Recent Developments

Recent Developments (at January 30, 2017)
Q4 & Full Year 2016 Summary

Detour Gold reported fourth quarter and full year 2016, 2017 guidance and an update on West Detour on January 30, 2017.

View the related press releases:
Q4 & Full Year 2016/ 2017 Guidance
West Detour Update

2016 Fourth Quarter and Full Year Operational Results

  • Gold production of 143,512 ounces in the fourth quarter bringing total gold production to 537,765 ounces for the year, in line with revised guidance of 525,000 to 545,000 ounces.
  • In the fourth quarter, the mill facility processed a record 5.5 million tonnes (Mt) of ore at an average grade of 0.90 g/t with average recoveries of 90%. For the year, the mill processed 20.8 Mt of ore as planned, an increase of 1 Mt over the prior year. Head grade of 0.90 g/t and recoveries of 89% were below plan for the year by 6% and 2%, respectively.
  • A total of 20.9 Mt (ore and waste) was mined in the fourth quarter (equivalent to mining rates of 227,000 tpd), below plan mainly as a result of lower shovel availability. The Campbell pit recovery plan which started in September remained on target at year-end. For the year, a total of 87.4 Mt was mined, approximately 9.3 Mt below plan.
  • At the end of December, run-of-mine stockpiles stood at 7.0 Mt grading 0.65 g/t (approximately 145,000 contained gold ounces).
  • From September to year-end, the Company conducted a large-scale test where it crushed and screened approximately 1.9 Mt of low and medium grade stockpiles (average grade of approximately 0.48 g/t) to <2 inches. The screened portion (<2 inches), equivalent to 665,000 tonnes, was processed through the mill at an estimated grade of 0.79 g/t (or 65% grade improvement). The other crushed material generated during this process can be used for the tailings and road construction. The Company will evaluate these results along with the prior testwork to assess the best approach of integrating the fines in the operations.

2016 Detour Lake Mine Operation Statistics:

  Q2 2016 Q2 2016 Q3 2016 Q4 2016 2016 2015
Ore mined (Mt) 7.3 5.5 5.0 5.8 22.3 23.0
Waste mined (Mt) 15.2 16.4 18.5 15.0 65.1 67.7
Total mined (Mt) 21.0 21.9 23.5 20.9 87.4 90.7
Strip ratio (waste:ore) 2.6 3.0 3.7 2.6 2.9 2.9
Mining rate (tpd) 231,000 241,000 256,000 227,000 239,000 249,000
Ore milled (Mt) 4.7 5.3 5.2 5.5 20.8 19.8
Head grade (g/t Au) 0.91 0.92 0.88 0.90 0.90 0.88
Recovery (%) 91 89 87 90 89 91
Mill throughput (tpd) 52,165 58,466 56,453 60,052 56,792 54,114
Mill operating time (%) 88 87 84 86 86 84
Ounces produced (oz) 127,136 139,359 127,758 143,512 537,765 505,558
Ounces sold (oz) 137,608 131,606 113,845 144,668 527,727 486,243

Note: Totals may not add due to rounding.

  • Sustaining capital expenditures for 2016 are estimated at approximately US$100 million, at the low end of the revised guidance of US$100-$110 million, and include approximately US$16 million for capital purchases originally planned in 2017-18 (including three CAT795 trucks, bringing the hauling fleet to 28 trucks at year-end). Capitalized stripping costs totaled approximately US$3 million. The Company incurred approximately US$2 million of non-sustaining expenditures for the development of West Detour.
  • AISC1 for 2016 are estimated at US$1,005 per ounce sold, within the revised guidance of US$970 to US$1,020 per ounce sold. For the fourth quarter, AISC1 are estimated at US$1,124 per ounce sold and were impacted by accelerated capital expenditures in the quarter.

2017 Guidance:

Gold production (oz) 550,000-600,000
Total cash costs (US$/oz sold)1 $690-$750
All-in sustaining costs (US$/oz sold)1 $1,025-$1,125
  • Gold production is expected to be between 550,000 and 600,000 ounces for 2017 with production being the lowest in the first quarter.
  • The mine plan calls for approximately 100 million tonnes (Mt) to be mined from the Detour Lake pit in 2017. Mining rates are expected to trend higher starting in the second quarter with the addition of a CAT6060 shovel and four CAT795 trucks, bringing the available fleet to six shovels and 32 trucks, supported by the addition of a new ROM fleet. The average waste to ore ratio for the year is estimated at 3.6:1. There are specific months during the year where this strip ratio will be above the life of mine pit average and stripping costs will be capitalized.
  • The Detour Lake operation is forecast to process 21 to 22 Mt of ore in 2017. Head grades are expected improve after the first quarter. The Company does not anticipate processing fines during the year and will continue to engineer its low-grade stockpiles (0.4-0.5 g/t) for future use.
  • 2017 AISC1 are expected to range from US$1,025 to US$1,125 per ounce sold, with total cash costs from US$690 to US$750 per ounce sold. Due to the variability of gold production and the timing of capital expenditures, the Company expects that the first quarter actual all-in sustaining costs will be significantly above the yearly guidance.
2017 Capital Expenditures (US$ millions)  
Mining $78
Processing 6
Tailings 40
Site infrastructure, G&A & other 31
Total sustaining 155
Capitalized stripping 14
Development 5
Total capital expenditures US$160-$180
  • Sustaining expenditures include an investment of approximately US$40 million for mining equipment to advance the Phase 2 mining and increase mining rates (one CAT6060 shovel, four CAT795 trucks and ROM fleet) and US$30 million of accelerated capital for the construction of Cell 2 of the tailings facility (US$9 million), the replacement of the contractor camp (US$17 million) and the lead nitrate project (US$4 million). Approximately US$23 million of these sustaining expenditures will be paid in 2018.
  • The Company is expected to incur non-sustaining expenditures of US$5 million for the development of West Detour.
Key assumptions used for the 2017 guidance include:
Gold price of US$1,200/oz CAD/US FX rate of 1.30
Diesel fuel price of C$0.70 per litre Power cost of C$0.03 per kilowatt hour

1This is a non-IFRS Performance measure. Refer to the MD&A corresponding financial reporting period for reconciliation or explanation.

Technical Information
The scientific and technical content of this news release has been reviewed, verified and approved by Drew Anwyll, P.Eng., Senior Vice President Technical Services, a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 “Standards of Disclosure for Mineral Projects”.

NI 43-101 Disclosure:
On January 25, 2016, Detour Gold announced an updated mine production plan for the Detour Lake project. The NI 43-101 compliant Technical Report for this update was filed on SEDAR on January 25, 2016. The report was prepared by the Detour Gold Technical Services Department, led by Drew Anwyll, Senior Vice President Technical Services, a Qualified Person (QP) under National Instrument 43-101.