CANADA S INTERMEDIATE GOLD PRODUCER

Transcription

1 CANADA S INTERMEDIATE GOLD PRODUCER Updated LOM Plan Detour Lake June 28, 2018

2 Cautionary Statement on 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 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, 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 the Company s actual results, performance or achievements to differ materially from those expressed or implied by such 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 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. In particular, this presentation contain forward-looking statements including, without limitation, with respect to Detour Gold s 2018 LOM plan assumptions and parameters, mine production plan, estimated unit costs, estimated site operating costs, estimated capital costs, estimated deferred stripping costs, estimated total site costs, estimated cash flows, estimated revenues, estimated net project value of the Detour Lake mining operation, permitting schedule, realizing the operational improvement strategy, and expectations regarding future price assumptions, financial performance and other outlook or guidance. 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, regulation and policies, support of the Company s Aboriginal communities, receipt of permits, interest rate and exchange rate fluctuations, general economic conditions and other risks involved in the gold exploration, development and production 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 ( AIF ) 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 and the results of the final revised life of mine plan are likely to differ, and may differ materially or materially and adversely, from those expressed or implied by forward-looking statements, including those contained in this presentation. 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; results of operations; 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 the proposed development of the West Detour project and the continued development of the Detour Lake pit, other 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. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking 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. All monetary amounts are in Canadian dollars unless otherwise stated. 2

3 Note to Investors Non-IFRS Financial Performance Measures The Company has included non-ifrs measures in this presentation: total site costs, net debt, and free cash flow before financing activities. 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 this measure differently as a result of differences in underlying principles and policies applied. Total site costs, total site costs per ounce and various unit costs Detour Gold reports total site costs and total site costs per ounce on a sold 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. 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 process costs 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. Information Concerning Estimates of Mineral Reserves and Resources These estimates have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States' securities laws. The terms "mineral reserve", "proven mineral reserve and "probable mineral reserve" are Canadian mining terms as defined in accordance with NI and the CIM Definition Standards. The CIM Definition Standards differ from the definitions in the United States Securities and Exchange Commission ("SEC") Guide 7 ("SEC Guide 7") under the United States Securities Act of 1933, as amended. Under SEC Guide 7, a "final" or "bankable" feasibility study is required to report mineral reserves, the three-year historical average price is used in any mineral reserve or cash flow analysis to designate mineral reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. In addition, the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in NI and recognized by Canadian securities laws but are not defined terms under SEC Guide 7 or recognized under U.S. securities laws. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be upgraded to mineral reserves. "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 by upgraded to a higher category. Under Canadian securities laws, estimates of "inferred mineral resources" may not form the basis of feasibility or pre-feasibility studies, except in rare cases. U.S. investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Accordingly, these mineral reserve and mineral resource estimates and related information may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal laws and the rules and regulations thereunder, including SEC Guide 7. Mineral resources are not mineral reserves, and do not have demonstrated economic viability, but do have reasonable prospects for economic extraction. Measured and indicated mineral resources are sufficiently well defined to allow geological and grade continuity to be reasonably assumed and permit the application of technical and economic parameters in assessing the economic viability of the resource. Inferred mineral resources are estimated on limited information not sufficient to verify geological and grade continuity or to allow technical and economic parameters to be applied. Inferred mineral resources are too speculative geologically to have economic considerations applied to them to enable them to be categorized as mineral reserves. There is no certainty that mineral resources of any category can be upgraded to mineral reserves through continued exploration. Detour Gold s mineral reserve and mineral resource figures are estimates and Detour Gold can provide no assurances that the indicated levels of gold will be produced or that Detour Gold will receive the gold price assumed in determining its mineral reserves. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While the Company believes that these mineral reserve and mineral resource estimates are well established and the best estimates of Detour Gold s management, by their nature mineral reserve and mineral resource estimates are imprecise and depend, to a certain extent, upon analysis of drilling results and statistical inferences which may ultimately prove unreliable. If the Company s mineral reserve or mineral reserve estimates are inaccurate or are reduced in the future, this could have an adverse impact on Detour Gold s future cash flows, earnings, results or operations and financial condition. Detour Gold estimates the future mine life of the Detour Lake operation. Detour Gold can give no assurance that its mine life estimate will be achieved. Failure to achieve this estimate could have an adverse impact on Detour Gold s future cash flows, earnings, results of operations and financial condition. 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 Updated Life of Mine Plan for Detour Lake Conference Call and Webcast All monetary amounts are in Canadian dollars unless otherwise stated. MICHAEL KENYON Interim CEO & Director FRAZER BOURCHIER COO JAMES MAVOR CFO 4

5 Updated Life of Mine Plan Commitment to optimizing Detour Lake operation Detour Lake is a unique asset in a good jurisdiction with a long mine life and a large mineral reserve LOM average annual gold production estimated at ~659,000 oz LOM pre-tax cash flows estimated at $8.4 B After-tax NPV5% of $3.45 B which equates to approximately $19.70 per share A new COO, updated mining plan, operational improvements, and a renewed focus on execution, together with a strong balance sheet, solidify path to deliver value to shareholders 5

6 Agenda 2018 LOM Plan Overview Permitting 2018 LOM Plan Site Operating and Capital Costs Economic Analysis Operational Improvement Strategy Opportunities & Risks Additional Information 6

7 Overview Why an updated LOM Plan? Longer timeframe to obtain permits Cost review of current conditions indicating increased operating costs and capital investment assumptions Successful reduction of annual variations in gold production profile from the prior LOM plan Pit sequencing improvements without increasing operational risk Focus plan over next 5 years to achieve incremental improvements DETOUR LAKE IS A ROBUST ECONOMIC OPERATION 7

8 Permitting Aboriginal Consultation Permitting Process 8

9 Aboriginal Consultation West Detour Project Draft ESR* filed in January 2017 Agreements signed with Wahgoshig and TTN supporting West Detour project Continued support from Métis Nation of Ontario Ongoing engagement challenges with MCFN leadership Next Steps File final draft ESR for West Detour project by year-end Following EA approval (anticipated in 2019) apply for required additional permits (FN consultation continues during that process) *Environmental Study Report. 9

10 Permitting Process Adding Time 2018 LOM Plan adds more time to obtain required permits: Environmental Assessment (In-hand) Associated remaining permit expected in Q Associated permits required by mid-2020 West Detour Project & Walter Lake permits required by 2025 and beyond 4 Walter Lake 120m offset 4 4 Lindbergh Lake 3 Pond

11 Permitting Process West Detour Project Draft ESR Main components of ESR: DLM Pit (Walter Lake) North Pit West Detour Pit Stockpiles:MRS2-Ext, MRS3, and MRS4 Water discharge point (Sunday creek or Detour river) 11

12 2018 LOM Plan Production Plan (summary) Operating Plan Changes from Prior Plan 12

13 Key Inputs in 2018 LOM Plan 2018 LOM Plan 1 ( ) Economic Assumptions (long-term) Gold price (US$/oz) $1,300 Exchange rate (CAD$/US$) 1.25 Electricity ($/kwh) 2 $0.035/$0.080 Diesel fuel ($/L) $0.80 Income/mining tax rate (%) 25/10 Net smelter royalty (%) 2.0 Mine Parameters Total mined (Mt) 2,141 Ore mined (Mt) 488 Strip ratio (waste:ore) 3.4 Ore milled (Mt) Average gold grade (g/t) 0.97 Estimated gold recovery (%) 92.8 Total recovered gold (M oz) 14.9 Mine life (years) 22.6 Average annual gold production (oz) 659,000 (1) Refer to the amended mineral reserve statement (December 31, 2017) for Detour Lake operation in Additional Information Section. (2) Electricity costs at $0.035/kWh to end of 2024 (except $0.03/kWh for 2018) and $0.08/kWh for (3) Includes LG Fines and ROM stockpiles at year-end 2017 processed over LOM. 13

14 Summary Mine Production Plan Item LOM Total LOM Avg Total Mined (Mt) , Strip Ratio (waste:ore) Tonnes Milled (Mt) Head Grade (g/t Au) Gold Recovery (%) Gold Production (k oz) , (1) As per revised guidance provided on April 26, All numbers are approximate. Average annual gold production of 614,000 oz for next 12 years Subsequently, 10 years averaging 725,000 oz per year 14

15 Detour Lake Operating Plan Gold production (k oz) 1,000 LOM Gold Production Head grade (g/t Au) koz/yr for next 12 yrs & 725 koz/yr for subsequent 10 yrs Gold Production (k oz) Head Grade (g/t Au) 15

16 Detour Lake Operating Plan Tonnes Mined (Mt) 140 Tonnes Mined per Pit Strip Ratio (waste:ore) Detour Lake pit (88% of ore) Detour Lake Pit West Detour Pit North Pit Overall S/R

17 Tonnes Milled (Mt) Detour Lake Operating Plan Gradual ramp up of processing plant: Throughput from 21.0 Mt in 2018 to 23.0 Mt in 2021 onwards Gold recovery LOM average of 92.8% LG Fines accounts <5% of total LOM feed Mt Mt 22.5Mt 23 Mt 23 Mt 23 Mt (guid) Ore Feed LG Fines 17

18 Notable Changes from Prior 2017 LOM More consistent production profile ( ) Strip ratio reduced to bring ounces forward however additional permitting delay Increase in operating costs and modify productivity assumptions Inflation, rate & amount productivity gains, consumable consumption Increase in capital costs TMA inflation & design changes, plant investment to sustain, mine fleet Permitting flexibility North Pit in 2026, Walter Lake impacted in 2028 Higher standards for closure plan Best practices to increase social license Economic Assumptions Long-term gold price from US$1,250 to US$1,300 per ounce 18

19 Costs Operating and Capital Costs Summary Unit Costs Capital Costs 19

20 Operating and Capital Costs Summary Description Units Unit Costs LOM Total LOM Average Mining Unit Costs 1,2 $/t mined Processing Unit Costs 1 $/t milled G&A Unit Costs 1,3 $/t milled Site Operating Costs 4 $ M , Site Capital 5 $ M , Deferred Stripping $ M , Total Capital Costs $ M , Total Site Costs 1,6 US$/oz sold 1,179 1, (1) Refer to the section on Non-IFRS Performance Measures on slide 3. (2) Mining unit costs exclude planned component replacements (PCR) and capitalized maintenance and repair contract (MARC). These costs are included in capital costs. (3) Exclude costs related to agreements with Aboriginal communities. (4) Include all site costs including bullion delivery, refining and costs related to agreements with Aboriginal communities. Include adjustments for deferred stripping and stockpile movements. (5) Include closure costs. (6) Ounces sold = production X 97.95% (100%-2% NSR-0.05% refiners take). 20

21 Unit Cost ($/t mined) Tonnes Mined (Mt) Unit Costs Compared to Mining Rate Mining LOM Avg $2.92/t 2014A 2015A 2016A 2017A 2018 (guid) 2019* Actual Unit Rate ($/mined) 2018 LOM Tonnes Mined (Mt/yr) Unit mining costs impacted by: Lower truck haulage efficiency (trucks speeds and delays) Higher truck hours Higher diesel consumption Increased mobile equipment maintenance costs * Range provided for 2019 is Mt. 21

22 Unit Processing Costs ($/t milled) Tonnes Milled (Mt) Unit Costs Compared to Processing Rate Processing LOM Avg $9.25/t A 2015A 2016A 2017A 2018 (guid) 2019* Actual Unit Rate ($/milled) 2018 LOM Plant Throughput (Mt/yr) 0 Unit processing costs impacted by: Higher anticipated key reagent consumption (CN, SO 2, PbNO 3 ) to reflect assumed trend of higher copper and sulfur levels in ore Increased labour (operations and maintenance) and maintenance costs * Range provided for 2019 is Mt. 22

23 G&A Unit Costs ($/t milled) Tonnes Milled (Mt) Unit Costs Compared to Processing Rates G&A and Other (excluding FN costs) A 2015A 2016A 2017A 2018 (guid) 2019* Actual Unit Rate ($/milled) 2018 LOM Plant Throughput (Mt/yr) 0 G&A and Other costs impacted by: Higher site infrastructure costs for water management and site services Inflationary impacts Increased personnel on site (higher camp costs) * Range provided for 2019 is Mt. 23

24 Capital Costs Summary of capital requirements over 2018 LOM Plan LOM LOM Description Units Total Average Mining 1 $ M , Process plant 2 $ M Tailings 3 $ M G&A and Other 4 $ M Mine Closure $ M Site Capital Costs $ M , Deferred stripping $ M , Total Capital Costs $ M , Main components of capital include: 1) Replacement of truck fleet and ancillary gear and some shovels, component change outs, MARC, shop, and safety. 2) Conveyors, dust management, spares, corrosion, leach tanks, ball mill trunnions, screen replacements, and detox modifications. 3) Split approximately 15% Cell 1, 50% Cell 2 and 35% Cell 3. 4) G&A and other include capital for increasing camp capacity and quality, IT, supply chain and security systems. 24

25 Capital Cost ($M) Capital Costs Changes from prior LOM plan: TMA Facility & Water Management Higher contractor rates Dam design changes based on final geotech evaluations (impacting Cell 2) 1, Site Capital Costs 2018 LOM Plan Processing Plant Projects to ensure plant operating time improvements and sustainable throughput Health and Safety projects (Dust collection system and cyanide off-loading) Mining Some additional haul truck replacement Pit-related infrastructure Capitalized Mining Opex (PCRs + MARC) Mining Capital (Excl PCR +MARC) TMA Capital Plant Capital Closure Added safety related technology and infrastructure Closure Plan Additional closure costs to achieve higher standards 25

26 Economic Analysis NPV 5% Sensitivity Analysis 26

27 Economic Analysis* NPV5% (after Tax) = $3.45 B (@ $1,300/oz & FX rate of 1.25) Description Units LOM Total LOM Avg Revenue $ M ,720 1,050 Operating Costs $ M , Total Capital Costs 1 $ M , Total Site Costs 2 $ M , US$/oz 1,179 1, Pre-tax Cash Flow 3 $ M , NPV5% (pre-tax) $ M ,233 - Tax 4 $ M , NPV5% (after-tax) $ M 3,448 (1) Included deferred stripping and closure costs. (2) Refer to the section on Non-IFRS Performance Measures on slide 3. (3) Includes adjustments for working capital movements. (4) Calculated on site cash flows only, without benefit for tax shield from corporate, exploration and interest costs. * Valuation is based on a start date of January 1,

28 Economic Analysis* NPV5% (after tax)sensitivity Analysis (in $ B) C$/US$ FX Rate Gold US$/oz , , , % LOM Plan +10% Gold price Operating Cost Capital Expenditure * Valuation is based on a start date of January 1,

29 Financial Strength and Cash Flow Generation As at March 31, Financial Position Cash: US$152 M LT Debt: US$258 M Net Debt: US$106 M 2. Financial Covenants Leverage Ratio 0.5:1 Interest Coverage 14.8:1 3. US$500 M Credit Facility US$90 M on Revolver (debt and LC s) US$200 M Term Loan US$210 M Available and Undrawn 4. LOM Pre-tax Cash Flow Generation $1.1 B $1.0 B Beyond 2028 $6.2 B $8.3 B LOW NET DEBT AND STRONG COVERAGE OF FINANCIAL COVENANTS 29

30 Operational Improvement Strategy 30

31 Top Operational Focus Areas Focus Area People and Organization Structure / Effectiveness Benchmarking and Gap Analysis Systems Focus Automation and Data Analytics Examples Depth and experience to leadership Focus on efficiency and communications Culture of change Plant review and re-capitalization Mobile maintenance review Operational benchmarking Alignment of key value drivers Mine operating systems review Contractor management Mine/Mill interface Reliability & planning centered systems Predictive maintenance Tele-remote drills Remote dozers Semi-autonomous haul trucks Expected Improvements Timeframes Immediate impact Sustained improvement within months Gap analysis completed (plant and mobile fleet) Capital injection progressing Sustainable benefits expected months Improve stability of the operation and operational predictability (12-36 months) Allows for financial upside (improvement to 2018 LOM Plan) 31

32 Additional Information (Appendix) Mine Production Plan Shovel Productivity Block Model Reconciliation Amended Mineral Reserves and Resources Operational Focus Areas SNL Benchmarking Pit Phases Key Risks and Opportunities 32

33 Mine Production Plan Full 2018 LOM (23 years) Ore Gold Gold Ore Mined Waste Mined Strip Ratio Head Grade Year Processed Recovery Production (Mt) (Mt) (waste:ore) (Mt) (g/t Au) % koz 2018 ~107 ~4.7 ~21.0 ~ Total 488 1, ,884 Average

34 Mt/yr Rope Shovel Production CAT 7495 Rope Shovel Production per Year per Unit (A) 2015 (A) 2016 (A) 2017 (A) 2018 (F) Rope shovels priority for waste production Modeling has increased with time reflecting increased efficiency and increased availability from current operating levels 34

35 Mt/yr Hydraulic Shovel Production CAT 6060 Hydraulic Shovel Production per Year per Unit (A) 2015 (A) 2016 (A) 2017 (A) 2018 (F) CAT 6060 shovels will move the bulk of ore tonnes and the balance of waste remaining from CAT 7495s Moderate increase in future years An increase in productivity will decrease mining costs 35

36 20% Block Model Reconciliation Reserve to Declared Ore Mined Block Model Reconcilliation 15% 12.5% 11.3% 10% 5% 0% -5% -10% 4.1% 1.1% 2.9% 6.7% 5.5% 1.0% -6.2% -5.4% 1.8% -3.0% -4.7% 8.3% 2.8% 4.40% -1.60% 2.80% -15% -20% Tonnage Grade Ounce (TO END OF M AY ) 2014 T O DAT E Recent external resource audit completed in 2018 by SRK confirms the integrity of the Detour Lake resource model SRK: Methodology used to estimate the Detour Lake mineral resource was reasonable and based on generally accepted best practices. Reserve model has been accurate to predict annual results Historical variability has been largely within a 10% window 36

37 Amended Reserves & Resources Effective Dec. 31, 2017 Reserves Tonnes (millions) Grade (g/t Au) Contained Gold Ounces (000 s oz) Detour Lake Pit Proven ,538 Probable ,233 Total P&P ,771 West Detour Pit Proven Probable ,596 North Pit Probable Total P&P ,843 LG Fines Probable Total P&P ,044 Resources Detour Lake Pit Measured Indicated ,092 M+I ,793 West Detour Pit Measured Indicated North Pit Indicated M+I Total M+I ,671 Detour Lake Mine Inferred West Detour Pit Inferred North Pit Inferred Total Inferred ,124 Notes: 1. The Company s amended mineral reserve and mineral resource estimates effective December 31, 2017 are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ( CIM ) CIM Definition Standards For Mineral Resources and Mineral Reserves adopted by the CIM Council (as amended, the CIM Definition Standards ) in accordance with the requirements of National Instrument Standards of Disclosure for Mineral Projects ( NI ). Mineral reserve and mineral resource estimates reflect the Company s reasonable expectation that all necessary permits and approvals will be obtained and maintained. 2. 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 CAD/US 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. LG Fines also include 1.7 Mt averaging 0.45 g/t Au. 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. Mineral resources are constrained within an economic pit shell. 7. Totals may not add due to rounding. 37

38 Operational Focus Areas 1. People & Organizational Structure Top Priority Commentary: Currently have an engaged and committed site leadership team and workforce Adding depth and experience to the organization to support soon-to-behired MGM New positions: senior mine manager and senior maintenance manager Allow Leaders to work on efficiency and improvements as opposed to fire fighting Behaviour based and leadership training 38

39 Operational Focus Areas 2. Benchmarking, Asset Performance and Gap Analysis Comments on Benchmarking: Mining Understand areas for improvement on mining unit cost Higher tonnes = lower unit costs (economies of scale) More mature mines tend to have lower costs (experience curve) Plant Operating time is the largest lever to reduce unit costs Commentary on areas of improvement: Undertake plant review complete gaps and opportunities confirmed, capital motivations and approvals in progress Maintenance review complete gaps and opportunities confirmed, skills and structure changes in progress Contractor management and rationalization to commence 39

40 Operational Focus Areas 3. Systems Focus Improve operational stability and predictability Fleet management Maintenance based on reliability & planning Optimization and standardization of Mine Operating Systems in Operations and Maintenance Improved Root Cause Analysis and Failure Mode and Effects Analysis Key focus area Mine Mill Interface to reduce mine operating costs and increase plant milling rates Additional SAP training 40

41 Operational Focus Areas 4. Automation, Analytics & Technology Data Analytics Improved Data Management integrated systems, acquires, filter, analyze, make decisions Improved data collection and use in reliability-based maintenance Automation / Technology upside to 2018 LOM Tele-remote drilling (H2 2018); followed by evaluation of automation Feasibility of CAT truck fleet automation Evaluation of trolley assist trucks (on dump) 41

42 SNL Benchmarking Mining 1 (2017 Costs) Commentary on this dataset: Potential for +10% improvement on Mining unit cost Not all data points allow for direct comparison, but present a trend: Higher tonnes = lower unit costs (economies of scale) More mature mines tend to have lower costs (experience curve) 1. North American OP operations Mt/yr Cu and Au operations source data SNL database All costs in US$ / tonne 42

43 SNL Benchmarking Processing 1 (2017 Costs) Commentary: DGC does not have many direct peers for plants Not all benchmarking data comparable; not all data reliable We do know, there is room for improvement 1. North American Plant operations 5-50 Mt/yr Cu, Au and Heap leach operations source data SNL database All costs in US$ / tonne 43

44 Detour Lake - Pit Phases 44

45 Opportunities not in 2018 LOM Plan Additional optimization studies initiated for equipment productivity improvements Fleet automation and technology advancements including semiautonomous and/or trolley line Reducing dilution from current assumptions Further improvements in plant operating time, gold recovery and plant throughput Potential to add mineral resources Obtaining key operational permits ahead of planned schedule Potential to convert mineral resources into mineral reserves Advancing Zone 58N to development and production Renewal of electricity contract post 2024 Remote mining tax application 45

46 Risks to the 2018 LOM Further delays in obtaining various operating permits Not achieving the 2018 LOM Plan assumptions including mining productivities and processing plant capital effectiveness Adverse gold price and/or CAD/US exchange rate over a longtime period Adverse mineralogy in ore feed 46

47 Contact Information Michael Kenyon Interim CEO Phone: Laurie Gaborit VP Investor Relations Phone: