Detour Gold, (TSX: DGC) a Toronto-based exploration and development company is moving forward aggressively on their flagship property, the Detour Lake Gold Project, located just north of Timmins, Ontario.
According to Laurie Gaborit, Director of Investor Relations for Detour Gold, “We have the largest gold reserve in Canada, with 11.4 million ounces of gold. In November, we started getting our provincial permits and we got the permits for power in December. So, right now we have started the infrastructure construction activities on site.” Infrastructure improvement includes developing power and building a sizable camp. She continues, “We have a camp that can currently hold 400 people. Our new camp will hold 1000 people, which is scheduled for April.”
Balancing construction with additional exploration is the focus for Detour Gold's work at the Detour Lake site. Gaborit said, “We are in full mode of construction activity, even though we have not put out a formal construction announcement we are starting to contract for the entire infrastructure for the project.” With the amount of exploration and construction, Detour has kept an eye on finances. Gaborit said, “Right now we have just under $1 billion dollars in cash. The Cap X for the project is right about $1.2 billion dollars. We're close to 80%-85% right now for the project, but we have time to finance this project. We have plenty of time.” With production scheduled for the first quarter of 2013, the plant will start at 55,000 ounces per day and ramp up to 61,000 ounces per day. According to Gaborit, “With that, we should be producing 650,000 ounces of gold per year over a 16 year mine life. The key is that if we are successful at mining the deposit to the west, we will be looking at an extension based on the gold prices. So, we will be increasing the throughput of the plant up to maybe 90,000 pounds per day and our gold production to over 800,000 ounces per year. The decision has not been made on that, but at higher gold prices, that's where we'd be looking.”
A Focus on Exploration
Detour Gold is moving forward on additional exploration of the Detour Lake property and will be providing new information shortly. “Basically, we'll have an update in the first quarter of this year, which would be our new resource update. That update will include the drilling we did in 2010 – about 105,000 meters of drilling. That drilling was done all to the west side, so we will give out a new number sometime in March,” said Gaborit. “We have been very successful in that campaign, so you will see positive results in terms of the resource update. This year, we are going to start with 50,000 meters of drilling to the west of the deposit,” she said. The plan for 2011 is to continue testing. Gaborit explains, “We have some new targets that we will drill test during the winter. As we do the tests and find resources closer to the surface, hopefully of a higher grade, we can transfer them to the mill.”
This continued exploration is critical to Detour's continued growth. Comments Gaborit, “We want to work on growth. The deposit is still open to the west and on top of that there are other targets. It's like two belts. The Detour Gold deposit is located on the lake formation zone and there's another belt located on the south, which is why we acquired the land from Conquest Resources. We will be testing that other belt as well, because there is some gold from previous drill holes that showed there are some gold intersections, so we will be testing those also throughout the year.” The goal of additional testing is to expand the property to the west. As part of the project, Detour Gold has a partnership with Trade Winds and has 30,000 meters of drilling approved on the deposit. That part of Detour Gold's holdings is “not as advanced as Detour Lake, and we have some more work to do. It's still early stage,” said Gaborit. Detour Gold has an exploration budget for this year of $14 million dollars.
For investors who are interested in Detour Gold, Gaborit said that their growth is twofold, with the first value being in the current position of the company as Detour is right between construction and production. Detour believes they are positioned for additional growth. Gaborit said, “We can grow this project organically. This deposit keeps going to the west. We've been very successful year after year to increase our resource base and that's very important. Our objective is not to acquire any other properties or to merge with anybody because we have a five year organic growth plan where we will hopefully be successful in finding more ounces. While we build this project, we are going to keep finding more ounces. And, that will pay for discovery.”
Planning for Challenges
With their focus on the Detour Lake Project, Detour Gold has been planning carefully. Gaborit comments, “I would say that we cannot consider anything high risk at this stage. We have to build this project on time and on budget and that will be our focus. The thing that we don't control is the permitting process on the federal level. We have permits on the provincial side, that's why we're starting to structure our activities. We're scheduled to have the federal permit by the third quarter of this year, but we don't control this process. Even if we have a delay, it's not a big deal.” Even without the federal permits, the project is moving forward. Gaborit said, “Weather is not an issue at all. A lot of northern operations run twelve months a year. We are putting in hydroelectric power and are putting in the line.” Adding power to the Detour project is no small matter. “The line basically goes west of the project, all the way to Ireland Falls. When this project was in operation in the '80's and '90's, they took out all of the poles. We have to rebrush it and put back the poles, and we're installing a bigger line. It will go 185 kilometers. We will do 135 kilometers this year, which will connect to Ireland Falls, and be a 115 kilovolt line and then we go from Ireland Falls to Frazier, and that's about 40 kilometers and that will be done in the winter of 2012.” As the site currently sits, access is not an issue because the roads are in good shape.
With a focus on exploration and the development of their production facility, Detour Gold is in position to enjoy growth and profitability over the sixteen year mine life of the Detour Lake Project. Gaborit said, “Exploration is the exciting part right now and we are looking forward to our resource results update to show our growth. We are looking to be Canada's largest gold mine.”
For more information:
http://www.detourgold.com
Detour Gold Corporation
Royal Bank Plaza - South Tower
200 Bay Street, Suite 2200, Box#23
Toronto, ON M5J 2J1, Canada
Telephone: 416.304.0800
Facsimile: 416.304.0184
Investor Relations
Laurie Gaborit, Director Investor Relations
Detour Gold Corporation
Royal Bank Plaza - South Tower
200 Bay Street, Suite 2200, Box#23
Toronto, ON M5J 2J1, Canada
Telephone: 416.304.0581
Facsimile: 416.304.0184
Email: info@detourgold.com