February 27, 2017

Q UIC RESEARCH REPO RT

Metals & Mining

Carmen Chen
Tracy Li
Charan Arulmani
Connor Steckly

Detour Gold: The Simple, One-Asset Mine We Need

Detour Gold Corporation is a Canadian gold producer headquartered

in Toronto. Their business is in the acquisition, exploration,
development, and operation of mines in Northern Ontario. Detour has
a 100% ownership interest in its flagship asset, the Detour Lake mine,
which is one of the largest gold-producing mines in the country.

Highlights

1. Investment Thesis I: Premium, High-Quality Asset

2. Investment Thesis II: Organic Growth Potential within Existing Assets

3. Investment Thesis III: Effective Cost Cutting and Deleveraging

Activities

4. Investment Thesis IV: Ideal Position for a Potential Acquisition

QUIC Research Reports focus on

emerging in vestment themes that
affect current portfolio companies
Current Price: $17.07 | Target Price: $22.33 | Stop Loss: $15 | Return: and companies under coverage.
30.8%

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Queens University 2017

QU IC Resear c h Repor t
February 27, 2017
Detour Gold: The Simple, One-Asset Mine We Need

Table of Contents

Business Overview 3

Industry Overview 4

Investment Theses

Investment Thesis I: Premium, High-Quality Asset 5

Investment Thesis II: Organic Growth Potential within Existing Assets 6

Investment Thesis III: Effective Cost Cutting and Deleveraging Activities 8

Investment Thesis IV: Ideal Position for a Potential Acquisition 9

Catalysts and Risks 11

Valuation

NAV Model 12

Comparables 13

Portfolio Implications 14

References 15

Appendices 16

February 27, 2017

QU IC Resear c h Repor t
February 27, 2017
Detour Gold: The Simple, One-Asset Mine We Need

Business Over view

Detour Gold Corporation is a Canadian gold
producer headquartered in Toronto. Their business
is in the acquisition, exploration, development, and
operation of mines in Northern Ontario. Detour has
a 100% ownership interest in its flagship asset, the
Detour Lake mine, which is one of the larg est go ld-
producing mines in the country.
Additionally, the company controls the Burntbush
property, which spans 494 squared kilometers and
can be found 70 kilometers south of the Detour
Lake Mine. Detour has plans on performing
electromagnetic surveys and field mapping to
explore this land in the future.
A primary focus for the company recently has been
in the area of exploration. In 2016, 36 holes were
drilled on the Lower Detour Trend, which is 25
kilometers of under-explored land on the Detour
Lake mine property. Additionally, 19 holes were
drilled in the eastern section of the property; the
company has plans in 2017 to trench along the
identified mineralization to determine the location
of unidentified gold.
Detour holds a near-surface gold deposit located 1
kilometer west of the main Detour Lake Mine that is
referred to as West Detour. The property is
estimated to contain a reserve of 1.5 million ounces.
The company has plans to develop this land so it
can produce gold and contribute to the overall
output of the Detour Lake Mine. Headwinds
regard ing obtaining the necessary permits to begin
development have delayed the start of this project
from an original date of 2018 to an expected date
of 2021.
The company generated annual revenues of $563
million and incurred a net loss of $163 million in
2015. Detour has a market capitalization of $2.3
billion with a Total Debt/EBITDA ratio of 3.3, a 25%
reduction from 2014 levels.

EXHIBIT I
Management Overview

Paul Martin James Mavor Pierre Beaudoin

Position President, CEO, Director Chief Financial Officer Chief Operating Officer

Annual Compensation $3,439,211 $1,702,395 $2,235,662

25+ years experience in 20+ years experience in 28+ years experience of

precious metals mining mining. VP Finance at international operating
& development. Detour before & development mining
Previously CFO at becoming CFO. Was VP experience. SVP Capital
Detour between 2013- and Treasurer at Barrick Projects with Detour in
Experience
2014. CFO of New Gold Gold in the past. Earned the past. 16 years with
Inc. prior to joining bachelor of Electrical Barrick Gold prior to
Detour. Engineering at Queens joining Detour.
University and is a CA
charter holder.

Source: Company Reports, Thomson One

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Detour Gold: The Simple, One-Asset Mine We Need

Industr y Over view

Introduction
The gold industry extracts minerals from the
ground for its gold content and is then processed
into bars, called bullion, either on-site or elsewhere.
Gold is primarily demanded by investors, electronic
manufacturing, jewelry, and central banks.
Success Factors
Rising inflation is beneficial for the gold industry as
it makes gold an attractive investment. Unlike
currencies, gold maintains its value in inflationary
environments, which acts as a hedge against
inflation.
In Canada, the strength of the dollar relative to
trading partners has an impact on the affordability
of products, meaning a weak Canadian dollar will
generate greater sales for domestic gold producers.
Global Supply & Demand
growth can be attributed to an increase in recycled
gold and net producer hedging (accelerated timing
of sales). The rally in global gold prices caused
recycled gold to be more appealing, which justifies
the growth in its supply of 17%. This growth was
offset by a stagnant growth in gold production.
However, higher gold prices is lik ely to increase
capital expenditure within the industry in the
coming years, which will increase development and
eventually total production.
In terms of the demand for gold, it grew at a
slightly slower rate of 2% in 2016. A surge in
demand for gold-backed ETFs lead the growth in
demand, while a slump in jewelry and central bank
demand offset growth. Demand from jewelry and
central banks was at a 7 and 6 year low,
respectively. The increase in gold prices during
2016 reduced the demand for jewelry. This was a
detriment fo r the demand of gold given it is a
primary input of jewelry.

The gold industry experienced overall gro wth in

global supply of 5% during the year of 2016. The

EXHIBIT II EXHIBIT III

Gold Price & Total Exploration Announcements 2016 Demand Growth by Segment

2,000 150 6,000

+660.2
5,000
1,500 -9.5 -17.9 -192.9
100 4,000 -347 +92.9
1,000 3,000
50 2,000
500 1,000
-
- -
Central Banks
Technology

Jewellery
Bar and Coin
ETFs & Similar

Net Change (2016 vs

2015

2016

2008 2009 2010 2011 2012 2013 2014 2015

2015)

Price of Gold ($/oz. LHS)

Significant Exploration Announcements

Source: World Gold Council

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Detour Gold: The Simple, One-Asset Mine We Need

Investment Thesis I: Long-life Premium Asset

With the scarcity in single-asset gold mines with
multi-million ounce reserves, Detour has an
incredibly valuable asset. The substantial size of the
mine is superior to several smaller mines because it
has the ability to deliver stable, predictable free
cash flow for over 20 upcoming years given its long
life. The mine has a reserve of 16.4 million ounces,
which is much larger than the flagship mines of
other Canadian mines. Additionally, the 620
squared kilometer property is located in the
politically-stab le geographical reg ion of Northern
Ontario.
Under the new Life of Mine (LOM) plan, the Detour
Lake Mine is expected to produce an annual output
of 617,000 ounces over the next three y ears. With
operational p erfo rmance enhancements, the mine
is estimated to have an annual production of
655,000 ounces over its 23-year useful life.
Another advantage of owning a property as large
as the Detour Lake M ine is that it p rovides ample
exploration projects. Exploration projects are the
basis of production growth. Detour has identified
opportunities to explore in the western and
northern sections of their main mine, and has
already begun drilling holes to identify new
mineralization in the lower and eastern sections of
the property. The overflow of potential pro jects to
undertake within the Detour Lake asset is likely to
uncover resources that were not originally
accounted for, which will increase the value of this
asset over time.
As indicated in Exhibit VI, all-in sustainable costs
(AISC) for the Detour Lake Mine have decreased
since inception and are expected to remain
stagnant into the future. Contrarily, gold production
has increased since inception and is expected to
remain at an annual output near the 600,000
ounces per year figure into the future, which does
not include the West Detour Mine. Overall, the
fundamentals of the mine continue to improve,
meaning the value offered from this asset acts as a
hedge to any unforeseen risks to Detours balance
sheet.

EXHIBIT VI EXHIBIT V
Detour Lake Output vs. All-in Sustainable Costs Detour Lake & West Detour Map Outlines

800 $1,600
Gold Production (koz)

700 $1,400
Northern Pit
600 $1,200
Costs (US$/oz)

500 $1,000
400 $800 West Detour
300 $600
200 $400 Detour Lake Mine
100 $200
- $0
2013 2015 2017E 2019E 2021E

Detour Lake (LHS) AISC (RHS)

Source: Desjardins Capital Markets Source: Company Reports

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Detour Gold: The Simple, One-Asset Mine We Need

Investment Thesis II: Organic Growth Potential within Existing Assets

The West Detour satellite deposit located 1
kilometre from the Detour Lake mine, was b eing
developed to start pre-stripping in early 2018 for a
2019 start up. The development has 1.5MM ounces
of gold in reserves. However, one of Detour Golds
aboriginal partners has requested that the
permitting process for the project be conducted
through the Federal Environment Assessment
process. After consideration of this request, Detour
has postponed production from the West Detour
Pit until after 2021. The Canadian Environmental
Assessment Agency (CEAA) has 45 days from the
filing of the request to decide if the assessment will
fall under provincial o r federal ju risdiction. The
difference between federal and provincial
jurisdiction will be: timeline of the project, public
participation, and increased ministry scrutiny. The
timeline for a federally overseen project is more
than two years a similar Ontarian project, the
EXHIBIT VI
Rainy River mine, took 815 days to be issued a
verdict.
However, besides the increased timeline there are
relatively few d rawbacks of pursuing the
assessment at the federal level. The Agency had
advised the company in 2015 that a federal process
would not be required, but is now obligated to
review the decision due to the request from the
indigenous band. A comprehensive study
completed by the CEAA in 2011 concluded that the
Detour Project would not cause significant adverse
environmental effects and since then the project
has not changed significantly. Detour Gold is
preparing a new life-of-mine (LOM) plan that
incorporates the deferring of mining in the West
Detour Pit to 2021, that is expected to effectively
utilize the mine. We believe the markets are over
exaggerating how detrimental the new LOM plan
will be to the mine.

Overview of Federal Environment Assessment

45 Days to distinguish
jurisdiction (Current
Stage)

Determination of Environmental Impact Environmental Impact

necessity of EA statement guidelines Statement

Environmental
Assessment or Review Final Decision
Panel

Source: Government of Canada

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Detour Gold: The Simple, One-Asset Mine We Need
Investment Thesis II: Organic Growth Potential within Existing Assets
The incorporation of West Detour into the 2016
LOM plan was important but does not negate the
value of the companys assets or the growth
pipeline that currently exists. The actual NAV impact
of the project was modest and the main benefit of
the operation was it helped de-risk the mine plan
by allowing for lower mining rates. The 2014 mine
plan called for aggressive mining rates, and West
Detour added a second source of ore while
boosting free cash flow by improving head grades
and lowering the strip ratio. However, West Detour
only represents 9% of total reserves at the Detour
Lake property and the company will still generate
strong free cash flow without the project.
EXHIBIT V
Detour Lake Pit (2018E and 2038E)
February 27, 2017
As part of the new LOM plan, Detour will be
focused on optimizing their 2019 to 2021
production, including an option to start p roducing
from the North satellite pit in the Detour Lake mine.
The companys objectives are to optimize the strip
ratio, take advantage of the 60,000 tonnes per day
processing plant, and not change the cut-off grade.
Detour Gold plans to increase its 2017 truck fleet by
one to 28, to increase the tonnes per annum from
100MM to 112MM. In addition, the company is
undergoing a 30,000-metre infill d rilling prog ram in
FY 2017 which will occur 250-450 meters below
surface. The company has also identified Zone 58N
in the Lower Detour region of its mine, which has
the potential to be a high-grade underground
mine.
EXHIBIT VI
Detour Lake Growth Prospects
7
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Detour Gold: The Simple, One-Asset Mine We Need
Investment Thesis III: Effective Cost Cutting and Deleveraging Activities
Year to date, Detour Gold has repurchased
$142MM convertible notes, in face value, reducing
the amount due at maturity in November 2017 to
$358MM. Management has highlighted they aim to
reduce the outstanding amount by $58MM prior to
maturity, which is a realistic target per the
companys estimated cash flows. In 2016,
management had repaid $142MM of debt and the
company had a Net Deb t/EBITDA multiple of 1.4x.
~65% of Detour Golds costs are in Canadian
dollars which acts a natural hedge against currency
price fluctuations. The firm ended FY 2016, with
$129MM of debt in their balance sheet.
The company expects to have $160-$180MM in
capital expenditures in FY 2017, in which $23MM
will be paid in 2018. At the end of Q3 2016, the firm
had ~$116MM in cash and cash equivalents. In
EXHIBIT VII
Debt Reduction ($MM) 2013 to 2017E
$700
$610
$520
$430
$340
$250
2013 2014 2015 2016 Nov-17
Source: Company Reports
February 27, 2017
terms of sustaining capital expenditures, 45% of the
spending will be used on the mine in FY 2017. The
next largest area of spending will be mining
equipment (23%). Improvements to the mill and the
capital expenditures at the West Detour
development will be 3% each. The firm has also
been steadily cutting cash and production costs
YoY which has helped increase margins and cash
flows. With a lower than planned capital
expenditure in FY 2017 and a high 2016 cash
balance of $129MM, Detour Gold will have enough
liquidity for the foreseeable future. These initiatives
that the company has partaken in will alleviate
concerns of an imminent capital raise. In addition,
the firm has exceptionally high recovery rates that
often are more than 90%. This allows the firm to
effectively extract gold from the ore that it mines
and mills.
EXHIBIT VIII
AISC and Margins ($/oz)
$1,400 $550
$500
$1,200 $450
$400
$1,000 $350
$300
$800 $250
AISC (RHS) Margin (LHS)
8
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Detour Gold: The Simple, One-Asset Mine We Need

Investment Thesis IV: Ideal Position for a Potential Acquisition

The prime suspects for a takeover of Detour Go ld
include: Agnico-Eagle, Barrick Gold, Goldcorp,
Kinross, Newcrest, and Newmont. According to
CIBC World Markets, Goldcorp is the most likely to
benefit from the acquisition of the company.
Detour Gold provides Go ldcorp with a health
improvement in asset mix, a meaningful production
transformation, and fits its new strateg ic initiatives.
A main aspect of the 2016 strategic shift for the
company was investment in juniors. Detour has the
potential to lift Goldcorps production by 15%-25%
from 2018E to 2027E. Detour could also dilute the
companys significant exposure to Penasquito in
Mexico and provide another long-life open-pit
asset in the portfolio. Barrick could also afford to
acquire Detour and the transaction would
strengthen Barricks near-term production profile.
All six acquirers could benefit in terms of
production profile and net present value, even with
a 50% premium in an all-share transaction. The
long-life nature of the Detour Lake mine results in a
growing importance within the p roduction mix for
all potential acquires and could offset possible
production decline in the future.

EXHIBIT IX
Market Capitalization and P/NPV of Acquirers
$20 4
$15
3
$10
2
$5
$0 1
Agnico Eagle Barrick Goldcorp Kinross Newcrest Newmont Detour

Market Cap ($B) (LHS) P/NPV (RHS)

EXHIBIT X
NPV Accretion of Acquirers
25% 22%21%
19%
20% 17%
14% 15%
15% 11%
9% 9% 9%
10% 6% 6%
5%

0%
Agnico Eagle Barrick Goldcorp Kinross Newcrest Newmont

30% Premium 50% Premium

Source: CIBC World Markets, Company Reports, Capital IQ

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Detour Gold: The Simple, One-Asset Mine We Need

Investment Thesis IV: Ideal Position for a Potential Acquisition

Goldcorp (TSX:G) is one of the most p rominent
holdings for the Metals and Mining sector. With the
leadership of David Garofalo, Goldcorp aimed to
have a strateg ic shift into focusing on: 1) NAV
accretion, 2) decentralization and cost-cutting, 3)
reinvestment of FCF, and 4) investment in junior
miners. A case study was completed to investigate
how accretive and lucrative an acquisition of Detour
could be for Goldcorp. As aforementioned, even
with a 50% p remium the acquisition would be
accretive to Goldcorp shareholders. Hence, in a
potential acquisition QUICS Metals and Mining
sector would dually benefit. Detour has the
potential to lift Goldcorps production by 15-25%
during 2018E to 2027E, while representing 21% of
the company using a 30% premium. The mining
expertise found at Goldcorp appears to be
compatible for Detour. Detour also helps dilute
Goldcorps significant exposure to Penasquito in
Mexico and provides another long-life open-pit
asset in the portfolio.

EXHIBIT XI

Goldcorp Gold Production after Acquisition of Detour (MM oz)

0
2005 2010 2015 2020 2025 2030

Canada Mexico Guatamala USA Dominican Republic Argentina Other Detour

Source: CIBC World Markets, Company Reports, Capital IQ

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Detour Gold: The Simple, One-Asset Mine We Need
Catalysts & Risks
Catalysts
1) Exploration Program
Detour Gold has begun significant exploration
projects in 2016 that will continue into the coming
years. Activ ities include drilling over 50 holes on
their Detour Lake Mine property and surveying land
on the Burntbush property. Plans to trench areas
where mineralization was found could uncover
resources that were not accounted for, which would
increase the reserve of the mine and increase its
value.
2) Operational Improvements
The opportunity to implement Continuous
Improvement Projects and optimize processes over
the 23-year life of its Detour Lake mine has the
potential to lower the overall costs of production,
which would grow margins.
3) West Detour Ore Softness
The ore that is will be extracted once the West
Detour mine is in operation is softer than ores
currently being mined. Soft o res can be processed
faster, which will result in lower costs and higher
outputs at Detours plant.
Risks
1) Price of Gold
The profitability of the Company depends heavily
on the world price of gold. The nature of gold
prices are volatile, and fluctuate for reasons beyond
Detours control. Factors influencing the price of
gold include: inflation, consumer confidence, and
exchange rates. Significant devaluation of gold
could force the Company to liquidate assets and/or
record an impairment on the value of its assets,
thus reducing the value of the company.
February 27, 2017
2) West Detour Development Issues
An important factor for Detours g rowth in
production moving forward is the development of
their West Detour mine. Recently, the Company was
denied a permit that was necessary to proceed with
development, delaying the project start date from
2018 to an expected date of 2021. Abo riginal
partners have requested the permit application to
be considered at the fed eral level instead of the
provincial level, which takes 2-3 years as opposed
to one year. Inability to obtain permits will hinder
Detours p rojected annual production of 655,000 oz
from the Detour Lake mine.
3) Currency Volatility
Being a Canadian company, Detours revenues have
benefitted from a weak Canadian Dollar in
comparison to the US Dollar. American buyers are
attracted to buying from Detour because of the
economical exchange rate. If this relation changes
and the Canadian Dollar strengthens, revenues will
decrease because Detour will not export as much of
its gold to its trading partners.
EXHIBIT XII
Historical Price of Gold ($/oz)
2,000
1,500
1,000
500
-
2007 2009 2011 2013
Source: World Gold Council
11
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Detour Gold: The Simple, One-Asset Mine We Need

Comparables P/NAV
Average P/NAV

2.5x
2.0x
1.5x 1.50
1.0x 1.07

0.5x
0.0x

Large Cap Mid Cap Small Cap Average Detour

The average P/NAV in a comparable set of companies is 1.5x. Detour Gold is currently trading at 1.07x. A
benchmark of 1.4x was selected as a conservative estimate.

NAV Output
NAV Summary Long-term Assumptions
Share Price (TSX:DGC) $17.07 Discount Rate 5.00%
FDSO 175.37 Gold (USD/oz) $1,200.00
Exchange Rate (USD/CAD) 1.35
Market Capitalization (CAD) $2,993.57 Implied Current P/NAV 1.07x
Adjustments (CAD) $57.91 2017E P/NAV 1.40x
Enterprise Value (USD) $3,051.47 Target Price $22.33

NAV based on after-tax UFCF

Ownership Discount NAV (USD NAV per
Asset
Interest Rate MM) share
Detour Lake 100.0% 5.0% 1,808.76 10.31

Gross Asset Value 1,808.76 10.31

- Debt 102.72 0.59
+ Cash and investments 160.63 0.92
NAV (USD) 2,072.11 11.82
NAV (CAD) 2,797.35 15.95

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Detour Gold: The Simple, One-Asset Mine We Need

Comparables Analysis
Comparable Companies
Gold - Senior Producers Market Enterprise EV / EBITDA P/CF Dividend Price / Earnings Net Debt/EBITDA
Cap ($MM) Value ($MM) LTM 2016E 2017E LTM Yield P/NAV 2016E 2017E 2016E 2017E EV/Reserves EV/R+R
Barrick Gold Corp. $29,838 $40,476 7.2x 7.8x 8.0x 3.4x 0.6% 2.1x 23.1x 23.2x 1.4x 1.4x $269 $147
Goldcorp Inc. $18,532 $21,973 11.8x 11.1x 9.9x 7.3x 0.5% 2.0x 43.7x 32.6x 1.7x 1.5x $226 $148
Agnico-Eagle Mines $10,195 $10,763 12.5x 13.0x 11.3x 8.8x 0.9% 1.7x 73.3x 44.6x 0.7x 0.6x $106 $74
B2Gold Corp. $4,236 $4,671 12.1x 11.5x 15.5x 5.9x - 1.3x 26.0x nmf 1.1x 1.4x $383 $173
Alamos Gold $3,146 $3,198 17.0x 15.2x 12.2x 7.5x 0.2% 1.5x nmf 50.0x 0.2x 0.2x $249 $75
IAMGOLD Corp. $2,576 $2,418 6.0x 6.3x 5.5x 4.0x - 1.0x nmf nmf 2.3x 1.5x $132 $53
Endeavour Mining $2,504 $2,585 9.5x 8.6x 7.8x nmf - 1.4x 23.9x 18.5x nmf nmf $299 $227
NovaGold Resources $2,450 $2,423 nmf nmf 0.0x nmf - 2.3x nmf 0.0x nmf nmf $557 $256
Torex Gold $2,150 $2,556 15.8x 9.1x 8.2x nmf - 1.1x 22.6x 22.1x 0.6x nmf $651 $316
New Gold, Inc. $2,014 $2,959 8.0x 7.5x 4.9x 4.5x - 2.0x 57.3x 20.3x 1.1x 1.0x $134 $84
Centerra $1,920 $2,369 4.6x 4.3x 4.1x 2.5x 2.4% 0.7x 9.6x 9.3x 0.7x 0.8x nmf nmf
Semafo $1,436 $1,175 6.1x 6.0x 7.0x 5.0x - 0.8x 21.4x 26.7x nmf nmf $1,367 $300
Mean $6,750 $8,131 10.0x 9.1x 7.9x 5.4x 0.9% 1.5x 33.4x 24.7x 1.1x 1.1x $398 $168
Median $2,540 $2,772 9.5x 8.6x 7.9x 5.0x 0.6% 1.5x 23.9x 22.6x 1.1x 1.2x $269 $148

Detour Gold Corporation $2,980 $3,267 11.2x 10.9x 10.3x 15.9x - 1.1x nmf nmf 0.7x 0.7x $711 $323

Detour Gold Co rporation (TSX:DGC) is currently trad ing at a p remium on an EV/EBITDA basis in a LTM
(11.2x), 2016E (10.9x), and 2017E (10.3x) compared to an industry average of 10.0x, 9.1x, and 7.9x
respectively. The premium is due to the fact that the industry peer-set includes more stable, larger names
such as Barrick Gold and Goldcorp. On a P/NAV basis, DGC trades at a significant discount. For an asset-
centric firm like DGC, this discount is due to recent negative news events and is overplayed by the market
such as the West Detour problems. The asset has historically traded at 1.4x-1.5x P/NAV.

Target Price

Credit Suisse $21.00

Desjardins $21.50

QUIC $22.33

BMO Capital $23.00 Target Price

Current Price $17.07
CIBC $24.00 12-Month Target Price $22.33
Price Return 30.8%
National Bank $25.00
Dividend Yield -
Canaccord Genuity $26.50 Total Implied Return 30.8%

Paradigm Capital $27.50

Average $29.67

RBC Capital Markets $35.00

Based on a NAV with a target P/NAV of 1.4x the implied share p rice is $22.23 which has an implied return
of 30.8%. Compared to the analyst average of $29.67, QUICs model is very conservative.

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Detour Gold: The Simple, One-Asset Mine We Need

Portfolio Implications
EXHIBIT XIII

Pro-forma Portfolio

Lundin Mining Goldcorp

Corporation Inc. Franco-Nevada Goldcorp
Franco-
10% 8% Corporation, Tahoe Inc.
Nevada
28% Resources 11%
Corporation,
Inc. 24%
11%

Tahoe
Resources
CCL
Inc. Industries
9% Inc.
CCL Teck 14%
Industries Silver Resources Silver
Detour Gold
Inc. Wheaton Limited Wheaton
24%
14% Corp. 18% Corp.
13% 16%

Source: Capital IQ

The Metals and Mining secto r see Detour Gold as a
potentially significant fit in the po rtfolio. We plan to
sell our holdings in Lundin Mining Corporation
(TSX:LUN) as we believe the marg in of safety for the
company has depreciated. Using proceeds from the
sale, we will purchase a stake in Detour Go ld
(TSX:DGC) and complete rebalancing trades to
decrease the weight of Franco-Nevada Corporation
(TSX:FNV). Franco-Nevada is one of QUICs legacy
holdings. We have conviction in the companys
management team, current assets, and future
royalty/streaming deals.
Following these trades, the QUIC M&M portfolio
will be composed of 6 different names, down from
11 at the beginning of fiscal 2016. We believe
further consolidation is necessary as suggested in
the strategic plan for FY 2016. However, we believe
that our other holdings still have room to
appreciate. The next move would be to sell off
either Goldcorp or F ranco-Nevada and dispose
either Tahoe Resources or Silver Wheaton. CCL
industries has been an excellent performer and
further analysis must be taken to see if the
company is overvalued and should be sold.

In addition, QUIC will sell one of our top holdings in

FY 2016 Teck Resources. Teck is currently trading
at $27.16, and has made a tremendous comeback
from its single dig it share price in 2015 due to the
commodity downturn.

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Detour Gold: The Simple, One-Asset Mine We Need

References
1. CIBC World Market

2. S&P Capital IQ

3. Paper Report

4. Wells Fargo

5. Jeffries

6. Grandview Research

7. BMO Capital Markets

8. TD Securities

9. Morningstar

10. PriceWaterCooper

11. Deloitte

12. IBIS World

13. Bloomberg

14. RBC Capital Markets

15. Credit Suisse

16. Desjardins

17. Canaccord Genuity

18. Paradigm Capital

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Detour Gold: The Simple, One-Asset Mine We Need

Appendix I: Net Asset Value Model Assumptions

Toggle Active Bear Base Bull

Commodity Price Assumptions
Gold 2 $ 1,200 $ 1,100 $ 1,200 $ 1,300

Financial Assumptions
Discount Rate 2 5.0% 7.0% 5.0% 3.0%
Tax Rate 2 10.0% 10.0% 10.0% 10.0%
Depreciation & Amortization 2 20.0% 22.0% 20.0% 18.0%
TSX:DGC 2017-02-24
Working Capital Assumptions
Cash and Equivalents $ 160.63
Current Assets $ 275.07
Current Liabilities $ 61.08
Revenues $ 563.02
Working Capital (WC) $ 53.37
WC (% of Revenue) 9.48%

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Detour Gold: The Simple, One-Asset Mine We Need

Appendix II: Net Asset Value Model (2016E-2023E)

NAV Model (2016E-2023E)

2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E
Payable Metals
Total Ore Milled (k oz) 2,140 2,140 2,140 2,300 2,300 2,300 2,300 2,300
Ore Grade (Au g/t) 0.98 0.98 0.98 0.89 0.89 0.89 1.06 1.06
Gold Recovery 91.5% 91.5% 91.5% 92% 92% 92% 92% 92%
Gold Production (k oz) 617.00 617.00 617.00 605.52 605.52 605.52 721.18 721.18
Total Mined (k oz) 1,048 1,048 1,048 1,194 1,194 1,194 1,180 1,180
Total Au Production (oz) 617.00 617.00 617.00 605.52 605.52 605.52 721.18 721.18
Net Smelter Royalty to FNV 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Gold Available for DGC 604.66 604.66 604.66 593.41 593.41 593.41 706.76 706.76

Revenue $ 755,820 $ 786,053 $ 816,286 $ 712,089 $ 712,089 $ 712,089 $ 848,106 $ 848,106

Operating costs ($/oz) $812.00 $812.00 $812.00 $803.00 $803.00 $803.00 $632.00 $632.00
Operating costs $ 501,001 $ 501,001 $ 501,001 $ 486,231 $ 486,231 $ 486,231 $ 455,785 $ 455,785

Operating Income $ 254,819 $ 285,052 $ 315,285 $ 225,858 $ 225,858 $ 225,858 $ 392,321 $ 392,321
Less: D&A $ 151,164 $ 157,211 $ 163,257 $ 142,418 $ 142,418 $ 142,418 $ 169,621 $ 169,621
EBIT $ 103,655 $ 127,842 $ 152,028 $ 83,440 $ 83,440 $ 83,440 $ 222,700 $ 222,700
Less: Income Taxes -$ 3,000 $ 6,000 $ 46,000 $ 11,000 $ 11,000 $ 11,000 $ 65,000 $ 65,000
NOPAT $ 106,655 $ 121,842 $ 106,028 $ 72,440 $ 72,440 $ 72,440 $ 157,700 $ 157,700

Operating Income

Total CAPEX $ 170,000 $ 105,000 $ 105,000 $ 62,000 $ 62,000 $ 62,000 $ 28,000 $ 28,000
Less: Change in WC $ 71,641 $ 74,507 $ 77,372 $ 67,496 $ 67,496 $ 67,496 $ 80,388 $ 80,388
Less: Taxes -$ 3,000 $ 6,000 $ 46,000 $ 11,000 $ 11,000 $ 11,000 $ 65,000 $ 65,000
After Tax UFCF $ 16,178 $ 99,546 $ 86,913 $ 85,362 $ 85,362 $ 85,362 $ 218,933 $ 218,933

PV of FCF $ 15,788 $ 92,521 $ 76,933 $ 71,962 $ 68,535 $ 65,272 $ 159,434 $ 151,842

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Detour Gold: The Simple, One-Asset Mine We Need

Appendix III: Net Asset Value Model (2024E-2030E)

NAV Model (2024E-2030E)

2024E 2025E 2026E 2027E 2028E 2029E 2030E
Payable Metals
Total Ore Milled (k oz) 2,300 2,300 2,300 2,300 2,300 2,300 2,300
Ore Grade (Au g/t) 1.06 0.89 0.89 0.89 0.87 0.87 0.87
Gold Recovery 92.0% 92.0% 92.0% 92% 92% 92% 92%
Gold Production (k oz) 721.18 605.52 605.52 605.52 591.91 591.91 591.91
Total Mined (k oz) 1,180 1,232 1,232 1,232 1,181 1,181 1,181
Total Au Production (oz) 721.18 605.52 605.52 605.52 591.91 591.91 591.91
Net Smelter Royalty to FNV 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Gold Available for DGC 706.76 593.41 593.41 593.41 580.07 580.07 580.07

Revenue $ 848,106 $ 712,089 $ 712,089 $ 712,089 $ 696,087 $ 696,087 $ 696,087

Operating costs ($/oz) $632.00 $632.00 $632.00 $632.00 $632.00 $632.00 $632.00
Operating costs $ 455,785 $ 382,687 $ 382,687 $ 382,687 $ 374,088 $ 374,088 $ 374,088

Operating Income $ 392,321 $ 329,402 $ 329,402 $ 329,402 $ 322,000 $ 322,000 $ 322,000

Less: D&A $ 169,621 $ 142,418 $ 142,418 $ 142,418 $ 139,217 $ 139,217 $ 139,217
EBIT $ 222,700 $ 186,984 $ 186,984 $ 186,984 $ 182,782 $ 182,782 $ 182,782
Less: Income Taxes $ 65,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000
NOPAT $ 157,700 $ 103,984 $ 103,984 $ 103,984 $ 99,782 $ 99,782 $ 99,782

Operating Income

Total CAPEX $ 28,000 $ 53,000 $ 53,000 $ 53,000 $ 53,000 $ 53,000 $ 53,000

Less: Change in WC $ 80,388 $ 67,496 $ 67,496 $ 67,496 $ 65,979 $ 65,979 $ 65,979
Less: Taxes $ 65,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000
After Tax UFCF $ 218,933 $ 125,906 $ 125,906 $ 125,906 $ 120,020 $ 120,020 $ 120,020

PV of FCF $ 144,611 $ 79,204 $ 75,433 $ 71,840 $ 65,221 $ 62,115 $ 59,158

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Detour Gold: The Simple, One-Asset Mine We Need

Appendix IV: Net Asset Value Model (2031E-2038E)

NAV Model (2031E-2038E)

2031E 2032E 2033E 2034E 2035E 2036E 2037E 2038E
Payable Metals
Total Ore Milled (k oz) 2,300 2,300 2,300 2,300 2,300 2,300 1,810 1,810
Ore Grade (Au g/t) 1.06 1.06 1.06 1.15 1.15 1.15 1.08 1.08
Gold Recovery 92.0% 92.0% 92.0% 92% 92% 92% 92% 92%
Gold Production (k oz) 721.18 721.18 721.18 782.41 782.41 782.41 578.24 578.24
Total Mined (k oz) 885 885 885 515 515 515 194 194
Total Au Production (oz) 721.18 721.18 721.18 782.41 782.41 782.41 578.24 578.24
Net Smelter Royalty to FNV 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Gold Available for DGC 706.76 706.76 706.76 766.76 766.76 766.76 566.68 566.68

Revenue $ 848,106 $ 848,106 $ 848,106 $ 920,115 $ 920,115 $ 920,115 $ 680,016 $ 680,016

Operating costs ($/oz) $ 632 $ 632 $ 632 $ 632 $ 632 $ 632 $ 632 $ 632
Operating costs $ 455,785 $ 455,785 $ 455,785 $ 494,484 $ 494,484 $ 494,484 $ 365,451 $ 365,451

Operating Income $ 392,321 $ 392,321 $ 392,321 $ 425,632 $ 425,632 $ 425,632 $ 314,565 $ 314,565
Less: D&A $ 169,621 $ 169,621 $ 169,621 $ 184,023 $ 184,023 $ 184,023 $ 136,003 $ 136,003
EBIT $ 222,700 $ 222,700 $ 222,700 $ 241,609 $ 241,609 $ 241,609 $ 178,562 $ 178,562
Less: Income Taxes $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000
NOPAT $ 139,700 $ 139,700 $ 139,700 $ 158,609 $ 158,609 $ 158,609 $ 95,562 $ 95,562

Operating Income

Total CAPEX $ 53,000 $ 53,000 $ 53,000 $ 53,000 $ 53,000 $ 53,000 $ 53,000 $ 53,000
Less: Change in WC $ 80,388 $ 80,388 $ 80,388 $ 87,214 $ 87,214 $ 87,214 $ 64,456 $ 64,456
Less: Taxes $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000 $ 83,000
After Tax UFCF $ 175,933 $ 175,933 $ 175,933 $ 202,418 $ 202,418 $ 202,418 $ 114,109 $ 114,109

PV of FCF $ 82,587 $ 78,655 $ 74,909 $ 82,082 $ 78,173 $ 74,451 $ 39,972 $ 38,068

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