Detour Gold Corp.

"In September, Detour released the results of the Pre-Feasibility Study (PFS) for its eponymous project in northern Ontario. The study disclosed the potential for a large-scale open pit mine with average annual gold production of 560,000 oz/year at a cash cost of US$404/oz over a 14.5 year mine life.

We anticipate the company releasing its DFS in early Q2/10 and have revised our project model and valuation to reflect our expectations. These include: increased reserves and a longer mine life, higher levels of gold production, and higher capital and operating costs that result primarily from the stronger Canadian dollar.

As a result, our 12-month target price increases to $22/share (from $20/share) and we reiterate our Speculative BUY recommendation. In our view, Detour offers an attractive valuation which is highlighted by a comparison to what we consider to be its closest peer, Osisko. We note that Osisko trades at 1.5x NAV5%, a premium of 110%, on the basis of a similar project. A valuation at this level would imply a potential target price for Detour of $33/share and is representative, in our view, of what may be achievable if the company were to advance its project through feasibility, permitting, and complete project financing over the next 12 to 18 months."
    -DANIEL EARLE,   NEWCREST, TD SECURITIES (02/02/10)

"The company is on track to deliver the full feasibility study for the 100%-owned Detour Lake gold deposit in northern Ontario during Q2/10. We believe there are several opportunities to improve the positive economics outlined in the 2009 pre-feasibility study, including:

• Reserve Increases—From in-fill drilling and increased long-term gold price assumption (US$775/oz used in pre-feasibility).
• Coarser Grind Size—Higher daily throughput leading to higher production rates if coarser grind size is used (assuming gold recovery rates are not significantly negatively impacted). The company expects to announce testwork results later this month.
• Stockpiling Lower Grade Ore—For processing later in the mine life; could increase ore grades in early years, leading to higher gold output, lower costs, and improved economics.

With a major milestone expected in Q2/10, we believe a positive feasibility study could lead to a re-rating of DGC shares, for the successful delivery of a new Tier II gold producer, once permits are received and financing secured to build the Detour Lake mine. In our view, one metric that clearly shows the re-rating opportunity is AMC/oz of mineable reserve.

We also consider the tabling of the feasibility study as the opening of a 'window of opportunity' for takeover of DGC by other larger producers, which we believe would be interested in a large (+550Koz/yr) gold mine in a low political risk jurisdiction."
    -MICHAEL CURRAN,   RBC CAPITAL MARKETS (02/02/10)

"On January 13, 2009 Detour Gold disclosed additional infill drilling results of its 2009 program on the Detour Lake deposit. Assay results from an additional 40 holes totaling 18,052m are part of the 2009 drill totaling 101,074m (242 holes) that have aimed to infill and extend investigation outside the $US775 pit outline. We estimate that a further 14,679m of new drill data are left to report from the 2009 drill program.

Results suggest continued gold intersections within and outside the current modeled pit shell out-line. Disclosed drilling results are in majority from the western sector (24 holes) of the proposed pit in the Calcite Zone (sections 18,000E to 18,5000E). The assay results of 16 of these holes suggest continued mineralization outside the modeled pit shell with multi gold intersections ranging 1.5 to 3 g/t Au. We believe the impact of this is positive as these drilling results confirm geological continuity and grade, as well as potential for pit expansion. We believe this should positively impact mineral resources and reserves. Indeed these new assays should be incorporated in the feasibility study, which is anticipated to be made public by Q2 of 2010.

. . .We remain of the opinion that ongoing work [at] the Detour Lake project is confirming increased size and geological continuity. We believe that the Detour Lake project is set in the right direction and we are raising our share price target to $21.00 (previously $18.50). We are also changing our Speculative Buy rating to a Buy rating."
    -ERIC LEMIEUX,   LAURENTIAN BANK SECURITIES (01/14/10)

"Detour Gold reported assay results for an additional 41 holes totaling 15,205m from its 2009 infill diamond drilling program at the Detour Lake project in northern Ontario. The 2009 program is now complete with 101,074m of drilling (242 holes) to nearly finish the 40mx40m drill spacing up to section 18,000E, at the west end of Calcite zone.

Good continuity of the gold mineralization. Results from 25 infill holes completed in the area of the former open pit continued to show good continuity of the gold mineralization in the core of the mineralized corridor. . .

Confirmation of continuity in mineralization in the Gap and Calcite zones. To the west of the former open pit area, in the Gap zone, results from seven infill holes confirmed the continuity of the gold mineralization. In the Calcite Zone, results from nine infill holes confirmed the gold mineralization encountered in prior holes.

We are raising our price target from C$15 to C$21 to account for a valuation which reflects the recent financing of C$275m at C$14.25/sh (19.3m shares issued) and the higher gold price environment. Under the current gold price ($1,100/oz), our NAV5% is C$26.77, compared to our previous NAV5% estimate of C$21.14 , based on a $1,000/oz gold price and accounting for dilution of 20.8m shares at $12/sh. Our target reflects a 22% discount to our NAV at $1,100/oz.

We maintain our Outperform rating. With the equity financing complete, we anticipate a re-rating of the stock as the project reaches key milestones."
    -PIERRE VAILLANCOURT,   MACQUARIE SECURITIES (12/18/09)

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