Detour Gold Corporation
TSX : DGC

Detour Gold Corporation

November 17, 2010 08:36 ET

Detour Gold Announces a Bought Deal on US$250 Million of the Previously Announced Up to US$500 Million Unsecured Convertible Note Private Placement and Revises Terms

Paulson Commits to US$250 Million

TORONTO, ONTARIO--(Marketwire - Nov. 17, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Detour Gold Corporation (TSX:DGC) ("Detour Gold" or the "Company") is pleased to announce that the Company has entered into an agreement with a syndicate of underwriters (the "Underwriters") led by BMO Capital Markets ("BMO") and including RBC Capital Markets and UBS Securities Canada Inc., under which the Underwriters have agreed to buy US$250 million of 5.50% senior unsecured convertible notes (the "Notes").

Paulson & Co. Inc. ("Paulson") has committed to purchase US$175 million of the Notes and US$75 million of cash settled notes ("Cash Settled Notes") which are substantially identical to the Notes except that, in lieu of receiving common shares of the Company ("Common Shares") upon conversion, Paulson will receive cash, subject to the Company's right (provided that the conversion of such portion would not cause Paulson to be determined to be an Acquiring Person (as defined in the Company's shareholders rights plan agreement dated as of April 29, 2009)) to settle the Cash Settled Notes in Common Shares ("Cash Settlement Provisions"). The Notes and the Cash Settled Notes will be sold on a private placement basis (the "Private Placement").

The Notes and the Cash Settled Notes will mature on November 30, 2017. The Notes and the Cash Settled Notes will be convertible by the holders thereof (the "Noteholders"), at any time prior to maturity of the Notes, into Common Shares (subject, in the case of the Cash Settled Notes, to the Cash Settlement Provisions) at a conversion price of US$38.50 per common share (C$39.40 at current exchange rate of 1.023), representing an approximately 30% premium to the closing price of the Common Shares on the TSX on November 16, 2010. The Notes and the Cash Settled Notes are redeemable at the option of the Company at any time after the third anniversary of issuance, provided that the Common Shares are trading at 130% of the conversion price at the time of redemption and subject to the conversion rights of the Noteholders.

Detour Gold intends to use the proceeds from the Private Placement to finance the development of its wholly owned Detour Lake gold project in northeastern Ontario. There will be no obligation on the Company to escrow interest payments. 

The Private Placement is expected to close on December 1, 2010, or such other date agreed upon by the Company and BMO. Closing of the Private Placement is also conditional upon the execution of definitive documentation with respect to the Private Placement and upon satisfaction of customary closing conditions and deliveries, including receipt of all required regulatory approvals.

About Detour Gold

Detour Gold is a Canadian gold exploration and development company whose focus is to advance the development of its Detour Lake gold project located in northeastern Ontario. Detour Gold's shares trade on the Toronto Stock Exchange under the trading symbol DGC.

For further information, please visit Detour Gold's website at www.detourgold.com, email info@detourgold.com.

The Notes and the Cash Settled Notes and the Common Shares have not been and will not be registered under the U.S.Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy such securities.

Forward-Looking Information

This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as "forward-looking statements"). Specifically, this press release contains forward-looking statements regarding the closing of the Private Placement and the intended use of proceeds from the Private Placement. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Detour Gold's ability to predict or control and may cause actual results, performance or achievements to be materially different from any of future results, performance or achievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, gold price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, general economic conditions and other risks involved in the gold exploration and development industry, as well as those risk factors discussed in the section entitled "Description of Business - Risk Factors" in Detour Gold's 2009 annual information form. Such forward-looking statements are also based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the following: the availability of financing for exploration and development activities; the estimated timeline for the development of the Detour Lake gold project; the supply and demand for, and the level and volatility of the price of, gold; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; the receipt of necessary permits; market competition; ongoing relations with employees and impacted communities; and general business and economic conditions. Accordingly, readers should not place undue reliance on forward-looking statements. Detour Gold undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law.

Contact Information

  • Detour Gold Corporation
    Gerald Panneton
    President and CEO
    (416) 304.0800
    or
    Detour Gold Corporation
    Laurie Gaborit
    Director Investor Relations
    (416) 304.0581
    or
    Detour Gold Corporation
    Royal Bank Plaza, South Tower
    200 Bay Street, Suite 2200
    Toronto, Ontario
    M5J 2J1