PRECIOUS METALS

Detour reports net loss, flags higher costs

Under-pressure miner reports on costly quarter

Staff reporter
Under-pressure miner reports on costly quarter

Under-pressure miner reports on costly quarter

The under-pressure miner reported net earnings of $12.7 million for the September quarter but an adjusted net loss of $1.5 million.

It expects to be within its 2018 production guidance of 595,000-635,000 ounces but said total cash costs could be "slightly above" the forecast $700-$750/oz.

The company produced 151,402 ounces from its Detour Lake mine in Ontario for the period, at total cash costs of $798/oz and an all-in sustaining cost of $1,377/oz.

It achieved an average realised price of $1,214/oz.

Detour put the higher cash costs down to the timing of gold sales, higher contractor and maintenance costs and higher consumable costs.

It said the AISC reflected higher operating costs, sustaining capex of $53 million and deferred stripping costs of $21.8 million.

The company has been fending off pressure from shareholder Paulson & Co, which has called for Detour shareholders to be given the opportunity to oust the entire board, saying it was frustrated with "the company's inability to appropriately manage shareholders' assets".   

Detour did not refer to the stoush in its results but COO Frazer Bourchier said the company anticipated "efficiency improvements with sustainable benefits to continue over the next 18 to 24 months".

"The mine and mill performance highlight progressive quarterly improvements throughout the year, with the highest mining rates achieved over a quarter since operations commenced," he said.

The company said it had advanced on several "key strategic operational improvements", including appointing a mine general manager and completing an in-depth audit of plant operations, maintenance and mining.

The company reported cash and equivalents of $156.3 million at the end of September and said its revolving credit facility had been extended by one year to July 2022.

Detour shares have lost more than 27% of their value this year, closing yesterday at C$10.78 to capitalise it at C$1.9 billion.

 

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