corporate presentation - september 28, 2012
DESCRIPTION
Corporate Presentation - September 28, 2012TRANSCRIPT
1 1
BUILDING CANADA’S LARGEST GOLD MINE Production Early 2013
Corporate Presentation
September 27, 2012
2
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 reserve and
resource estimates, ore grade, expected mine life, anticipated gold production, gold recovery, cash operating costs and other
costs, capital costs, sensitivity to metal prices and other sensitivities, financial analysis of the project, commencement of
operations, potential expansion opportunities, and plans for organic growth. 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
2011 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 supply and demand for gold, and the level and volatility of the price of gold;
the availability of financing for exploration and development activities; the estimated timeline for the development of the Detour
Lake gold project; the expected mine life; anticipated gold production; gold recovery; the development schedule; cash
operating costs and other costs; the financial analysis for the project; capital costs; sensitivity to metal prices and other
sensitivities; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource
estimates are based; the receipt of necessary permits; 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.
3
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 January 31, 2011, Detour Gold announced an updated mineral resource and reserve estimate. The following QPs
participated in this update: Michel Dagbert, Eng., Senior Geostatistician and André Laferrière, P. Geo., Senior Geologist of
SGS Canada Inc. (mineral resources); and André Allaire, Eng., Director Mining and Metals and Patrice Live, Eng., Mining
Manager of BBA Inc. (mineral reserves). The NI 43-101 compliant Technical Report for this update was filed on SEDAR on
March 15, 2011.
On January 25, 2012, Detour Gold announced a mineral resource and reserve update. The following QPs participated in this
update: Michel Dagbert, Eng., Senior Geostatistician of SGS Canada Inc (mineral resources) and Patrice Live, Eng., Mining
Manager of BBA Inc. (mineral reserves).
On September 4, 2012, Detour Gold announced an updated mine production plan prepared by Patrice Live, Eng., Mining
Manager of BBA Inc. (mineral reserves) with the collaboration Detour Gold Corporation. The NI 43-101 compliant Technical
Report for this update will be filed on SEDAR within 45 days of the press release.
NI-43 101 Disclosure
Information Containing Estimates of Mineral Reserves and Resources
4
Focus on a world-class asset – Detour Lake
Canada’s largest pure gold play with 15.6 M oz in reserves
Construction progressing on schedule (87% as of August 31)
One of the best cash flow/share opportunities
Gold production starting in Q1 2013
Average annual gold production of 657,000 oz
Excellent organic growth potential (5 year plan)
Potential expansion of mill throughput
Invest in Detour Gold
Our Vision
5
Market cap: C$3.1 billion
Cash position: C$414 million
Major shareholders: Paulson & Co. 15%
Fidelity Mgmt 8%
Detour Gold Mgmt <2%
Institutions total >90%
Note: Share data and cash position as of August 31, 2012.
Share Capital
FULLY DILUTED
134.7 M
OPTIONS & FN SHARE
COMMITMENTS
9.0 M
CONVERTIBLE
NOTES
13.0 M
ISSUED AND
OUTSTANDING
112.7 M
6
ABX NEM
Gabriel
Anglo Gold Ashanti AEM
GSC Eco Oro
Andina
Osisko
(239%)
Yamana
Randgold
Eldorado
Buenaventura
Newcrest IMG
Kinross Hecla
Goldfields CG
AGI
Aurizon G
Jan. 2007 to Present % Change in Shares Outstanding
100 150 0 50 200
Share Issuance vs. Performance
Source: BMO, Aug. 2012
Ja
n. 2
00
7 t
o P
res
en
t To
tal
Retu
rn
400%
300%
200%
100%
0%
-100%
500%
600%
700%
800%
900%
1000%
AuRico
Great Basin
(209%)
DGC
01/12
DGC
08/11
DGC
07/10
DGC
11/09
DGC
04/08
DGC
07/09
IPO
681% total
return since IPO
Share Capital
Note: Date of DGC equity financings
7
PRODUCTION 2013
Record Timing from “Discovery” to Projected Production
Detour Lake in 6 years
ACQUISITION /DISCOVERY
PRE-FEASIBILITY STUDY
FEASIBILITY STUDY & PERMITTING
DEVELOPMENT PRODUCTION
2007 2009 2010 2011-12 2013
Successful Focused Approach
8
• Mineral reserves/resources update for 2011 year-end
• Top up of $277 million to complete the project and working capital
• Second 45 km segment of transmission line complete
• 230 kV transmission line connection in Q3
• Phase 1 drilling (49,000m) for Block A pre-feasibility study
Updated mine plan & operational forecast in Q3
Commissioning mills in Q4
Ore stockpile of 2.3 Mt available in Q4 for processing
Manpower ramp-up to 400 (now 324 employees at site and
Cochrane)
2012 Year end = 20 haul trucks + 4 shovels
Detour Gold 2012 Objectives
9
Resource Growth Exceeding 750% Since IPO
Date Accumulative DGC Drilling
Resources/Reserves (M oz) Inferred
2007-12 50,000m
2008-06 123,000m
2012-01 523,000m $850/oz 15.6
2011-01 430,000m $850/oz 14.9
2010-06 334,000m $850/oz 11.4
2009-09 249,000m 8.8
2005-05 Estimated by Pelangio
2006-09 DGC due diligence
10M 20M 30M
M&I 2P
Growing Reserve/Resource Base
10
@ US$850/oz Tonnes
(millions)
Grade
(g/t)
Contained Gold
(‘000 oz)
Reserves (1)
Proven 101.6 1.29 4,222
Probable 368.4 0.96 11,351
P&P 470.0 1.03 15,573
Resources (2)
Measured 124.5 1.36 5,424
Indicated 554.3 1.00 17,836
M&I 678.8 1.07 23,261
Inferred 208.5 0.86 5,785
1. After a 95% mining recovery rate; Mining dilution factor of 15.5%.
2. Inclusive of mineral reserves.
Detour Lake Reserves & Resources
As at December 31, 2011
11
1.0 g/t Au
0.5 - 1.0 g/t Au
<0.5 g/t Au
20,600E
16,500E
700 m
Open pit
@ 0.5 g/t cut-off
Detour Lake September
2012 Mine Plan
Production Start Q1 2013
OP Reserves (M oz) 15.6
Mill throughput (tpd) 55,000
Strip Ratio (waste:ore) 3.7
Gold recoveries 91%
Average grade (g/t) 1.03
Estimated mine life (yrs) 21.5
Avg. Production (oz/yr) 657,000
Cash operating costs (C$/oz) $710
Total cash costs (C$/oz) $749
Initial Capex (C$ B) 1.45
Detour Lake Profile
Note: Gold price assumptions: US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015.
12
800
700
600
500
400
300
200
100
0
Gold Production (‘000 oz)
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0
Grade (g/t Au)
Updated LOM Gold Production
Avg. 657,000 oz/yr
13
MAINTENANCE
LABOUR POWER
DIESEL
G&A
ROYALTY+
OTHER
(2% NSR)
CONSUMABLES
29%
22%
18% 12%
8%
5%
6%
Breakdown of 2013-14 TCC
Operating Costs (LOM) C$/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
Updated Operating Costs
2013 TCC estimated between C$800/oz and C$900/oz (on commercial production of 200,000 oz to 250,000 oz sold)
10% change in diesel or power = $9/oz change in TCC
10% change in Cdn$ FX rate = $63/oz in TCC
14
12-08-20
Capital Expenditures (C$ M) Spent
08/31/2012
PCE
11/2011
Mining Fleet and Facilities 171 203
Crushing and Processing (P&E) 498 565
Tailings and Water Mgmt 29 65
Infrastructure and Power line 145 156
Other Indirect 183 310
EPCM 87 101
Contingency (10%) - 50
Total (pre-production) 1,112 1,450
Capex & Sustaining Capital
Note: As of August 31, 2012, the Company has approximately $414 million in cash and short-term investments sufficient
to fully finance the remaining project expenditures ($338 million).
Estimated LOM sustaining capital of C$1.2 billion: 2013 = C$180 M
2014 = C$140 M
15
Gold - US$1,200/oz (1)
F/X - $Cdn/$US = 1.00
Base Case (1)
US$ Billions Undiscounted (0%) 5.0%
Pre-tax cash flow 4.3 1.7
Net cash flow after tax 3.0 1.1
Pre-tax IRR 14.4%
49
Power Cdn $0.065/kwh
Diesel US$100/barrel (WTI)
Financial Analysis
Base Case Assumptions
1. Gold price US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015.
@ US$1,600/oz
US$ Billions Undiscounted (0%) 5.0%
Pre-tax cash flow 9.4 4.4
Net cash flow after tax 6.6 3.0
Pre-tax IRR 24.6%
16
DETOUR LAKE DEVELOPMENT Progressing on Schedule
17
2010 2011 2012 2013
Construction Schedule Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Award of Engineering Contract
Award of PCM Contract
Detailed Engineering
Construction Camp (1,200 people)
Power line (Phase 1&2) - Electrification
Equipment purchase/delivery/assembly
Pre-production stripping
Process Plant - Commissioning start-up
Tailings Dam Construction (first cell)
Provincial Permits/Aboriginal IBAs
Federal Permits
Start production and ramp-up
Detour Lake: We are on Schedule
1 2
Gold Production Projected in Q1 2013
18
12-08-20 Ore ready to be processed
by Q4 2012
Pre-production capital costs include $78 M for pre-strip activities
Plan to have 2.3 Mt @ 0.81 g/t stockpiled
4 crews working on 2 shifts operating 8 haul trucks (CAT 795F) and
2 hydraulic shovels (CAT6060- 34m3 electric and 28 m3 diesel)
2012 Pre-Stripping Status (08/31/2012)
Overburden/Till 10.1 Mt
Waste 3.7 Mt
Low Grade 0.4 Mt
Ore 0.1 Mt
Total 14.3 Mt
ORE WASTE
Mining is Ramping Up
19
NORTH WASTE
DUMP PLANT SITE
CAMPBELL
PIT
APPROX. PIT SHELL
AT END OF 2014
CURRENT PIT SHAPE
JULY 2012
MINERALIZED
ZONE
Mining is Ramping Up
20
2013 Mine Plan
Based on January 2013 Startup
Total gold production estimate of 407,000 oz (1)
Pre-commercial production = 144,000 oz
Commercial production = 250,000 oz (excludes 12,715 oz locked in
circuit load)
Management guidance:
350,000 to 400,000 oz
Total cash costs between
C$800/oz and C$900/oz
1. 2013 production of 394,000 ounces of saleable gold plus 12,715 ounces locked in circuit load.
21
DETOUR LAKE CONSTRUCTION
Progressing on Schedule
22
• Second 45 km segment of powerline connected to grid
• Pre-stripping program ongoing
• Installation of mill equipment underway
Mechanical installation is 98% complete on first line and 85%
complete on second line
• Installation of equipment in gold room underway
• Commissioning with water for leach tanks completed
• Truck wash facilities completed
• Permanent camp construction completed
Detour Lake Construction Progress
Project Construction 87% Complete (End of August)
23
Overview Detour Lake Facilities
PROCESSING
PLANT
STOCKPILE
RECLAIM
TRUCK SHOP &
WAREHOUSE
TRUCK WASH
MINE OFFICES
12-08-20
24
Overview Detour Lake Facilities
12-08-20
SECONDARY
CRUSHERS
GEODESIC
DOME
STOCKPILE
RECLAIM
PRIMARY
CRUSHER
25
35 m
Surface
Gyro is
9 m high
12-08-20
Primary Crusher (up to 100,000 tpd capacity)
26
Stockpile Reclaim
12-08-20
27
Processing Plant Building
12-08-20
SAG MILL BALL MILL
12-08-20
Conventional gravity and CIP plant
55,000 tpd (=92% availability of 60,000 tpd capacity)
2 parallel lines (each with 1 secondary cone crusher + 1 SAG & 1 ball mill)
28
Processing Plant Building
CIP TANKS
PUMPS
12-08-20
Estimated gravity recovery: 30-40%
Estimated overall gold recovery: 91.0%
Leach time 29 hours; leach feed size 80% passing 95 μm
29
Gyratory
crusher:
60” x 113”
90,000 tpd
SAG mills:
2 X 36’ x 20’, 15MW
55,000 tpd To
leaching
circuit
To
gravity
circuit
Secondary crushers:
2 X XL-1100
67,000 tpd
Pebble crushers:
2 X XL-1100
73,000 tpd
Circ. load
28 % Circ. load
250 % From
gravity
circuit
Stockpile
12 h live capacity
Ball mills:
2 X 26’ x 40’6’’, 15MW
55,000 tpd
Leach circuit:
55,000 tpd + 15% contingency in piping capacity
Simple Process Plant @ 92% Availability
30
Construction Phase
+1,400 workers (at August 31, 2012)
Ramping up DGC team (324)
Operation Phase (Starting 2013)
400-500 employees
Rotation 1 week in/out
New modern camp facilities with 400 en-suite rooms completed
Detour Lake Employees & Contractors
31
FRONT LINE
81%
PROFESSIONAL
19%
Professional are: MGMT, Eng., Geo., Supt.
Front Line are: Operators, Admin, Support
Continuing focus on hiring local/regional
25% of employees are Aboriginals
NORTHERN
ONTARIO
44%
COCHRANE
28%
COCHRANE
AREA
23%
REST OF
ONTARIO
3%
2%
WORKFORCE ORIGIN DIVISION OF LABOUR
OTHER
* Excludes Corporate office. 400 is minimum target.
Focus: Hiring Local First
Year-end 2012 Employment Objective: 324/400 as of August 31, 2012*
32
PLANNING FOR ORGANIC GROWTH
Under-Explored Greenstone Belt
33
• Two main gold structures with total strike length of >80km
• Continue focus on Detour Lake deposit extension (northern
structure i.e. Block A)
• Test targets on structure south of Detour Lake
Grow reserve base to +20 M oz (@ US$850/oz)
Increase mill throughput to above 75,000 tpd for gold production
output of +800,000 oz/yr
Find high-grade ore near-surface within trucking distance to
supplement mill
Planning for Organic Growth
5 Year Plan for Successful Organic Growth
Large prospective land position of approx. 540 km2
Future objectives
34
*Not updated with TWD Dec. 30th PR. On Dec. 1, 2011, Detour Gold announced the acquisition of TWD.
Block A
Pre-feasibility
Priority #1 – Block A Target
Detour Lake deposit open to the west and at depth
Block A Pre-feasibility underway: Phase 1 drilling (49,000 m)
completed
35
August 4, 2012
2012 proposed DH
2012 extension DH
2012 completed DH
Historical DH
Cancelled or
not accessible
2011 year-end reserves
= 15.6 M oz
Block A
2012 Drilling Program
Priority #1 – Block A Target
36
Existing DDH Gold occurrence (OGS)
DDH intersection >1g/2m DDH intersection >1g/10m
*Note: Excludes drilling around Detour Lake and M zone (Block A).
+80 km of favourable geology
MMI Survey Coverage
MMI Au Anomaly
Priority #2 – South Structure
15.6 M oz in Reserves
Sunday Lake Option
37
Best scenario is throughput increase 55,000 to 75,000 tpd @ US$1,200/oz
Start pre-feasibility on block A
2013
2012
2014
Complete feasibility study and assess technical feasibility and resultant project economics
At >US$1,000/oz and after successful commercial production is achieved, proceed with plant expansion
Complete expansion within 2 years
Evaluating Expansion Opportunities
38
Focus on a world-class asset – Detour Lake
Canada’s largest pure gold play with 15.6 M oz in reserves
Construction progressing on schedule (87% as of August 31)
One of the best cash flow/share opportunities
Gold production starting in Q1 2013
Average annual gold production of 657,000 oz
Excellent organic growth potential (5 year plan)
Potential expansion of mill throughput
Invest in Detour Gold
Our Vision
39
ADDITIONAL INFORMATION
40
Detour Lake Profile
Detour Lake January 2011
Update (2)
September 2012
Mine Plan
Gold price (US$/oz) (1) 850 1,200
Foreign exchange rate (US$/Cdn$) 1.10 1.00
Assumptions Fuel price (US$/barrel) 80 100
Income/mining tax rate (%) 25/10 25/10
Net Smelter Royalty (%) 2 2
Ore milled (Mt) 449.6 470.0
Waste mined (Mt) (3) 1,654 1,734
Mine Strip ratio (waste:ore) 3.9 3.7
Parameters Average gold grade (g/t) 1.03 1.03
Total contained gold (M oz) 14.9 15.6
Estimated gold recovery (%) 91.0 91.0
Total recovered gold (M oz) 13.5 14.1
Mine life (years) 21 21.5
Average annual gold production (oz) 657,000 657,000
1. US$1,600/oz for 2013, US$1,500/oz for 2014, and US$1,400/oz for 2015.
2. Press release dated January 31, 2011 with Technical Report dated March 15, 2011.
3. Includes low-grade stockpile.
41
800
700
600
500
400
300
200
100
0
Gold Production (‘000 oz)
900
850
800
750
700
650
600
550
500
Total Cash Costs (C$/oz)
Gold Production/Cost Profile
Note: Excludes stripping adjustments.
Avg. C$749/oz
42
1,600
1,400
1,200
1,000
800
600
400
200
0
Ou
nces (
000’s
)
0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0
Cut-off BINs
OK (oz Au)
ID3 (oz Au)
Approx. 3 M oz between 0.3-0.5 g/t Au
Block Model – Gold Distribution
Stockpile over LOM
0.3-0.5 g/t material
43
Grade Control – Bench 6264 DDH
44
Grade Control – Bench 6252 DDH
45
Grade Control – Bench 6264 RC G/C
46
Grade Control – Bench 6252 RC G/C
47
Gerald Panneton Founder, President & CEO
Director
Michael Kenyon Chairman
Paul Martin CFO
Pierre Beaudoin Sr. VP Capital Projects
Pat Donovan VP Corporate Development
Julie Galloway VP General Counsel &
Corporate Secretary
James Mavor VP Finance
Rachel Pineault VP HR & Northern Affairs
James Robertson VP Environment &
Sustainability
Derek Teevan VP Aboriginal &
Government Affairs
Eric Josipovic Controller
Drew Anwyll 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
and Controls
Christian Brousseau Project Manager
Patrik Gillerstedt Mine Manager
Peter Crossgrove
Louis Dionne
Robert E. Doyle
Ingrid Hibbard
Jonathan Rubenstein
Graham Wozniak
Michael Kenyon
Alex G. Morrison
Gerald Panneton
Management & Directors
Management
Directors
48
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