TORONTO, ONTARIO--(Marketwired - Oct 9, 2013) - Detour Gold Corporation (DGC.TO) ("Detour Gold" or the "Company") reports its third quarter operational update on the Detour Lake mine located in northeastern Ontario. The Company continues to make positive progress on the ramp-up of the mine with commercial production reached on August 12, 2013. The Company produced 75,672 ounces of gold in the third quarter. Cash and short-term investments stand at Cdn$161 million at the end of the quarter.
Third Quarter Highlights
- Commercial production reached on August 12 (declared September 1)
- Gold production of 75,672 ounces (80,765 ounces poured)
- Mill processing rates averaging 42,142 tonnes per calendar day (or 53,821 tonnes per operating day)
- Mining rates steadily increasing from 158,000 tpd in July to 201,000 tpd in September
- Tailings dam construction for 2014 mining operation fully complete
Gerald Panneton, President and CEO commented, "The Company achieved a major milestone during the quarter by declaring commercial production at the Detour Lake mine as per the schedule. We are pleased with the steady progress made both at the mill and mine operations. Milling rates are steadily improving above 50,000 tpd with plant availability now above 80%. On the mine side of the operation, we are well advanced on the pre-stripping of the higher grade Domain 2. This was possible with the steady progress on ex-pit tonnage, which has now passed the 200,000 tpd mark. Our production guidance of approximately 270,000 ounces for 2013 remains unchanged."
Detour Lake Mine - Ramp-up Update
During the third quarter, the mill processed a total of 3.88 million tonnes (Mt) of ore from a combination of direct feed and run-of-mine stockpiles. The mill facility (both grinding lines) reported an average of 42,142 tonnes (a 33% improvement from the second quarter) processed per calendar day (53,821 tonnes per operating day) with a record day at 58,000 tonnes. There were 12 days in September where the mill processed more than 50,000 tonnes per day.
Mill availability improved from 68% during the second quarter to 78% during the third quarter. A six-day planned shutdown reduced availability by 10% in September. The planned shutdown was scheduled to change the shell liners for the first time in both SAG mills and included other maintenance that was required after nine months of operation. In the third quarter, design and operational changes were implemented on the secondary crushers' shuttle conveyors which will lead to further improvement in availability during the fourth quarter.
The mill processed 3.88 Mt at an average grade of 0.72 g/t with recoveries of 85% for a gold production of 75,672 ounces. Recovery in the last two months of the quarter averaged 87%. Recovery is expected to further improve in the fourth quarter with higher availability of the gravity circuit.
The head grade was slightly lower than planned in the third quarter due to the lower grade stockpile contribution (487,900 tonnes at 0.57 g/t, or 13% of total feed) and mining dilution of 8% (an improvement over the 12% mining dilution obtained in the second quarter). The reserve grade for the quarter of 0.78 g/t reconciled well with grade control (reverse circulation drilling).
|Detour Lake Mine Operation Statistics|
|Q1 2013||Q2 2013||Q3 2013|
|Ore tonnes mined (Mt)||1.29||2.70||4.16|
|Tonnes milled (Mt)||1.02||2.87||3.88|
|Mill grade (g/t Au)||0.64||0.76||0.72|
|Ounces produced (oz) (1)(2)||16,841||57,897||75,672|
- Q3 = 80,765 oz poured (circuit inventory reduced from 23,189 to 17,998 oz).
- During September, the first month of commercial production, the Detour Lake mine produced 24,021 oz of gold.
The open pit operation mined 16.6 Mt during the third quarter, of which 12.4 Mt were waste (including 4.16 Mt of overburden and till) for a quarterly strip ratio of 2.98 to 1 (4.16 Mt of ore mined). At the end of September, the run-of-mine ore stockpiles contained over 1.77 Mt grading 0.72 g/t.
Mining rates during the third quarter averaged 180,222 tpd of total material moved (overburden, ore, and waste). Mining rates reached an average of 201,000 tpd in September with a record day at 252,000 tpd. This significant improvement (27% from the start of the quarter) is the result of higher shovel productivity rates, increased pit access, higher blasted rock inventory, and quality of haul roads. The Company targets to exit 2013 at a mining rate of 250,000 tpd.
Pre-stripping activities continued during the quarter to provide access to the higher grade zone (Domain 2) located just west of the former Campbell pit (with an average grade of 1.2 g/t). Mining of Domain 2 is scheduled to start in the fourth quarter.
In preparation for the 2014 mine plan, a contractor with smaller equipment has started work in the south part of the pit to further accelerate pre-stripping (removal of 2 Mt of overburden) for the construction of a second haulage road south of the pit.
The Company is taking delivery of an additional hydraulic shovel (CAT 6060) in November along with three haul trucks (CAT 795F) before year-end. In 2014, the Company will have a mining fleet of 23 haul trucks), three hydraulic shovels (CAT 6060), one excavator (CAT 6030), and two rope shovels (CAT 7495).
As of September 30, 2013, the Company had approximately Cdn$161 million in cash and short-term investments.
The scientific and technical content of this news release has been reviewed, verified and approved by Drew Anwyll, P.Eng., Director of Operations, a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects".
Third Quarter Financial Results
The Company plans to announce its third quarter financial results for the period ended September 30, 2013 after market close on Thursday, November 7, 2013. A webcast and conference call will be held on Friday, November 8, 2013 starting at 10:00 a.m. Eastern Time.
About Detour Gold
Detour Gold 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. Gold production is expected to average 657,000 ounces of gold annually over a period of 21.5 years assuming a 10% expansion of the processing plant. The decision to proceed with this expansion is being delayed to year-end 2014.
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 improvement of plant availability in the fourth quarter, improvement of the gold recovery in the fourth quarter with higher availability of the gravity circuit, exiting 2013 with mining rates of 250,000 tpd, the commencement of mining of Domain 2 in the fourth quarter, delivery of additional mining equipment prior to year-end, meeting 2013 production guidance of approximately 270,000 ounces of gold and annual production of 657,000 ounces of gold over a period of 21.5 years (assuming a 10% expansion of the processing plant). 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 Detour Gold's actual results, performance or achievements to be materially different from any of its 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 2012 AIF and in the continuous disclosure documents filed by Detour Gold on and available on SEDAR at www.sedar.com. 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; operating and capital costs; the Company's ability to attract and retain skilled staff; the mine development schedule; sensitivity to metal prices and other sensitivities; the supply and demand for, and the level and volatility of the price of, gold; timing of the receipt of regulatory and governmental approvals for development projects and other operations; the supply and availability of consumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; 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. The forward-looking statements contained herein are made as of the date hereof, or such other date or dates specified in such 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. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.