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.
•Annual gold production of 571,463 ounces, within mid-range of guidance of 550,000 to 600,000 ounces
•Revenues of $707.8 million on sales of 561,974 ounces of gold at an average realized gold price1 of $1,256 per ounce
•Earnings from mine operations of $161.5 million
•All-in sustaining costs ("AISC")1 of $1,064 per ounce sold, at mid-point of guidance of $1,025 to $1,125 per ounce sold
•Net earnings of $88.2 million ($0.50 per share) and adjusted earnings1 of $114.5 million ($0.66 per share)
•Year-end cash and cash equivalents of $134.1 million
•Closed $500 million bank debt facility
•Signed amended Impact Benefit Agreement with Taykwa Tagamou Nation to include the West Detour project
•Proven and probable reserves of 15.8 million ounces of gold at year-end
Q4 2017 Highlights
•Quarterly gold production of 150,046 ounces
•Revenues of $200.0 million
•Earnings from mine operations of $50.0 million
•AISC1 of $989 per ounce sold
•Net earnings of $16.7 million ($0.10 per share) and adjusted earnings1 of $40.2 million ($0.23 per share)
•Repaid $30 million on the revolver credit facility
•Signed amended Impact Benefit Agreement with Wahgoshig First Nation to include the West Detour project
Selected Financial Information
Q4 2017 Financial Review
•Fourth quarter revenues for 2017 were $200.0 million on the sale of 156,293 ounces of gold. Revenues in the current period benefitted from a higher amount of ounces sold and at a higher average realized gold price¹ of $1,277 per ounce, a $67 per ounce increase from the prior year period.
•Total cash costs¹ for the fourth quarter of 2017 were $705 per ounce sold, representing an 18% decrease from the prior year period. Lower total cash costs in the current period resulted from increased gold sales volumes from the processing of higher grade ore. As well, total cash costs in 2016 were impacted by additional costs associated with testing the processing of fines.
•Fourth quarter AISC¹ for 2017 decreased to $989 per ounce sold from $1,132 per ounce sold due to lower total cash costs and the timing of capital expenditures.
•Earnings from mine operations, net earnings and adjusted earnings all reflect higher revenues and lower total cash costs in the current period.
Full Year 2017 Financial Review
•Revenues for the full year 2017 totaled $707.8 million on the sale of 561,974 ounces of gold. The average realized gold price1 in 2017 was $1,256 per ounce versus $1,221 in 2016, as the Company realized market prices on its 2017 gold sales.
•Total cash costs¹ decreased to $716 per ounce sold in 2017 from $746 per ounce sold in 2016, driven by higher gold sales, modestly lower processing costs and there were no fines tested in 2017.
•AISC¹ increased by 6% to $1,064 per ounce sold in 2017, primarily as a result of higher planned sustaining capital expenditures. Sustaining capital expenditures in 2017 totaled $174.8 million and included deferred stripping costs of $34.4 million.
•Earnings from mine operations, net earnings and adjusted earnings for 2017 increased year-over-year, due to the factors impacting higher revenues and lower total cash costs described above.
Liquidity and Capital Resources
•The Company closed a $500 million credit facility in July 2017. The facility is comprised of a $300 million Revolving Credit Facility for a tenor of four years and a $200 million Term Loan for a tenor of three years.
•The convertible notes matured on November 30, 2017 and $320.5 million was repaid principally by drawing down on the credit facility plus interest owed.
•Debt was reduced during the year by $88 million, including a discretionary $30 million payment made in December towards its Revolving Credit Facility.
•As at December 31, 2017, the Company had $134.1 million of cash and cash equivalents, approximately $200 million available from its bank debt facility, and net debt of $166 million.
Financial Risk Management
•During 2017, the Company entered into a number of gold, foreign exchange and diesel derivative contracts. The total realized gain on these derivative instruments for 2017 was $6.1 million.
•As at December 31, 2017, the Company had $156 million of zero-cost collars to hedge its Canadian dollar costs in 2018 whereby it can sell U.S. dollars at an average rate of 1.25 and can participate up to an average of 1.32. This represents a hedge coverage ratio of approximately 25% for projected 2018 expenditures.
•The Company does not have any gold hedges as of March 8, 2018.
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.
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:
•Via webcast, go to www.detourgold.com and click on the "2017 Fourth Quarter and Year-End Results Conference Call and Webcast" link on the home page
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