CANADA S INTERMEDIATE GOLD PRODUCER

Transcription

1 CANADA S INTERMEDIATE GOLD PRODUCER Denver Gold Forum Colorado Springs September 25-27,

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, gold price volatility, changes in debt and equity markets, 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, 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: the availability of financing for exploration and development activities; operating and capital costs; the Company's ability to attract and retain skilled staff; the mine development and production schedule and related costs, 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. All monetary amounts are in U.S. dollars unless otherwise stated. 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. 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) 2017 Production Guidance (K oz) 5

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

7 H Highlights PRODUCTION COSTS FINANCIALS 282 K OZ gold $746 TCC 1 /oz sold $65 EARNINGS FROM MINE OPERATIONS million 47.0 MT mined $1,120 AISC 1 /oz sold $128 CASH BALANCE² million 10.7 MT milled $500 BANK DEBT FACILITY CLOSED million Positive drill results from Zone 58N 1. Refer to the section on Non-IFRS Performance Measures on slide 3. Reconciliation of these measures is described in the Q2 17 MD&A. 2. As at June 30, 2017; approximately $30 M utilized post Q2 to complete convertible note refinancing. 7

8 Q Operating Results Throughput rate at 60,259 tpd Milling rates (tpoh) continuing to exceed budget Inclusive of planned shutdown in June (initially planned for July) Oxygen control system in operation at Q2 end MT ore milled G/T AU head grade % recovery Mining rates of 277,000 tpd Phase 1 & Phase 2 on track Increase due to additions to mining fleet and benefit of productivity gains from pit opening up At end of July: 6 shovels and 32 haul trucks 25.2 MT total mined 4.2 strip ratio 6.2 stockpiles 0.64 g/t Au 8

9 Detour Lake Open Pit Phase 1: Campbell Pit Area Mine Equipment at July 31: 2 x CAT 7495 shovels 4 x CAT 6060 shovels 32 x CAT 795 trucks Phase 2 Phase 1: West (calcite zone) Phase 2 (pre-stripping) July 5,

10 Mine Ops Initiatives (with USC) Consulting started in April 2017 Project Schedule Summary Sept 22 No. of Weeks Drill Load/Blast Shovel Truck/Dispatch Muck Bench Clean-up & Pattern Prep Mine Mobile Maintenance Materials Management Benefits to be incorporated into 2018 Budget still early! 10

11 Q Costs Q2 AISC: Included a scheduled plant shutdown Reflecting higher sustaining capex Partially offset by lower electricity costs and stronger U.S. dollar Q2 Sustaining Capital ($ M) Annual guidance of $ M maintained In $ M Q2 17 H1 17 Q2 17 Q2 16 $706 $691 TCC 1 ($/oz sold) $1,123 $1,030 Mining $30.0 $58.8 Tailings $4.4 $8.3 Processing $3.1 $4.6 Infrastructure, G&A & other $3.7 $5.0 Total sustaining $41.2 $76.7 Capitalized stripping $8.6 $12.0 AISC 1 ($/oz sold) 1. Refer to the section on Non-IFRS Performance Measures on slide 3. Reconciliation of these measures is described in the Q2 17 MD&A. 11

12 Bank Debt Facility & Hedging Closed $500 bank debt facility in July Term Loan (3-year term) $200 M Revolving Credit Facility (4-year term) $300 M Total debt facility $500 M Status $200 M drawn down $100 M drawn down Financial covenants: Net debt to EBITDA <3.5:1 (now at <1.5:1) Interest coverage ratio >3.5:1 Facility permits equipment leasing and hedging Financial Risk Management (at Q2 end) $159 M of zero cost collars to hedge Canadian dollar costs with floor at ,000 oz of zero-cost collars with average range of $1,208 to $1,342/oz 12

13 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 and CAD/US FX rate of 1.30 (=C$1,560/oz); diesel fuel price of C$0.70 per litre; power cost of C$0.03/kWh 1. Refer to the section on Non-IFRS Performance Measures on slide 3 of this presentation. 13

14 5-Year Mine Ramp-up LOM Plan Targets Mine Plan (Mt/yr) Mine Mill 6 shovels max. 32 trucks shovels max. 34 trucks Shovel #8 in capex (not in mine plan)

15 Organic Growth Pipeline WEST DETOUR DEVELOPMENT ZONE 58N LOWER DETOUR BURNTBUSH CLAIM BLOCK Reserves: 1.8 M oz Provincial ESR filed In LOM plan West Detour production in 2025 Potential for highgrade UG mine Evaluating options for mining widths and cut-off grade for different UG mining scenarios New claim block staked 70 km south of Detour Lake Airborne geophysical survey completed 15

16 West Detour Project Progress Permitting and Consultation Progress Permitting stays under Provincial EA process Government led consultation starting this fall Agreement with WFN and TTN expected prior to year-end Working on finalizing Closure Plan update and local user engagement plan with MCFN; alignment on ESR anticipated prior to year-end North Pit Walter Lake Detour Lake Pit West Detour Pit 16

17 Zone 58N Progress Next steps leading to decision to proceed with Advanced Exploration program 14,000 m surface drilling program underway Update block model Complete conceptual mine design Preliminary cost for AdEx program (infrastructure and UG development) Additional metallurgical testing Document ready to submit for AdEx program Report mineral resource estimate by year-end 17

18 Upcoming Catalysts Strong operational performance to continue in H2 Upward trend for mining rates Recovery improvements Continued benefits from operational review Zone 58N conceptual mine design with associated costs and mineral resource estimate by year-end 18

19 DETOUR GOLD INTERMEDIATE GOLD PRODUCER THANK YOU! 19

20 ADDITIONAL information Safety Performance Shareholder Information Operational Statistics Property Geology Map Summary LOM Plan Year-end 2016 Reserves & Resources Analyst Coverage Management & Directors Contact Information 20

21 Safety Performance H1 2017: Focus on key elements of 5-Yr Safety Journey includes: Management of Change process Operational Risk Mgmt Framework Documents Contractor Management: ISNetworld Qualification of Contractors Visible Felt Leadership Workplace Safety Program Audits Total Recordable Injury Frequency Rate (TRIFR) 1 (12 Month Rolling Average) 1. TRIFR: Total recordable injuries x 200,000 hours divided by total man hours worked. 21

22 Shareholder Information Share Structure (August 31, 2017) Share Structure (03/31/2014) M Issued & outstanding 4.9 M Share options 8.3 M Convertible notes M FULLY DILUTED Top Shareholders Top Shareholders 10% Van Eck Associates 8% BlackRock 6% Fidelity 2 >80% INSTITUTIONS TOTAL $128.3 MILLION cash and short-term investments at June 30, Conversion price for the Notes is $ Includes Fidelity Investments Canada, Fidelity Management & Research Company and Fidelity Institutional Asset Management. 22

23 Operational Statistics Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Ore mined (Mt) Waste mined (Mt) Total mined (Mt) Strip ratio (waste:ore) Mining rate (tpd) 241, , , , ,000 Ore milled (Mt) Mill grade (g/t Au) Recovery (%) Mill throughput (tpd) 58,466 56,453 60,052 58,114 60,259 Mill availability (%) Ounces produced (oz) 139, , , , ,138 Ounces sold (oz) 131, , , , ,970 23

24 Property Geology Map 24

25 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 Slide 27 for additional details. 2. Refer to the section on Non-IFRS Performance Measures on slide 3. 25

26 2017 LOM Production Plan Yearly Average per Period Total LOM LOM Ore milled (Mt) Head grade (g/t Au) Gold recovery (%) Gold production (k oz) ,250 Total mined (Mt) ,175 Strip ratio (waste:ore) Average for the last years at 2.25 years. 26

27 2017 LOM Plan Financial Summary 2-Year Average 2017LOM Units Average Total Gold Production k oz ,250 Gold Sales 4 k oz ,937 Site Costs Operating Costs 1 C$ M ,960 Sustaining Capital 2 C$ M ,488 Deferred Stripping C$ M Total Capital Costs C$ M ,372 Total Site Costs C$ M ,332 US$/oz sold 980 1, Cash Flow Site Cash Flow 3 (after Tax) NPV5% (after tax) = C$3.7 M C$ M ,038 (1) Includes all site costs including bullion delivery, refining and costs related to agreements with Aboriginal communities. (2) Includes closure costs. (3) US$/C$ exchange rate of 1.30 in 2017, 1.27 in 2018, and 1.25 in (4) Ounces sold = Production x 97.95% (= 100% - 2% NSR % Refiners take). 27

28 Year-end 2016 Reserves & Resources At Dec. 31, 2016 Reserves Tonnes (millions) Grade (g/t Au) Contained Gold Ounces (000 s oz) Detour Lake Pit Proven ,579 Probable ,490 Stockpiles Total P&P ,214 West Detour Pit Proven Probable ,596 North Pit Probable Total P&P ,843 LG Fines Probable Total P&P ,460 Resources Detour Lake Pit Measured Indicated ,255 M+I ,991 West Detour Pit Measured Indicated North Pit Indicated M+I Total M+I ,869 Detour Lake Mine Inferred West Detour Pit Inferred North Pit Inferred Total Inferred ,188 Notes: 1. The Company s mineral resources and reserves conform with generally accepted definitions and guidelines given in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves as required by NI Mineral reserves were estimated using a gold price of US$1,000/oz and mineral resources were estimated using a gold price of US$1,200/oz at a US$/C$ exchange rate of Mineral reserves and resources were based on a cut-off grade of 0.50 g/t Au. 4. LG Fines (sourced from material grading g/t Au) classified as Measured and Indicated were reported as Probable mineral reserves and included in the mine plan. 5. Further information, including key assumptions, parameters, and methods used to estimate mineral resources and mineral reserves are described in the Technical Report on the Detour Lake operation, dated March 22, Mineral resources are reported exclusive of mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 7. Totals may not add due to rounding. 28

29 Analyst Coverage (20) Firm Analyst Target Price at September 22, 2017 Bank of America Merrill Lynch Michael Jalonen $23.00 Beacon Securities Michael Curran $18.25 BMO Brian Quast $29.00 Canaccord Rahul Paul $21.00 CIBC World Markets Cosmos Chiu $20.00 Cormark Securities Richard Gray $23.00 Credit Suisse Anita Soni $20.00 Desjardins UNDER REVIEW Eight Capital Research UNDER REVIEW Global Mining Research David Radclyffe/David Cotterell $18.00 GMP Securities Ian Parkinson $20.00 Goldman Sachs UNDER REVIEW Haywood Kerry Smith $28.00 Macquarie Mike Siperco $22.00 National Bank Mike Parkin $23.00 Paradigm Don Blyth/Don MacLean $25.50 Raymond James Farooq Hamed $23.00 RBC Dan Rollins $20.00 Scotiabank Trevor Turnbull $21.00 TD Dan Earle $22.00 Average target $

30 Management & Directors MANAGEMENT Paul Martin President and CEO James Mavor CFO Julie Galloway General Counsel & Corporate Secretary Drew Anwyll Sr VP Technical Services Derek Teevan Sr VP Corporate & Aboriginal Affairs Charles Hennessey Mine General Manager Laurie Gaborit VP Investor Relations Ruben Wallin VP Environment & Sustainability Alberto Heredia Controller Jacques McMullen Corporate Technical Advisor DIRECTORS Lisa Colnett Edward C. Dowling Robert E. Doyle André Falzon Ingrid Hibbard Michael Kenyon Paul Martin Alex G. Morrison Jonathan Rubenstein 30

31 Contact Information Paul Martin President and Chief Executive Officer Phone: Laurie Gaborit VP Investor Relations Phone: