TORONTO--(BUSINESS WIRE)-- Detour Gold Corporation (TSX: DGC) (“Detour Gold” or the “Company”) reports its operational and financial results for the third quarter of 2019. All amounts are in U.S. dollars unless otherwise indicated.

This release should be read in conjunction with the Company’s third quarter 2019 Financial Statements and MD&A on the Company’s website or on SEDAR. All references to non-IFRS measures are denoted with the superscript “0” and are discussed at the end of this news release.

Q3 2019 Highlights
• Safety metrics improving with a decline in the TRIFR for both employees and contractors with a 48% reduction from 2.27 in Q3 2018 to 1.17 in Q3 2019, a record low
• Increasing the lower end of 2019 gold production guidance range to 590,000-605,000 ounces and expecting to be towards the upper end of that range
• Gold production of 137,670 ounces in Q3 2019 in line with the forecast grade profile, compared to 151,402 ounces in Q3 2018
• AISC (0) of $1,198 per ounce sold and total cash costs(0) of $730 per ounce sold in Q3 2019, representing a 13% and 9% improvement, respectively, compared to Q3 2018 results of $1,377 and $798 per ounce sold, respectively
• Reducing 2019 AISC guidance range by $75 per ounce to $1,100-$1,175 per ounce and expecting to be towards the bottom end of that range and reducing 2019 total cash cost guidance from $790-$840 to $750-$790
• Free cash flow (0)of $37.5 million in Q3 2019 compared to $7.3 million in Q3 2018
• Net cash balance at the end of Q3 2019 of $44.2 million
• Operating cash flow per share of $0.50 in Q3 2019 compared to $0.47 in Q3 2018
• Strong positive block model reconciliation continues with ounces mined up 21.6% relative to mineral reserves
• Improving mill throughput with the mill regularly achieving the daily permit limit of 75 ktpd, leading the Company to elect to apply to increase the daily limit to 90 ktpd
• Adjusted net earnings (0)of $35.3 million ($0.20 per basic share) in Q3 2019 compared to adjusted net loss(0) of $1.5 million ($0.01 per basic share) in Q3 2018
• Net loss of $12.6 million ($0.07 per basic share) in Q3 2019 compared to net earnings of $12.7 million ($0.07 per basic share) in Q3 2018, including the pre-tax impact of $20.3 million ($0.11 per basic share) of impairment of long-term deposits (representing irrecoverability of estimated down payments on significant components of mobile equipment) resulting in a deferred tax recovery of $6.4 million, and the deferred tax impact associated with the amendment of the closure plan of $16 million ($0.09 per basic share)
• Cash and cash equivalents of$144.2 million at September 30, 2019 compared to $131.9 million at December 31, 2018 after repaying $150.0 million of principal payments against the credit facility, reducing the outstanding principal balance to $100.0 million
• The West Detour project final Environmental Study Report was filed in Q3 and the Company is in the process of consultation with all of the relevant stakeholders
• Closure Plan amendment for Detour Lake mine was accepted by the Ontario government in November 2019 following posting of increased financial assurance

Mick McMullen, President and Chief Executive Officer, stated: “Q3 was a good operational quarter for the Company where we continued to deliver on guidance and look for improvements within the business. As we noted on our Q2 conference call, we expected the grade to be lower in Q3 and much stronger in Q4 and this is what we have seen.

Given the strength of the operating performance and improvements realized in the business year-to-date, we are lowering our cash cost and all-in sustaining cost guidance for the year and increasing the lower end of our production guidance.

During Q3, we continued to work on optimizing the mine plan, with the result that we have been able to reduce planned total expit tonnes relative to the 2018 LOM by 18 Mt in 2020 and 31 Mt in each of 2021 and 2022 while still filling the mill. This is a result of the continued strongly positive reserve reconciliation (21.6% more ounces year to date) and using discounted cash flows to plan the pit staging.

Despite the lower ounces produced quarter over quarter, we have made very good progress on reducing absolute costs and this quarter represents our highest ever cash cost margin per ounce.

Contractor management has improved significantly and based on the work to date we expect to save approximately C$15-$20 million per annum from 2020 onwards on contractor spend. This represents over C$300 million in value life-of-mine.

The work to reduce the maintenance back log in the plant along with the fragmentation project is paying dividends with the mill now regularly reaching its 75 ktpd permit limit and we will soon be applying to increase the mill permit to 90 ktpd. Amendments to the mobile equipment maintenance and repair contract are underway and a definitive agreement is expected in Q4, as a result of this amendment the Company expects to realize cumulative cash savings of over $25 million through 2022.

Subsequent to the end of Q3, we received approval for our updated Closure Plan from the Ontario government and have put in place surety bonds for this, rather than letters of credit, freeing up head room under our Revolving Credit Facility. The Closure Plan approval is a reflection of the hard work of our team who worked closely with the relevant government agencies and all of our Indigenous stakeholders.”

Q3 2019 Operational Results
• Safety metrics improving with a decline in the TRIFR to 1.17 for both employees and contractors. This is the lowest quarterly TRIFR in the Company’s history and is testament to the systems being put in place and the Company’s commitment to safety.
• Gold production totaled 137,670 ounces in Q3.
• Mill throughput was 5.6 Mt. Fragmentation improvements at the mine are making a positive impact at the mill (i.e. better crushing and grinding performance, and higher recovery).
• Head grade averaged 0.83 g/t with recoveries improving to 91.2%. The improvement in recovery is the result of completed and ongoing capital projects at the mill combined with better operating practices and a more uniform feed from fragmentation work in the pit. Head grades mined in the quarter were in-line with the mine plan and increased to 0.85 g/t towards the end of the quarter as we accessed higher grade zones resulting in an increase in gold-in-circuit of approximately 5,000 ounces that was subsequently poured in early Q4.
• A total of 26.3 Mt (ore and waste) was mined in Q3 (equivalent to mining rates of 286 ktpd). As a result of the positive block model reconciliation, which has resulted in approximately 26% more ore tonnes at slightly lower grade mined than the mineral reserves in the first nine months of 2019, there is no need to move as many waste tonnes to fill the mill.
• Run-of-mine stockpiles of 4.8 Mt grading 0.65 g/t (approximately 100,000 ounces) at the end of Q3, well above the planned stockpile balance due to the strong reserve reconciliation.

Detour Lake Operation Statistics
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