glori, the only things that really stand out to me (other than a $3bil market cap) are that all resources are "measured and indicated" and the feasibility study is for an "open pit"...they're still not permitted and the fact that they have no P&P resources suggests to me that "mid-tier", "near construction" explorers are starting to demand a premium in this market...we may not be as far away as we think...

Detour Gold -Canada's largest new gold play breaking ground by Christmas

What is billed as Canada's largest gold play is moving ahead well and plans to commence construction as soon as final permitting is in place.

Author: Lawrence Williams
Posted: Tuesday , 21 Sep 2010

Denver-

The second day of the Denver Gold Forum sees the emphasis on presentations shifting to the mid-tier miners, and the really big new projects which are in, or close to, construction with the presenters allowed a little more time to make their cases to the audience of financiers, analysts and fellow miners.

The opening presentation at one of the two conference streams was by one of the most interesting of the new project explorers/developers - Detour Gold, which is close to commencing construction on Canada's largest pure gold project, which has a Measured and Indicated resource of 17.7 million ounces of gold to develop around an old mining operation once run by Placer Dome as an underground mine. The project this time around, like a number of others now coming to fruition in Ontario and Quebec in Canada, involves the development of a large, big scale, low grade surface mining operation in an area which has previously supported underground gold mining.

Indeed, according to the company's President and CEO, Gerald Panetton, the exploration potential in the proximity to the already-defined resource could be as much as 24-25 million ounces, with the orebody open to the west and at depth.

Currently Detour is awaiting its final permitting to be approved, and expects this to be in place late this year at which point construction would commence. Everything is in pace for this to move ahead fast with long lead time equipment for the plant on order, the EPCM contract has been awarded, as has the contract for the 36 strong 300 ton truck fleet and the necessary closure plan has already been filed.

The very positive feasibility study is based on an open pit reserve of 11.4 million ounces calculated at a gold price of $850 an ounce, giving it a 16 year life at 55,000 to 61,000 tonnes per day. Annual gold production on this basis would be 649,000 ounces at a cash cost of US$437 an ounce. Obviously at higher gold prices the economics are even more compelling, and would probably lead to a lower cut off grade being imposed which might reduce annual output, but improve the reserve figure and mine life - and this is without the additional potential from extending the pit to the west.

The company has also over-designed many plant elements - notably the primary crusher - which would enable it to increase throughput very easily should this be decided upon

The construction schedule suggests gold output at end 2012/early 2013. About half the Can$1.2 billion financing for the project has already been secured and Panetton says he does not plan to raise the balance through equity, but through debt finance and this should be in place early next year.

There is, according to Panetton, great additional discovery potential adjacent to the planned pit and in the company's big land holdings close by - and as noted above it would be relatively easy to expand the plant to 90,000 tonnes a day - perhaps by 2016 which could have the project producing 900,000 ounces a year over a 20-year mine life, and, if things go well this could be in place by 2016.