Detour Gold Corp.has repurchased US$75 million worth of its convertible notes after returning toprofit in the first quarter.
The Canadian producer said April 27 that it bought back the notesfrom Paulson & Co. Inc. for US$76.9 million, plus accrued and unpaid interestof US$1.7 million, using existing cash on hand.
The move comes at the same time Detour Gold revealed a net incomeresult of US$27.6 million, or 16 cents per share, for the first quarter, which sawthe company back in black for the first time following several consecutive quartersof loss.
By comparison, the company booked a US$63.1 million, or 38-cent-per-share,net loss in the first quarter of 2015.
"As the company's financial position continues to strengthen,we have taken this opportunity to further reduce debt levels," CFO James Mavorsaid.
"With increased confidence in our mining operation and astronger gold price environment, we would now expect to re-finance less than [US]$300million of notes at maturity."
In December 2010, Detour Gold sold US$500 million worth of notesvia a private placement to finance the development of its wholly owned gold mine in northeasternOntario.
The remaining notes mature Nov. 30, 2017.
Gold production from the Detour Lake mine in the first quarterclimbed to 127,136 ounces at a substantially reduced all-in sustaining cost of US$824per ounce sold. This compares to 105,572ounces produced in the same period of 2015 at an all-in sustaining costof US$1,321 per ounce sold.
Production was at the low end of Detour Gold's guidance rangefor the quarter due to mill throughput being 5% below the design rate, mainly dueto limited power draw on one of the sag mills and coarser material being processed,which impacted milling rates.
Reduced costs were the result of a favorable exchange rate, lower-than-budgetprices for electricity and diesel fuel and slower CapEx spend.
Meanwhile, gold sales increased to 137,608 ounces during thequarter, from 104,497 ounces in the same quarter of 2015.
Earnings from mine operations shifted into the positive at US$30.8million, from a loss of US$7.2 million a year earlier.
"Despite achieving the lower end of our gold productionguidance range for the first quarter, the company delivered a solid quarter withits lowest total cash costs and all-in sustaining costs since the start of operations,"President and CEO Paul Martin said.
"With the successful modifications of the 410-conveyor completedearlier this month, we now expect improved plant performance supporting our operationaltargets for the rest of the year."