TORONTO, March 7, 2019 /CNW/ - Detour Gold Corporation
(TSX: DGC) ("Detour Gold" or the "Company") reports its
financial results for the fourth quarter and year ended
December 31, 2018. The Company
previously released its fourth quarter and full year 2018
operational results on January 15,
2019. All amounts are in U.S. dollars unless otherwise
indicated.
This release should be read in conjunction with the Company's
Audited Consolidated Financial Statements and corresponding
MD&A for the year ended December 31,
2018 filed on SEDAR and posted on the Company's website. All
references to non-IFRS measures are denoted with the superscript
"0" and are discussed at the end of this news release.
2018 Highlights
- Annual gold production of 621,128 ounces, above mid-point of
the annual guidance of 595,000 to 635,000 ounces
- Revenues of $776.0 million on
sales of 610,672 ounces of gold at an average realized gold
priceo of $1,268 per
ounce
- Earnings from mine operations of $145.7
million
- All-in sustaining costs ("AISC")o of $1,158 per ounce sold, below guidance of
$1,200 to $1,280 per ounce sold
- Net loss of $1.0 million
($0.01 per basic share) and adjusted
net earningso of $64.2
million ($0.37 per basic
share)
- Year-end cash and cash equivalents of $131.9 million
- Repaid $20.0 million on the
revolving credit facility
- Extended revolving credit facility by one year from
July 2021 to July 2022
- Updated LOM plan in June 2018
with technical report filed in November
2018
- Initial mineral resource estimate for Zone 58N
Q4 2018 Highlights
- Quarterly gold production of 158,200 ounces, representing best
ever quarterly production
- Revenues of $212.8 million on
sales of 172,935 ounces of gold at an average realized gold
priceo of $1,228 per
ounce
- Earnings from mine operations of $33.2
million
- AISCo of $1,102 per
ounce sold
- Net loss of $32.4 million
($0.19 per basic share) and adjusted
net earningso of $17.0
million ($0.10 per basic
share)
Subsequent Events
- Financial risk management programs established for gold sales,
Canadian dollar expenditures, and diesel fuel exposures for
2019
- Bill Williams appointed Interim
Chief Executive Officer on January 3,
2019 (following the voting results at the Special Meeting of
shareholders on December 13,
2018)
- Resignation of James Mavor,
Chief Financial Officer, effective April 15,
2019
- Resignation of James Gowans,
Director and Board Chair, effective March 6,
2019
- Appointment of Dawn Whittaker as
Interim Chair of the Board, to hold office until the Annual General
Meeting of Shareholders on June 5,
2019
Selected Financial Information
|
2018
|
2017
|
2018
|
2017
|
(in $ millions unless
specified)
|
Q4
|
Q4
|
Annual
|
Annual
|
Gold ounces
produced
|
158,200
|
150,046
|
621,128
|
571,463
|
Gold ounces
sold
|
172,935
|
156,293
|
610,672
|
561,974
|
|
|
|
|
|
Average realized
priceo ($/oz)
|
1,228
|
1,277
|
1,268
|
1,256
|
Total cash
costso ($/oz sold)
|
712
|
705
|
742
|
716
|
AISCo
($/oz sold)
|
1,102
|
989
|
1,158
|
1,064
|
|
|
|
|
|
Unit costs
|
|
|
|
|
Mining (C$/t
mined)
|
2.92
|
2.99
|
3.21
|
2.89
|
Milling (C$/t
milled)
|
9.65
|
10.51
|
10.81
|
9.63
|
G&A (C$/t
milled)
|
3.60
|
3.43
|
3.88
|
3.37
|
|
|
|
|
|
Metal
sales
|
212.8
|
200.0
|
776.0
|
707.8
|
Production
costs
|
125.9
|
110.9
|
457.7
|
405.9
|
Depreciation and
depletion
|
53.7
|
39.1
|
172.6
|
140.4
|
Cost of
sales
|
179.6
|
150.0
|
630.3
|
546.3
|
Earnings from mine
operations
|
33.2
|
50.0
|
145.7
|
161.5
|
|
|
|
|
|
Net earnings
(loss)
|
(32.4)
|
16.7
|
(1.0)
|
88.2
|
Net earnings (loss)
per share
|
(0.19)
|
0.10
|
(0.01)
|
0.50
|
Adjusted net
earningso
|
17.0
|
26.8
|
64.2
|
75.1
|
Adjusted net earnings
per shareo
|
0.10
|
0.15
|
0.37
|
0.43
|
Note: G&A unit
costs include costs related to agreements with Indigenous
communities. Totals may not add up due to rounding.
|
Q4 2018 Financial Review
- Fourth quarter revenues for 2018 were $212.8 million on the sale of 172,935 ounces of
gold at an average realized priceo of $1,228 per ounce.
- Total cash costso for the fourth quarter of 2018
were $712 per ounce sold,
representing an increase of 1% from the prior year period.
- Fourth quarter AISCo for 2018 was $1,102 per ounce sold compared to $989 per ounce sold from the prior year period,
reflecting higher sustaining capital expenditures, including
deferred stripping costs.
- Sustaining capital expenditures totaled $50.1 million for the fourth quarter, including
$22.9 million for mining (mainly for
major component replacements for the mobile fleet and two
excavators), $18.5 million for the
ongoing construction of the tailings facility, $6.6 million for the processing plant, and
$2.2 million for site infrastructure.
Deferred stripping costs totaled $11.0
million.
- Earnings from mine operations for the fourth quarter totaled
$33.2 million.
- Net loss for the fourth quarter was $32.4 million ($0.19 per basic share). Adjusted net
earningso for the fourth quarter amounted to
$17.0 million ($0.10 per basic share).
Full Year 2018 Financial Review
- Revenues for the full year 2018 totaled $776.0 million on the sale of 610,672 ounces of
gold. The average realized gold priceo in 2018 was
$1,268 per ounce versus $1,256 per ounce in 2017.
- Total cash costso increased to $742 per ounce sold in 2018 from $716 per ounce sold in 2017, mainly due to higher
diesel fuel costs and rope shovel repairs during the first half of
the year. As well, the Company incurred higher milling costs in the
first half of the year due to the maintenance and installation of a
new mantle which necessitated contractor ore crushing costs to
maintain mill throughput.
- AISCo increased by 9% to $1,158 per ounce sold in 2018 compared to 2017,
primarily attributable to higher sustaining capital expenditures
and total cash costs. AISC in 2018 were below the Company's
guidance of $1,200 to $1,280 per ounce sold because of the delay in
sustaining capital expenditures.
- Sustaining capital expenditures in 2018 amounted to
$180.0 million, including
$84.5 million for mining (mainly for
payments for haul truck and shovel purchases, and major component
replacements for the mobile fleet), $65.6
million for the ongoing construction of the tailings
facility, $16.1 million for the
processing plant, and $13.9 million
for site infrastructure, mainly for the new accommodation camp.
Deferred stripping costs totaled $47.5
million for the year.
- Sustaining capital expenditures were lower than guidance for
the year due to delays in the construction of Cell 2 of the
tailings facility, deferral of other discretionary capital, and a
weaker Canadian dollar than budgeted.
- Earnings from mine operations for the year totaled $145.7 million.
- Net loss for 2018 was $1.0
million ($0.01 per basic
share). Adjusted net earningso for 2018 amounted to
$64.2 million ($0.37 per basic share).
Liquidity and Capital Resources
- Revolving credit facility extended by one year, from
July 2021 to July 2022.
- A discretionary $20 million
payment was made in 2018 towards the revolving credit
facility.
- As at December 31, 2018, the
Company had $131.9 million of cash
and cash equivalents, and approximately $221.3 million available and undrawn from its
$500 million Credit Facility.
Financial Risk Management
The Company has established financial risk management programs
for its 2019 gold sales, Canadian dollar expenditures, and diesel
fuel requirements. These programs are in place to reduce a portion
of the Company's exposure to volatile markets and to lock-in known
rates for budgeting purposes. As at February
28, 2019, the Company has the following positions:
- 222,000 gold ounces of collars on approximately 45% of the
Company's remaining 2019 gold sales at an average floor price of
$1,250 per ounce and participation up
to an average ceiling price of $1,423
per ounce. These collars mature relatively evenly over 2019.
- $300 million of collars that
allow the Company to sell U.S. dollars at no worse than 1.27 and
have upside to 1.35. These collars mature relatively evenly over
2019. These contracts along with other spot transactions completed
in January and February have secured prices for approximately 60%
of the Company's estimated 2019 Canadian
dollar requirements.
- 28.3 million litres of diesel fuel contracts at an average rate
of C$0.85 per litre, which settle on
a net basis. These contracts are predominantly weighted in the
first nine months of 2019 and represent approximately 45% of the
Company's diesel fuel requirements for the remainder of 2019.
Proxy Contest Costs and Deemed Change of Control
On July 26, 2018, Paulson &
Co. Inc. ("Paulson") requisitioned a Special Meeting of
shareholders and nominated eight Directors. The Special Meeting was
held on December 13, 2018.
At the Special Meeting, five of Paulson's nominees were elected
to the nine member Board. These nominees had not been
nominated by Management. As the Paulson nominees represented a
majority of the Directors on the Board, this resulted in a deemed
change of control under the Company's Share Option Plan, Restricted
Share Unit Plan (covering both RSUs and PSUs) and certain
employment contracts. All previously granted share options held by
employees and former employees immediately vested and all
previously granted RSUs and PSUs under the Restricted Share Unit
Plan immediately vested, resulting in a compensation expense in the
period totaling $8.8 million. These
awards were settled in cash resulting in payments totaling
$12.3 million to certain employees
and former employees of the Company in December 2018.
In addition, the Company incurred $4.9
million of costs associated with the proxy contest in
relation to the engagement of third party advisors.
On February 11, 2019, the Company
and Paulson announced that both parties had agreed to a dismissal
of the court action that Detour Gold had commenced on July 24, 2018. As part of the agreement, both
parties agreed to provide releases of certain claims in respect of
the proxy contest, complaints made by the Company to Staff of the
Ontario Securities Commission, the court action and reimbursement
of certain costs claimed by Paulson of $2.6
million.
A breakdown of the expenses and cash outlays is as follows:
(in $
millions)
|
2018
Expense
|
Cash
Outlay
|
Stock options, RSUs
and PSUs
|
$8.8
|
$12.3
|
Detour Gold proxy
contest costs
|
4.9
|
4.9
|
Reimbursement of
Paulson's Costs
|
2.6
|
2.6
|
Total proxy
contest costs
|
$16.3
|
$19.8
|
Notes:
|
1.
|
Stock option, RSU and
PSU expense booked as follows: $7.9 in Corporate
administration and $0.9 in production costs.
|
2.
|
Proxy contest costs
booked in Corporate administration.
|
3.
|
Reimbursement of
Paulson's costs recorded in Corporate administration. Payment
occurred in February 2019.
|
Management has excluded $16.3
million of proxy contest costs from its AISC and adjusted
net earnings on the basis that these costs are non-recurring and
exceptional to the business. Refer to the "Non-IFRS Financial
Performance Measures" section later in this news release.
Resignation of Chairman
The Company announces that James
Gowans has resigned as a Director and Board Chair, effective
immediately to focus on his other professional commitments. The
Board has appointed Dawn Whittaker,
a current Director of the Company, as Interim Chair of the Board,
to hold office until the Annual General Meeting of Shareholders on
June 5, 2019.
2018 Year-end Mineral Reserves & Resources
The mineral reserves at December 31,
2018 were 15.4 million ounces of gold. The decrease from
year-end 2017 is attributable to mining depletion at the Detour
Lake mine. There was no change to the gold price assumption of
$1,000 per ounce at an exchange rate
of 1.00US:1.10CDN for estimating
mineral reserves. In 2018, there was no infill drilling
targeting the conversion to mineral reserves within the Detour Lake
pit and West Detour project. Based on the expected throughput rates
projected in the life of mine plan ("2018 LOM Plan"), the remaining
mineral reserve life of the Detour Lake operation is approximately
22 years as of December 31, 2018.
The measured and indicated resources increased to 4.4 million
ounces of gold with the addition of approximately 534,000 ounces of
gold in the indicated category from Zone 58N, located six
kilometres south of the Detour Lake mine. The inferred resources
increased by 136,000 ounces of gold from Zone 58N to approximately
1.3 million ounces of gold. Refer to the news release dated
July 25, 2018 for additional details
on the initial mineral resource at Zone 58N.
The mineral resources were estimated using a gold price
assumption of $1,200 per ounce at an
exchange rate of 1.00US:1.10CDN for
the Detour Lake operation (including West Detour project) and
$1,300 per ounce at an exchange rate
of 1.00US:1.25CDN for Zone 58N.
Additional details regarding mineral reserve and resource
estimation, including classification, key assumptions, parameters,
methods used, data verification procedures and associated risks are
provided in the Detour Lake Operation NI 43-101 Technical Report
which was filed in November 2018.
Refer to the mineral reserves and resources tables below for
more details.
Technical Information
The scientific and technical content of this news release was
reviewed, verified and approved by David
Londono, Operations Manager, a Qualified Person as defined
by Canadian Securities Administrators National Instrument 43-101
"Standards of Disclosure for Mineral Projects."
Annual General Meeting of Shareholders
Detour Gold's Annual General Meeting of Shareholders will be
held on June 5, 2019 at 2:00 PM E.T. in the St. Andrew's Lounge
(27th Floor) of Vantage Venues at 150 King Street West
in Toronto.
About Detour Gold
Detour Gold is a mid-tier gold producer in Canada that holds a 100% interest in the
Detour Lake mine, a long life large-scale open pit operation.
Detour Gold's shares trade on the Toronto Stock Exchange under the
trading symbol DGC.
For further information, please contact:
Bill Williams,
Interim CEO
|
Laurie Gaborit, VP
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 1E
|
Mineral Reserves
and Resources1, 8, 9
|
(Effective
December 31, 2018)
|
Proven and
Probable Mineral Reserves
|
Deposit
|
Proven
|
Probable
|
Proven and
Probable
|
Tonnes
|
Grade
|
Contained
Ounces
|
Tonnes
|
Grade
|
Contained
Ounces
|
Tonnes
|
Grade
|
Contained
Ounces
|
(Mt)
|
(g/t Au)
|
(K oz)
|
(Mt)
|
(g/t Au)
|
(K oz)
|
(Mt)
|
(g/t Au)
|
(K oz)
|
Detour Lake
(open pit)2, 3
|
83.3
|
1.24
|
3,324
|
331.6
|
0.92
|
9,846
|
414.9
|
0.99
|
13,170
|
West Detour (open
pit) 2, 3
|
1.9
|
0.96
|
60
|
59.0
|
0.94
|
1,783
|
60.9
|
0.94
|
1,843
|
West Detour
pit
|
1.9
|
0.96
|
60
|
53.0
|
0.94
|
1,596
|
54.9
|
0.94
|
1,656
|
North pit
|
-
|
-
|
-
|
6.0
|
0.98
|
187
|
6.0
|
0.98
|
187
|
LG
Fines4
|
-
|
-
|
-
|
22.6
|
0.59
|
431
|
22.6
|
0.59
|
431
|
Total
P&P
|
85.2
|
1.24
|
3,384
|
413.2
|
0.91
|
12,060
|
498.4
|
0.96
|
15,444
|
|
Measured and
Indicated Mineral Resources
|
Deposit
|
Measured
|
Indicated
|
Measured and
Indicated
|
Tonnes
|
Grade
|
Contained
Ounces
|
Tonnes
|
Grade
|
Contained
Ounces
|
Tonnes
|
Grade
|
Contained
Ounces
|
(Mt)
|
(g/t Au)
|
(K oz)
|
(Mt)
|
(g/t Au)
|
(K oz)
|
(Mt)
|
(g/t Au)
|
(K oz)
|
Detour Lake
(open pit)2, 3
|
16.4
|
1.35
|
713
|
65.0
|
1.10
|
2,290
|
81.4
|
1.15
|
3,003
|
West Detour (open
pit) 2, 3
|
0.3
|
0.93
|
9
|
30.6
|
0.88
|
870
|
31.0
|
0.88
|
878
|
West Detour
pit
|
0.3
|
0.93
|
9
|
28.5
|
0.88
|
806
|
28.8
|
0.88
|
815
|
North pit
|
-
|
-
|
-
|
2.1
|
0.93
|
64
|
2.1
|
0.93
|
64
|
Zone 58N5, 6,
7
|
-
|
-
|
-
|
2.9
|
5.80
|
534
|
2.9
|
5.80
|
534
|
Total
M+I
|
16.7
|
1.34
|
722
|
98.5
|
1.17
|
3,694
|
115.3
|
1.19
|
4,415
|
|
Inferred Mineral
Resources
|
|
Deposit
|
Inferred
|
|
Tonnes
|
Grade
|
Contained
Ounces
|
|
(Mt)
|
(g/t Au)
|
(K oz)
|
|
Detour
Lake (open pit)2, 3
|
33.6
|
0.79
|
855
|
|
West Detour (open
pit) 2, 3
|
9.3
|
0.95
|
282
|
|
West Detour
pit
|
9.2
|
0.95
|
280
|
|
North pit
|
0.1
|
0.85
|
2
|
|
Zone 58N5, 6,
7
|
1.0
|
4.35
|
136
|
|
Total
Inferred
|
43.9
|
0.90
|
1,273
|
|
Notes:
|
1.
|
The Company's mineral
reserve and mineral resource statement is classified in accordance
with the Canadian Institute of Mining, Metallurgy and Petroleum
("CIM") "CIM Definition Standards - For Mineral Resources and
Mineral Reserves" adopted by the CIM Council (as amended, the "CIM
Definition Standards") in accordance with the requirements of
National Instrument 43-101 "Standards of Disclosure for Mineral
Projects" ("NI 43-101"). Mineral reserve and mineral resource
estimates reflect the Company's reasonable expectation that all
necessary permits and approvals will be obtained and
maintained.
|
2.
|
Mineral reserves were
estimated using a gold price of $1,000/oz and mineral resources
were estimated using a gold price of $1,200/oz at a $US/$CDN
exchange rate of 1.10.
|
3.
|
Mineral reserves and
resources were based on a cut-off grade of 0.50 g/t Au.
|
4.
|
LG Fines (sourced
from material grading 0.40-0.50 g/t Au) classified as Measured and
Indicated were reported as Probable mineral reserves and included
in the mine plan. LG Fines, reported above, also included 1.7 Mt
averaging 0.45 g/t Au.
|
5.
|
Mineral resources for
Zone 58N reported at a cut-off grade of 2.2 g/t Au, using a gold
price of $1,300 per ounce and a $US/$CDN exchange rate of 1.25 with
an assumed mining dilution of 12%.
|
6.
|
High grade gold
assays were capped at values ranging from 20 to 120 g/t Au
depending on the domain.
|
7.
|
Interpolation
completed using 2 metre composites. The block grade estimate used
1-pass nearest neighbor (NN) and 4-pass Inverse Distance Cubed
(ID3) interpolation method. Block model uses block sizes of 5 x 3 x
5 metres.
|
8.
|
Mineral resources are
reported exclusive of mineral reserves. Mineral resources that are
not mineral reserves do not have demonstrated economic viability.
Mineral resources are constrained within an economic pit
shell.
|
9.
|
Totals may not add
due to rounding.
|
Qualified Persons
The Qualified Persons as defined by Canadian Securities
Administrators National Instrument 43-101 "Standards of Disclosure
for Mineral Projects" responsible for the mineral reserve and
resource estimates are detailed in the table below.
Mineral
Resources
|
|
|
Mauro Bassotti,
P.Geo
|
Director, Reserves
and Resources
|
Detour Lake
operation
|
Réjean Sirois,
Eng.
|
Vice President
Geology and Resources for G Mining Services Inc.
|
Zone 58N
|
Mineral
Reserves
|
|
|
David
Londono
|
Operations
Manager
|
Detour Lake
operation
|
Information Concerning Estimates of Mineral Reserves and
Resources
These estimates have been prepared in accordance
with the requirements of Canadian securities laws, which differ
from the requirements of United
States' securities laws. The terms "mineral reserve",
"proven mineral reserve and "probable mineral reserve" are Canadian
mining terms as defined in accordance with NI 43-101 and the CIM
Definition Standards. The CIM Definition Standards differ from the
definitions in the United States
Securities and Exchange Commission ("SEC") Guide 7 ("SEC Guide 7")
under the United States Securities Act of 1933, as amended. Under
SEC Guide 7, a "final" or "bankable" feasibility study is required
to report mineral reserves, the three-year historical average price
is used in any mineral reserve or cash flow analysis to designate
mineral reserves and the primary environmental analysis or report
must be filed with the appropriate governmental authority. In
addition, the terms "mineral resource", "measured mineral
resource", "indicated mineral resource" and "inferred mineral
resource" are defined in NI 43-101 and recognized by Canadian
securities laws but are not defined terms under SEC Guide 7 or
recognized under U.S. securities laws. U.S. investors are cautioned
not to assume that any part or all of mineral deposits in these
categories will ever be upgraded to mineral reserves. "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 by upgraded to a higher
category. Under Canadian securities laws, estimates of "inferred
mineral resources" may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. U.S. investors are
cautioned not to assume that all or any part of an inferred mineral
resource exists or is economically or legally mineable.
Accordingly, these mineral reserve and mineral resource estimates
and related information may not be comparable to similar
information made public by U.S. companies subject to the reporting
and disclosure requirements under the
United States federal laws and the rules and regulations
thereunder, including SEC Guide 7.
On October 31, 2018, the SEC
adopted final rules effecting a complete overhaul of the technical
disclosure requirements applicable to companies engaged in material
mining operations, including royalties. Upon effectiveness in 2021,
the new rules will replace the SEC's decades old guidelines, set
forth in SEC Guide 7. The new rules will bring the U.S. reporting
regime closer to global reporting standards, and will apply to all
SEC reporting companies except those that report exclusively under
the Canada-U.S. MJDS system.
Non-IFRS Financial Performance Measures
(o)
The Company has included certain
Non-IFRS measures in this document with no standard meaning under
International Financial Reporting Standards ("IFRS"): total cash
costs, all-in sustaining costs, average realized gold price,
adjusted net earnings and adjusted net earnings per basic share.
Refer to Non-IFRS Financial Performance Measures in the Company's
2018 MD&A for further information.
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.
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
below), 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, realized gains and losses on
hedges due to operating and capital costs, but excluding proxy
contest costs, all divided by the total gold ounces sold to arrive
at a per ounce figure.
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 Indigenous
communities, less 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 and
depletion. Production costs include the costs associated with
providing the royalty in-kind ounces.
All-in sustaining costs and total cash costs do not have any
standardized meaning whether under IFRS or otherwise and therefore
may not be comparable to other issuers. Accordingly, 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. These 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.
|
|
|
Three months
ended
|
|
|
Year ended
|
|
|
|
December
31
|
|
December
31
|
In millions of
dollars, except where noted
|
|
|
2018
|
2017
|
|
2018
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
Gold ounces
sold
|
|
|
172,935
|
156,293
|
|
610,672
|
561,974
|
527,727
|
|
|
|
|
|
|
|
|
|
Total Cash Costs
Reconciliation
|
|
|
|
|
|
|
|
|
Production
costs
|
|
|
$
|
125.9
|
$
|
110.9
|
|
$
|
457.7
|
$
|
405.9
|
$
|
398.1
|
Less: Share-based
compensation
|
|
|
(2.4)
|
(0.4)
|
|
(3.1)
|
(1.7)
|
(3.0)
|
Less: Silver
sales
|
|
|
(0.4)
|
(0.4)
|
|
(1.4)
|
(1.6)
|
(1.4)
|
Total cash
costs
|
|
|
$
|
123.1
|
$
|
110.1
|
|
$
|
453.2
|
$
|
402.6
|
$
|
393.7
|
Total cash costs per
ounce sold
|
|
|
$
|
712
|
$
|
705
|
|
$
|
742
|
$
|
716
|
$
|
746
|
|
|
|
|
|
|
|
|
|
All-in Sustaining
Costs Reconciliation
|
|
|
|
|
|
|
|
|
Total cash
costs
|
|
|
$
|
123.1
|
$
|
110.1
|
|
$
|
453.2
|
$
|
402.6
|
$
|
393.7
|
Sustaining capital
expenditures1
|
|
|
62.5
|
40.6
|
|
228.8
|
174.8
|
102.4
|
Accretion on
decommissioning and restoration provision
|
|
|
0.1
|
-
|
|
0.2
|
0.2
|
0.1
|
Share-based
compensation
|
|
|
2.4
|
0.4
|
|
3.1
|
1.7
|
3.0
|
Realized (gain) loss
on operating hedges2
|
|
|
-
|
(1.8)
|
|
0.1
|
(6.2)
|
1.8
|
Corporate
administration expense3
|
|
|
2.3
|
4.8
|
|
20.7
|
22.5
|
27.6
|
Sustaining
exploration expenditures4
|
|
|
0.3
|
0.5
|
|
1.3
|
2.1
|
2.8
|
Total all-in
sustaining costs
|
|
|
$
|
190.7
|
$
|
154.6
|
|
$
|
707.4
|
$
|
597.7
|
$
|
531.4
|
All-in sustaining
costs per ounce sold
|
|
|
$
|
1,102
|
$
|
989
|
|
$
|
1,158
|
$
|
1,064
|
$
|
1,007
|
1Based 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 include the value of
commissioned assets with deferred payments. Non-sustaining capital
expenditures primarily relate to the West Detour
project.
|
|
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, within caption "net finance cost".
|
|
3Includes
the sum of corporate administration expense, which includes
share-based compensation, per the statement of comprehensive
earnings, excluding depreciation and selected non-sustaining
activities within those figures. Non-sustaining activities include
proxy contest costs and vesting of RSUs, PSUs and options as a
result of the deemed Change of Control of the Company following the
Special Meeting of shareholders on December 13, 2018.
|
|
4Includes
the sum of sustaining exploration and evaluation expense, which
includes share-based compensation, per the statement of
comprehensive earnings, 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 earnings (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.
|
|
|
Three months
ended
|
|
|
Year ended
|
|
|
|
December
31
|
|
|
December
31
|
In millions of
dollars, except where noted
|
|
|
2018
|
2017
|
|
2018
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
Metal
sales
|
|
|
$
|
212.8
|
$
|
200.0
|
|
$
|
776.0
|
$
|
707.8
|
$
|
658.3
|
Realized (gain) loss
on gold contracts
|
|
|
-
|
-
|
|
-
|
(0.1)
|
(12.8)
|
Silver
sales
|
|
|
(0.4)
|
(0.4)
|
|
(1.4)
|
(1.6)
|
(1.4)
|
Revenues from gold
sales
|
|
|
$
|
212.4
|
$
|
199.6
|
|
$
|
774.6
|
$
|
706.1
|
$
|
644.1
|
Gold ounces
sold
|
|
|
172,935
|
156,293
|
|
610,672
|
561,974
|
527,727
|
Average realized
price per gold ounce sold
|
|
|
$
|
1,228
|
$
|
1,277
|
|
$
|
1,268
|
$
|
1,256
|
$
|
1,221
|
Less: Total cash
costs per gold ounce sold
|
|
|
(712)
|
(705)
|
|
(742)
|
(716)
|
(746)
|
Average realized
margin per gold ounce sold
|
|
|
$
|
516
|
$
|
572
|
|
$
|
526
|
$
|
540
|
$
|
475
|
Adjusted net earnings (loss) and Adjusted basic net
earnings (loss) per share
Adjusted net earnings (loss) and adjusted basic net earnings
(loss) 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 net earnings (loss) is defined as net earnings (loss)
adjusted to exclude specific items that are significant, but not
reflective of the underlying operations of the Company, including:
the impact of foreign exchange gains and losses, unrealized and
non-cash fair value gains and losses of financial instruments,
accretion on long-term debt, impairment provisions and reversals
thereof, and other unusual or non-recurring items (such as proxy
contest costs). The tax effect of adjustments, as well as the
impact of foreign exchange translation on non-monetary assets
related to deferred taxes, is presented in the income and mining
tax adjustments line.
Adjusted basic net earnings (loss) per share is calculated using
the weighted average number of shares outstanding under the basic
method of earnings per share as determined under IFRS.
|
|
|
Three months
ended
|
|
|
Year ended
|
|
|
|
December
31
|
|
|
December
31
|
In millions of
dollars and shares, except where noted
|
|
|
2018
|
2017
|
|
2018
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
|
175.1
|
174.8
|
|
175.1
|
174.7
|
173.5
|
|
|
|
|
|
|
|
|
|
Adjusted net
earnings (loss) and Adjusted basic net earnings (loss) per share
reconciliation
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
before taxes
|
|
|
$
|
(0.2)
|
$
|
32.4
|
|
$
|
74.8
|
$
|
91.8
|
$
|
(24.4)
|
Adjusted
for:
|
|
|
|
|
|
|
|
|
Fair value gain of the
convertible notes1
|
|
|
-
|
-
|
|
-
|
(0.9)
|
4.6
|
Non-sustaining
corporate administrative expense3
|
|
|
15.2
|
-
|
|
16.3
|
-
|
-
|
Accretion on
debt1
|
|
|
0.1
|
5.4
|
|
1.3
|
28.5
|
31.8
|
Non-cash unrealized
(gain) loss on derivative instruments2
|
|
|
8.6
|
1.0
|
|
10.3
|
(0.5)
|
(1.7)
|
Foreign exchange
(gain) loss1
|
|
|
3.1
|
1.3
|
|
5.2
|
(4.6)
|
-
|
Adjusted earnings
before taxes
|
|
|
$
|
26.8
|
$
|
40.1
|
|
$
|
107.9
|
$
|
114.3
|
$
|
10.3
|
|
|
|
|
|
|
|
|
|
Income and mining
taxes (expense) recovery
|
|
|
(32.2)
|
(15.8)
|
|
(75.8)
|
(3.6)
|
17.5
|
Income and mining tax
adjustments
|
|
|
22.4
|
2.5
|
|
32.1
|
(35.6)
|
(18.1)
|
Adjusted income
and mining tax expense
|
|
|
$
|
(9.8)
|
$
|
(13.3)
|
|
$
|
(43.7)
|
$
|
(39.2)
|
$
|
(0.6)
|
|
|
|
|
|
|
Adjusted net
earnings (loss)
|
|
|
$
|
17.0
|
$
|
26.8
|
|
$
|
64.2
|
$
|
75.1
|
$
|
9.7
|
Adjusted basic net
earnings (loss) per share
|
|
|
$
|
0.10
|
$
|
0.15
|
|
$
|
0.37
|
$
|
0.43
|
$
|
0.05
|
1Balance
included in the statement of comprehensive earnings caption "Net
finance cost". The related financial statements include a detailed
breakdown of "Net finance cost".
|
|
2Includes
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.
|
|
3Includes
proxy contest costs and vesting of RSUs, PSUs and options as a
result of the deemed Change of Control.
|
Additional IFRS Financial Performance Measures
The
Company has included the additional IFRS measure "Earnings from
mine operations" in the news release. The Company believes that
this measure 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 income
and costs, and taxation.
Cautionary Note regarding Forward-Looking
Information
This news release contains certain
forward-looking information and forward-looking statements, as
defined in applicable securities laws (collectively referred to
herein as "forward-looking statements"). Forward-looking statements
reflect current expectations or beliefs regarding future events or
the Company's future performance. 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.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the Company's
actual results, performance or achievements to differ materially
from those expressed or implied by such forward-looking statements.
All forward-looking statements, including those herein are
qualified by this cautionary statement. Accordingly, readers
should not place undue reliance on forward-looking statements. The
forward-looking statements in this news release speak only as of
the date of this news release or as of the date or dates specified
in such statements.
Inherent in forward-looking statements are risks, uncertainties
and other factors beyond the Company's ability to predict or
control. These risks, uncertainties and other factors
include, but are not limited to, the results of the life of mine
plan ("2018 LOM Plan"), 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, support of
the Company's Indigenous communities, interest rate and exchange
rate fluctuations, general economic conditions and other risks
involved in the gold exploration, development and production
industry, as well as those risk factors listed in the section
entitled "Description of Business - Risk Factors" in Detour Gold's
2017 Annual Information Form ("AIF") and in the continuous
disclosure documents filed by Detour Gold on and available on SEDAR
at www.sedar.com. Readers are cautioned that the foregoing list of
factors is not exhaustive of the factors that may affect
forward-looking statements. Actual results and developments and the
results of the 2018 LOM Plan are likely to differ, and may differ
materially or materially and adversely, from those expressed or
implied by forward-looking statements, including those contained in
this news release. Such statements are 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; results of operations; the Company's available cash
resources; 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 Indigenous 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 mineral reserve and mineral 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; and
general business and economic conditions.
The Company undertakes no obligation to update publicly or
otherwise revise any forward-looking statements 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.
SOURCE Detour Gold