TORONTO, ONTARIO, Jul 23, 2012 (MARKETWIRE via COMTEX) — Detour Gold Corp. (“Detour Gold” or the “Company”) reports on the construction progress of its 100% owned Detour Lake open pit gold mine in northeastern Ontario.
The project remains on budget and on schedule for gold production to start in the first quarter of 2013. All dollar amounts are in Canadian dollars.
The following project milestones have recently been achieved:
— Project construction reached 75% completion mark on June 30
— 230 kV transmission line connected to grid on July 19
— Pre-stripping reaches 10 million tonnes mined
— Process plant mechanical contract at 60% completion
— New peak in construction activities with 1,550 workers at site
— Now over 279 Detour Gold employees at site and Cochrane office
Gerald Panneton, President and CEO of Detour Gold commented, “We have achieved another significant milestone with the successful connection of the 230 kV transmission line, which will allow for the full commissioning of the grinding mills to start as planned before year-end. We are pleased with the performance of our contractors in achieving the 75% completion mark at the end of June. Our site and Cochrane team of 279 employees are actively preparing for the commencement of operations. The Company remains on budget with sufficient cash to complete the project construction and on schedule for gold production to commence in the first quarter of 2013.”
Capital Expenditures Remain on Budget
Pre-production capital cost estimates for Detour Lake remain unchanged at $1.45 billion, of which approximately $969 million has been spent as of June 30, 2012 leaving $481 million to be spent. Approximately $1.29 billion has been committed (or 99% of all the contracts). The Company has approximately $576 million in cash and short-term investments, sufficient to fully finance the remaining project expenditures. As part of our risk management strategy, the Company is seeking a $100 million secured credit facility to provide additional financial flexibility and working capital during the initial mine ramp-up period.
230 kV Transmission Line is connected
The project site has been connected to a 115 kV connection since October 2011. With the completion of the transmission line to Pinard (Fraserdale Power Station), the new 230 kV connection was established on July 19. The 230 kV transmission line allows for the commissioning to start, providing more than the 85 MW of power consumption needed to service the entire Detour Lake mine operation once in full production. Thanks to Hydro One Networks’ team for their excellent support in finalizing the connection.
Detour Lake Construction 75% Complete
Construction progress is at the 75% completion mark. A significant portion of the remaining construction activities are within the process plant building where over 800 workers are installing equipment and proceeding with the mechanical, piping, electrical and instrumentation (MPEI) contracts.
Status of construction progress is as follows:
— Overall 94% of concrete is poured and 99% of steel is erected
— Concrete and building structure for the primary (gyratory) crusher is complete; mechanical installation underway
— Geodesic dome installation is underway over the reclaim area
— Secondary and pebble crushers are installed for both grinding lines
— First grinding line mechanical installation is nearly completed; second grinding line mechanical installation is progressing in parallel
— Commissioning with water has started for the leach tanks
— All the CIP tanks are installed; equipment installation in the gold room is underway and reagents systems are well advanced
— Mine service facility is nearing completion and expected to be operational in August
Civil construction of the first cell of the Tailings Management Area continues to advance on schedule.
As already reported in April 2012, the truck wash facility is now fully operational. In addition, Detour Gold has commissioned all four wings (400 rooms) of the permanent camp, which brings the total to 1,700 rooms available at site. This is providing construction planning flexibility in having more contractors at site to further advance construction progress.
Pre-stripping Activities Reaches 10 Mt Mined
The 2012 pre-stripping operation is well underway in the Calcite Zone (western portion) of the Detour Lake deposit. The Company has started its mining activities in this wide mineralized zone (50 to 150 metres wide) a lower grade zone (0.8 to 0.9 g/t), than the average grade of the mineral reserves, but much wider and easier to provide ore production in the ramp up year of the mine to sustain the throughput. The pre-stripping operation is supported by eight haul trucks, two hydraulic shovels and two additional excavators. The production rates are steadily increasing and have now reached a peak of nearly 120,000 tpd. The Company is still targeting to have up to 3 million tonnes of ore (at an average grade of 0.85 g/t Au) available for processing prior to the commencement of operations.
In preparation for the 2013 production plan, the Company will have by year-end 2012 a mining fleet at site of 26 haulage trucks (20 X 320 tonnes and 6 X 100 tonnes) with four shovels (two of 28/34 m3 and two of 48 m3) and two smaller excavators (for the 100 t trucks). The table below shows the status of the current mining fleet. A significant portion of these deliveries will be leased under the Company’s US$150 million lease facility with CAT Finance.
The operational readiness planning is progressing on schedule in preparation for commissioning and start-up activities. The Detour Gold operation manpower is now at 279 employees with all 23 senior operational management positions filled. A significant portion of the employees are working on the open pit mine development. Currently, the Company is meeting its planned hiring rate expectations and is confident in meeting its 400 permanent employee target by year-end for its 2013 operational requirements.
Appointment of Senior Management Position
Detour Gold is pleased to announce the appointment of Jean-Francois Metail as Director of Reserve and Resources. Mr. Metail is a geologist with over 20 years of direct involvement in economic geology. Prior to joining Detour Gold in July 2012, Mr. Metail spent 16 years with Barrick Gold Corporation where he progressed to Director, Geology and Reserves Strategy with responsibility for geology functions as they relate to production and overall reserves strategy. He received a Bachelor of Science in Geology from Universite de Montreal.