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QUIC RESEARCH REPORT

QUIC Research Reports focus onemerging investment themes thataffect current portfolio companiesand companies under coverage.

Metals & Mining

Detour Gold: The Simple, One-Asset Mine We Need

Detour Gold Corporation is a Canadian gold producer headquarteredin Toronto. Their business is in the acquisition, exploration,development, and operation of mines in Northern Ontario. Detour hasa 100% ownership interest in its flagship asset, the Detour Lake mine,which is one of the largest gold-producing mines in the country.

Highlights

1. Investment Thesis I: Premium, High-Quality Asset

2. Investment Thesis II: Organic Growth Potential within Existing Assets

3. Investment Thesis III: Effective Cost Cutting and Deleveraging Activities

4. Investment Thesis IV: Ideal Position for a Potential Acquisition

Current Price: $17.07 | Target Price: $22.33 | Stop Loss: $15 | Return: 30.8%

February 27, 2017

Carmen Chen Tracy LiCharan Arulmani Connor Steckly

QUIC Research ReportFebruary 27, 2017


February 27, 2017

Table of Contents

Business Overview 3

Industry Overview 4

Investment Theses

Investment Thesis I: Premium, High-Quality Asset 5

Investment Thesis II: Organic Growth Potential within Existing Assets 6

Investment Thesis III: Effective Cost Cutting and Deleveraging Activities 8

Investment Thesis IV: Ideal Position for a Potential Acquisition 9

Catalysts and Risks 11

Valuation

NAV Model 12

Comparables 13

Portfolio Implications 14

References 15

Appendices 16



February 27, 2017

EXHIBIT I

3

Management Overview

Detour Gold Corporation is a Canadian goldproducer headquartered in Toronto. Their businessis in the acquisition, exploration, development, andoperation of mines in Northern Ontario. Detour hasa 100% ownership interest in its flagship asset, theDetour Lake mine, which is one of the largest gold-producing mines in the country.

Additionally, the company controls the Burntbushproperty, which spans 494 squared kilometers andcan be found 70 kilometers south of the DetourLake Mine. Detour has plans on performingelectromagnetic surveys and field mapping toexplore this land in the future.

A primary focus for the company recently has beenin the area of exploration. In 2016, 36 holes weredrilled on the Lower Detour Trend, which is 25kilometers of under-explored land on the DetourLake mine property. Additionally, 19 holes weredrilled in the eastern section of the property; the

company has plans in 2017 to trench along theidentified mineralization to determine the locationof unidentified gold.

Detour holds a near-surface gold deposit located 1kilometer west of the main Detour Lake Mine that isreferred to as West Detour. The property isestimated to contain a reserve of 1.5 million ounces.The company has plans to develop this land so itcan produce gold and contribute to the overalloutput of the Detour Lake Mine. Headwindsregarding obtaining the necessary permits to begindevelopment have delayed the start of this projectfrom an original date of 2018 to an expected dateof 2021.

The company generated annual revenues of $563million and incurred a net loss of $163 million in2015. Detour has a market capitalization of $2.3billion with a Total Debt/EBITDA ratio of 3.3, a 25%reduction from 2014 levels.

Source: Company Reports, Thomson One

Business Overview

Paul Martin James Mavor Pierre Beaudoin

Position President, CEO, Director Chief Financial Officer Chief Operating Officer

Annual Compensation $3,439,211 $1,702,395 $2,235,662

Experience

25+ years experience in precious metals mining & development. Previously CFO at Detour between 2013-2014. CFO of New Gold Inc. prior to joining Detour.

20+ years experience in mining. VP Finance at Detour before becoming CFO. Was VP and Treasurer at Barrick Gold in the past. Earned bachelor of Electrical Engineering at Queen’s University and is a CA charter holder.

28+ years experience of international operating & development mining experience. SVP Capital Projects with Detour in the past. 16 years with Barrick Gold prior to joining Detour.



February 27, 2017 4

EXHIBIT IIIEXHIBIT II

Gold Price & Total Exploration Announcements

Introduction

The gold industry extracts minerals from theground for its gold content and is then processedinto bars, called bullion, either on-site or elsewhere.Gold is primarily demanded by investors, electronicmanufacturing, jewelry, and central banks.

Success Factors

Rising inflation is beneficial for the gold industry asit makes gold an attractive investment. Unlikecurrencies, gold maintains its value in inflationaryenvironments, which acts as a hedge againstinflation.

In Canada, the strength of the dollar relative totrading partners has an impact on the affordabilityof products, meaning a weak Canadian dollar willgenerate greater sales for domestic gold producers.

Global Supply & Demand

The gold industry experienced overall growth inglobal supply of 5% during the year of 2016. The

growth can be attributed to an increase in recycledgold and net producer hedging (accelerated timingof sales). The rally in global gold prices causedrecycled gold to be more appealing, which justifiesthe growth in its supply of 17%. This growth wasoffset by a stagnant growth in gold production.However, higher gold prices is likely to increasecapital expenditure within the industry in thecoming years, which will increase development andeventually total production.

In terms of the demand for gold, it grew at aslightly slower rate of 2% in 2016. A surge indemand for gold-backed ETFs lead the growth indemand, while a slump in jewelry and central bankdemand offset growth. Demand from jewelry andcentral banks was at a 7 and 6 year low,respectively. The increase in gold prices during2016 reduced the demand for jewelry. This was adetriment for the demand of gold given it is aprimary input of jewelry.

Source: World Gold Council

2016 Demand Growth by Segment

Industry Overview

-

50

100

150

-

500

1,000

1,500

2,000

2008 2009 2010 2011 2012 2013 2014 2015

Price of Gold ($/oz. LHS)

Significant Exploration Announcements

+660.2-9.5 -17.9 -192.9 -347 +92.9

-1,0002,0003,0004,0005,0006,000

2015

ETFs

& S

imila

r

Tech

nolo

gy

Bar a

nd C

oin

Cent

ral B

anks

Jew

elle

ry

2016

Net

Cha

nge

(201

6 vs

20

15)



February 27, 2017 5

EXHIBIT VEXHIBIT VI

Detour Lake Output vs. All-in Sustainable Costs

With the scarcity in single-asset gold mines withmulti-million ounce reserves, Detour has anincredibly valuable asset. The substantial size of themine is superior to several smaller mines because ithas the ability to deliver stable, predictable freecash flow for over 20 upcoming years given its longlife. The mine has a reserve of 16.4 million ounces,which is much larger than the flagship mines ofother Canadian mines. Additionally, the 620squared kilometer property is located in thepolitically-stable geographical region of NorthernOntario.

Under the new Life of Mine (LOM) plan, the DetourLake Mine is expected to produce an annual outputof 617,000 ounces over the next three years. Withoperational performance enhancements, the mineis estimated to have an annual production of655,000 ounces over its 23-year useful life.

Another advantage of owning a property as largeas the Detour Lake Mine is that it provides ampleexploration projects. Exploration projects are thebasis of production growth. Detour has identified

opportunities to explore in the western andnorthern sections of their main mine, and hasalready begun drilling holes to identify newmineralization in the lower and eastern sections ofthe property. The overflow of potential pro jects toundertake within the Detour Lake asset is likely touncover resources that were not originallyaccounted for, which will increase the value of thisasset over time.

As indicated in Exhibit VI, all- in sustainable costs(AISC) for the Detour Lake Mine have decreasedsince inception and are expected to remainstagnant into the future. Contrarily, gold productionhas increased since inception and is expected toremain at an annual output near the 600,000ounces per year figure into the future, which doesnot include the West Detour Mine. Overall, thefundamentals of the mine continue to improve,meaning the value offered from this asset acts as ahedge to any unforeseen risks to Detour’s balancesheet.

Source: Desjardins Capital Markets

Detour Lake & West Detour Map Outlines

Source: Company Reports

Investment Thesis I: Long-life Premium Asset

$0$200$400$600$800$1,000$1,200$1,400$1,600

-100200300400500600700800

2013 2015 2017E 2019E 2021E

Cost

s (U

S$/o

z)

Gol

d Pr

oduc

tion

(koz

)

Detour Lake (LHS) AISC (RHS)

West Detour

Northern Pit

Detour Lake Mine



February 27, 2017

The West Detour satellite deposit located 1kilometre from the Detour Lake mine, was beingdeveloped to start pre-stripping in early 2018 for a2019 start up. The development has 1.5MM ouncesof gold in reserves. However, one of Detour Gold’saboriginal partners has requested that thepermitting process for the project be conductedthrough the Federal Environment Assessmentprocess. After consideration of this request, Detourhas postponed production from the West DetourPit until after 2021. The Canadian EnvironmentalAssessment Agency (CEAA) has 45 days from thefiling of the request to decide if the assessment willfall under provincial or federal ju risdiction. Thedifference between federal and provincialjurisdiction will be: timeline of the project, publicparticipation, and increased ministry scrutiny. Thetimeline for a federally overseen project is morethan two years – a similar Ontarian project, the

Rainy River mine, took 815 days to be issued averdict.

However, besides the increased timeline there arerelatively few drawbacks of pursuing theassessment at the federal level. The Agency hadadvised the company in 2015 that a federal processwould not be required, but is now obligated toreview the decision due to the request from theindigenous band. A comprehensive studycompleted by the CEAA in 2011 concluded that theDetour Project would not cause significant adverseenvironmental effects and since then the projecthas not changed significantly. Detour Gold ispreparing a new life-of-mine (LOM) plan thatincorporates the deferring of mining in the WestDetour Pit to 2021, that is expected to effectivelyutilize the mine. We believe the markets are overexaggerating how detrimental the new LOM planwill be to the mine.

EXHIBIT VI

6

Overview of Federal Environment Assessment

Source: Government of Canada

Investment Thesis II: Organic Growth Potential within Existing Assets

45 Days to distinguish jurisdiction (Current

Stage)

Determination of necessity of EA

Environmental Impact statement guidelines

Environmental Impact Statement

Environmental Assessment or Review

PanelFinal Decision



February 27, 2017 7

The incorporation of West Detour into the 2016LOM plan was important but does not negate thevalue of the company’s assets or the growthpipeline that currently exists. The actual NAV impactof the project was modest and the main benefit ofthe operation was it helped de-risk the mine planby allowing for lower mining rates. The 2014 mineplan called for aggressive mining rates, and WestDetour added a second source of ore whileboosting free cash flow by improving head gradesand lowering the strip ratio. However, West Detouronly represents 9% of total reserves at the DetourLake property and the company will still generatestrong free cash flow without the project.

As part of the new LOM plan, Detour will befocused on optimizing their 2019 to 2021production, including an option to start producingfrom the North satellite pit in the Detour Lake mine.The company’s objectives are to optimize the stripratio, take advantage of the 60,000 tonnes per dayprocessing plant, and not change the cut-off grade.Detour Gold plans to increase its 2017 truck fleet byone to 28, to increase the tonnes per annum from100MM to 112MM. In addition, the company isundergoing a 30,000-metre infill drilling program inFY 2017 which will occur 250-450 meters belowsurface. The company has also identified Zone 58Nin the Lower Detour region of its mine, which hasthe potential to be a high-grade undergroundmine.

Investment Thesis II: Organic Growth Potential within Existing Assets

EXHIBIT VI

EXHIBIT V

Detour Lake Pit (2018E and 2038E)

Detour Lake Growth Prospects



February 27, 2017 8

EXHIBIT VIIIEXHIBIT VII

Debt Reduction ($MM) – 2013 to 2017E

Year to date, Detour Gold has repurchased$142MM convertible notes, in face value, reducingthe amount due at maturity in November 2017 to$358MM. Management has highlighted they aim toreduce the outstanding amount by $58MM prior tomaturity, which is a realistic target per thecompany’s estimated cash flows. In 2016,management had repaid $142MM of debt and thecompany had a Net Debt/EBITDA multiple of 1.4x.~65% of Detour Gold’s costs are in Canadiandollars which acts a natural hedge against currencyprice fluctuations. The firm ended FY 2016, with$129MM of debt in their balance sheet.

The company expects to have $160-$180MM incapital expenditures in FY 2017, in which $23MMwill be paid in 2018. At the end of Q3 2016, the firmhad ~$116MM in cash and cash equivalents. In

terms of sustaining capital expenditures, 45% of thespending will be used on the mine in FY 2017. Thenext largest area of spending will be miningequipment (23%). Improvements to the mill and thecapital expenditures at the West Detourdevelopment will be 3% each. The firm has alsobeen steadily cutting cash and production costsYoY which has helped increase margins and cashflows. With a lower than planned capitalexpenditure in FY 2017 and a high 2016 cashbalance of $129MM, Detour Gold will have enoughliquidity for the foreseeable future. These initiativesthat the company has partaken in will alleviateconcerns of an imminent capital raise. In addition,the firm has exceptionally high recovery rates thatoften are more than 90%. This allows the firm toeffectively extract gold from the ore that it minesand mills.

Source: Company Reports

AISC and Margins ($/oz)

Investment Thesis III: Effective Cost Cutting and Deleveraging Activities

$250

$340

$430

$520

$610

$700

2013 2014 2015 2016 Nov-17

$250

$300

$350

$400

$450

$500

$550

$800

$1,000

$1,200

$1,400

AISC (RHS) Margin (LHS)



February 27, 2017

EXHIBIT IX

The prime suspects for a takeover of Detour Goldinclude: Agnico-Eagle, Barrick Gold, Goldcorp,Kinross, Newcrest, and Newmont. According toCIBC World Markets, Goldcorp is the most likely tobenefit from the acquisition of the company.Detour Gold provides Goldcorp with a healthimprovement in asset mix, a meaningful productiontransformation, and fits its new strategic initiatives.A main aspect of the 2016 strategic shift for thecompany was investment in juniors. Detour has thepotential to lift Goldcorp’s production by 15%-25%from 2018E to 2027E. Detour could also dilute the

company’s significant exposure to Penasquito inMexico and provide another long-life open-pitasset in the portfolio. Barrick could also afford toacquire Detour and the transaction wouldstrengthen Barrick’s near-term production profile.All six acquirers could benefit in terms ofproduction profile and net present value, even witha 50% premium in an all-share transaction. Thelong-life nature of the Detour Lake mine results in agrowing importance within the production mix forall potential acquires and could offset possibleproduction decline in the future.

9

Market Capitalization and P/NPV of Acquirers

Source: CIBC World Markets, Company Reports, Capital IQ

Investment Thesis IV: Ideal Position for a Potential Acquisition

EXHIBIT X

NPV Accretion of Acquirers

14%

22%

9%

15%

9%

19%

11%

21%

6%9%

6%

17%

0%

5%

10%

15%

20%

25%

Agnico Eagle Barrick Goldcorp Kinross Newcrest Newmont

30% Premium 50% Premium

1

2

3

4

Agnico Eagle Barrick Goldcorp Kinross Newcrest Newmont Detour$0

$5

$10

$15

$20

Market Cap ($B) (LHS) P/NPV (RHS)



February 27, 2017

EXHIBIT XI

10

Goldcorp (TSX:G) is one of the most prominentholdings for the Metals and Mining sector. With theleadership of David Garofalo, Goldcorp aimed tohave a strategic shift into focusing on: 1) NAVaccretion, 2) decentralization and cost-cutting, 3)reinvestment of FCF, and 4) investment in juniorminers. A case study was completed to investigatehow accretive and lucrative an acquisition of Detourcould be for Goldcorp. As aforementioned, evenwith a 50% premium the acquisition would beaccretive to Goldcorp shareholders. Hence, in a

potential acquisition QUIC’S Metals and Miningsector would dually benefit. Detour has thepotential to lift Goldcorp’s production by 15-25%during 2018E to 2027E, while representing 21% ofthe company using a 30% premium. The miningexpertise found at Goldcorp appears to becompatible for Detour. Detour also helps diluteGoldcorp’s significant exposure to Penasquito inMexico and provides another long-life open-pitasset in the portfolio.

Goldcorp Gold Production after Acquisition of Detour (MM oz)

Source: CIBC World Markets, Company Reports, Capital IQ

Investment Thesis IV: Ideal Position for a Potential Acquisition

0

1

2

3

4

2005 2010 2015 2020 2025 2030

Canada Mexico Guatamala USA Dominican Republic Argentina Other Detour



February 27, 2017 11

Catalysts

1) Exploration Program

Detour Gold has begun significant explorationprojects in 2016 that will continue into the comingyears. Activ ities include drilling over 50 holes ontheir Detour Lake Mine property and surveying landon the Burntbush property. Plans to trench areaswhere mineralization was found could uncoverresources that were not accounted for, which wouldincrease the reserve of the mine and increase itsvalue.

2) Operational Improvements

The opportunity to implement ContinuousImprovement Projects and optimize processes overthe 23-year life of its Detour Lake mine has thepotential to lower the overall costs of production,which would grow margins.

3) West Detour Ore Softness

The ore that is will be extracted once the WestDetour mine is in operation is softer than orescurrently being mined. Soft ores can be processedfaster, which will result in lower costs and higheroutputs at Detour’s plant.

Risks

1) Price of Gold

The profitability of the Company depends heavilyon the world price of gold. The nature of goldprices are volatile, and fluctuate for reasons beyondDetour’s control. Factors influencing the price ofgold include: inflation, consumer confidence, andexchange rates. Significant devaluation of goldcould force the Company to liquidate assets and/orrecord an impairment on the value of its assets,thus reducing the value of the company.

2) West Detour Development Issues

An important factor for Detour’s growth inproduction moving forward is the development oftheir West Detour mine. Recently, the Company wasdenied a permit that was necessary to proceed withdevelopment, delaying the project start date from2018 to an expected date of 2021. Aboriginalpartners have requested the permit application tobe considered at the federal level instead of theprovincial level, which takes 2-3 years as opposedto one year. Inability to obtain permits will hinderDetour’s projected annual production of 655,000 ozfrom the Detour Lake mine.

3) Currency Volatility

Being a Canadian company, Detour’s revenues havebenefitted from a weak Canadian Dollar incomparison to the US Dollar. American buyers areattracted to buying from Detour because of theeconomical exchange rate. If this relation changesand the Canadian Dollar strengthens, revenues willdecrease because Detour will not export as much ofits gold to its trading partners.

Catalysts & Risks

EXHIBIT XII

Historical Price of Gold ($/oz)

Source: World Gold Council

-

500

1,000

1,500

2,000

2007 2009 2011 2013




Comparables P/NAVAverage P/NAV

NAV Output

1.50

1.07

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

Large Cap Mid Cap Small Cap Average Detour

The average P/NAV in a comparable set of companies is 1.5x. Detour Gold is currently trading at 1.07x. Abenchmark of 1.4x was selected as a conservative estimate.

NAV Summary Long-term AssumptionsShare Price (TSX:DGC) $17.07 Discount Rate 5.00%FDSO 175.37 Gold (USD/oz) $1,200.00Exchange Rate (USD/CAD) 1.35Market Capitalization (CAD) $2,993.57 Implied Current P/NAV 1.07xAdjustments (CAD) $57.91 2017E P/NAV 1.40xEnterprise Value (USD) $3,051.47 Target Price $22.33

NAV based on after-tax UFCF

AssetOwnership

InterestDiscount

RateNAV (USD

MM)NAV per

shareDetour Lake 100.0% 5.0% 1,808.76 10.31

Gross Asset Value 1,808.76 10.31 - Debt 102.72 0.59 + Cash and investments 160.63 0.92 NAV (USD) 2,072.11 11.82 NAV (CAD) 2,797.35 15.95




Comparables AnalysisComparable Companies

Target Price

Based on a NAV with a target P/NAV of 1.4x the implied share price is $22.23 which has an implied returnof 30.8%. Compared to the analyst average of $29.67, QUIC’s model is very conservative.

Detour Gold Corporation (TSX:DGC) is currently trading at a premium on an EV/EBITDA basis in a LTM(11.2x), 2016E (10.9x), and 2017E (10.3x) compared to an industry average of 10.0x, 9.1x, and 7.9xrespectively. The premium is due to the fact that the industry peer-set includes more stable, larger namessuch as Barrick Gold and Goldcorp. On a P/NAV basis, DGC trades at a significant discount. For an asset-centric firm like DGC, this discount is due to recent negative news events and is overplayed by the marketsuch as the West Detour problems. The asset has historically traded at 1.4x-1.5x P/NAV.

Gold - Senior Producers Market Enterprise EV / EBITDA P/CF Dividend Price / Earnings Net Debt/EBITDA

Cap ($MM) Value ($MM) LTM 2016E 2017E LTM Yield P/NAV 2016E 2017E 2016E 2017E EV/Reserves EV/R+RBarrick Gold Corp. $29,838 $40,476 7.2x 7.8x 8.0x 3.4x 0.6% 2.1x 23.1x 23.2x 1.4x 1.4x $269 $147Goldcorp Inc. $18,532 $21,973 11.8x 11.1x 9.9x 7.3x 0.5% 2.0x 43.7x 32.6x 1.7x 1.5x $226 $148Agnico-Eagle Mines $10,195 $10,763 12.5x 13.0x 11.3x 8.8x 0.9% 1.7x 73.3x 44.6x 0.7x 0.6x $106 $74

B2Gold Corp. $4,236 $4,671 12.1x 11.5x 15.5x 5.9x - 1.3x 26.0x nmf 1.1x 1.4x $383 $173Alamos Gold $3,146 $3,198 17.0x 15.2x 12.2x 7.5x 0.2% 1.5x nmf 50.0x 0.2x 0.2x $249 $75

IAMGOLD Corp. $2,576 $2,418 6.0x 6.3x 5.5x 4.0x - 1.0x nmf nmf 2.3x 1.5x $132 $53Endeavour Mining $2,504 $2,585 9.5x 8.6x 7.8x nmf - 1.4x 23.9x 18.5x nmf nmf $299 $227

NovaGold Resources $2,450 $2,423 nmf nmf 0.0x nmf - 2.3x nmf 0.0x nmf nmf $557 $256Torex Gold $2,150 $2,556 15.8x 9.1x 8.2x nmf - 1.1x 22.6x 22.1x 0.6x nmf $651 $316

New Gold, Inc. $2,014 $2,959 8.0x 7.5x 4.9x 4.5x - 2.0x 57.3x 20.3x 1.1x 1.0x $134 $84

Centerra $1,920 $2,369 4.6x 4.3x 4.1x 2.5x 2.4% 0.7x 9.6x 9.3x 0.7x 0.8x nmf nmf

Semafo $1,436 $1,175 6.1x 6.0x 7.0x 5.0x - 0.8x 21.4x 26.7x nmf nmf $1,367 $300Mean $6,750 $8,131 10.0x 9.1x 7.9x 5.4x 0.9% 1.5x 33.4x 24.7x 1.1x 1.1x $398 $168

Median $2,540 $2,772 9.5x 8.6x 7.9x 5.0x 0.6% 1.5x 23.9x 22.6x 1.1x 1.2x $269 $148

Detour Gold Corporation $2,980 $3,267 11.2x 10.9x 10.3x 15.9x - 1.1x nmf nmf 0.7x 0.7x $711 $323

Target PriceCurrent Price $17.0712-Month Target Price $22.33Price Return 30.8%Dividend Yield -Total Implied Return 30.8%

$35.00

$29.67

$27.50

$26.50

$25.00

$24.00

$23.00

$22.33

$21.50

$21.00

RBC Capital Markets

Average

Paradigm Capital

Canaccord Genuity

National Bank

CIBC

BMO Capital

QUIC

Desjardins

Credit Suisse



February 27, 2017

Franco-Nevada Corporation,

28%

Teck Resources

Limited18%

Silver Wheaton

Corp.13%

CCL Industries

Inc.14%

Tahoe Resources

Inc.9%

Lundin Mining Corporation

10%

Goldcorp Inc.8%

14

The Metals and Mining sector see Detour Gold as apotentially significant fit in the portfolio. We plan tosell our holdings in Lundin Mining Corporation(TSX:LUN) as we believe the margin of safety for thecompany has depreciated. Using proceeds from thesale, we will purchase a stake in Detour Gold(TSX:DGC) and complete rebalancing trades todecrease the weight of Franco-Nevada Corporation(TSX:FNV). Franco-Nevada is one of QUIC’s legacyholdings. We have conviction in the company’smanagement team, current assets, and futureroyalty/streaming deals.

In addition, QUIC will sell one of our top holdings inFY 2016 – Teck Resources. Teck is currently tradingat $27.16, and has made a tremendous comebackfrom its single dig it share price in 2015 due to thecommodity downturn.

Following these trades, the QUIC M&M portfoliowill be composed of 6 different names, down from11 at the beginning of fiscal 2016. We believefurther consolidation is necessary as suggested inthe strategic plan for FY 2016. However, we believethat our other holdings still have room toappreciate. The next move would be to sell offeither Goldcorp or Franco-Nevada and disposeeither Tahoe Resources or Silver Wheaton. CCLindustries has been an excellent performer andfurther analysis must be taken to see if thecompany is overvalued and should be sold.

Source: Capital IQ

EXHIBIT XIII

Portfolio Implications

Pro-forma Portfolio

Franco-Nevada

Corporation, 24%

Detour Gold24%

Silver Wheaton

Corp.16%

CCL Industries

Inc.14%

Tahoe Resources

Inc.11%

Goldcorp Inc.11%



February 27, 2017

References

15

1. CIBC World Market

2. S&P Capital IQ

3. Paper Report

4. Wells Fargo

5. Jeffries

6. Grandview Research

7. BMO Capital Markets

8. TD Securities

9. Morningstar

10. PriceWaterCooper

11. Deloitte

12. IBIS World

13. Bloomberg

14. RBC Capital Markets

15. Credit Suisse

16. Desjardins

17. Canaccord Genuity

18. Paradigm Capital




Appendix I: Net Asset Value Model Assumptions

Toggle Active Bear Base BullCommodity Price Assumptions

Gold 2 1,200$ 1,100$ 1,200$ 1,300$

Financial AssumptionsDiscount Rate 2 5.0% 7.0% 5.0% 3.0%Tax Rate 2 10.0% 10.0% 10.0% 10.0%Depreciation & Amortization 2 20.0% 22.0% 20.0% 18.0%

TSX:DGC 2017-02-24Working Capital Assumptions

Cash and Equivalents 160.63$ Current Assets 275.07$ Current Liabilities 61.08$ Revenues 563.02$ Working Capital (WC) 53.37$

WC (% of Revenue) 9.48%




Appendix II: Net Asset Value Model (2016E-2023E)

NAV Model (2016E-2023E)2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E

Payable MetalsTotal Ore Milled (k oz) 2,140 2,140 2,140 2,300 2,300 2,300 2,300 2,300 Ore Grade (Au g/t) 0.98 0.98 0.98 0.89 0.89 0.89 1.06 1.06Gold Recovery 91.5% 91.5% 91.5% 92% 92% 92% 92% 92%Gold Production (k oz) 617.00 617.00 617.00 605.52 605.52 605.52 721.18 721.18 Total Mined (k oz) 1,048 1,048 1,048 1,194 1,194 1,194 1,180 1,180 Total Au Production (oz) 617.00 617.00 617.00 605.52 605.52 605.52 721.18 721.18 Net Smelter Royalty to FNV 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Gold Available for DGC 604.66 604.66 604.66 593.41 593.41 593.41 706.76 706.76

Revenue 755,820$ 786,053$ 816,286$ 712,089$ 712,089$ 712,089$ 848,106$ 848,106$ Operating costs ($/oz) $812.00 $812.00 $812.00 $803.00 $803.00 $803.00 $632.00 $632.00Operating costs 501,001$ 501,001$ 501,001$ 486,231$ 486,231$ 486,231$ 455,785$ 455,785$

Operating Income 254,819$ 285,052$ 315,285$ 225,858$ 225,858$ 225,858$ 392,321$ 392,321$ Less: D&A 151,164$ 157,211$ 163,257$ 142,418$ 142,418$ 142,418$ 169,621$ 169,621$ EBIT 103,655$ 127,842$ 152,028$ 83,440$ 83,440$ 83,440$ 222,700$ 222,700$ Less: Income Taxes 3,000-$ 6,000$ 46,000$ 11,000$ 11,000$ 11,000$ 65,000$ 65,000$ NOPAT 106,655$ 121,842$ 106,028$ 72,440$ 72,440$ 72,440$ 157,700$ 157,700$

Operating Income

Total CAPEX 170,000$ 105,000$ 105,000$ 62,000$ 62,000$ 62,000$ 28,000$ 28,000$ Less: Change in WC 71,641$ 74,507$ 77,372$ 67,496$ 67,496$ 67,496$ 80,388$ 80,388$ Less: Taxes 3,000-$ 6,000$ 46,000$ 11,000$ 11,000$ 11,000$ 65,000$ 65,000$ After Tax UFCF 16,178$ 99,546$ 86,913$ 85,362$ 85,362$ 85,362$ 218,933$ 218,933$

PV of FCF 15,788$ 92,521$ 76,933$ 71,962$ 68,535$ 65,272$ 159,434$ 151,842$




Appendix III: Net Asset Value Model (2024E-2030E)

NAV Model (2024E-2030E)2024E 2025E 2026E 2027E 2028E 2029E 2030E

Payable MetalsTotal Ore Milled (k oz) 2,300 2,300 2,300 2,300 2,300 2,300 2,300 Ore Grade (Au g/t) 1.06 0.89 0.89 0.89 0.87 0.87 0.87Gold Recovery 92.0% 92.0% 92.0% 92% 92% 92% 92%Gold Production (k oz) 721.18 605.52 605.52 605.52 591.91 591.91 591.91 Total Mined (k oz) 1,180 1,232 1,232 1,232 1,181 1,181 1,181 Total Au Production (oz) 721.18 605.52 605.52 605.52 591.91 591.91 591.91 Net Smelter Royalty to FNV 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Gold Available for DGC 706.76 593.41 593.41 593.41 580.07 580.07 580.07

Revenue 848,106$ 712,089$ 712,089$ 712,089$ 696,087$ 696,087$ 696,087$ Operating costs ($/oz) $632.00 $632.00 $632.00 $632.00 $632.00 $632.00 $632.00Operating costs 455,785$ 382,687$ 382,687$ 382,687$ 374,088$ 374,088$ 374,088$

Operating Income 392,321$ 329,402$ 329,402$ 329,402$ 322,000$ 322,000$ 322,000$ Less: D&A 169,621$ 142,418$ 142,418$ 142,418$ 139,217$ 139,217$ 139,217$ EBIT 222,700$ 186,984$ 186,984$ 186,984$ 182,782$ 182,782$ 182,782$ Less: Income Taxes 65,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ NOPAT 157,700$ 103,984$ 103,984$ 103,984$ 99,782$ 99,782$ 99,782$

Operating Income

Total CAPEX 28,000$ 53,000$ 53,000$ 53,000$ 53,000$ 53,000$ 53,000$ Less: Change in WC 80,388$ 67,496$ 67,496$ 67,496$ 65,979$ 65,979$ 65,979$ Less: Taxes 65,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ After Tax UFCF 218,933$ 125,906$ 125,906$ 125,906$ 120,020$ 120,020$ 120,020$

PV of FCF 144,611$ 79,204$ 75,433$ 71,840$ 65,221$ 62,115$ 59,158$




Appendix IV: Net Asset Value Model (2031E-2038E)

NAV Model (2031E-2038E)2031E 2032E 2033E 2034E 2035E 2036E 2037E 2038E

Payable MetalsTotal Ore Milled (k oz) 2,300 2,300 2,300 2,300 2,300 2,300 1,810 1,810 Ore Grade (Au g/t) 1.06 1.06 1.06 1.15 1.15 1.15 1.08 1.08Gold Recovery 92.0% 92.0% 92.0% 92% 92% 92% 92% 92%Gold Production (k oz) 721.18 721.18 721.18 782.41 782.41 782.41 578.24 578.24 Total Mined (k oz) 885 885 885 515 515 515 194 194 Total Au Production (oz) 721.18 721.18 721.18 782.41 782.41 782.41 578.24 578.24 Net Smelter Royalty to FNV 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%Gold Available for DGC 706.76 706.76 706.76 766.76 766.76 766.76 566.68 566.68

Revenue 848,106$ 848,106$ 848,106$ 920,115$ 920,115$ 920,115$ 680,016$ 680,016$ Operating costs ($/oz) 632$ 632$ 632$ 632$ 632$ 632$ 632$ 632$ Operating costs 455,785$ 455,785$ 455,785$ 494,484$ 494,484$ 494,484$ 365,451$ 365,451$

Operating Income 392,321$ 392,321$ 392,321$ 425,632$ 425,632$ 425,632$ 314,565$ 314,565$ Less: D&A 169,621$ 169,621$ 169,621$ 184,023$ 184,023$ 184,023$ 136,003$ 136,003$ EBIT 222,700$ 222,700$ 222,700$ 241,609$ 241,609$ 241,609$ 178,562$ 178,562$ Less: Income Taxes 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ NOPAT 139,700$ 139,700$ 139,700$ 158,609$ 158,609$ 158,609$ 95,562$ 95,562$

Operating Income

Total CAPEX 53,000$ 53,000$ 53,000$ 53,000$ 53,000$ 53,000$ 53,000$ 53,000$ Less: Change in WC 80,388$ 80,388$ 80,388$ 87,214$ 87,214$ 87,214$ 64,456$ 64,456$ Less: Taxes 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ 83,000$ After Tax UFCF 175,933$ 175,933$ 175,933$ 202,418$ 202,418$ 202,418$ 114,109$ 114,109$

PV of FCF 82,587$ 78,655$ 74,909$ 82,082$ 78,173$ 74,451$ 39,972$ 38,068$

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