CANADA S INTERMEDIATE GOLD PRODUCER

Transcription

1 CANADA S INTERMEDIATE GOLD PRODUCER European Gold Forum Zurich April 4-6,

2 Forward Looking Information This presentation contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to herein as forward-looking statements ). Forward-looking statements relate to future events or future performance and reflect current expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral resources and mineral reserves and exploration targets; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of mining operations; (iv) assumptions relating to recovered grade, average ore recovery, internal dilution, mining dilution and other mining parameters set out in the technical reports, studies and disclosure of the Company; (v) assumptions relating to revenues, operating cash flow and other revenue metrics set out in the Company s disclosure materials (vi) mine expansion potential and expected mine life; (vii) expected time frames for completion of permitting and regulatory approvals; (viii) future capital and operating expenditures; (ix) future exploration plans; (x) future gold prices; and (xi) sources of and anticipated financing requirements. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as plans, expects, is expected, budget, scheduled, estimates, continues, forecasts, projects, predicts, intends, anticipates, targets, or believes, or variations of, or the negatives of, such words and phrases or state that certain actions, events or results may, could, would, should, might or will be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those anticipated in such forward-looking statements. The forward-looking statements in this presentation speak only as of the date of this presentation or as of the date or dates specified in such statements. 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, the ability of the Company to refinance its convertible notes and credit facility on or before maturity (November 30, 2017 and August 31, 2017, respectively) on acceptable terms, gold price volatility, changes in debt and equity markets, a reduction in the company s available cash resources, the uncertainties involved in interpreting geological data, risks relating to variations in recovered grades and mining dilution, variations in rates of recovery, changes or delays in mining development and exploration plans, the success of mining, development and exploration plans, changes in project parameters, risks related to the receipt of regulatory approvals, increases in costs, environmental compliance and changes in environmental legislation and regulation, delays in the consultation and permitting process for West Detour, 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 2016 AIF and in the continuous disclosure documents filed by Detour Gold on and available on SEDAR at 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: a constant gold price of $1,200/oz in 2017, a constant CAD/US exchange rate of 1.30 in 2017, a constant diesel fuel price of C$0.70/L in 2017, and a constant power cost of C$0.30/kWhr in 2017, the ability of the Company to refinance its convertible notes and credit facility on or before maturity (November 30, 2017 and August 31, 2017, respectively) on acceptable terms, the availability of financing for exploration and development activities; operating and capital costs; the Company s available cash resources in 2017; the Company's ability to attract and retain skilled staff; the mine development schedule and related costs; the mine production schedule; dilution control, sensitivity to metal prices and other sensitivities; the supply and demand for, and the level and volatility of the price of, gold; timing of the receipt of regulatory and governmental approvals for development projects and other operations; the timing and results of consultations with the Company s Aboriginal partners, the supply and availability of consumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; required capital investments; estimates of net present value and internal rate of returns, the accuracy of reserve and resource estimates, production estimates and capital and operating cost estimates and the assumptions on which such 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. 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. 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. 2

3 Notes to Investors Non-IFRS Financial Performance Measures The Company has included non-ifrs measures in this presentation: total cash costs and all-in sustaining costs,. 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, agreements with Aboriginal communities, 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. The Company believes the measure all-in sustaining costs 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. Total site costs and total site costs per ounce Detour Gold reports total site costs and total site costs per ounce on a sales basis. Total site costs include production and operating costs such as mining, processing, site general and administration, bullion shipment, refining, agreements with Aboriginal communities, capital costs (including closure costs) and net of silver sales. The Company calculates total site costs per ounce as the sum of total site costs (as described above) divided by the total gold ounces sold. Gold ounces produced is noted before delivering the royalty in kind ounces. Unit costs Detour Gold reports the following unit costs: Mining unit costs: calculated as mining costs divided by total tonnes mined (ore + waste). Processing unit costs: calculated as processing costs (including bullion delivery and refining) divided by the total tonnes milled. G&A unit costs: calculated as site G&A costs (excluding costs related to agreements with Aboriginal communities) divided by total tonnes milled. Qualified Persons The scientific and technical content of this presentation was reviewed, verified and approved by Drew Anwyll, P.Eng., Senior Vice President Technical Services, a Qualified Person as defined by Canadian Securities Administrators National Instrument Standards of Disclosure for Mineral Projects. All monetary amounts are in U.S. dollars unless otherwise stated. 3

4 DGC Investment Thesis Unmatched combination of long life and large production profile Top-ranked jurisdiction Competitive cost profile relative to industry peers Production growth Strong exploration potential 4

5 #1 Large Scale/Long Life Mine 100% OWNERSHIP IN QUALITY ASSET DGC Detour Lake AEM/YRI Canadian Malartic G Eleonore AEM LaRonde G Red Lake DGC Detour Lake AEM/YRI Canadian Malartic G Eleonore AEM LaRonde G Red Lake 2016YE Reserves (M oz) Gold reserves mined in 2016 replaced 2017 Production Guidance (K oz) Gold production increase 5

6 DGC Strategic Focus OPERATIONS GROWTH BALANCE SHEET Mine and mill optimization Realize on economies of scale Organic growth valuation Add value with: Zone 58N Debt re-financing Maintain capital discipline Gold Production (K oz) E 2018E 6

7 2017 Guidance Estimated production THOUSAND oz gold 2017 fifth year of operation Estimated costs Total cash costs $ TCC 1 per oz sold All-in sustaining costs $1,025-1,125 1 AISC per oz sold Key Assumptions Gold price of $1,200/oz, diesel fuel price of C$0.70 per litre; power cost of C$0.03/kWh; and CAD/US FX rate of Refer to the section on Non-IFRS Performance Measures on slide 3 of this presentation. 7

8 2017 Operations Focus 1 MINE: 100 Mt 2 Additional equipment to attain 100 Mt Success at Campbell pit Engaged consultants to improve efficiencies MILL: Mt Addition of lead nitrate/oxygen system in Q3 Improving operating time CAPITAL $ M Include: $40 M for additional mining equipment, $30 M of accelerated capital mainly for TMA Cell 2 ($9 M) and new camp ($17 M) 8

9 Balance Sheet Cash position: $129 M (Dec 31, 2016) Currently Net Debt:EBITDA = ~1.4 Re-financing needs: Future Current Notes 1 +/-$300 M $358 M Letters of Credit $50 M $30 M Sub-total utilized $350 M $388 M Undrawn revolver +/-$100 M $60 M Total debt facility $425-$475 M $450 M Targeting Q2 completion with the existing bank syndicate 1. Convertible notes mature on Nov 30,

10 Updated Life of Mine (LOM) Plan Detour Lake Operation Assumptions Long-Term Gold price $1,250/oz US$/C$ 1.25 Diesel C$0.80/L Power cost C$0.08/kWh 10

11 Permitting Update LOM plan update de-couples permitting timelines Provincial Environmental Study Report (ESR) filed on Jan. 30, 2017 Request made for Federal review Environmental protection equally similar for both Provincial and Federal processes North Pit Walter Lake Detour Lake Pit West Detour Pit Provincial or Federal EA Flexible LOM Plan 11

12 2017 LOM Plan Summary Key Statistics 2017 LOM Plan Proven & Probable Reserves (M oz) Average gold grade (g/t) 0.97 Estimated gold recovery (%) 92.7 Mine life (years) ~23 Average annual gold production (oz) 656,000 Total Site Costs 2 $758/oz sold Mining rates for Detour Lake pit ramping up from 100 Mt in 2017 to 125 Mt in 2022 Mill throughput increasing from 21.5 Mt in 2017 to 23 Mt in 2021 North pit starts in 2019 / West Detour pit starts in Estimated using a gold price of $1,000/oz and a US$/C$ exchange rate of Refer to the section on Non-IFRS Performance Measures on slide 3. 12

13 Mining Ramp-up Advancing Detour Lake pit From 100 Mt in 2017 to 122 Mt in 2020 Mining rate increase with equipment not productivity Load and haul fleet include contingent capacity Mt 7+1 Shovels 7+1 Shovels 7+1 Shovels Mt 7 Shovels 6 Shovels Mt Mt Mt Trucks Shovels Trucks Shovels Trucks Shovels Trucks Shovels Trucks Shovels Contingent Capacity Required Capacity Mining Rate 13

14 2017 LOM Plan Gold Production Plan Yearly average gold production (k oz) per period LOM Total Site $980/oz $1,187/oz $718/oz $758/oz Costs 1 LOM total site costs of $758/oz sold with variability in Near-term increase level of capital spending Opportunity to reduce and/or remove contingent capital near-term 1. Total site costs = Site operating costs + Total capital costs divided by ounces sold. Refer to the section on Non-IFRS Performance Measures on slide 3. 14

15 LOM Opportunities Main opportunities not included in LOM Plan Mine Increase equipment productivities Improve dilution control Evaluate alternate pit staging with in-pit dumping Plant Zone 58N Increase plant capacity to 24 Mt/yr Increase milling rate (>2,850 tpoh) and improve operating time High-grade ore source feed 15

16 450 m Advanced Exploration - Zone 58N Preliminary Model and Conceptual Design Model assumes 3 metre min. horizontal thickness Evaluation underway for potential wider mining areas Conceptual UG advanced exploration program prepared; cost estimated at C$30-50 M over 5 years Advanced exploration permit required for UG access Drilling Program Underway 30,000 m of infill drilling between m Selective holes deeper to delineate continuity Conceptual UG Design for Zone 58N 16

17 Detour Gold Short-term Objectives: Re-finance debt in Q2 Deliver strong cash flow in Updated LOM plan set-up for success Independent of permitting process Achievable mining rate Realize on opportunities not included in LOM plan Detour Lake - Unique asset in the gold space: Long life and large production profile Strong cash flows over LOM 17

18 DETOUR GOLD INTERMEDIATE GOLD PRODUCER 18