TORONTO, ONTARIO -- (Marketwire) -- 07/23/12 -- Detour Gold Corporation (TSX: DGC) ("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.
Equipment in Equipment
use for Additional Equipment in Available in
mining Assembly Line 2013
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To be
Completed in Completed in
2Q 2012 3Q & 4Q 2012
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CAT 795F (320 t) 8 6(i) 6 20(i)
CAT 777F (100 t) 2 4 - 6
CAT 6060FS (28/34 m3) 2 - - 2
CAT 7495 (48 m3) 0 - 2 2
CAT 385 (5 m3) 2 - - 2
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(i) Includes 2 trucks supplied by Caterpillar as warranty units.
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.
Detour Gold Launches its New Website
Detour Gold launched an entirely new website on July 18. You will find it easier to navigate the site and get quick access to our key online content areas. Learn about Detour Gold and stay abreast of our latest news and events at www.detourgold.com.
About Detour Gold
Detour Gold is a Canadian gold exploration and development company whose primary focus is to advance the development of its Detour Lake gold project, located in northeastern Ontario, towards production. Detour Gold's shares trade on the Toronto Stock Exchange under the trading symbol DGC.
Forward-Looking Information
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 expected start of gold production in the first quarter of 2013; the estimated pre-production capital costs and the sufficiency of funds to finance the remaining project expenditures; obtaining a $100 million credit facility; the target of up to 3 million tonnes of ore available for processing prior to the commencement of operations; the delivery and availability of mining equipment in 2012-13; and meeting the 400 permanent employee target by year-end for its 2013 operational requirements. 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 the Business - Risk Factors" in Detour Gold's 2011 annual information form 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 supply and demand for gold, and the level and volatility of the price of gold; the availability of financing for exploration and development activities; the estimated timeline for the development of the Detour Lake gold project; the expected mine life; anticipated gold production; gold recovery; the development schedule; cash operating costs and other costs; the financial analysis for the project; capital costs; sensitivity to metal prices and other sensitivities; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; the receipt of necessary permits; 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.
Contacts:
Detour Gold Corporation
Gerald Panneton
President and CEO
(416) 304.0800
Detour Gold Corporation
Laurie Gaborit
Director Investor Relations
(416) 304.0581
Detour Gold Corporation
Royal Bank Plaza, South Tower
200 Bay Street, Suite 2200
Toronto, Ontario M5J 2J1
www.detourgold.com
