DGC - Shares Heading Higher
Expert Analysis
John Hayes, BMO Capital Markets (10/24/11) "Detour Gold Corp. connected its Detour Lake gold project to the Ontario power grid. . .grid connection brings cost savings, as the company will no longer require diesel power. . .the company also announced the appointment of Drew Anwyll as director of operations. A mining engineer, Mr. Anwyll has over 20 years of international operating experience within the mining industry at both open-pit and underground mines. . .Detour's shares are trading at a 57% discount to our current 0% net-asset-value estimate of US$69.96/share."
Alex Terentiew, Credit Suisse (10/4/11) "Detour Gold Corp. continues its march towards production by Q113, on time and on budget; the project is now fully financed, and the high tonnage operation should benefit from the projected strength in gold prices. We expect ongoing exploration updates, and with the recent acquisition of Trade Winds, we expect that the company will focus on replacing lower grade tons in its resource with higher grade material. . .we are increasing our target price to CAD$46/share and maintain our rating at Outperform."
The Gold Report Interview with Steven Butler (10/3/11) "It's already booked a reserve of 13 Moz. and counting. It has raised all the required amount of capital that it needs to build the project. It is substantially advanced. The odds of M&A are not necessarily 100%, of course. For Detour, the attraction is that this deposit is already a large reserve at a conservative gold price and there is potential for Detour Lake to produce over 600 Koz./yr. when the mine starts up in less than two years.
The site construction is well underway. In a Jan. 11 update, the company said average annual production was 657 Koz./year. There is potential for it to be large enough to be of relevance to a number of other companies. Detour is trading at about 0.5 times net asset value (NAV), while the senior and intermediate group is trading at about 0.9 times NAV. This could be enough of a value spread whereby valuation and production accretion would make sense. . .[Detour has] the potential production on full rampup of over 600 Koz./yr., enough to move the dial for anybody."
Daniel Earle, TD Newcrest (9/27/11) "Pre-market yesterday, Detour Gold Corp. announced that it had entered into a definitive agreement to acquire Trade Winds Ventures. . .Trade Winds' principal asset is its interest in a 50/50 joint venture with Detour on the block A property, which is contiguous to the west of the Detour Lake Property. . .we maintain our 12-month target price of $50/share and reiterate our Speculative Buy recommendation: With project financing finalized, construction approximately 40% complete and permitting expected to conclude in the near future, Detour Gold should continue to trend to a premium multiple consistent with eventual upper mid-tier levels of gold production in what we consider to be an attractive mining jurisdiction."
Steve Parsons, National Bank Financial (9/26/11) "Detour Gold Corp.'s proposed acquisition of Trade Winds Ventures adds strategic land position and resources. . .once complete, the deal would add ~2.4 Moz. Au resources (Indicated & Inferred—Trade Winds' share). Most importantly, we see the acquisition as allowing Detour Gold to reinstate its aggressive drill program toward the western portion of the project, with the potential to restore the rapid rate of gold discovery. . .we reiterate our Outperform rating, $49.25 target price."