CANADA S INTERMEDIATE GOLD PRODUCER

Transcription

1 CANADA S INTERMEDIATE GOLD PRODUCER Fourth Quarter and Year-End 2017 Results Conference Call & Webcast March 9,

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 forwardlooking statements ). These forward-looking statements reflect current expectations or beliefs regarding future events or the Company s future performance. 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 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 contained in this presentation include, without limitation, statements with respect to: guidance for production, operating expense, cash costs, all-in sustaining costs, and the factors contributing to those expected results, including mine output, mill throughput, gold recoveries, and expected capital and other expenditures; planned development activities and exploration; estimation of mineral reserves and mineral resources; and permitting timelines. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company s actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. The forward-looking statements contained are made as of the date hereof, or as of the date or dates specified in such statements. Inherent in forward-looking statements are risks, uncertainties and other factors beyond the Company s ability to predict or control. 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 listed in the section entitled "Description of Business - Risk Factors" in Detour Gold's 2017 Annual Information Form and in the continuous disclosure documents filed by Detour Gold on and available on SEDAR at Readers are cautioned that the foregoing list of factors is not exhaustive of the factors that may affect forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by forward-looking statements, including those contained in this news release. Such statements are 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 available cash resources; 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 mineral reserve and mineral 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; and general business and economic conditions. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company s actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements. All forward-looking statements, including those herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forwardlooking statements 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, all-in sustaining costs, adjusted earnings (loss) and adjusted basic earnings (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, 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. IFRS Measures The Company has included IFRS measure in this presentation: earnings (loss) from mine operations. The Company believes that this measure provides useful information to investors as an indication of the Company s principal business activities before consideration of how those activities are financed, sustaining capital expenditures, corporate administration expense, exploration and evaluation expenses, loss on disposal of assets, finance income and costs, and taxation. 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. 3

4 Management Participants Fourth Quarter and Year-End 2017 Results Conference Call and Webcast All monetary amounts are in U.S. dollars unless otherwise stated. PAUL MARTIN President and CEO JAMES MAVOR CFO FRAZER BOURCHIER COO 4

5 Safety Performance 2017: TRIFR of 1.78 for the year Safety performance improvement in Q4 Completed hiring to bolster the Safety team Establish Safety Journey Plan for 2018 Including a commitment to increase behavioral safety training across workforce Total Recordable Injury Frequency Rate (TRIFR) 1 (Annual Average) TRIFR: Total recordable injuries x 200,000 hours divided by total man hours worked. 5

6 2017 Highlights GOLD PRODUCTION (oz) Q4 17 YTD , ,463 GOLD SALES (oz) AVG REALIZED GOLD PRICE 1 ($/oz) REVENUES ($ M) TCC 1 ($/oz sold) AISC 1 ($/oz sold) 156,293 $1,277 $200 $705 $ ,974 $1,256 $708 $716 $1, Refer to the section on Non-IFRS Performance Measures on slide 3. Reconciliation of these measures is described in the Q4 17 MD&A. 6

7 2017 Financial Highlights $161.5 MILLION earnings from mine operations MILLION $88.2 net earnings or $0.50 per share MILLION $114.5 adjusted earnings 1 or $0.66 per share $134.1 MILLION cash & cash equivalents Repaid $88 M in debt in 2017, $230 M since Refer to the section on Non-IFRS Performance Measures on slide 3. Reconciliation of this measure is described in the Q4 17 MD&A. 7

8 2017 Costs Q4 Unit Costs Mining costs impacted mainly by higher diesel prices and support equipment repair costs Processing costs impacted by mantle repairs (primary crusher) All in Sustaining Costs Mid-range of guidance Sustaining capex of $174.8 M, including $34.4 M of deferred stripping costs $989 $1,064 $705 $716 Q Mining (C$/t mined) $2.99 $2.89 Processing (C$/t milled) $10.51 $9.63 Q4' Q4' G&A (C$/t milled) $3.43 $3.37 TCC 1 ($/oz sold) AISC 1 ($/oz sold) 1. Refer to the section on Non-IFRS Performance Measures on slide 3. 8

9 2018 Guidance Change photo; same as last year Estimated production THOUSAND oz gold Estimated costs Total cash costs $ TCC 1 per oz sold All-in sustaining costs $1,050-1,150 1 AISC per oz sold Key Assumptions Gold price of $1,250/oz and CAD vs US FX rate of 1.25 (=C$1,562/oz); diesel fuel price of C$0.75/L; power cost of C$0.03/kWh 1. Refer to the section on Non-IFRS Performance Measures on slide 3 of this presentation. 9

10 Permitting / Consultation West Detour Mine development ESR submitted in January 2017 Supported by provincial government 2 out 3 First Nations bands have signed updated agreements Consultation ongoing with remaining band: Operation is now better understood Closure plan amendments almost complete Walter Lake, water discharge location and footprint to be resolved Mine plan allows time to complete permitting discussions Targeting provincial approval by year-end 10

11 Optimization Plan Improving near-term production and cash flow profile With operational confidence gained in 2017 and additional peer / external review, an alternative mine plan is being evaluated to improve : Bring ore tonnes forward from Reduce reliance on stockpiles in 2020 Review associated capital plan Targeting Q for completion LOM Plan Targets 1 Average Site Cash Flows per Year (after tax) (C$ M) $448 $186 $ LOM plan dated March 2017: $1,250/oz gold price; FX rate of 1.27 for 2018 and 1.25 for

12 Zone 58N Next steps leading to evaluate Advanced Exploration program Completed 4,750 m of drilling at 12.5 m spacing in Q for further testing of block model Completing block model with improved geological interpretation Next steps: Initial mineral resource estimate in Q2 Evaluating an advanced exploration program to test the underground mining potential of Zone 58N Conceptual UG Design for Zone 58N 12

13 COO s First Impressions Operating upside to be realized. Block model performing well Well capitalized operation performing below standards Near-term operational priorities: Resolve below benchmark mill and mobile fleet availabilities Upgrade overall maintenance planning and scheduling Improve costs with increased unit productivities and reduced contractor usage Enhance LOM production profile

14 Closing Comments 2018 to be another solid Year for Detour Gold: Production growth Continued free cash flow growth Financial strength and flexibility Leverage to gold price ATTRACTIVE VALUATION OPPORTUNITY 14

15 DETOUR GOLD INTERMEDIATE GOLD PRODUCER Q & A October

16 Additional Information 2017 Operational Statistics 2017 Financial Review Shareholder Information 16

17 2017 Operational Statistics Q1 17 Q2 17 Q3 17 Q Ore mined (Mt) Waste mined (Mt) Total mined (Mt) Strip ratio (waste:ore) Mining rate (tpd) 242, , , , ,000 Ore milled (Mt) Mill grade (g/t Au) Recovery (%) Mill throughput (tpd) 58,114 60,259 61,548 54,144 58,508 Ounces produced (oz) 131, , , , ,463 Ounces sold (oz) 134, , , , ,974 17

18 2017 Financial Review Income Statement ($ M, except per share amount) Q4 17 Q Metal Sales $ $ $ $ Cost of sales Production costs Depreciation Earnings from Mine Operations Corporate and administrative expense Exploration and evaluation expense Other operating (income) expenses (0.6) 0.0 (0.1) (0.1) Earnings before Finance Items and Taxes Net finance income (cost) (11.0) Income and mining tax expense (15.8) (16.8) 3.6 (17.5) Net Earnings (loss) $ 16.7 $ (13.5) $ 88.2 $ (6.9) Earnings (loss) per Share basic $ 0.10 $ (0.08) $ 0.50 $ (0.04) Note: Totals may not down add due to rounding. 18

19 2017 Financial Review Adjusted Earnings (Loss) per Share ($ M, except per share amount) Q4 17 Q Net Earnings (Loss) $ 16.7 $ (13.5) $ 88.2 $ (6.9) Adjusted for: Fair value (gain) loss of the convertible notes 0.0 (13.0) (0.9) 4.6 Accretion on debt Accretion on decommissioning and restoration provision Non-cash unrealized (gain) loss on derivative instruments 1.0 (4.5) (0.5) (1.7) Foreign exchange (gain) loss (4.6) 0.0 Deferred income and mining taxes (17.5) Adjusted Earnings (Loss) 1 $ 40.2 $ (6.0) $114.5 $ 10.4 Adjusted Basic Earnings (Loss) per Share 1 $ 0.23 $ (0.03) $ 0.66 $ 0.06 Note: Totals may not down add due to rounding. 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 period. 19

20 2017 Financial Review Cash Flows ($ M) Q4 17 Q Operations $ 86.5 $ 44.0 $ $ Working capital Items (18.7) Operating activities Investing activities (44.4) (37.8) (175.3) (103.5) Financing activities (33.1) (9.8) (111.8) (124.2) Effects of exchange rate changes (1.2) (0.6) 1.8 (0.5) Changes in cash and cash equivalents 20.4 (13.8) 4.7 (31.2) Cash and cash equivalents beginning of period Cash and cash equivalents end of period $ $ $ $ Note: Totals may not down add due to rounding. 20

21 Shareholder Information Share Structure (March 8, 2018) Share Structure (03/31/2014) M Issued & outstanding 11% 4.6 M Share options & Units M FULLY DILUTED Top Shareholders Van Eck Associates 8% BlackRock >80% INSTITUTIONS TOTAL $134 MILLION cash and cash equivalents at December 31,

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