rbc global mining and materials conference
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RBC Global Mining and Materials ConferenceTRANSCRIPT
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CANADA’S NEXT INTERMEDIATE GOLD PRODUCER
RBC Global Mining & Materials Conference, Boston
June 16-18, 2013
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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 the
commencement of commercial production at the Detour Lake mine, 2013 guidance for gold production and total cash costs,
reserve and resource estimates, ore grade, expected mine life, average annual gold production, gold recovery, cash operating
costs and other costs, sensitivity to metal prices and other sensitivities, ramp-up of operations, mining rates reaching
approximately 200,000 tpd by year-end 2013, 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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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.
NI-43 101 Disclosure
Information Containing Estimates of Mineral Reserves and Resources
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Focus and Discipline
Leverage to gold price
Optimize operation
Organic growth
Safe jurisdiction
Per Share Value Creation
Free cash flow growth
Limit share dilution
Return on capital
Invest in Detour Gold
Our Vision
Become a leading intermediate gold producer and
premier investment opportunity
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Note: Cash position and share data at June 11, 2013 (includes equity raise of 20,125,000 sh @ C$8.75
for gross proceeds of C$176 M). Conversion price for the Notes is US$38.50.
Share Capital
FULLY DILUTED
159.9 M
OPTIONS & FN SHARE
COMMITMENTS
8.8 M
CONVERTIBLE
NOTES
13.0 M
ISSUED AND
OUTSTANDING
138.0 M C$1.5 B
C$245 M
TOP SHAREHOLDERS
MARKET CAP
CASH POSITION
PAULSON & CO: 15%
INSTITUTIONS TOTAL: >80%
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Focused on One Core Asset
Detour Lake - Ontario, Canada
Low-risk, safe mining jurisdiction
Large prospective land package of 566 km2 on Abitibi Greenstone Belt
› Detour Lake open pit mine – 15.6 M oz in reserves
› Significant potential to expand mineral resources
› Exploration upside
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PRODUCTION 2013
Record Timing from “Discovery” to Production
Detour Lake in 6 years
ACQUISITION /DISCOVERY
PRE-FEASIBILITY STUDY
FEASIBILITY STUDY & PERMITTING
DEVELOPMENT PRODUCTION
2007 2009 2010 2011-12 2013
From Core to Pour
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Scorecard Highlights
Delivered results in timely manner over last 6 years
Built strong management team with track record of success
Increased mineral resources by 750% since acquisition at <$5/oz
Completed positive economic studies over a 2-year period
Raised over $2.5 billion (equity + debt)
Completed mine construction on time (27 months)
Obtained strong community and Aboriginal support
Started gold production in Q1 2013
Focus Q3 Q4
Strategy: Execution Discipline
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H1 2013
First gold pour in February
Secured $90 million credit facility
Commissioned second production line
25,000 m drilling program targeting high-grade
gold mineralization
H2 2013
Achieving commercial production in Q3
Gold production target of between 260,000 and
320,000 ounces for the year
Year-end mineral resources/reserves update
2013 Objectives
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Focus on health and safety of our employees, the well-being of
our community and the protection of the natural environment
Hiring in the region, giving priority to local Aboriginal communities:
95% of workforce from region
28% are Aboriginals
Scholarship and job training
Supporting local communities
Business opportunities
Participation in municipal development
Corporate philanthropy
NORTHERN
ONTARIO
44%
COCHRANE
25%
COCHRANE
AREA
26%
REST OF
ONTARIO
3%
2% OTHER
Corporate Responsibility
WORKFORCE ORIGIN
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OP reserves (M oz) 15.6
Mill throughput (tpd) 55,000
Strip ratio (waste:ore) 3.7
Gold recoveries 91%
Average grade (g/t) 1.03
Estimated mine life (yrs) 21.5
Avg. production (oz/yr) 657,000
Initial capex (C$ B) 1.5
Sustaining capex (C$ B) 1.2
Detour Lake Mine at a Glance
Gold production started in February 2013
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MAINTENANCE
LABOUR POWER
DIESEL
G&A
ROYALTY+
OTHER
(2% NSR)
CONSUMABLES
29%
22%
18% 12%
8%
5%
6%
Breakdown of 2013-14 TCC
Operating Costs (LOM) C$/t milled C$/t mined C$/oz
Mining costs 11.65 2.49 388
Processing cost 7.83 -- 260
G&A 1.86 -- 62
Cash operating costs 21.34 -- 710
Royalty (2%) and other 1.26 -- 42
Refining 0.12 -- 4
Silver credit (0.20) -- (7)
Total cash costs (TCC) 22.52 -- 749
A 10% change in:
Diesel or power costs = $9/oz change in TCC
Cdn$ FX rate = $63/oz in TCC
Projected LOM Operating Costs
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2013 Ramp Up
Mining
Current stockpiles:
2.3 Mt grading 0.7 g/t
1.9 Mt grading 0.4 g/t
Mining rates to ~200,000 tpd by
year-end
Mining fleet of 20 haul trucks &
4 shovels
Processing Plant
55,000 tpd conventional gravity and
CIP processing plant with two
production lines
Line 1 & 2 in operation
Optimize and improve efficiencies
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PLANT SITE
CAMPBELL
PIT
APPROX. PIT SHELL
AT END OF LOM
CURRENT
PIT SHAPE
MINERALIZED
ZONE
Satellite image dated July 2012
NORTH WASTE
DUMP
Mining Production
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Bench
6252m
Bench
6240m
Grade Control DDH Block model 40x40m drill spacing RC GC 20X10m & 10X10m drill spacing
Block Gold Grade (g/t)
< 0.3
< 0.5
< 0.8
< 2.0
> = 2.0
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Q1 2013
Ore tonnes mined (Mt) 1.29
Tonnes milled (Mt) 1.02
Mill grade (g/t Au) 0.64
Recovery (%) 80
Availability (%) (1) 66
Gold produced (oz) (2) 16,841
Q1 Operation Statistics
(1) Quarterly period starting on January 12 with
first production line and on March 9 with second
production line. Availability averaged 70% for
both production lines in the last week of March.
(2) 7,300 oz poured and 9,541 oz of plant
inventory.
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2013 Guidance
2013 Revised Guidance
Total gold production of 260,000 to
320,000 oz
Post commercial production (Q3):
Total cash costs of C$800 to
C$1,000/oz
Sustaining capital: C$180 M
(C$89 M incurred up to May 31)
Commercial production target in Q3
NOTE: Commercial production to be declared after 60
consecutive days of operating at >75% of throughput
(55,000 tpd x 75% = 41,250 tpd)
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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
To Market
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
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Grow reserve base to +20 M oz
Reserve/resource update for
Detour Lake mine
Evaluate Detour Lake mine
expansion and Block A
Large prospective land position of
566 km2
Tested gold targets on structures
south of Detour Lake: 25,000 m
completed (partial results received)
Inferred M&I P&P
10M oz
20M oz
30M oz
15.6 14.9
11.4
8.8
Organic Growth Opportunities
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*Note: Excludes drilling around Detour Lake and M zone (Block A).
25,000 m in 2013
15.6 M oz in Reserves
Organic Growth Opportunities
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Near-term objectives (1-3 years):
Detour Lake reserve/resource update (open pit west expansion)
Evaluation of potential expansion options
Organic Growth Opportunities
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25,000 m in 2013
15.6 M oz in Reserves
20.1g/t/4.5m
Organic Growth Opportunities
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Focus and Discipline
Leverage to gold price
Optimize operation
Organic growth
Safe jurisdiction
Per Share Value Creation
Free cash flow growth
Limit share dilution
Return on capital
Invest in Detour Gold
Our Vision
Become a leading intermediate gold producer and
premier investment opportunity
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ADDITIONAL INFORMATION
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Detour Lake Profile Detour Lake
Sept. 2012
Mine Plan(3)
Gold price (US$/oz) (1) 1,200
Foreign exchange rate (US$/Cdn$) 1.00
Assumptions Fuel price (US$/barrel) 100
Income/mining tax rate (%) 25/10
Net Smelter Royalty (%) 2
Ore milled (Mt) 470.0
Waste mined (Mt) (4) 1,734
Mine Strip ratio (waste:ore) 3.7
Parameters Avg. gold grade (g/t) 1.03
Total contained gold (M oz) 15.6
Estimated gold recovery (%) 91.0
Total recovered gold (M oz) 14.1
Mine life (years) 21.5
Avg. annual gold production (oz) 657,000
1. US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015.
2. Press release Jan. 31, 2011 with Technical Report dated Mar. 15, 2011.
3. Press release Sept. 4, 2012 with Technical Report dated Oct. 18, 2012.
4. Includes low-grade stockpile.
1.0 g/t Au
0.5 - 1.0 g/t Au
<0.5 g/t Au
20,600E
16,500E
700 m
Open pit
@ 0.5 g/t cut-off
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800
700
600
500
400
300
200
100
0
Gold Production (‘000 oz)
900
850
800
750
700
650
600
550
500
Total Cash Costs (C$/oz)
Gold Production/Cost/Grade Profile
Note: Excludes stripping adjustments.
Avg. C$749/oz
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
Grade (g/t Au)
Avg. 657,000 oz/yr
2013 Guidance ]
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@ US$850/oz Tonnes
(millions)
Grade
(g/t)
Contained Gold
(‘000 oz)
Reserves (1)
Proven 101.6 1.29 4,222
Probable 368.4 0.96 11,351
P&P 470.0 1.03 15,573
Resources (2)
Measured 124.5 1.36 5,424
Indicated 554.3 1.00 17,836
M&I 678.8 1.07 23,261
Inferred 208.5 0.86 5,785
1. After a 95% mining recovery rate; Mining dilution factor of 15.5%.
2. Inclusive of mineral reserves.
Detour Lake Reserves & Resources
As at December 31, 2011
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2012 completed DH
Historical DH
Block A near-surface resource
Detour Lake
2011 year-end reserves = 15.6 M oz DH included in 2011 year-end reserves
DH not included in 2011 year-end reserves
Detour Lake & Block A
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Gerald Panneton
Founder, President & CEO
Michael Kenyon
Executive Chairman
Paul Martin CFO
Pierre Beaudoin Chief Operating Officer
Julie Galloway Sr VP General Counsel &
Corporate Secretary
Derek Teevan
Sr VP Corporate &
Aboriginal Affairs
Pat Donovan VP Corporate Development
James Mavor
VP Finance
Rachel Pineault VP HR & Northern Affairs
James Robertson
VP Environment &
Sustainability
Eric Josipovic Controller
Drew Anwyll MGM/Director of Operations
Andrew Croal
Director Technical Services
Laurie Gaborit Director Investor Relations
Jean-Francois Metail
Director Reserves and Resources
Greg Miazga
Director Construction & Engineering
Bill Snelling
Director Corporate Systems & Controls
Rickardo Welyhorski Director Mineral Processing
Christian Brousseau
Process Plant Construction Manager
Charles Hennessey
Deputy General Manager/Process
Plant Manager
Patrik Gillerstedt Mine Manager
Peter Crossgrove
Louis Dionne
Robert E. Doyle
André Falzon
Gerald Panneton
Jonathan Rubenstein
Graham Wozniak
Ingrid Hibbard
Michael Kenyon
Alex G. Morrison
Management & Directors Management
Directors
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Gerald Panneton President & CEO
Email: [email protected]
Phone: 416.304.0800
Laurie Gaborit Director Investor Relations
Email: [email protected]
Phone: 416.304.0800
www.detourgold.com
Contact Information