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Dgc 14 01_28-29 - td mining conference

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1 TD Securities Mining Conference, Toronto January 28-29, 2014 CANADA’S INTERMEDIATE GOLD PRODUCER
Transcript
Page 1: Dgc 14 01_28-29 - td mining conference

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TD Securities Mining Conference, Toronto

January 28-29, 2014

CANADA’S INTERMEDIATE GOLD PRODUCER

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Forward Looking Information This presentation contains certain forward-looking information as defined in applicable securities laws (referred to herein as “forward-looking

statements”). Specifically, this presentation contains forward-looking statements regarding gold production and cash costs guidance,

sustaining capital expenditures for 2014, reserve estimates, ore grade, expected mine life, average annual gold production, gold recovery,

strip ratio, cash operating costs and other costs, ramp-up of operations, throughput and mining rates, future operating plans, potential

expansion opportunities, and plans for organic growth which includes growing mineral reserves to more than 20 million ounces. 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,

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 2012 AIF and in the continuous disclosure

documents filed by Detour Gold on and available on SEDAR at www.sedar.com. 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 schedule; 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 supply and

availability of consumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; the accuracy

of reserve and resource estimates and the assumptions on which the reserve and resource 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.

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Notes to Investors

The mineral reserve and resource estimates reported in this presentation were prepared in accordance with Canadian National Instrument

43-101Standards of Disclosure for Mineral Projects (“NI 43-101”), as required by Canadian securities regulatory authorities. For United

States reporting purposes, the United States Securities and Exchange Commission (“SEC”) applies different standards in order to classify

mineralization as a reserve. In particular, while the terms “measured,” “indicated” and “inferred” mineral resources are required pursuant to

NI 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC. Investors are

cautioned not to assume that any part or all of the mineral deposits in these categories constitute or will ever be converted into reserves. In

addition, “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 be upgraded to a higher category. Under

Canadian securities laws, issuers must not make any disclosure of results of an economic analysis that includes inferred mineral resources,

except in rare cases.

On September 4, 2012, Detour Gold announced an updated mine production plan for the Detour Lake project. The NI 43-101 compliant

Technical Report for this update was filed on SEDAR on October 18, 2012. The following QPs participated in this update: BBA Inc., under

the direction of André Allaire, Eng., Vice-President, Markets – Mining and Metals and Patrice Live, Eng., Mining Manager; SGS Canada Inc.,

under the direction of Michel Dagbert, Eng., Senior Geostatistician and Maxime Dupéré, P.Geo., Senior Geologist; and AMEC Environment

& Infrastructure, a Division of AMEC Americas Limited, David G. Ritchie M.Eng., P.Eng, Senior Associate Geotechnical Engineer.

The scientific and technical content of this presentation has been reviewed, verified and approved by Drew Anwyll, P.Eng., Vice President of

Operations, a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for

Mineral Projects”.

Information Containing Estimates of Mineral Reserves and Resources

Non-IFRS Financial Performance Measures The Company has included a non-IFRS measure in this press release: “total cash cost per ounce of gold sold”. The Company believes that

this measure, 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.

Detour Gold reports total cash costs on a sales basis. Total cash costs per gold ounce include production costs such as mining, processing,

refining and site administration, 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. Production costs are exclusive of depreciation and depletion. Production costs include the costs

associated with providing the royalty in kind ounces. Other companies may calculate this measure differently. .

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Invest in Detour Gold

15.6 MILLION oz of gold

in proven and

probable reserves

600 average annual gold

production over next five years

~ THOUSAND oz / year 21

in mining-friendly

Ontario, Canada

+ YEAR mine life

A premier intermediate Canadian gold producer

and long-term investment opportunity

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Flagship Operation in Canada

DETOUR LAKE – ONTARIO, CANADA

Low-risk, safe mining jurisdiction

100% owned large prospective land package

of 630 km2 on Abitibi Greenstone Belt

› High quality, long life producing

open pit mine (15.6 M oz in

reserves)

› Significant potential for production

growth

› Exploration upside for high-grade

mineralization

ONTARIO

Toronto

Timmins

DETOUR LAKE MINE

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6 Oct. 2, 2013

Detour Lake: 1st Year of Operation

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80

60

40

20

0 Q2 Q1 Q4 Q3

Pro

du

cti

on

(K

oz)

2013 GOLD PRODUCTION

Detour Lake: 1st Year of Operation

Gold production 2013 Key statistics

2013 gold production of 232,287 oz

Total cash costs expected to be

$1,100/oz during commercial period

(September to December)

Capital expenditures of C$196 M

incurred

Significant milestones

First gold pour in February 2013

Commercial production declared on

September 1, 2013

Discovery of high grade mineralization

at Lower Detour

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Q1 Q2 Q3 Q4 2013

Ore tonnes mined (Mt) 1.29 2.70 4.16 4.08 12.24

Tonnes milled (Mt) 1.02 2.87 3.88 3.40 11.18

Mill grade (g/t Au) 0.64 0.76 0.72 0.81 0.75

Recovery (%) 80 83 85 92 86

Availability (%) 66 68 78 66 71

Ounces produced (oz) (1) 16,841 57,897 75,672 81,877 232,287

1. During the commercial period (September 1 to year-end), the Detour Lake mine produced 105,898 oz of gold.

Detour Lake: 1st Year of Operation

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2013 Mine performance

Exiting 2013 with average mining

rates close to 2014 planned rates

Access to multiple ore zones in pit,

including higher grade Domain #2

Improvement in shovel productivity

and haul truck cycle

Continuous improvement in dilution

control

Year-end stockpiles of 2.4 Mt at

0.82 g/t providing operation flexibility

Detour Lake: 1st Year of Operation

203 THOUSAND tpd

222 THOUSAND tpd

Q4

DEC

Mining rates:

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2013 Mill Performance

Milling rates proven at design levels

(2,500 tpoh)

Availability below expectations as a

result of unplanned shutdowns

Main shutdown: 15 days in December due to

structural damage to the torque cage of the

pre-leach thickener

Gold recovery has exceeded design

levels

Modifications to secondary and pebble

crushers completed

Detour Lake: 1st Year of Operation

45 THOUSAND

tpd

47 THOUSAND tpd

OCT

NOV

Best months:

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2014

INCREASE production

DECREASE costs

PRODUCTION

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Realize immediate opportunities to improve liquidity:

Have secured long-term

power contract

Finalizing discussion to

refresh mine equipment

lease to US$150 M

Ramp up to full nameplate capacity (55,000 tpd) by year-end

Achieve financial and production guidance targets

Confirm high-grade mineralization through 2014 drilling program

at Lower Detour

2014 Corporate Objectives

C$20 MIILLION per yr for 6 yrs

Estimated cost savings

C$40 MILLION for 2014

Extra borrowing capacity

UP TO

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2014 Guidance

450-500 estimated gold production

THOUSAND oz

US$800-900 estimated total cash costs

TCC per oz sold

US$131 estimated capital expenditures

MILLION capex

Other

US$19 M Corporate G&A

US$3 M Exploration program

(3)

1. Refer to the section on Non-IFRS Financial Performance Measures on slide 3 of this presentation.

2. The following price and cost assumptions were used to forecast 2014 production and costs: diesel fuel price of

C$0.95 per litre; power cost of C$0.05 per kilowatt hour; and exchange rate of $1US:$1.05C.

3. Includes deferred stripping costs of US$35 M.

(1) (2)

second year

of operation

2014

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2014 Capital Plan

Sustaining Capital: US$131 M

Mine

› Mobile fleet purchase

(1 truck, 1 shovel)

› Capitalize maintenance

Mill

› Plant improvements

TMA

› Raise dam of Cell 1 by 6 m

› Commence Cell 3 footprint

Mine

US$33 M

TMA

US$40 M Deferred

Stripping

US$35 M

BREAKDOWN OF 2014 SUSTAINING CAPITAL

Other

$US5 M

Mill

US$18 M

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Targets:

2014 Operating Plan

Steady state production & optimization

H2 gold production will be ~20% higher

than H1 as throughput rates are

projected to gradually increase to

55,000 tpd in Q4

Higher grade ore from Domain

2 and 11 will represent up to

50% of overall mill feed

Mining rates to average

+250,000 tpd

19 MT ore milled

3.3:1 WASTE:ORE strip ratio

0.87 G/T AU head grade

92 % gold recovery

2014 gold production (oz) 450,000-500,000

H1 2014 200,000-225,000

H2 2014 250,000-275,000 (1)

1. Includes 7% dilution at 0.20 g/t.

PRODUCTION

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2014 Operating Plan

Steady state production & optimization

Mining and milling unit costs to decrease

– ‘economy of scale’

Reach design operating rates by

year-end

Increase availability

› Improve maintenance schedule

to reduce downtime

Tailing facility costs reduced with

construction change to “center-line”

design

52 THOUSAND tpd throughput

87 % availability

Targets:

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Increase throughput to 61,000 tpd/

94% availability for 2017

Operations Outlook Beyond 2014

58 THOUSAND tpd

61 THOUSAND tpd

2016

Debottlenecking exercise starting in

2014

› Modification of primary crusher

conveyor

› Installation of 1 cyanide detox

tank and 1 additional oxygen plant

Gold recovery improvement

Secondary crushers optimization

2017

Targets:

55 THOUSAND tpd 2015

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Discovery of Zone 75 with

17.33 g/t over 4.4

Organic Growth Opportunities

Long-term growth of reserve base to

+20 M oz

› Reserve/resource update for

Detour Lake mine and Block A

Large prospective land position of

630 km2

› Focus on high-grade gold

targets:

› Up to 8,000 m drilling program in

Q1 2014

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*Note: Excludes drilling around Detour Lake mine and Block A.

Lower Detour Area

15.6 M oz in Reserves

Organic Growth Opportunities

630 km2

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Organic Growth Opportunities 8,000 m of proposed

drilling in Q1 2014

*Proposed

drill locations

subject to

change

pending initial

drill results.

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Invest in Detour Gold

15.6 MILLION oz of gold

in proven and

probable reserves

600 average annual gold

production over next five years

~ THOUSAND oz / year 21

in mining-friendly

Ontario, Canada

+ YEAR mine life

A premier intermediate Canadian gold producer

and long-term investment opportunity

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ADDITIONAL information

Shareholder Information

Corporate Responsibility

Detour Lake Mine at a Glance

Conventional Milling Process

Q3 2013 Financial Highlights

Debt Repayment Schedule

Management & Directors

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Shareholder Information

Paulson & Co

>80% INSTITUTIONS TOTAL

Research Coverage

Bank of America Merrill Lynch

Beacon Securities

BMO Capital Markets

Canaccord Genuity

CIBC World Markets

Credit Suisse Securities

Desjardins Capital Markets

GMP Securities

Haywood Securities

Laurentian Bank Securities

Macquarie Capital Markets

National Bank Financial

Paradigm Securities

Raymond James

RBC Capital Markets

Scotia Capital

TD Securities

10.5 M Options & FN share commitments

13.0 M Convertible notes (1)

161.7 M FULLY DILUTED

138.2 M Issued & outsanding

Share Structure Top Shareholders

Cash position and share structure at Dec 31, 2013.

1. Conversion price for the Notes is US$38.50.

15%

C$850 MILLION market cap C$96 MILLION

cash position

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Focus on health and safety of our employees, the well-being of

our community and the protection of the natural environment

Hiring in the region, giving priority to local Aboriginal communities:

625 full-time employees*

93% of workforce from region

25% are Aboriginals

Scholarship and job training

Supporting local communities

Business opportunities

Participation in municipal development

Corporate philanthropy

Northern

Ontario

38%

Cochrane

24%

Cochrane

Area

31%

Rest of

Ontario

3%

4% Other

Corporate Responsibility

WORKFORCE ORIGIN

* As of December 31, 2013.

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Key Statistics Sept 2012 (1)

OP reserves (M oz) 15.6

Mill throughput (tpd) 55,000

Strip ratio (waste:ore) 3.7

Gold recoveries 91%

Average grade (g/t) 1.03

Estimated mine life (yrs) 21.5

Avg. production (oz/yr) (2) 657,000

Initial capex (C$ B) 1.5

Sustaining capex (C$ B) 1.2

Detour Lake Mine at a Glance

1. Based on September 2012 Mine Plan (October 2012 Technical Report).

2. Includes expansion from 55,000 tpd to 61,000 tpd.

Commercial production declared

on September 1, 2013

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Conventional Milling Process

Primary Crusher 90,000 tpd

Mine Trucks

Secondary Crushers (2) 67,000 tpd

Pebble Crushers (2) 73,000 tpd

Gold Doré Bars

Gold Furnace

Gold Electrowinning

Carbon Stripping

To Gravity Circuit

To Gravity Circuit

Stockpile SAG Mills (2) 55,000 tpd

Ball Mills (2) 55,000 tpd

CIP

Leach

Tailings

Pre-Leach Thickener

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Q3 2013 Financial Highlights

1. All sales prior to commercial production were credited against capitalized project costs.

Income Statement Q3 2013

Revenues 1 $33.1 M

Cost of sales

Production costs $30.4 M

Depreciation and depletion $2.9 M

Loss from mine operations $0.2 M

G&A $6.9 M

Exploration and evaluation $1.0 M

Net finance costs $3.7 M

Net loss for the period $11.8 M

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Debt Repayment Schedule

At Dec 31, 2013 Revolving Credit

Facility (1) CAT Finance Lease Convertible Notes

Face Value US$70 M (1) US$150 M US$500 M

Maturity March 2016 Jan 2017-Jan 2019 (2) November 30, 2017

Interest Rate LIBOR + 3% LIBOR + 4% 5.5%

Payable Monthly Quarterly Semi-annually

Conversion Price n/a n/a $38.50

Payment schedule Principal Interest Principal + Interest Principal Interest Total

(US$M)

2014 - $2.3 $33.7 - $27.5 $63.5

2015 - $2.3 $34.2 - $27.5 $64.0

2016 $70 $0.4 $32.3 - $27.5 $130.2

2017 - - $24.0 $500 $27.5 $551.5

Thereafter - - $4.1 - - $4.1

Total (US$M) $70 $5.0 $128.3 $500 $110.0 $813.3

1. The Revolving Credit Facility provides for borrowings of up to C$90 M. Subject to a completion tests prior to September 30, 2014.

2. Includes multiple leases with maturities of 5 yrs from lease date.

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Michael Kenyon Executive Chairman

Paul Martin Interim Chief Executive Officer

Pierre Beaudoin Chief Operating Officer

James Mavor Interim Chief Financial Officer

Julie Galloway Sr VP General Counsel &

Corporate Secretary

Derek Teevan Sr VP Corporate &

Aboriginal Affairs

Drew Anwyll MGM/VP Operations

Pat Donovan VP Corporate Development

Jean-Francois Metail VP Reserves and Resources

Rachel Pineault VP HR & Aboriginal Affairs

James Robertson VP Environment &

Sustainability

Andrew Croal Director Technical Services

Laurie Gaborit Director Investor Relations

Alberto Heredia Controller

Bill Snelling Director Corporate Systems & Controls

Rickardo Welyhorski Director Mineral Processing

Charles Hennessey Process Plant Maintenance Manager

and Deputy Mine General Manager

Joshua Hurrell Acting Mine Manager - Chief Geologist

Mike Papadakis Process Plant Manager

Peter Crossgrove

Louis Dionne

Robert E. Doyle

André Falzon

Jonathan Rubenstein

Graham Wozniak

Ingrid Hibbard

Michael Kenyon

Alex G. Morrison

Management & Directors

Management

Directors

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Paul Martin Interim Chief Executive Officer

Email: [email protected]

Phone: 416.304.0800

Laurie Gaborit Director Investor Relations

Email: [email protected]

Phone: 416.304.0800

www.detourgold.com

Contact Information


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