Detour Gold Corporation (TSX: DGC): Long Life Large-Scale Open Pit Operation in Northern Ontario, Interview with Laurie Gaborit, VP of Investor Relations
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 5/23/2017
Detour Gold Corporation (TSX: DGC) is a Canadian intermediate gold producer that owns and operates the Detour Lake mine, a
long life large-scale open pit operation in the mining-friendly jurisdiction of northern Ontario. We learned from Laurie
Gaborit, VP of Investor Relations of Detour Gold, that they are expected to produce over 600,000 ounces a year for the next 20
years or so. Currently, Detour Lake is one of the largest gold producing mines in Canada, with reserves of over 16 million
ounces of gold and significant exploration potential on the property. Plans for 2017 include improving the mining rates and
continue infill drilling on the high grade Zone 58 N target, located 6 km south of the mill. The Company is in the process of
arranging up to $500 million in bank debt and currently has $133 million in cash.
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Laurie Gaborit, VP of Investor
Relations of Detour Gold. Laurie, could you give me an overview of Detour Gold.
Laurie Gaborit: Detour Gold operates one of the largest gold mines in Canada. We're an intermediate gold producer
expected to produce over 600,000 ounces for the next 20 years or so. The mine is located in Northeastern Ontario, just a few
hours Northeast of Cochrane and Timmins.
Dr. Allen Alper: That's great! Could you tell me a bit about your reserves and resources?
Laurie Gaborit: We have over 16 million ounces in reserves, which are the largest reserves for a Canadian producer. We
have another 5 million ounces in resources. That is why we have a long life asset and we have barely looked at the prospective
exploration potential of our property. We have a large property of 625 square kilometers. Our main focus is Zone 58 N, an
underground target from which we would truck the ore to our mill. We expect to do more drilling this summer and possibly have
a resource estimate at the end of the year.
Dr. Allen Alper: Sounds very good! Could you tell me a bit about your operations, the results you are getting and your
operating results?
Laurie Gaborit: We've just gone through the first quarter results and everything was online. We had already
telegraphed this would be the lowest production quarter for the year. Now we expect to make improvements progressively on the
operation and get higher production quarter to quarter. So we can reach our guidance of 550 to 600 thousand ounces for the
year. The biggest thing we need to focus on is executing on our mining rates. In the second quarter we'll have another shovel
operating for a total of 6 shovels with 30 haul trucks. We look forward to the process we are going to make in the second
quarter. Following that we should have two more haul trucks at the end of June.
Dr. Allen Alper: Excellent! Could you tell me a bit about your balance sheet?
Laurie Gaborit: We reduced our debt another $20 million in the first quarter. Now we have about $338 million left to
pay from the convertible notes. We just announced that we're progressing on refinancing those notes and our revolver facility
so we expect to have a bank debt facility of up to $500 million dollars in place by the end of the second quarter. Our balance
sheet is in good shape, ending the first quarter with $133 million in cash.
Dr. Allen Alper: That is excellent. Could you tell me a bit more about your plans for 2017?
Laurie Gaborit: There are two plans. One of them is to execute on our mine plan. As you know, we had to do a new life
of mine plan at the end of March, as a result of permitting delays for West Detour. The main focus is improving mining rates,
which will be done with our additional investment in capital towards mine equipment. In addition, we have engaged a third
party consulting firm to improve efficiencies at the mine operation and maintenance. We hope to start seeing results in the
second half of the year from those two activities.
Secondly, we are going to continue our exploration activities on the property. This summer we're planning a drilling program
for Zone 58 N and we're going to do more geophysics and drilling in the area of the tailings facility. Last year we acquired
Burntbush Property, which is about 70 kilometers to the south of Detour Lake property, and we plan to do an airborne physical
survey as an initial exploration activity.
Dr. Allen Alper: Sounds excellent. Could you tell our readers and investors a bit about yourself, your management team
and your board?
Laurie Gaborit: It has been the same management team since the end of 2013 and it has not changed at corporate office.
Our COO Pierre Beaudoin will be leaving the company at the end of the second quarter. The board is composed of nine members.
Michael Kenyon remains the Chair of the board. We all have one goal in mind, operational improvement at the mine and
delivering on our 2017 guidance.
Dr. Allen Alper: That sounds very good. Could you tell me a little bit about your capital structure?
Laurie Gaborit: Capital structure is quite simple. We have about 175 million shares outstanding and that should remain
about the same since the convertible notes will not convert in November.
Dr. Allen Alper: That sounds very good. What are the primary reasons our high-net-worth readers/investors should
consider investing in your company?
Laurie Gaborit: Detour Gold has a unique asset in gold space – long mine life and large production profile in a top
ranked jurisdiction. It is the only +500000 oz gold producer not controlled by a major. We have a competitive cost profile
relative to industry peers and significant potential for growth on its own large property.
Dr. Allen Alper: Sounds excellent! I think you have an excellent company.
http://www.detourgold.com/
Detour Gold Corporation
Paul Martin
President and CEO
(416) 304.0800
Laurie Gaborit
Vice President Investor Relations
(416) 304.0581
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