Press release from Marketwire
Detour Gold Reports Second Quarter Production Results
Tuesday, July 09, 2013
Detour Gold Reports Second Quarter Production Results17:28 EDT Tuesday, July 09, 2013
TORONTO, ONTARIO--(Marketwired - July 9, 2013) - Detour Gold Corporation (TSX:DGC) ("Detour Gold" or the "Company") reports its second quarter operational update on the Detour Lake mine located in northeastern Ontario. The Company continues to advance the ramp-up of the mine and remains on schedule to declare commercial production in the third quarter of 2013. The Company will host a conference call on Wednesday July 10 at 10:00 a.m. Eastern Time.
Second Quarter Highlights
- Mine and mill ramp-up making positive progress through the quarter
- Gold production of 57,897 ounces
- Mill facility processing rates averaging 31,500 tonnes per calendar day
- Throughput record day of 56,000 tonnes processed on June 30
- Daily throughput levels exceeded 40,000 tonnes processed for 15 days in June
- Commissioning of gravity circuit for first production line started in June
- Tailings dam construction for 2014 mining operation 80% complete and ahead of schedule (completion expected in August)
Gerald Panneton, President and CEO commented, "The Company has made steady progress in the ramp-up of the Detour Lake gold mine in the second quarter. During the month of June, the mill achieved throughput levels above 40,000 tonnes per day (tpd) for 15 days. This is a very good sign that the operation can achieve its nameplate capacity. We also want to acknowledge the hard work and dedication of all our employees for the progress achieved to date during the ramp-up."
Detour Lake Mine - Ramp-up Update
During the second quarter, the mill processed a total of 2.87 million tonnes (Mt) of ore from a combination of direct feed and run-of-mine stockpiles (2.2 Mt) and pre-production stockpiles (0.67 Mt). The mill facility (both grinding lines) reported an average of 31,500 tonnes processed per calendar day (46,500 tonnes per operating day). Towards the end of June, the mill was regularly operating above 80% of nameplate capacity (55,000 tpd). There were 15 days in June where the mill processed more than 40,000 tpd, including five days at above 50,000 tonnes with a record day at 56,000 tonnes.
Mill availability improved during the quarter, from an average of 63% in April to 73% in June. This was still lower than expected as a result of unplanned shutdowns that affected daily mill throughput. The main challenges which slowed down progress during the second quarter have been largely fixed, for example the change of SAG mill grates and the malfunctioning valves in the SO2 cyanide detoxification system. The two pebble by-pass chutes were replaced during the quarter, resulting in significant improvements in pebble throughput. The feed chutes and shuttle conveyors for the secondary crushers were also modified and further adjustments are planned for the third quarter. The Company expects the number of unplanned shutdowns to reduce significantly in the third quarter as the processing plant continues to reach a steady state towards design capacity.
In the second quarter, the mill processed 2.87 Mt at an average grade of 0.76 g/t with recoveries of 83% for a gold output of 57,897 ounces. The progress made was good but below the Company's expectation of 3.58 Mt. Recovery did improve in the second quarter, slightly below the Company's target of 85%. The gravity circuit for the first production line became operational in June and the benefits are expected to be seen in the third quarter with slightly higher overall recoveries.
The open pit operation mined 12.7 Mt during the second quarter, of which 10.0 Mt were waste (including 4.0 Mt of overburden and till) for a quarterly strip ratio of 3.7 to 1 (2.7 Mt of ore mined). At the end of June, the run-of-mine ore stockpiles contain over 1.8 Mt grading 0.7 g/t. The low-grade stockpile was increased by 0.7 Mt to 2.4 Mt grading 0.4 g/t.
Mining rates during the second quarter averaged approximately 160,000 tpd of total material moved (overburden, ore, waste, and re-handling). Ore mining occurred in both the wide Calcite zone and narrower zones to the north. During the third quarter, the mine will focus on pre-stripping activities 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).
|Detour Lake Mine Operation Statistics|
|Q1 2013||Q2 2013|
|Ore tonnes mined (Mt)||1.29||2.70|
|Tonnes milled (Mt)||1.02||2.87|
|Mill grade (g/t Au)||0.64||0.76|
|Ounces produced (oz) (1)||16,841||57,897|
|(1)||Q2 = 44,154oz poured and total of 23,189 oz of plant inventory.|
In the second quarter, mine grade reconciled very well with grade control (reverse circulation drilling) validating the reserve model at 0.84 g/t. Mine to mill reconciliation indicated a 12% mining dilution.
As of June 30, 2013, the Company had approximately $207 million in cash and short-term investments.
The Company remains on schedule to achieve commercial production in the third quarter of 2013. Commercial production is expected to be declared on the first day of the calendar month following the mine having operated for a period of 60 consecutive days at an average of 75% or more of the designed production capacity (55,000 tpd x 75% = 41,250 tpd).
Although guidance is always subject to review, there are no changes to the revised 2013 guidance provided on May 9, 2013. Detour Lake is expected to produce between 260,000 ounces and 320,000 ounces of gold for the year. Post-commercial production, total cash costs are expected to be between $800/oz and $1,000/oz.
About Detour Gold
Detour Gold is an emerging mid-tier gold producer in Canada. The Detour Lake open pit mine is expected to produce an average of 657,000 ounces of gold annually over a period of 21.5 years. Detour Gold's shares trade on the Toronto Stock Exchange under the trading symbol DGC.
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".
Conference Call and Webcast
Detour Gold's management will hold a conference call and live webcast on July 10 at 10:00 a.m. Eastern Standard Time to review the results. To join the call:
- By phone toll free in Canada and the United states 1-866-223-7781
- By phone International 416-340-8018
- To listen online, go to www.detourgold.com and click on the "Conference Call Audio Webcast, July 10, 2013" link on home page
The conference call will be recorded and playback of the call will be available after the event by dialing toll free in Canada and the United States 1-800-408-3053, or internationally 905-694-9451, pass code 5511427 (available up to July 24, 2013).
Note Regarding Certain Measures of Performance
This press release presents estimates of future "total cash costs per ounce of gold produced" which is not a recognized financial measure under GAAP. This non-GAAP financial measure is intended to provide additional information to investors and may not be comparable to data presented by other gold producers. The estimates of future total cash costs per ounce of gold produced includes estimated mining, milling, site administration and royalty costs net of estimated silver by-product credits divided by estimated gold ounces produced. These future estimates are based upon the total cash costs per ounce of gold produced that the Company expects to incur to mine gold at the Detour Lake mine. As the Detour Lake mine has not yet reached commercial production, there is no reconciliation to actual GAAP measures provided as it is not practicable to reconcile this forward-looking non-GAAP financial measure to the most comparable GAAP measure.
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 commencement of commercial production at the Detour Lake mine in the third quarter of 2013, the plant being able to deliver its nameplate of 55,000 tpd (at 92% availability), the expected reduction of unplanned shutdowns in the third quarter, the slightly higher overall recoveries expected from the gravity circuit in the third quarter, and producing between 260,000 ounces and 320,000 ounces of gold in 2013, total cash costs in 2013 of between $800/oz and $1,000/oz post-commercial production and annual production of 657,000 ounces of gold over a period of 21.5 years. 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
President and CEO
Director Investor Relations
Detour Gold Corporation
Royal Bank Plaza, South Tower
200 Bay Street, Suite 2200