Detour Gold Corporation (TSX:DGC) (“Detour Gold”
or the “Company”) reports its operational and financial results for
the third quarter of 2017. This release should be read in
conjunction with the Company’s third quarter 2017 Financial
Statements and MD&A on the Company’s website or on SEDAR. All
amounts are in U.S. dollars unless otherwise indicated.
In this news release, the Company uses the
following non-IFRS measures: total cash costs, all-in sustaining
costs (“AISC”), realized gold price, average realized margin,
adjusted earnings (loss), and adjusted earnings (loss) per basic
share. Refer to the Company’s MD&A and at the end of this news
release for an explanation and discussion of these non-IFRS
measures.
Highlights_______________________________________________________________________________________________________________________________
- Gold production of 139,861 ounces for the quarter and 421,417
ounces year to date
- Record mill throughput of 61,548 tpd and mining rate of 283,000
tpd
- Total cash costs of $668 per ounce sold and AISC of $1,032 per
ounce sold
- Revenues of $164.0 million on gold sales of 128,498 ounces at
an average realized price of $1,273 per ounce
- Earnings from mine operations of $46.7 million
- Net earnings of $41.1 million ($0.24 per basic share) and
adjusted earnings of $37.4 million ($0.21 per basic share)
- Cash and cash equivalents of $113.7 million at September 30,
2017
- Closed $500 million bank debt facility; drew down $300 million
from the facility and placed $329.3 million in escrow to repurchase
convertible notes maturing in November 2017
- Signed amended Impact Benefit Agreement with Taykwa Tagamou
Nation to include West Detour project
“Detour Lake
operation continued to improve with record mining and milling
rates, although gold production was at the lower end of our
projections for the quarter. We expect a strong fourth quarter gold
production to meet the mid-range of our annual guidance,” said Paul
Martin, President and CEO. “With a strong balance sheet and having
generated approximately $60 million of free cash flow before
financing activities in the first nine months of the year, the
Company now has the flexibility of further reducing debt in the
fourth quarter.”
Q3 2017 Summary Operational
Results_______________________________________________________________________________________________________________________________
- Gold production totaled 139,861 ounces for the third quarter,
mainly reflecting a lower than projected head grade.
- Mill throughput averaged a record 5.7 million tonnes (Mt)
during the third quarter. Head grade was 0.86 grams per tonne
(g/t), mainly impacted by unfavorable grade reconciliation in the
central portion of the orebody and higher mining dilution.
Mill recoveries averaged 90%.
- A total of 26.1 Mt (ore and waste) was mined in the third
quarter (equivalent to mining rates of 283,000 tpd). Both Phase 1
(including the Campbell pit area) and Phase 2 mining are on track
with the mine plan to achieve a total of 100 Mt this year.
|
Detour Lake Mine Statistics |
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|
YTD 2017 |
|
Q3 2017 |
|
Q2 2017 |
|
Q1 2017 |
|
Q4 2016 |
|
Q3 2016 |
|
Ore mined (Mt) |
15.1 |
|
5.4 |
|
4.9 |
|
4.8 |
|
5.8 |
|
5.0 |
|
Waste mined (Mt) |
58.0 |
|
20.6 |
|
20.4 |
|
17.0 |
|
15.0 |
|
18.5 |
|
Total mined (Mt) |
73.1 |
|
26.1 |
|
25.2 |
|
21.8 |
|
20.9 |
|
23.5 |
|
Strip ratio (waste:ore) |
3.9 |
|
3.8 |
|
4.2 |
|
3.6 |
|
2.6 |
|
3.7 |
|
Mining rate (k tpd) |
268 |
|
283 |
|
277 |
|
242 |
|
227 |
|
256 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore milled (Mt) |
16.4 |
|
5.7 |
|
5.5 |
|
5.2 |
|
5.5 |
|
5.2 |
|
Head grade (g/t Au) |
0.90 |
|
0.86 |
|
0.95 |
|
0.88 |
|
0.90 |
|
0.88 |
|
Recovery (%) |
89 |
|
90 |
|
90 |
|
89 |
|
90 |
|
87 |
|
Mill throughput (tpd) |
59,992 |
|
61,548 |
|
60,259 |
|
58,114 |
|
60,052 |
|
56,453 |
|
Mill operating time (%) |
87 |
|
88 |
|
87 |
|
85 |
|
86 |
|
84 |
|
Ounces produced (oz) |
421,417 |
|
139,861 |
|
150,138 |
|
131,418 |
|
143,512 |
|
127,758 |
|
Ounces sold (oz) |
405,681 |
|
128,498 |
|
142,970 |
|
134,213 |
|
144,668 |
|
113,845 |
|
|
|
|
|
|
|
|
|
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|
|
|
|
Average realized price ($/oz) |
$1,248 |
|
$1,273 |
|
$1,257 |
|
$1,216 |
|
$1,210 |
|
$1,281 |
|
Total cash costs ($/oz sold) |
$721 |
|
$668 |
|
$706 |
|
$788 |
|
$855 |
|
$802 |
|
AISC ($/oz sold) |
$1,092 |
|
$1,032 |
|
$1,123 |
|
$1,118 |
|
$1,132 |
|
$1,042 |
|
|
|
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|
Mining (Cdn$/t mined) |
$2.86 |
|
$2.84 |
|
$2.83 |
|
$2.92 |
|
$3.25 |
|
$2.66 |
|
Milling (Cdn$/t milled) |
$9.37 |
|
$8.29 |
|
$9.63 |
|
$10.26 |
|
$8.74 |
|
$11.74 |
|
G&A (Cdn$/t milled) |
$3.36 |
|
$3.26 |
|
$3.35 |
|
$3.46 |
|
$3.46 |
|
$3.46 |
Note: Totals may not add up due to rounding.
G&A includes costs related to agreements with Aboriginal
communities.
- Total cash costs of $668 per ounce sold in the third quarter.
The decrease from the prior quarter reflects lower milling costs,
partially offset by a less favorable exchange rate.
- AISC improved to $1,032 per ounce sold in the third quarter and
reflected sustaining capital expenditures of $39.3 million and
deferred stripping costs of $6.3 million.
- Sustaining expenditures included $14.8 million for mining
(mainly relating to the purchase of one haul truck and significant
components to the mobile fleet), $14.4 million for the construction
of the tailings facility, $2.2 million for processing, and $7.9
million for site infrastructure (mainly for the new camp).
Q3 2017 Financial
Review_______________________________________________________________________________________________________________________________
- Revenues for the third quarter were $164.0 million. The Company
sold 128,498 ounces of gold at an average realized price of $1,273
per ounce.
- Gold sales lagged gold production during the third quarter due
to the timing of gold pours and shipments. The gold in-circuit
inventory rose significantly at the end of the quarter as a result
of operational difficulties in stripping the gold. The circuit is
expected to return to normal levels in the fourth quarter at
approximately 25,000 ounces of gold.
- Cost of sales for the third quarter totaled $117.3 million,
including $30.5 million of depreciation (or $237 per ounce sold).
- Earnings from mine operations for the third quarter totaled
$46.7 million.
- Net earnings for the third quarter were $41.1 million ($0.24
per basic share). Adjusted earnings in the third quarter amounted
to $37.4 million ($0.21 per basic share) as a result of record
earnings from operations.
Liquidity and Capital
Resources_______________________________________________________________________________________________________________________________
- Cash and cash equivalents totaled $113.7 million at September
30, 2017.
- Funds of $329.3 million ($300 million drawn from credit
facility plus $29.3 million from cash balance) were placed on
deposit with the convertible note trustee in July. The holders of
the convertible notes will be paid at the maturity date of November
30, 2017.
- Company’s liquidity strengthened in the third quarter with cash
and undrawn credit facility amounting to $280 million.
|
Summary Financial Data |
|
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|
|
| (in $
millions unless specified) |
YTD 2017 |
Q3 2017 |
Q2 2017 |
Q1 2017 |
Q4 2016 |
Q3 2016 |
| Metal sales |
507.8 |
164.0 |
180.1 |
163.7 |
176.6 |
152.0 |
|
Production costs |
295.1 |
86.8 |
101.8 |
106.4 |
123.9 |
91.3 |
|
Depreciation |
101.2 |
30.5 |
35.6 |
35.1 |
47.8 |
35.5 |
| Cost of sales |
396.3 |
117.3 |
137.5 |
141.5 |
171.7 |
126.8 |
| Earnings from mine
operations |
111.5 |
46.7 |
42.6 |
22.2 |
4.8 |
25.2 |
| |
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|
| Net income (loss) |
71.5 |
41.1 |
24.4 |
6.0 |
(13.5) |
9.7 |
| Net
income (loss) per basic share |
0.41 |
0.24 |
0.14 |
0.03 |
(0.08) |
0.06 |
|
Adjusted earnings (loss) |
74.4 |
37.4 |
26.4 |
10.5 |
(6.0) |
1.3 |
| Adjusted
earnings (loss) per basic share |
0.43 |
0.21 |
0.15 |
0.06 |
(0.03) |
0.01 |
Note: Totals may not add up due to rounding.
Financial Risk
Management_______________________________________________________________________________________________________________________________
- As at September 30, 2017, the Company had $52.0 million of
zero-cost collars to hedge its Canadian dollar costs whereby it can
sell U.S. dollars at an average rate of 1.30 and can participate up
to an average rate of 1.40.
- As at September 30, 2017, the Company had 45,000 ounces of
zero-cost collars to protect its gold sales from October to
December 2017. The collars have an average range of $1,208 to
$1,342 per ounce.
- As at September 30, 2017, the Company had a total of 6.8
million litres of outstanding diesel contracts at an average rate
of $0.41 per litre, which will settle on a net basis.
Exploration
Update_______________________________________________________________________________________________________________________________
- The Company has completed the summer drilling program with
10,789 metres in 27 holes at Zone 58N targeting mainly the eastern
end of the deposit between vertical depths of 250 and 450 metres at
an approximate spacing of 35 metres.
- Approximately 4,000 metres of additional drilling at a closer
spacing is underway to better define the tonnage and grade
estimation of Zone 58N due to the high nuggety and coarse nature of
the gold. Evaluation of these results will assist in the completion
of the block model and subsequent mineral resource estimate.
- A 6,000 metre drilling program east of the current tailings
facility (TMA area) has been re-scheduled to 2018, targeting IP
anomalies and following up on the 2016 drilling results.
- An airborne geophysical survey totaling 5,570 line kilometres
was completed over the entire Burntbush grassroot property located
70 kilometres south of the Detour Lake mine. Preliminary review of
the results has identified 16 significant untested geophysical
anomalies. A prospecting and sampling program was completed to
follow up on the airborne EM (electromagnetic) anomalies,
historical mineral occurrences and areas of exposed bedrock.
2017
Outlook_______________________________________________________________________________________________________________________________
- Detour Gold is expected to attain the mid-range of its
annual guidance for production, total cash costs, and
AISC.
|
Gold production (oz) |
550,000-600,000 |
| Total
cash costs ($/oz sold) |
$690-$750 |
|
All-in sustaining costs ($/oz sold) |
$1,025-$1,125 |
- Mine plan is on target for approximately 100 Mt to be mined
from the Detour Lake pit in 2017 with the current available fleet
of six shovels and 32 haul trucks supported by the addition of a
ROM fleet.
- The Company has secured delivery of additional mining equipment
as it continues to position itself for higher tonnages in 2018 and
beyond. The Company has ordered its seventh shovel (CAT6060) and
two additional haul trucks (#33 and #34 CAT795), which are
scheduled to arrive at site at year-end.
- Projected capital expenditures for 2017 remain as previously
stated at approximately $160 to $180 million with higher
capitalized stripping costs.
- Provincial approval for the West Detour project is targeted for
mid-2018 (current life of mine plan requires approval by end of
2018).
Technical
Information_______________________________________________________________________________________________________________________________
The scientific and technical content of this
news release was reviewed, verified and approved by Drew Anwyll,
P.Eng., Senior Vice President, Technical Services and Guy
MacGillivray, P.Geo., Exploration Manager, Qualified Persons as
defined by Canadian Securities Administrators National Instrument
43-101 “Standards of Disclosure for Mineral Projects.”
Conference
Call_______________________________________________________________________________________________________________________________
The Company will host a conference call on
Thursday, October 26, 2017 at 10:00 AM E.T. where senior management
will discuss the third quarter operational and financial results.
Access the conference call as follows:
- Via webcast, go to www.detourgold.com and click on the “Q3 2017
Results Conference Call and Webcast” link on home page
- By phone toll free in Canada and the United States
1-800-319-4610
- By phone internationally 416-915-3239
A playback will be available until November 26,
2017 by dialing 604-674-8052 or 1-855-669-9658 within Canada and
the United States, using pass code 1729. The webcast and
presentation slides will be archived on the Company’s website.
About Detour
Gold_______________________________________________________________________________________________________________________________
Detour Gold is an intermediate gold producer in
Canada that holds a 100% interest in the Detour Lake mine, a long
life large-scale open pit operation.
For further information, please contact:
| Paul Martin, President
and CEO |
Laurie
Gaborit, Vice President Investor Relations |
| Tel: (416)
304.0800 |
Tel:
(416) 304.0581 |
Detour Gold Corporation, Commerce Court West,
199 Bay Street, Suite 4100, P.O. Box 121, Toronto, Ontario M5L
1E2
Non-IFRS Financial Performance
Measures The Company has included certain non-IFRS
measures in this news release. The Company believes that these
measures, 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.
The non-IFRS measures are defined below and are
reconciled with the reported IFRS measures. Refer to the Company’s
Third Quarter 2017 MD&A for full details. For other periods,
refer to the corresponding MD&A for details. The tables below
are in thousands of dollars, except where noted.
Total cash costs
Detour Gold reports total cash costs on a sales
basis. Total cash costs include production costs such as mining,
processing, refining and site administration, agreements with
Aboriginal communities, 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. The measure also includes other
mine related costs incurred such as mine standby costs and current
inventory write downs. Production costs are exclusive of
depreciation. Production costs include the costs associated with
providing the royalty in kind ounces.
All-in sustaining costs
The Company believes this measure more fully
defines the total costs associated with producing gold. The Company
calculates all-in sustaining costs as the sum of total cash costs
(as described above), share-based compensation, corporate general
and administrative expense, exploration and evaluation expenses
that are sustaining in nature, reclamation cost accretion,
sustaining capital including deferred stripping, and realized gains
and losses on hedges due to operating and capital costs, all
divided by the total gold ounces sold to arrive at a per ounce
figure.
Other companies may calculate these measures
differently as a result of differences in underlying principles and
policies applied. Differences may also arise to a different
definition of sustaining versus non-sustaining capital.
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Three months ended |
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Nine months ended |
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September 30 |
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September 30 |
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| In
thousands of dollars, except where noted |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gold ounces sold |
|
|
|
|
128 498 |
|
|
|
113
845 |
|
|
|
405 681 |
|
|
|
383
059 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Cash
Costs Reconciliation |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Production costs |
|
|
|
$ |
86 799 |
|
|
$ |
91
348 |
|
|
|
295 049 |
|
|
$ |
274
151 |
|
| Less: Share-based
compensation |
|
|
|
|
(558 |
) |
|
|
172 |
|
|
|
(1 303 |
) |
|
|
(3
196 |
) |
| Less: Silver sales |
|
|
|
|
(378 |
) |
|
|
(248 |
) |
|
|
(1 239 |
) |
|
|
(1 053 |
) |
| Total cash costs |
|
|
|
$ |
85 863 |
|
|
$ |
91 272 |
|
|
$ |
292 507 |
|
|
$ |
269
902 |
|
| Total cash costs per
ounce sold |
|
|
|
$ |
668 |
|
|
$ |
802 |
|
|
$ |
721 |
|
|
$ |
705 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| All-in
Sustaining Costs Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total cash costs |
|
|
|
$ |
85 863 |
|
|
$ |
91
272 |
|
|
$ |
292 507 |
|
|
$ |
269
902 |
|
| Sustaining capital
expenditures1 |
|
|
|
|
45 568 |
|
|
|
21
385 |
|
|
|
134 235 |
|
|
|
64
899 |
|
| Accretion
on decommissioning and restoration provision |
|
|
|
51 |
|
|
|
31 |
|
|
|
150 |
|
|
|
124 |
|
| Share-based
compensation |
|
|
|
|
558 |
|
|
|
(172 |
) |
|
|
1 303 |
|
|
|
3
196 |
|
| Realized (gain) loss on
operating hedges2 |
|
|
|
|
(5 145 |
) |
|
|
69 |
|
|
|
(4 437 |
) |
|
|
1 725 |
|
| Corporate
administration expense3 |
|
|
|
|
5 288 |
|
|
|
5 146 |
|
|
|
17 755 |
|
|
|
25 600 |
|
| Sustaining exploration
expenditures4 |
|
|
|
|
461 |
|
|
|
931 |
|
|
|
1 646 |
|
|
|
2 259 |
|
| Total all-in sustaining
costs |
|
|
|
$ |
132 644 |
|
|
$ |
118 662 |
|
|
$ |
443 159 |
|
|
$ |
367 705 |
|
| All-in sustaining costs
per ounce sold |
|
|
|
$ |
1 032 |
|
|
$ |
1 042 |
|
|
$ |
1 092 |
|
|
$ |
960 |
|
1 Based on property, plant and equipment
additions per the cash flow statement, which includes deferred
stripping. Non-sustaining capital expenditures included in the cash
flow statement have been excluded. Sustaining capital expenditures
includes the value of fully commissioned assets with deferred
payment terms. Non-sustaining capital expenditures primarily
relate to West Detour.
2Includes realized gains and losses on
derivative instruments related to operating hedges (foreign
exchange and diesel hedges only) as disclosed in the “Derivative
instruments” section of this document. These balances are included
in the statement of comprehensive earnings (loss), within caption
“net finance cost”.
3Includes the sum of corporate administration
expense, which includes share-based compensation, per the statement
of comprehensive earnings (loss), excluding depreciation within
those figures.
4Includes the sum of sustaining exploration and
evaluation expense, which includes share-based compensation, per
the statement of comprehensive earnings (loss), excluding
depreciation within those figures. Non-sustaining exploration and
evaluation expense, primarily relates to costs associated with Zone
58N, regional exploration, and Burntbush property.
Average realized price and Average realized
margin
Average realized price and average realized margin per ounce
sold are used by management and investors use these measures to
better understand the gold price and margin realized throughout a
period.Average realized price is calculated as metal sales per the
statement of comprehensive loss and includes realized gains and
losses on gold derivatives, less silver sales. Average realized
margin represents average realized price per gold ounce sold less
total cash costs per ounce sold.
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| |
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| |
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|
Three months ended |
|
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|
Nine months ended |
|
| |
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|
September 30 |
|
|
|
September 30 |
|
| In
thousands of dollars, except where noted |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Metal sales |
|
|
|
$ |
163 987 |
|
|
$ |
152 046 |
|
|
|
$ |
507 766 |
|
|
$ |
481 716 |
|
| Realized loss on gold
contracts |
|
|
|
|
(76 |
) |
|
|
(5 988 |
) |
|
|
|
(70 |
) |
|
|
(11 651 |
) |
| Silver sales |
|
|
|
|
(378 |
) |
|
|
(248 |
) |
|
|
|
(1 239 |
) |
|
|
(1 053 |
) |
| Revenues from gold
sales |
|
|
|
$ |
163 533 |
|
|
$ |
145 810 |
|
|
|
$ |
506 457 |
|
|
$ |
469 012 |
|
| Gold ounces sold |
|
|
|
|
128 498 |
|
|
|
113 845 |
|
|
|
|
405 681 |
|
|
|
383 059 |
|
| Average realized
price |
|
|
|
$ |
1 273 |
|
|
$ |
1 281 |
|
|
|
$ |
1 248 |
|
|
$ |
1 224 |
|
| Less: Total cash costs
per gold ounce sold |
|
|
|
|
(668 |
) |
|
|
(802 |
) |
|
|
|
(721 |
) |
|
|
(705 |
) |
| Average realized margin
per gold ounce sold |
|
|
|
$ |
605 |
|
|
$ |
479 |
|
|
|
$ |
527 |
|
|
$ |
519 |
|
Adjusted earnings and Adjusted basic earnings per share
Adjusted earnings and adjusted basic earnings
per share are used by management and investors to measure the
underlying operating performance of the Company. Presenting these
measures from period to period helps management and investors
evaluate earnings trends more readily in comparison with results
from prior periods.
Adjusted earnings is defined as net earnings
adjusted to exclude specific items that are significant, but not
reflective of the underlying operations of the Company, including:
fair value change of the convertible notes, the impact of foreign
exchange gains and losses, deferred income and mining taxes,
non-cash unrealized gains and losses on derivative instruments,
accretion on convertible notes, and decommissioning and restoration
provisions, impairment provisions and reversals thereof, and other
non-recurring items. Adjusted basic earnings per share is
calculated using the weighted average number of shares outstanding
under the basic method of loss per share as determined under
IFRS.
| |
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
| |
|
|
|
|
September 30 |
|
|
September 30 |
|
| In
thousands of dollars, except where noted |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic weighted average
shares outstanding |
|
|
|
|
174 735 263 |
|
|
|
174 487 277 |
|
|
|
174 652 096 |
|
|
|
173 180 274 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings and Adjusted basic earnings per
share reconciliation |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net earnings |
|
|
|
$ |
41 105 |
|
|
$ |
9 679 |
|
|
$ |
71 531 |
|
|
$ |
6 580 |
|
| Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair
value (gain) loss of the convertible notes1 |
|
|
|
|
(10 |
) |
|
|
(16 787 |
) |
|
|
(862 |
) |
|
|
17 577 |
|
| Accretion
on long-term debt1 |
|
|
|
|
7 731 |
|
|
|
7 913 |
|
|
|
23 081 |
|
|
|
24 249 |
|
| Accretion on decommissioning and restoration provision1 |
|
|
51 |
|
|
|
31 |
|
|
|
150 |
|
|
|
124 |
|
| Non-cash unrealized (gain) loss on derivative instruments2 |
|
|
|
330 |
|
|
|
(6 220 |
) |
|
|
(1 505 |
) |
|
|
2 810 |
|
| Foreign
exchange (gain) loss1 |
|
|
|
|
(3 194 |
) |
|
|
214 |
|
|
|
(5 872 |
) |
|
|
(551 |
) |
| Deferred
income and mining taxes |
|
|
|
|
(8 586 |
) |
|
|
6 491 |
|
|
|
(12 150 |
) |
|
|
(34 317 |
) |
| Adjusted
earnings |
|
|
|
$ |
37 427 |
|
|
$ |
1 321 |
|
|
$ |
74 373 |
|
|
$ |
16 472 |
|
| Adjusted basic
earnings per share |
|
|
|
$ |
0,21 |
|
|
$ |
0,01 |
|
|
$ |
0,43 |
|
|
$ |
0,10 |
|
1 Balance included in the statement of
comprehensive earnings (loss) caption “Net finance cost”. The
related financial statements include a detailed breakdown of “Net
finance cost”.2 Includes unrealized gains and losses on derivative
instruments as disclosed in the “Derivative Instruments” note in
the related financial statements. The balance is grouped with “Net
finance cost” on the statement of comprehensive earnings
(loss).
The Company has included the additional IFRS
measure:
Earnings (loss) from mine operations
Earnings (loss) from mine operations provides
useful information to investors as an indication of the Company’s
principal business activities before consideration of how those
activities are financed, sustaining capital expenditures, corporate
administration expense, exploration and evaluation expenses, loss
on disposal of assets, finance cost, and taxation.
Free cash flow before financing activities
Free cash flow before financing activities is
calculated as cash flow from operations less cash flow from
investing activities. It provides useful information to management
and investors as an indicator of the cash generated from the
Company’s operations before consideration of how those activities
are financed.
Forward-Looking Information
This press release contains certain forward-looking information as
defined in applicable securities laws (referred to herein as
“forward-looking statements”). Forward-looking statements relate to
future events or future performance and reflect current
expectations or beliefs regarding future events and include, but
are not limited to, statements with respect to: (i) the amount of
mineral resources and mineral reserves and exploration targets;
(ii) the amount of future production over any period; (iii)
assumptions relating to recovered grade, average ore recovery,
internal dilution, mining dilution and other mining parameters set
out in the technical reports, studies and disclosure of the
Company; (iv) assumptions relating to revenues, operating cash flow
and other revenue metrics set out in the Company's disclosure
materials (v) mine expansion potential and expected mine life; (vi)
expected time frames for completion of permitting and regulatory
approvals; (vii) future capital and operating expenditures; (viii)
future exploration plans; (ix) future gold prices; and (x) sources
of and anticipated financing requirements. All statements other
than statements of historical fact are forward-looking statements.
Often, but not always, forward-looking statements can be identified
by the use of words such as "plans", "expects", "is expected",
"budget", "scheduled", "estimates", "continues", "forecasts",
"projects", "predicts", "intends", "anticipates", "targets", or
"believes", or variations of, or the negatives of, such words and
phrases or state that certain actions, events or results "may",
"could", "would", "should", "might" or "will" be taken, occur or be
achieved.
Specifically, this press release contains
forward-looking statements regarding the Company’s expectation of a
strong fourth quarter gold production to meet the mid-range of
annual guidance; having flexibility of further reducing debt in the
fourth quarter; circuit to return to normal levels in the fourth
quarter at approximately 25,000 ounces of gold; holders of the
convertible notes being paid on November 30, 2017; attaining the
mid-range of its annual guidance for production, total cash costs,
and AISC; achieving 100 Mt mined from the Detour Lake pit in 2017;
Company’s seventh shovel and two haul trucks arriving at site at
year-end; capital expenditures of approximately $160 to $180
million; and provincial approval for the West Detour project
targeted for mid-2018.
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, a reduction in the Company’s available cash resources, the
uncertainties involved in interpreting geological data, risks
relating to variations in recovered grades and mining dilution,
variations in rates of recovery, changes or delays in mining
development and exploration plans, the success of mining,
development and exploration plans, changes in project parameters,
risks related to the receipt of regulatory approvals,
increases in costs, environmental compliance and changes in
environmental legislation and regulation, delays in the
consultation and permitting process for West Detour, 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
2016 AIF and in the continuous disclosure documents filed by Detour
Gold on and available on SEDAR at www.sedar.com.
Forward-looking statements in this press release
are also based on a number of assumptions which may prove to be
incorrect, including, but not limited to, assumptions about the
following: a constant gold price of $1,200/oz in 2017, a constant
diesel fuel price of C$0.70 per litre in 2017, a constant US/CAD
exchange rate of 1.30 in 2017 and a constant power cost of C$0.03
per kilowatt hour in 2017; the availability of financing for
exploration and development activities; operating and capital
costs; the Company’s available cash resources in 2017; the
Company's ability to attract and retain skilled staff; the mine
development and production schedule and related costs; dilution
control; 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 timing
and results of consultations with the Company’s Aboriginal
partners; the supply and availability of consumables and services;
the exchange rates of the Canadian dollar to the U.S. dollar;
energy and fuel costs; required capital investments; estimates of
net present value and internal rate of returns; the accuracy of
reserve and resource estimates, production estimates and capital
and operating cost estimates and the assumptions on which such
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.