Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
TORONTO, ONTARIO–(Marketwire – Feb. 6, 2012) – Detour Gold Corporation (TSX:DGC) (“Detour Gold” or the “Company”) is pleased to announce the closing of a mobile fleet equipment financing with Caterpillar Financial (“CAT Financial”). Pursuant to an amended and restated master purchase and lease agreement, CAT Financial will underwrite up to US$150 million in mobile fleet equipment financing to fund the Company’s acquisition of CAT mining equipment for the Detour Lake gold project in northeastern Ontario (the “Equipment Financing Facility”). This is slightly more than the increase of US$40 million to the US$105 million in mobile fleet equipment financing as announced in May 2011.
The Equipment Financing Facility will be used towards the acquisition cost of 23 CAT 795F – 322-tonne haul trucks, two rope shovels, two hydraulic shovels and ancillary equipment (the “Mobile Fleet”) with a value of approximately C$200 million of which a maximum of US$150 million will be underwritten by CAT Financial. Approximately C$76 million of the Mobile Fleet is related to pre-production mining equipment while the remainder relates to equipment which will arrive in 2012 but is only required subsequent to commercial production being achieved. The benefit of the lease (net of lease and interest payments) related to pre-production mining equipment is estimated at C$39 million and is reflected in the capital expenditure estimate of C$1.45 billion via a reduction in the total pre-production cost estimate.
The term of the Equipment Financing Facility is 5 years and will be secured by the Mobile Fleet. Title to the Mobile Fleet will transfer to the Company at the completion of the Lease and can be repaid without penalty at any time.
About Detour Gold
Detour Gold is a Canadian gold exploration and development company whose primary focus is to advance the development of its Detour Lake gold project, located in northeastern Ontario, towards production. Detour Gold’s shares trade on the Toronto Stock Exchange under the trading symbol DGC.
Forward-Looking Information
This news release contains certain forward-looking information as defined in applicable securities laws (referred to herein as “forward-looking statements”). Specifically, this news release contains forward-looking statements regarding the benefits and the use of the Equipment Financing Facility. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Detour Gold’s ability to predict or control and may cause Detour Gold’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. 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 Detour Gold’s July 27, 2011 short form prospectus and in the continuous disclosure documents filed by Detour Gold on and available at www.sedar.com.
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; the estimated timeline for the development of the Detour Lake gold project; the supply and demand for, and the level and volatility of the price of, gold; the results of the feasibility study and the assumptions on which the feasibility study is based; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; the receipt of necessary permits; 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. Detour Gold undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law. Certain information contained in this news release may be deemed “forward looking”. All statements in this news release, other than statements of historical fact, that address events or developments that Detour Gold or Trade Winds expect to occur, are “forward-looking statements”. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Detour Gold’s or Trade Winds’ ability to predict or control and may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements.
