Detour Gold Corporation (DGC-T)

Detour Gold Corporation (DGC-T) 2014 Financial Results Roughly In Line March 10, 2015 Michael Curran, CFA (416) 507-3950 mcurran@beaconsecurities.ca Detour Gold s focus is the continuing ramp up of its 100%-owned Detour Lake mine in northern Ontario to become a +600Koz/yr producer. 2014 Operating Results: the Detour Lake mine yielded 456Koz of gold at a total cash cost of $928/oz (prereleased in mid-january) last year. The company s 2015 operating guidance is unchanged at 475-525Koz of gold at a total cash cost of $780-$850/oz. Q4/14 Financial Results: Backing out non-cash and extra-ordinary items, we calculate operating EPS of a loss of $0.10/sh for the recent quarter, which was below consensus around breakeven and our estimate of a $0.02/sh loss. Variance was primarily due to deferred taxes of $34.4MM. CFPS of $0.22/sh was in line with our $0.23/sh estimate (see fig1 on page 2). Balance Sheet Highlights: Detour ended 2014 with $145 million of working capital (including $134 million in cash), and $503 million of long-term debt. In Q1/15, a C$162 million equity financing allowed the company to repay $124 million of debt, thus all remaining debt is related to the convertible debenture (maturing in Nov 2017). Revised Target, Rating Unchanged: we are tweaking our target multiples for the company, from 1.0x to 0.9x NAV, and from 10x to 9x CF, which reduces our 12- month target for DGC shares from C$15.00 to C$13.00. As we continue to see better return opportunities elsewhere in the gold patch, we maintain our Hold rating on DGC shares. Update HOLD (unch.) $13.00 (prev. $15.00) Previous Close C$ 9.51 12-month Target Price C$ 13.00 Potential Return 36.7% Dividend Yield 0.0% 52 Week Price Range $6.02-$15.62 Estimates (US$MM, except per unit) FY14 FY15e FY16e FY17e Revenue $535.8 $635.0 $771.0 $934.6 Net income -$149.4 -$23.6 $27.8 $113.1 Cashflow $126.6 $153.4 $206.0 $351.8 Shares O/S, wgt. avg. 154 171 175 180 EPS (operating) -$0.50 -$0.09 $0.19 $0.63 CFPS $0.82 $0.90 $1.18 $1.95 Valuation P/E n/a n/a 50.8x 15.1x P/CF 11.6x 10.6x 8.1x 4.9x NAV $19.02 $22.84 $23.07 P/NAV 0.5x 0.4x 0.4x Financials MM Shares Outstanding 170.6 Mgt/Insiders 1% (C$MM) Market Capitalization $1,622 LT Debt (corporate) $578 Working Capital $167 Enterprise Value $2,034 Fiscal Year End December 31 Reserves / Resources 2P Reserves 15.0 MMoz M+I Resources 4.9 MMoz Total Resources (M+I+I) 20.4 MMoz Quarterly Estimates (US$/sh) Q1/14 Q2/14 Q3/14 Q4/14 EPS (operating) -$0.13 -$0.11 -$0.10 -$0.10 CFPS $0.12 $0.25 $0.20 $0.22 Q1/15e Q2/15e Q3/15e Q4/15e EPS (operating) -$0.04 -$0.03 -$0.03 $0.00 CFPS $0.20 $0.21 $0.23 $0.26 Detour Gold is a Canadian gold mining company focused on the successful ramp up of the 100%-owned Detour Lake gold project in northern Ontario, which is poised to become the largest operating gold mine in Canada. All prices in US$ unless otherwise indicated. 6 5 4 3 2 1 0 Company at a Glance Stock Performance Detour Gold Corporation (DGC-CA) Volume (Millions) Price (CAD) Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Volume Detour Gold Corporation Average Volume - DGC-CA Source: FactSet Prices 16 14 12 10 8 6 4 Beacon Securities Ltd. 66 Wellington Street West Suite 4050, Toronto, Ontario, M5K 1H1 416.643.3830 www.beaconsecurities.ca

Investment Thesis 2015 A Year For Stabilization In our view, management has the plan for its Detour Lake mine to achieve full design capacity over the next few quarters, and begin generating meaningful cash flow when higher-grade ore is scheduled to be accessed in the pit in Q4/15. However, until we have greater confidence in achieving lower operating costs, a gold price recovery, or that the company could become a takeover candidate for larger gold producers, we are maintaining our HOLD rating on Detour Gold shares. Fig 1 Q4/14 Results: Detour Gold Corp. Beacon Q4/14e Q4/14a Variance Revenue 149.4 150.7 1% Direct Mining Expenses 99.7 110.3 11% Gross Operating Income 49.7 40.4-19% Depreciation 38.7 43.2 12% Exploration 1.2 1.1-5% G&A 4.5 2.6-42% Interest Expense 8.3 8.4 1% Environmental reclamation 0.0 0.0 - EBT (2.9) (14.9) - Current 0.0 0.0 - Deferred 0.0 34.4 - Total Taxes 0.0 34.4 - Foreign Exchange Loss (Gain) (0.4) 0.8 - Stock-based compensation 2.5 2.5-1% Writedowns 0.0 0.0 - Other (7.6) 6.1 - Net Income 2.5 (58.7) - EPS - reported $0.02 ($0.37) operating EPS ($0.02) ($0.10) - Cash Flow 36.2 35.5 CFPS $0.23 $0.22-2% S/O 158.5 158.5 Q4/14 Gold production (oz) 116,770 116,770 0% Q4/14 Gold sold (oz) 124,913 124,913 0% Total Cash Costs (US$/oz) 874 874 0% Source: Company press release and Beacon Securities estimates Valuation Methodology Our favored valuation method for precious metals producers is a price-tonet-asset-value (P/NAV) multiple based on a discounted cash flow (DCF) model constructed using our estimates of the parameters of existing or potential mining operations. We employ a $1,500/oz long-term gold price assumption, but have lower short-term gold price forecasts including $1,300/oz for 2015, $1,350/oz for 2016, and $1,400/oz for 2017. Future year cash flows are then discounted using a base rate of 5%, to which a risk premium is added, depending on the overall political risk the company s assets are exposed to. Detour s Ontario assets are considered to be firmly among the low risk group (no premium). March 10, 2015 Page 2 Michael Curran 416.507.3950 mcurran@beaconsecurities.ca

Fig 2 Net Asset Value Breakdown: Detour Gold Corp. Discount Rate Ownership Value Per Share (C$/sh) C$MM FY15e FY16e FY17e Detour Lake (Ontario) 5.0% 100% $3,710 $18.15 $21.48 $21.24 Exploration potential $25 $0.16 $0.16 $0.16 OPERATING ASSETS $3,735 $18.31 $21.64 $21.40 Working Capital $145 $0.71 $1.20 $1.66 LT Debt (non-debenture) $0 $0.00 $0.00 $0.00 CORPORATE ASSETS $145 $0.71 $1.20 $1.66 NET ASSET VALUE $3,880 $19.02 $22.84 $23.07 Source: Beacon Securities estimates In Fig. 2 we provide forward-looking NAV/sh estimates to show how the company s NAV is forecast to change over the next few years. For midsized gold producers (annual gold output between 250Koz and 1.5Moz), we employ a target range of 0.75-1.25x P/NAV. For Detour, we employ a target P/NAV multiple of 0.9x (previously 1.0x). Applying the target multiple on our 2015 NAV estimate suggests a fair value of C$17.00/sh for DGC. On a forward-looking P/CF multiple basis, we forecast CFPS of $0.90/sh in 2015. Applying our target multiple of 9.0x P/CF (previously 10.0x), which is within our 5.0x-12.5x target range for mid-sized gold producers, suggests a fair value of C$9.00/sh. Using the valuation methods described above, and a 50/50 blend of fair values, generates our 12-month target price of C$13.00 per DGC share. Fig 3 Open Pit: Detour Lake Mine Source: Company website March 10, 2015 Page 3 Michael Curran 416.507.3950 mcurran@beaconsecurities.ca

Appendix : Summary Financials Detour Gold Corporation Symbol DGC-TSX Last Share Price C$ 9.51 Stock Rating HOLD Shares Outstanding 170.6 Price Target C$ 13.00 Market Capz'n (C$MM) 1,622 All US$ unless noted For Fiscal Year Ended Dec 31 Beacon Securities Limited Michael Curran, CFA (416) 507-3950 INCOME STATEMENT FY13 FY14e FY15e FY16e RATIO ANALYSIS FY13 FY14e FY15e FY16e Revenues $MM 153.9 535.8 635.0 771.0 Dividend Paid $/sh $0.00 $0.00 $0.00 $0.00 Operating Costs $MM 128.3 392.1 429.7 507.8 Dividend Yield % 0.0% 0.0% 0.0% 0.0% EBITDA $MM 35.2 68.4 175.7 230.7 LTD/(Total Cap) % 22.3% 21.4% 17.1% 16.8% DD&A $MM 36.9 149.3 144.6 157.3 EV / EBITDA 57.7x 29.7x 11.6x 8.8x EBIT $MM (1.7) (80.9) 31.2 73.3 PRICES/EXCHANGE RATES FY13 FY14e FY15e FY16e Interest Expense $MM 10.6 34.1 29.8 27.9 Spot Gold Price $/oz 1,404 1,264 1,300 1,350 EBT $MM (54.5) (59.2) 8.9 50.4 Realized Gold Price $/oz 1,283 1,264 1,300 1,350 Non-Recurring Items/Other $MM (42.2) 55.9 7.5 5.0 US$:C$ exchange 1.03 1.08 1.13 1.10 Taxes/Recovery $MM - 34.4 25.0 17.6 Net Income (operating) $MM (12.3) (149.4) (23.6) 27.8 MINE/EQUITY PRODUCTION FY13 FY14e FY15e FY16e Shares o/s $MM 129.1 154.2 171.0 175.0 Gold Production 000 oz 120 457 498 583 EPS (adjusted) $/sh ($0.50) ($0.50) ($0.09) $0.19 Total Cash Costs $/oz 1,182 928 888 898 P/E Multiple x n.m. n.m. n.m. 50.8x All-in Sustaining Costs $/oz 1,724 1,080 1,033 1,031 Cash Flow (adjusted) $MM (28.6) 126.6 153.4 206.0 Gold Production (oz) Total Cash Costs (US$/oz) CFPS $/sh ($0.22) $0.82 $0.90 $1.18 800,000 $1,200 P/CF Multiple x n.m. 11.6x 10.6x 8.1x SCFP FY13 FY14e FY15e FY16e 700,000 $1,100 Cash Flows from Operations Net Income $MM (12.3) (149.4) (23.6) 27.8 600,000 $1,000 DD&A $MM 41.5 150.1 144.6 157.3 Deferred Taxes $MM - 34.4 25.0 15.9 500,000 $900 Non Recurring/Other $MM (46.4) 93.8 7.5 5.0 Working Cap. Changes $MM 40.9 (23.5) - - 400,000 $800 Net Operating Cash Flow 23.7 105.3 153.4 206.0 Cash Flows From Investing Capital Expenditure (net) $MM (386.9) (131.0) (112.5) (120.0) 300,000 $700 Acquis./Investments $MM 36.1 - - - 200,000 $600 Other $MM 4.6 15.3 - - Net Investing Cash Flow (346.2) (115.7) (112.5) (120.0) 100,000 $500 Cash Flows From Financing Equity Issues (net of costs) $MM 174.5 155.4 124.0-0 $400 2012 2013 2014 2015E 2016E 2017E Net Borrowings $MM 48.7 (40.0) (124.0) - Dividends Paid & Other $MM - (51.1) - - RESERVES / RESOURCES Net Financing Cash Flow $MM 223.2 64.3 - - Gold Reserves MMoz 15.0 Net Inc/Dec (incl FX) $MM (109.7) 45.4 40.9 86.0 AMC/oz $/oz 97 Cash at End of Year $MM 88.1 133.6 174.5 260.5 Total Gold Resources MMoz 20.4 BALANCE SHEET FY13 FY14e FY15e FY16e AMC/oz $/oz 71 Cash & Equivalents $MM 88.1 133.6 174.5 260.5 AMC = Market Cap + LTD - Working Capital Total Current Assets $MM 178.0 245.9 286.9 372.9 Total Resources = measured, indicated, and inferred PP&E & Mining Interests $MM 2,299.3 2,254.6 2,228.2 2,190.9 NET ASSET VALUE (NAV) - 2014E Other $MM 3.0 16.1 16.1 16.1 Discount Status Own'ship C$MM C$/Sh %NAV Total Assets $MM 2,480.3 2,516.6 2,531.3 2,579.9 Detour Lake 7.0% mine 100% $3,710 18.15 96% Current Liabilities $MM 112.8 104.8 81.9 81.9 Exploration $25 0.16 1% Long Term Debt $MM 158.9 101.4 - - Operating NAV $3,735 $18.31 96% Other Long Term Liabilities $MM 392.8 462.7 493.7 509.6 Working Capital $145 $0.71 4% Total Liabilities $MM 664.5 668.9 575.6 591.5 LT Debt $0 $0.00 0% S/Holder Equity $MM 1,815.8 1,847.8 1,955.6 1,988.4 NAV $3,880 $19.02 Total Liab. & S/Holder Equity $MM 2,480.3 2,516.6 2,531.2 2,579.9 Current P/NAV 0.5x Working Capital $MM 65.2 141.1 205.0 291.0 Source: Company reports, Beacon Securities estimates March 10, 2015 Page 4 Michael Curran 416.507.3950 mcurran@beaconsecurities.ca

Disclosure Requirements Does Beacon, or its affiliates or analysts collectively, beneficially own 1% or more of any class of the issuer's equity securities? Yes No Does the analyst who prepared this research report have a position, either long or short, in any of the issuer s securities? Yes No Does Beacon Securities beneficially own more than 1% of equity securities of the issuer? Yes No Has any director, partner, or officer of Beacon Securities, or the analyst involved in the preparation of the research report, received remuneration for any services provided to the securities issuer during the preceding 12 months? Yes No Has Beacon Securities performed investment banking services in the past 12 months and received compensation for investment banking services for this issuer in the past 12 months? Yes No Was the analyst who prepared this research report compensated from revenues generated solely by the Beacon Securities Investment Banking Department? Yes No Does any director, officer, or employee of Beacon Securities serve as a director, officer, or in any advisory capacity to the issuer? Yes No Are there any material conflicts of interest with Beacon Securities or the analyst who prepared the report and the issuer? Yes No Is Beacon Securities a market maker in the equity of the issuer? Yes No Has the analyst visited the head office of the issuer and viewed its operations in a limited context? Yes No Did the issuer pay for or reimburse the analyst for the travel expenses? Yes No All information contained herein has been collected and compiled by Beacon Securities Limited, an independently owned and operated member of the Investment Industry Regulatory Organization of Canada (IIROC). All facts and statistical data have been obtained or ascertained from sources, which we believe to be reliable, but are not warranted as accurate or complete. All projections and estimates are the expressed opinion of Beacon Securities Limited, and are subject to change without notice. Beacon Securities Limited takes no responsibility for any errors or omissions contained herein, and accepts no legal responsibility from any losses resulting from investment decisions based on the content of this report. This report is provided for informational purposes only and does not constitute an offer or solicitation to buy or sell securities discussed herein. Based on their volatility, income structure, or eligibility for sale, the securities mentioned herein may not be suitable or available for all investors in all countries. As at February 28, 2015 # Stocks Distribution Buy 45 76% Buy Total 12-month return expected to be >15% Speculative BUY 7 12% Speculative Buy Potential total 12-month return is high (>15%) but given elevated risk, investment could result in a material loss Hold 2 3% Hold Total 12-month return expected to be between 0% and 15% Sell 0 0% Sell Total 12-month return expected to be negative Under Review 5 8% Under Review Currently undergoing a change of analyst coverage Total 59 100% Dissemination Beacon Securities distributes its research products simultaneously, via email, to its authorized client base. All research is then available on www.beaconsecurities.ca via login and password. Analyst Certification The Beacon Securities Analyst named on the report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst s personal views about the company and securities that are the subject of the report; or any other companies mentioned in the report that are also covered by the named analyst. In addition, no part of the research analyst s compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report. Beacon Securities Ltd. 66 Wellington Street West Suite 4050, Toronto, Ontario, M5K 1H1 416.643.3830 www.beaconsecurities.ca