Detour Gold Reports First Quarter Production Results
TORONTO, ONTARIO -- (Marketwired) -- 04/09/13 -- Detour Gold Corporation (TSX: DGC) ("Detour Gold" or the "Company") reports its first 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 today at 10:00 a.m. Eastern Time.
First Quarter Highlights
-- First production line started on January 12
-- First gold pour on February 18
-- Second production line started on March 9
-- Gold production (poured and plant inventory) for the quarter totaled
16,841 ounces
-- Processing rates averaging 36,000 tonnes per operating day at end of
March
"As per our guidance, we started gold production in the first quarter of 2013 after 27 months of construction. Our commissioning and operational teams have worked hand in hand and deserve our recognition for their continuous efforts. The ramp-up is progressing and we had already achieved more than 36,000 tonnes per operating day in the latter part of March, including one 12 hour shift at 22,000 tonnes. We are confident that the plant will be able to deliver its nameplate of 55,000 tonnes per day (tpd) at 92% availability," said Gerald Panneton, President and CEO.
Detour Lake Mine - Ramp-up Update
The Company started its first production line on January 12 and the second production line on March 9. During the quarter, the mill processed a total of 1.02 million tonnes of ore from a combination of stockpiles and run-of-mine. In the last week of March, with both grinding lines in operation, the mill averaged more than 36,000 tonnes per operating day, largely without the use of the secondary crushers. As previously reported, all of the main operating units are fundamentally performing as expected. The valuable start-up experience of the first production line was effectively applied to the second production line and results are steadily improving despite lower than expected overall plant availability. The focus will now shift to adjusting and optimizing both secondary crushers' by-pass chutes and shuttle conveyors, which is necessary to increase availability and daily throughput levels to plant design. This work is expected to be completed in May 2013.
The mill facility produced 16,841 ounces of gold in its start-up quarter. As per the mine plan, the average head grade was 0.64 g/t and mill recoveries averaged 80%. Mill recoveries reached 86% in March, which is in line with the model recovery. The gravity circuit is expected to be commissioned in the third quarter coinciding with daily throughput closer to design capacity.
Detour Lake Mine Operation Statistics
Q1 2013
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Ore tonnes mined (Mt) 1.29
Tonnes milled (Mt) 1.02
Mill grade (g/t Au) 0.64
Recovery (%) 80
Availability (%) (1) 66
Ounces produced (oz) (2) 16,841
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(1) Quarterly period starting on January 12 with first production line and
on March 9 with second production line. Availability averaged 70% for
both production lines in the last week of March.
(2) 7,300 oz poured and 9,541 oz of plant inventory.
In the first quarter, 10.43 million tonnes were mined, of which 8.51 million tonnes were waste (including 4.4 million tonnes of overburden). The run of mine (ROM) ore stockpiles contain over 2.3 million tonnes grading 0.70 g/t. The low-grade stockpile was also increased by 0.62 million tonnes to 1.58 million tonnes grading 0.40 g/t.
The first quarter mining rates in the open pit averaged approximately 123,000 tpd (149,000 tpd in March) of total material moved (overburden, ore, waste and re-handling). Ore mining occurred in narrow, lower grade zones just north of the main Calcite zone where higher localized dilution reduced the average plant feed grade (i.e. mining widths of minimum 15 metres). In April, the ore mining has transitioned into the wider Calcite zone (+80 metres) where higher grade ore is to be mined during the second quarter and where dilution is expected to be reduced.
The reconciliation work indicates that the mining grades correspond well with the reserve block model, validating the value of the grade control methodology (RC drilling) and applicable mining dilution.
The Company has a mining fleet of 20 haul trucks and four shovels available for use, which more than meets the requirements of the 2013 mining operation.
2013 Guidance
The Company had given a production guidance of between 350,000 to 400,000 ounces of gold for 2013 and total cash costs of between $800/oz and $900/oz to be reported after commercial production is declared. The Company now believes that producing 350,000 ounces of gold will be at the higher end for 2013 production and will update its guidance in the second quarter. The Company still expects to reach commercial production in the third quarter of 2013.
Cash Position
As of March 31, 2013, the Company had approximately $170 million in cash and short-term investments, which includes a $70 million drawdown from its $90 million revolving credit facility.
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 today 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, April 9, 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 6068079 (available up to April 23, 2013).
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 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, completing the work necessary to increase availability and daily throughput levels to plant design, commissioning the gravity circuit in the third quarter of 2013, mining higher grade ore during the second quarter, reducing dilution, having the equipment required for the 2013 mining operation and confirming the Company's guidance in the second quarter of 2013. 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.
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