ENP Newswire -
Release date- 01052014 -
This release should be read in conjunction with the Company's first quarter 2014 financial statements and MD&A report on the Company's website or on SEDAR. All amounts are in U.S. dollars unless otherwise indicated.
Q1 2014 Highlights
Gold production of 107,154 ounces
Total cash costs of
Net loss of
Signed a 6-year fixed rate electricity contract at
Closed equity financing for gross proceeds of
Cash and short-term investment balance of
The progressive ramp-up of the mill to 55,000 tpd (design capacity) in the fourth quarter will be the main driver for higher production and lower costs. With the progress made in the first quarter, we remain on track to meet our gold production guidance of 450,000 to 500,000 ounces at total cash costs of
Summary Operational Results
In the first quarter of 2014, gold production met expectations at 107,154 ounces. The mill processed 4.1 million tonnes (Mt) of ore at an average grade of 0.90 g/t with recoveries of 91%.
The mill facility processed an average of 45,282 tonnes of ore per day (tpd) in the first quarter with 80% availability versus the targeted rate of 82%.
During the first quarter, a total of 19.2 Mt was mined versus budget of 20.9 Mt with mining rates averaging 213,000 tpd. The 1.7 Mt shortfall resulted mainly from in-pit rehandling to advance the southwall pushback, which is expected to be completed this summer and will provide improved access to higher grade ore. In addition, one shovel was removed from the pit for 10 consecutive days for the processing of a higher grade stockpile to test grade control. Despite the shortfall the run-of-mine ore stockpiles increased by approximately 500,000 tonnes during the quarter for a total of 2.8 Mt grading 0.78 g/t.
Reconciliation of these measures is described at end of the press release and in the MD&A for the first quarter ended
Total cash costs for the first quarter of 2014 were
Unit operating costs totaled
Summary Financial Results
Revenues in the first quarter amounted to
The Company recorded a net loss of
Adjusted net loss(3) in the first quarter amounted to
Cash flow used in operating activities amounted to
Capital expenditures totaled
Liquidity and Capital Resources
Cash and cash equivalents were
Financial Risk Management
In accordance with the Company's gold sales risk management policy, management is permitted to enter into transactions to hedge up to 50% of the Company's 2014 forecasted gold sales. The policy was put in place to reduce gold price risk as the Company continues to ramp-up its operation to design capacity by the end of 2014.
2014 Exploration Program
The Company's initial 8,000 metre drilling program in the Lower Detour area, approximately 6 kilometres south of the
The Company has now completed the program with 14,874 metres in 40 holes and received assay results for approximately 30% of the program. Results of the entire program are anticipated to be released by the end of the second quarter.
A new mineralized system has been identified to the north of Zone 75 after following up on the high grade intercept of 17.3 g/t over 4.4 metres (DLD-13-075, last hole of the 2013 drilling program). Approximately 11,638 metres in 30 holes tested this new zone (referred to as Zone 58N). The mineralized system extends over a strike length of 300 metres and has been tested from surface to a depth of approximately 300 metres. The gold mineralization is found within an altered feldspar porphyry intrusive containing quartz and/or quartz-tourmaline veins with pyrite and visible gold.
The Company continues to focus on completing the ramp-up of the
Capital expenditures are expected to be higher in the second and third quarter as the construction of the tailings facility accelerates.
The Company maintains its gold production and cost guidance for 2014.
The Company will host a conference call on
By phone toll free in
By phone International 416-915-3239
To listen online, go to www.detourgold.com and click on the 'Q1 Results Conference Call and Webcast' link on home page
The conference call will be recorded and playback of the call will be available after the event by dialing toll free in
Annual General Meeting
Non-IFRS Financial Performance Measures
The Company has included certain non-IFRS measures in this press 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 MD&A for the three months ended
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.
Average realized price and Average realized margin
Management and investors use these measures to better understand the gold price and margin realized throughout a period. Average realized margin represents average realized price per gold ounce sold less total cash costs per gold ounce sold.
Adjusted net earnings (loss) and Adjusted basic net earnings (loss) per share
Adjusted net 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 net earnings (loss) are 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, non-cash unrealized gains and losses on derivative instruments including hedges, accretion on convertible notes, unwinding of discount on decommissioning and restoration, impairment provisions and reversals thereof and other non-recurring items.
Adjusted net earnings (loss) per share is calculated using the weighted average number of share outstanding under the basic method of earnings (loss) per share as determined under IFRS.
The Company has included the additional IFRS measure 'Earnings (loss) from mine operations' in the financial statements. 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 and exploration and evaluation expenses, finance income and costs, and taxation.
This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as 'forward-looking statements').
Specifically, this press release contains forward-looking statements regarding further improving mill availability and mine output to attain 2014 operational targets; the ramp-up of the mill to 55,000 tpd in the fourth quarter of 2014; production of between 450,000 and 500,000 ounces of gold at total cash costs of
Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond
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 discussed in the section entitled 'Description of Business - Risk Factors' in
Such forward-looking statements are also 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 ability to attract and retain skilled staff; the mine development schedule; 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 supply and availability of consumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource 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.
President and CEO
Tel: (416) 304.0800
Tel: (416) 304.0581
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