Supt.
Front Line are: Operators, Admin, Support
Continuing focus on hiring local/regional
25% of employees are Aboriginal
NORTHERN
ONTARIO
43%
COCHRANE
25%
COCHRANE
AREA
26%
REST OF
ONTARIO
3%
2%
WORKFORCE ORIGIN DIVISION OF LABOUR
OTHER
* Excludes Corporate office.
DGC Employees: Hiring Local First
On track with ramp up schedule: 423 employees at December 31, 2012*
26
PLANNING FOR ORGANIC GROWTH
Under-Explored Greenstone Belt
27
• Two main gold structures with total strike length of >80km
• Continue focus on Detour Lake deposit extension (northern
structure i.e. Block A)
• Test targets on structure south of Detour Lake
Grow reserve base to +20 M oz (@ US$850/oz)
Increase mill throughput to above 75,000 tpd for gold production
output of +800,000 oz/yr
Find high-grade ore near-surface within trucking distance to
supplement mill
Planning for Organic Growth
5 Year Plan for Successful Organic Growth
Large prospective land position of approx. 566 km2
Future objectives
28
Resource Growth Exceeding 750% Since IPO
Date Accumulative DGC Drilling
Resources/Reserves (M oz) Inferred
2007-12 50,000m
2008-06 123,000m
2012-01 523,000m $850/oz 15.6
2011-01 430,000m $850/oz 14.9
2010-06 334,000m $850/oz 11.4
2009-09 249,000m 8.8
2005-05 Estimated by Pelangio
2006-09 DGC due diligence
10M 20M 30M
M&I 2P
Successful Growth of Resources
29
*Not updated with TWD Dec. 30th PR. On Dec. 1, 2011, Detour Gold announced the acquisition of TWD.
Block A
Pre-feasibility
Priority #1 – Block A Target
Block A pre-feasibility study by year-end 2013
Evaluate potential expansion options
30
2012 DH
2012 extension DH
Historical DH
Block A near-surface resource
Detour Lake
2011 year-end reserves = 15.6 M oz
Priority #1 – Block A Target
DH included in 2011 year-end reserves
DH not included in 2011 year-end reserves
31
Existing DDH Gold occurrence (OGS)
DDH intersection >1g/2m DDH intersection >1g/10m
*Note: Excludes drilling around Detour Lake and M zone (Block A).
20,000 m in 2013
MMI Survey Coverage
MMI Au Anomaly
15.6 M oz in Reserves
Priority #2 – South Structure
32
Focus on a world-class asset – Detour Lake
Canada’s largest pure gold play with 15.6 M oz in reserves
Gold processing initiated in January 2013
One of the best cash flow/share opportunities
Average annual gold production of 657,000 oz
Excellent organic growth potential (5 year plan)
Potential expansion of mill throughput
Invest in Detour Gold
Our Vision
33
ADDITIONAL INFORMATION
34
Detour Lake Profile
Detour Lake January 2011
Update (2)
September 2012
Mine Plan(3)
Gold price (US$/oz) (1) 850 1,200
Foreign exchange rate (US$/Cdn$) 1.10 1.00
Assumptions Fuel price (US$/barrel) 80 100
Income/mining tax rate (%) 25/10 25/10
Net Smelter Royalty (%) 2 2
Ore milled (Mt) 449.6 470.0
Waste mined (Mt) (4) 1,654 1,734
Mine Strip ratio (waste:ore) 3.9 3.7
Parameters Average gold grade (g/t) 1.03 1.03
Total contained gold (M oz) 14.9 15.6
Estimated gold recovery (%) 91.0 91.0
Total recovered gold (M oz) 13.5 14.1
Mine life (years) 21 21.5
Average annual gold production (oz) 657,000 657,000
1. US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015.
2. Press release Jan. 31, 2011 with Technical Report dated Mar. 15, 2011.
3. Press release Sept. 4, 2012 with Technical Report dated Oct. 18, 2012.
4. Includes low-grade stockpile.
35
800
700
600
500
400
300
200
100
0
Gold Production (‘000 oz)
900
850
800
750
700
650
600
550
500
Total Cash Costs (C$/oz)
Gold Production/Cost Profile
Note: Excludes stripping adjustments.
Avg. C$749/oz
36
@ 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
37
1,600
1,400
1,200
1,000
800
600
400
200
0
Ou
nces (
000’s
)
0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0
Cut-off BINs
OK (oz Au)
ID3 (oz Au)
Approx. 3 M oz between 0.3-0.5 g/t Au
Block Model – Gold Distribution
Stockpile over LOM
0.3-0.5 g/t material
38
Bench
6264m
Bench
6252m
Grade Control
DDH
DDH
RC G/C
RC G/C
39
Gerald Panneton Founder, President & CEO
Director
Michael Kenyon Executive Chairman
Paul Martin CFO
Pierre Beaudoin Sr VP Capital Projects
Derek Teevan Sr VP External &
Aboriginal Affairs
Julie Galloway Sr VP General Counsel &
Corporate Secretary
Pat Donovan VP Corporate Development
James Mavor VP Finance
Rachel Pineault VP HR & Northern Affairs
James Robertson VP Environment &
Sustainability
Eric Josipovic Controller
Drew Anwyll Director of Operations
Andrew Croal Director Technical Services
Laurie Gaborit Director Investor Relations
Jean-Francois Metail Director Reserves and Resources
Greg Miazga Director Construction & Engineering
Bill Snelling Director Corporate Systems & Controls
Christian Brousseau Project Manager
Patrik Gillerstedt Mine Manager
Peter Crossgrove
Louis Dionne
Robert E. Doyle
Ingrid Hibbard
Jonathan Rubenstein
Graham Wozniak
Michael Kenyon
Alex G. Morrison
Gerald Panneton
Management & Directors
Management
Directors
40
Gerald Panneton President & CEO
Email: [email protected]
Phone: 416.304.0800
Laurie Gaborit Director Investor Relations
Email: [email protected]
Phone: 416.304.0800
www.detourgold.com
Contact Information