Shares of Detour Gold (TSX: DGC) surged over 11% to a two-month high on Friday following the release of the company’s third quarter operational and financial results. For the quarter in review, the Toronto-based gold miner reported adjusted earnings of $35.3 million, compared to a net loss of $1.5 million in the same quarter last year, beating analysts’ estimates.
The company is currently focused on its wholly owned Detour Lake mine in Ontario, situated in the same area as the historic Detour Lake open-pit/underground mine operated by Placer Dome which produced 1.8 million oz gold from 1983 to 1999.
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During the third quarter, Detour Gold incurred all-in sustaining cost (AISC) of $1,198/oz and total cash cost of $730/oz, representing a 13% and 9% improvement respectively over the prior-year period
During the third quarter, Detour Gold incurred all-in sustaining cost (AISC) of $1,198/oz and total cash cost of $730/oz, representing a 13% and 9% improvement respectively over the prior-year period. Accordingly, the company reduced the AISC and cash cost guidance range for the year to reflect its enhanced operating performance.
Gold output reached 137,670 oz in Q3 2019, in line with the forecast grade profile, and the company has also decided to increase the lower end of its full-year production guidance to 590,000-605,000 oz.
Despite the lower ounces produced quarter over quarter, the company says it has made “very good progress” on reducing absolute costs, and this quarter represents its highest ever cash cost margin per ounce.
Contractor management improved significantly in Q3, and based on the work to date, the company expects to save approximately C$15 million to C$20 million per annum from 2020 onwards on contractor spend, representing C$300 million in value life-of-mine.
Subsequent to quarter end, the company received approval from the Ontario government for its updated closure plan for the Detour Lake mine.
Detour Gold has a current market capitalization of C$3.8 billion.
