Detour Gold: 4 Different Insiders Have Purchased Shares During The Last 30 Days

Dec. 2.13 | About: Detour Gold (DRGDF)

In this article, I will feature one mining company that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increased their holdings by more than 10%.

Detour Gold Corporation (OTCPK:DRGDF) is an emerging mid-tier gold producer in Canada. The company is ramping up its 100% owned Detour Lake mine to a long life, large scale open pit operation. The Detour Lake mine has proven and probable reserves of 15.6 million ounces of gold.

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Insider buying during the last 30 days

Here is a table of Detour Gold's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
Pierre Beaudoin COO Nov 12-27 15,000 15,500 shares +3,000%
André Falzon Director Nov 29 5,000 8,000 shares +166.7%
James Robertson VP Nov 11-21 9,430 35,136 shares +36.7%
Derek Teevan SVP Nov 28 3,200 17,700 shares +22.1%
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There have been 32,630 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Detour Gold's insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
November 2013 32,630 0
October 2013 0 0
September 2013 8,000 0
August 2013 0 125,000
July 2013 0 0
June 2013 70,000 100,000
May 2013 1,500 0
April 2013 4,606 0
March 2013 0 0
February 2013 0 24,175
January 2013 0 27,000
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There have been 116,736 shares purchased and there have been 276,175 shares sold by insiders this year.

Financials

Detour Gold reported the third-quarter financial results on November 7 with the following highlights:

Revenue $33.1 million
Net loss $11.8 million
Cash $156.0 million
Debt $553.5 million
Gold production 75,672 ounces
Total cash costs $1,214 per ounce
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Commercial production at Detour Lake was declared on September 1.

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(Source: November presentation)

Outlook

Detour Gold's guidance is as follows:

FY2013 FY2014
Gold production 240,000-260,000 ounces 440,000-500,000 ounces
Total cash costs $1,100 per ounce $1,150-$1,250 per ounce (all-in sustaining costs)
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(Source: November presentation)

Competition

Detour Gold's competitors include African Barrick Gold (OTC:ABGLF), Alamos Gold (NYSE:AGI), New Gold (NYSEMKT:NGD), Alacer Gold (OTCPK:ALIAF), B2Gold (NYSEMKT:BTG), AuRico Gold (NYSE:AUQ), Osisko Mining (OSKFF), Argonaut Gold (OTCPK:ARNGF), Allied Nevada Gold (NYSEMKT:ANV), and IAMGOLD (NYSE:IAG).

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(Source: November presentation)

Detour Gold's valuation looks attractive compared to its peers.

Here is a table of these competitors' insider-trading activities during the last 30 days.

Company Insider buying / shares Insider selling / shares
AGI 0 0
NGD 0 0
ALIAF 0 0
BTG 0 0
AUQ 0 100,000
OSKFF 66,000 80,000
ARNGF 0 0
ANV 0 0
IAG 7,250 404,060
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Only Detour Gold has seen intensive insider buying during the last 30 days.

Conclusion

There have been four different insiders buying Detour Gold and there have not been any insiders selling Detour Gold during the last 30 days. All four of these insiders increased their holdings by more than 10%.

There are 14 analyst buy ratings, zero neutral ratings, and zero sell ratings with an average price target of $9.29. Detour Gold has a book value of $13.46 per share. I believe the stock could be a good pick below the book value based on the intensive insider buying.

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(Source: November presentation)

Disclosure: I am long IAG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.