Detour Gold (DGC-T) triggered the slump by updating its guidance for this year and its mine plan for the next several years. For 2018, Detour has trimmed its production forecast to a mid-range target of 615,000 ounces, down from 625,000 ounces. It is also boosting its all-in sustaining cost estimate to a mid-range target of $1,240 (U.S.) per ounce, well above the previous estimate of $1,100 (U.S.) per ounce. As a result, Detour is trimming its projection of free cash flow before financing to $55-million (U.S.) from $115-million (U.S.).
While Detour's new mine plan is only preliminary at this point -- the final version is expected in June -- the company says that it has been successful in smoothing gold production over the next five years, while boosting gold production over the period to 630,000 ounces per year from the 606,000 ounces projected in the previous plan. Unfortunately, Mr. Martin, president and chief executive officer, says that the "benefits are diminished" because of two factors. First, the company has had to boost its capital and operating cost estimates based on "new insights based on recent operational experience." (In other words, recent disappointment: Bay Street, like its Howe Street cousin, often masks bad news in highfalutin prose.) The other problem, a lack of support by an Aboriginal community, has required the company to defer production of about 150,000 ounces until after 2023.
The Toronto-based Mr. Martin, now 57, draws an annual base salary of $750,000 per year. He also got a $695,000 cash bonus last year. Mr. Kenyon, a 68-year-old Vancouverite, receives a modest sum in director's fees and a retainer for serving as the company's chairman. He no doubt enjoys being retained, as he pulled in $222,000 last year. |
