Detour Gold Corporate Presentation
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Transcript of Detour Gold Corporate Presentation
1
CANADA’S NEXT INTERMEDIATE GOLD PRODUCER
Corporate Presentation
March 27, 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 commissioning of
the second production line, commencement of commercial production, completing a pre-feasibility study on Block A, 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, ramp-up of operations, future operating plans,
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 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
5
Note: Cash position at December 31, 2012 and share data at February 28, 2013.
Share Capital
FULLY DILUTED
139.8 M
OPTIONS & FN SHARE
COMMITMENTS
8.9 M
CONVERTIBLE
NOTES
13.0 M
ISSUED AND
OUTSTANDING
117.9M C$2.4 B
C$236 M
TOP SHAREHOLDERS
MARKET CAP
CASH POSITION
(YR-END)
PAULSON & CO: 15%
CARMIGNAC GESTION: 5%
INSTITUTIONS TOTAL: >80%
6
Focused on One Core Asset
Detour Lake - Ontario, Canada
Low-risk, mining friendly
jurisdiction
Large prospective land
package of 566 km2 on Abitibi
Greenstone Belt
In production: Detour Lake
open pit mine
15.6 M oz in reserves
In progress: Block A pre-
feasibility study
Exploration: Targeting
high-grade mineralization
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
Detour Lake Mine in 6 Years
Consistently Delivered Results
Focused on execution
Built strong management team with track record of success
Increased resource growth by 750% since acquisition at <$5/oz
Completed positive economic studies over a 2-year period
Raised over $2 billion while limiting share dilution
Completed mine construction within time frame (27 months)
Obtained strong community and Aboriginal support
9
H1 2013
First gold pour in February
Securing $90 million credit facility
Commissioning of second production line
20,000 m drilling program targeting high-grade gold mineralization
H2 2013
Achieving commercial production
Gold production target of +350,000 ounces for the year
Completing pre-feasibility study on Block A
Advancing evaluation of mine expansion scenarios
Year-end mineral resources/reserves update
2013 Objectives
10
Focus on health and safety of our employees, the well-being of
our community and the protection of the natural environment
Hiring in the region, giving priority to local Aboriginal communities:
95% of workforce from region
25% are Aboriginals
Scholarship and job training
Supporting local communities
Business opportunities
Participation in municipal development
Corporate philanthropy
NORTHERN
ONTARIO
43%
COCHRANE
25%
COCHRANE
AREA
26%
REST OF
ONTARIO
3%
2% OTHER
Corporate Responsibility
WORKFORCE ORIGIN
11
Production Start 02/ 2013
OP reserves (M oz) 15.6
Mill throughput (tpd) 55,000
Strip ratio (waste:ore) 3.7
Gold recoveries 91%
Average grade (g/t) 1.03
Estimated mine life (yrs) 21.5
Avg. production (oz/yr) 657,000
Initial capex (C$ B) 1.5
Sustaining capex (C$ B) 1.2
Detour Lake Mine
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
2013 Guidance
Total production: 350,000 oz to
400,000 oz of gold
Post commercial production (Q3):
Total cash costs of C$800/oz to
C$900/oz based on 200,000 oz to
250,000 oz sold
Sustaining capital: C$180 M
(<$80 M in H1)
Commercial production target in Q3
NOTE: Commercial production to be declared after 60
consecutive days of operating at >75% of throughput
(55,000 tpd x 75% = 41,250 tpd)
14
2013 Ramp Up
Mining
Current stockpiles:
1.3 Mt @ 0.8 g/t; 1.0 Mt @ 0.6 g/t;
and 1.0 Mt @ 0.4 g/t
Mining rates to ~200,000 tpd by
year-end
Mining fleet of 20 haul trucks &
4 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
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
16
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
17
Development
Grow reserve base to +20 M oz
Complete Block A pre-feasibility
study in 2013
Evaluate Detour Lake expansion
Exploration
Large prospective land position of
566 km2
Test gold targets on structure south
of Detour Lake: 20,000 m in H1
Inferred M&I P&P
10M oz
20M oz
30M oz
15.6 14.9
11.4
8.8
Organic Growth Opportunities
18
Development – Block A
Block A pre-feasibility study underway
Evaluate potential expansion options
19
*Note: Excludes drilling around Detour Lake and M zone (Block A).
20,000 m in H1 2013
15.6 M oz in Reserves
Exploration – South Structure
Existing DDH Gold occurrence (OGS)
DDH intersection >1g/2m DDH intersection >1g/10m
20
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
21
ADDITIONAL INFORMATION
22
Source: Bloomberg, company filings, select Street Research
Note: Market data updated to February 14, 2013.
1. Alamos shown pro-forma Aurizon acquisition announced January 14, 2013.
2. Shown based on gold only reserves on an attributable basis.
3. Calculated as US$1,000 divided by fully diluted market capitalization multiplied by total attributable gold only reserves.
Current Valuation vs. Peers Consensus P/NAV(1) Share of Au Reserves per
$1000(1)(3) EV / Reserves(1)(2)
1.6
2.5
2.9
3.7
3.8
4.9
5.9
6.0
6.1
8.7
New Gold
Alamos
AuRico
IAMGOLD
Osisko
Alacer
Allied Nevada
Centerra
Detour
African Barrick
0.47x
0.54x
0.57x
0.62x
0.65x
0.73x
0.74x
0.75x
0.87x
0.96x
Centerra
IAMGOLD
Allied Nevada
Alacer
Detour
African Barrick
Alamos
Osisko
AuRico
New Gold
$88
$152
$166
$169
$170
$216
$274
$293
$351
$642
African Barrick
Centerra
Alacer
Detour
Allied Nevada
IAMGOLD
Osisko
AuRico
Alamos
New Gold
23
Detour Lake Profile Detour Lake
Sept. 2012
Mine Plan(3)
Gold price (US$/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$1,400/oz for 2015.
2. Press release Jan. 31, 2011 with Technical Report dated Mar. 15, 2011.
3. Press release Sept. 4, 2012 with Technical Report dated Oct. 18, 2012.
4. Includes low-grade stockpile.
1.0 g/t Au
0.5 - 1.0 g/t Au
<0.5 g/t Au
20,600E
16,500E
700 m
Open pit
@ 0.5 g/t cut-off
24
800
700
600
500
400
300
200
100
0
Gold Production (‘000 oz)
900
850
800
750
700
650
600
550
500
Total Cash Costs (C$/oz)
Gold Production/Cost/Grade Profile
Note: Excludes stripping adjustments.
Avg. C$749/oz
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
Grade (g/t Au)
Avg. 657,000 oz/yr
25
Bench
6264m
Bench
6252m
Grade Control: First 2 Benches
DDH Block model 40x40m drill spacing
DDH Block model 40x40m drill spacing RC Grade Control 20x10m & 10X10 m drill
spacing
RC Grade Control 20X10m & 10X10m drill
spacing
26
@ 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
27
2012 DH
2012 extension DH
Historical DH
Block A near-surface resource
Detour Lake
2011 year-end reserves = 15.6 M oz
Detour Lake & Block A
DH included in 2011 year-end reserves
DH not included in 2011 year-end reserves
28
Gerald Panneton Founder, President & CEO
Director
Michael Kenyon Executive Chairman
Paul Martin CFO
Pierre Beaudoin Chief Operating Officer
Julie Galloway Sr VP General Counsel &
Corporate Secretary
Derek Teevan Sr VP External &
Aboriginal Affairs
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
29
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