Le Lézard
Classified in: Mining industry, Business
Subjects: ERN, FVT

Detour Gold Reports 2017 Fourth Quarter and Year-End Results



TORONTO, March 8, 2018 /CNW/ - Detour Gold Corporation (TSX: DGC) ("Detour Gold" or the "Company") reports its financial results for the fourth quarter and year ended December 31, 2017. The Company previously released its fourth quarter and full-year 2017 operational results on January 16, 2018 and its 2017 mineral reserve and resource statement on February 22, 2018. All amounts are in U.S. dollars unless otherwise indicated.

Detour Gold (CNW Group/Detour Gold)

This news release should be read in conjunction with Detour Gold's audited consolidated Financial Statements and related notes and schedules for the year ended December 31, 2017, and related Management's Discussion and Analysis ("MD&A"), which are available from the Company's website (www.detourgold.com) under the Investors section and on SEDAR (www.sedar.com). All references to non-IFRS measures are denoted with the superscript "1" and are discussed at the end of this news release.

2017 Highlights

Q4 2017 Highlights

Subsequent Events

Selected Financial Information


2017

2016

2017

2016

(in $ millions unless specified)

Q4

Q4

Annual

Annual

Gold ounces produced

150,046

143,512

571,463

537,765

Gold ounces sold

156,293

144,668

561,974

527,727






Average realized price¹ ($/oz)

1,277

1,210

1,256

1,221

Total cash costs¹ ($/oz sold)

705

855

716

746

AISC¹ ($/oz sold)

989

1,132

1,064

1,007






Unit costs






Mining (C$/t mined)

2.99

3.25

2.89

2.89


Milling (C$/t milled)

10.51

8.74

9.63

9.78


G&A (C$/t milled)

3.43

3.46

3.37

3.36






Metal sales

200.0

176.6

707.8

658.3


Production costs

110.9

123.9

405.9

398.1


Depreciation and depletion

39.1

47.8

140.4

165.3

Cost of sales

150.0

171.7

546.3

563.4

Earnings from mine operations

50.0

4.8

161.5

94.9






Net earnings (loss)

16.7

(13.5)

88.2

(6.9)

Net earnings (loss) per share

0.10

(0.08)

0.50

(0.04)

Adjusted earnings (loss)¹

40.2

(6.0)

114.5

10.4

Adjusted earnings (loss) per share¹

0.23

(0.03)

0.66

0.06

Note: Totals may not add up due to rounding.

Q4 2017 Financial Review

Full Year 2017 Financial Review

Liquidity and Capital Resources

Financial Risk Management

Upcoming Events

The Company is evaluating the opportunity of improving its near-term gold production and cash flow profile by accelerating access to the higher grades currently being processed in 2021 and 2022. Management anticipates that the results of this assessment on its current LOM plan will be completed in the second quarter of 2018.

Conference Call  

The Company will host a conference call on Friday, March 9, 2018 at 9:00 AM E.T. where senior management will discuss the 2017 operational and financial results. Access the conference call as follows:

A playback will be available until April 9, 2018 by dialing 604-674-8052 or 1-855-669-9658 within Canada and the United States, using pass code 2102. The webcast and presentation slides will be archived on the Company's website.

Annual General Meeting of Shareholders

Detour Gold's Annual General Meeting of Shareholders will be held on May 3, 2018 at 2:00 PM E.T. in the St. Andrew's Lounge (27th Floor) of Vantage Venues at 150 King Street West in Toronto.

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, a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."

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. Detour Gold's shares trade on the Toronto Stock Exchange under the trading symbol DGC.

For further information, please contact:

Paul Martin, President and CEO
Tel: 416-304-0800

Laurie Gaborit, VP Investor Relations
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 (1)
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 and adjusted earnings (loss). Refer to Non-IFRS Financial Performance Measures in the Company's 2017 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, 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.

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 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


2017

2016


2017

2016








Gold ounces sold


156,293

144,668


561,974

527,727








Total Cash Costs Reconciliation







Production costs


$

110.9

$

123.9


$

405.9

$

398.1

Less: Share-based compensation


(0.4)

0.2


(1.7)

(3.0)

Less: Silver sales


(0.4)

(0.3)


(1.6)

(1.4)

Total cash costs


110.1

123.8


402.6

393.7

Total cash costs per ounce sold 


705

855


716

746








All-in Sustaining Costs Reconciliation







Total cash costs


$

110.1

$

123.8


$

402.6

$

393.7

Sustaining capital expenditures1


40.6

37.5


174.8

102.4

Accretion on decommissioning and restoration provision


-

-


0.2

0.1

Share-based compensation


0.4

(0.2)


1.7

3.0

Realized (gain) loss on operating hedges2


(1.8)

-


(6.2)

1.8

Corporate administration expense3


4.8

2.1


22.5

27.6

Sustaining exploration expenditures4


0.5

0.5


2.1

2.8

Total all-in sustaining costs


$

154.6

$

163.7


$

597.7

$

531.4

All-in sustaining costs per ounce sold 


$

989

$

1,132


$

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. 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 the MD&A. 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 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

2017

2016


2017

2016







Metal sales

$

200.0

$

176.6


$

707.8

$

658.3

Realized (gain) loss on gold contracts

-

(1.1)


(0.1)

(12.8)

Silver sales

(0.4)

(0.4)


(1.6)

(1.4)

Revenues from gold sales

$

199.6

$

175.1


$

706.1

$

644.1

Gold ounces sold

156,293

144,668


561,974

527,727

Average realized price

$

1,277

$

1,210


$

1,256

$

1,221

Less: Total cash costs per gold ounce sold

(705)

(855)


(716)

(746)

Average realized margin per gold ounce sold

$

572

$

355


$

540

$

475

 

Adjusted earnings (loss) and Adjusted basic earnings (loss) per share

Adjusted earnings (loss) and adjusted basic 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 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: 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 long-term debt and decommissioning and restoration provisions, impairment provisions and reversals thereof, and other non-recurring items. Adjusted basic earnings (loss) per share is calculated using the weighted average number of shares outstanding under the basic method of earnings (loss) per share as determined under IFRS.

1

Balance included in the statement of comprehensive earnings caption "Net finance cost". The related financial statements include a detailed breakdown of "Net finance cost".


Three months ended


Year ended


December 31


December 31

In millions of dollars, except where noted

2017

2016


2017

2016







Basic weighted average shares outstanding

174,838,628

174,574,001


174,699,112

173,530,610







Adjusted earnings and Adjusted basic earnings per share reconciliation







Net earnings (loss)

$

16.7

$

(13.5)


$

88.2

$

(6.9)

Adjusted for:







Fair value (gain) loss of the convertible notes1

-

(13.0)


(0.9)

4.6


Accretion on debt1

5.4

7.6


28.5

31.8


Accretion on decommissioning and restoration provision1

-

-


0.2

0.1


Non-cash unrealized (gain) loss on derivative instruments2

1.0

(4.5)


(0.5)

(1.7)


Foreign exchange (gain) loss1

1.3

0.6


(4.6)

-


Deferred income and mining taxes

15.8

16.8


3.6

(17.5)

Adjusted earnings (loss)

$

40.2

$

(6.0)


$

114.5

$

10.4

Adjusted basic earnings (loss) per share

$

0.23

$

(0.03)


$

0.66

$

0.06

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 (loss).

Additional IFRS Financial Performance Measures
The Company has included the additional IFRS measure "Earnings (loss) from mine operations" in the news release. Management noted that "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 income and costs, and taxation.

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"). These 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" 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. 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.

Specifically, this news release contains forward-looking statements regarding the Company completing an assessment to improve near-term gold production and cash flow profile by accelerating access to the higher grades currently being processed in 2021 and 2022 in the second quarter of 2018.

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, 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, 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 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 are likely to differ, and may differ materially, 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; 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 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 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.

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 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 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.

Information Containing Estimates of Mineral Reserves and Resources
The mineral reserve and resource estimates were prepared in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), as required by Canadian securities regulatory authorities. Readers are advised to refer to the latest AIF of the Company and other continuous disclosure documents filed by the Company available at www.sedar.com, for detailed information regarding the mineral reserve and resource estimates. For United States reporting purposes, the United States Securities and Exchange Commission ("SEC") applies different standards in order to classify mineralization as a reserve. In particular, while the terms "measured", "indicated" and "inferred" mineral resources are required pursuant to NI 43-101, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories constitute or will ever be converted into reserves. In addition, "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 be upgraded to a higher category. Under Canadian securities laws, issuers must not make any disclosure of results of an economic analysis that includes inferred mineral resources, except in rare cases.

SOURCE Detour Gold


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