Detour Gold Corp DRGDF

RE:Sustaining Capital: Timing

[bengram]

shermandrock, what am I missing here?

$850 cash costs/ounce

+ (131 - 45 + 19 + 3) / 475K ounces of production in 2014

This comes out to $1,077/ounce. Still producing cash over the course of the year

But I'd argue that the full $131MM of CAPEX this year is cash ($10MM of maintenance and $35MM of stripping are true cash expenditures but are being capitalized) plus a few million of SG&A is stock options.

I get something closer to $1,163/ounce for the year. 

I agree with your comment that for a miner with a long-lived project like DGC, you need to look longer term. But given the leverage and the lower than desirable cash position, I think it is appropriate to be concerned about the next couple of quarters.

If you were going to analyze DGC on a quarter-by-quarter basis you need to be aware that 2014 CAPEX will be weighted to the first half of the year while production will be weighted towards 2H. I'm getting all-in costs in the low $1,200s for the first two quarters. 

I still like DGC as a long-term play, but results in 1Q and 2Q are going to be crucial