TORONTO, ONTARIO--(Marketwire - June 22, 2011) - Detour Gold Corporation (News - Market indicators) ("Detour Gold" or the "Company") reports on the construction progress and 2011 exploration program at its flagship Detour Lake gold project in northeastern Ontario. All dollar amounts are in Canadian dollars.
Detour Lake Construction Update
Detour Gold initiated infrastructure construction activities at the Detour Lake site in November 2010, following receipt of approvals from the provincial government. The development of the mine and construction of the processing plant are proceeding in accordance with the planned schedule. AMEC has operational responsibility for the procurement and construction management services for the project. There are currently approximately 902 construction personnel on site. Personnel at site is expected to reach in excess of 1,000 people at the peak of construction. Overall construction of the project is now approximately 25% complete.
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- Completion of the first 135 kilometre powerline section between the project site and Island Falls (two months ahead of schedule)
- Construction camp is currently at 1,000 rooms; an additional 200 beds anticipated by the end of June
- Plant site earthworks are close to 70% complete
- Concrete work is approximately 30% advanced
- Detailed engineering is 70% complete
- $815.3 million has been committed towards capital expenditures of which $245.6 million has been spent
The concrete work for the process plant building is advancing and the construction team is on schedule to initiate steel erection in late June. Installation of the leach tanks and the electric sub-station near the processing plant is underway. Dam construction around the existing tailings facility is scheduled to start in early July.
Purchase orders have been placed for all major equipment and the first of the initial six hauling trucks (CAT 795E) are arriving on site in July. The first RH340 shovel is scheduled to arrive in October. The SAG and ball mills will be ready to be shipped in August. The last significant contracts, the electric rope shovels and the MPEI (mechanical, piping, electrical and instrumentation), are expected to be awarded in the third quarter.
With procurement activities 85% completed, there is limited exposure for cost overrun or delivery delays for the remaining portion. The majority of contracts have been awarded at or below budget expectations.
The Project Control Estimate completed by AMEC shows total capital expenditures for the project at $1.28 billion versus the feasibility study estimate of $1.18 billion, an increase of approximately 8.5% and well within the feasibility study estimate of -10%/+15%. The increase in costs is primarily related to higher indirect costs in the areas of construction management, construction of temporary facilities and construction freight and an increase of the contingency by $12.1 million to $100.2 million. Management will make every effort to minimize contingency spending through effective construction management and cost control.
Gerald Panneton, President and CEO of Detour Gold said "We are extremely pleased with the progress we have made to date since commencing construction at the Detour Lake site. The project is currently on time and on budget. The Project Control Estimate, being well within the feasibility study estimate, demonstrates the high quality of the work that went into the feasibility study including ordering long lead equipment a year ago. The Company has currently $780 million cash on hand which, together with the US$105 million Caterpillar financing previously announced, provides us with the financing required well into 2012".
2011 Exploration Program
In May, Detour Gold increased its 2011 exploration budget from $14 million to $20 million. Exploration and drilling activities are focussing on:
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Western Extension of Detour Lake Deposit: |
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The initial drilling program of 50,000 metres has been increased to 70,000 metres. Approximately 49,691 metres has been completed to date. A significant amount of drilling is targeting the north wall of the current open pit outline to convert inferred resources into measured and indicated resources and mineral reserves. |
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Lower Detour Deformation Zone: |
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One drill hole on the Aurora claim block completed by Detour Gold on a splay of the Lower Detour Deformation Zone (a major structural break, similar to the Sunday Lake Deformation Zone, which hosts the Detour Lake deposit) encountered a 60 to 80 metre strongly altered shear zone with gold values of 22.6 g/t over 1 metre and 1.4 g/t over 3 metres approximately 50 metres above a historical intersection of 53 g/t over 3 metres. This structure will be tested by additional drilling during the 2012 winter program. |
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A MMI (Mobile Metal Ion) survey of approximately 5,000 samples and a 286 line- kilometre IP (induced polarization) survey are in progress along the 40 kilometre structure. Following the interpretation of the results of this survey, the Company is planning a systematic drilling program to test this important deformation zone. |
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Western End of Detour Lake Property: |
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The Company has completed a 75 line-kilometre IP survey after obtaining positive results from the 2010 MMI survey. The results of this survey will be interpreted once additional survey lines are completed later in the summer. |
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Sunday Lake Property (earning a 50% interest from Conquest Resources Limited): |
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The Company completed a 60 line-kilometre IP survey in January 2011, which was followed by 1,714 metres of core drilling. Assays are pending. |
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Block A (50% joint venture with Trade Winds Ventures Inc.): |
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The joint venture has completed 30,000 metres of drilling to infill the M Zone pit shell on a 40 metre by 40 metre spacing and to test several other targets further to the west of the M Zone. |
About Detour Gold
Detour Gold is a Canadian gold exploration and development company whose primary focus is to advance the development of its flagship 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.
On June 24, 2011, Detour Gold will be launching a photo gallery feature on its website (www.detourgold.com) under "Detour Lake Construction Progress" that will provide timely photo updates as it pertains to the continuing project construction. We invite you to visit the gallery frequently as new photos will be posted on an regular basis. Requests for images for use in publications/media should be directed to info@detourgold.com.
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 successful completion of certain construction activities for the Company's Detour Lake project and exploration to be carried out in 2011. 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 actual results, performance or achievements to be materially different from any of 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 2010 annual information form. 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; the estimated timeline for the development of the Detour Lake gold project; the supply and demand for, and the level and volatility of the price of, gold; 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. 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.
