Detour Gold shares gain 7% as production looms at Lake Gold Mine

Shares of Detour Gold Corp. (TSX: DGC) gained 7% during the market session Wednesday to close at $22.37 per share.

Despite yesterday’s gains the stock remains down -10% year to date and -18% over the last 52 weeks.

However when taken into context since the company’s initial public offering (IPO) in early 2007, the stock has returned gains of over 500% to shareholders to date.

Detour Gold owns and is constructing the Detour Lake Gold Mine, which hosts proven and probable reserves of 15.6 million ounces of gold. Once production is in full force the company expects to produce an average of 657,000 ounces of gold annually over 21 years.

News released by the company in November noted that construction was 95% complete as of November 30, 2012. The company’s guidance has called for the first gold pour to occur in H1 2013 and production to total 350,000-400,000 ounces by year end.

Detour has a large land package covering approximately 556 kilometers and is working to increase reserves to more than 20 million ounces. The nearby Block A Zone is currently undergoing a pre-feasibility study and is expected to add two million ounces to total reserves. Additional regional exploration remains ongoing as well.

The Lake Gold Project occurs along the Sunday Lake Deformation Zone in the Abitibi Greenstone belt. Abitibi is one of the most prolific gold belts in the world and has produced nearly 200 million ounces historically.

As Detour Gold settles into full production over the next two years and looks to replenish reserves, the company will begin identifying active juniors who are advancing deposits of merit in the shadow of its head frame.

Aggressively drilling directly east of the Detour Gold Mine is Balmoral Resources (TSX.V: BAR), a junior who has consolidated a large land position spanning 82 kilometers also along the Deformation Zone.

Balmoral has made multiple discoveries to date, including the high-grade Martiniere Gold System, as well as identified significant bulk-tonnage potential at its Northshore Property.

Balmoral is led by President and CEO Darin Wagner, who has a successful resume operating in the Abitibi Greenstone belt.

Mr. Wagner led West Timmins Mining Inc. for three years and developed the high-grade Thunder Creek Gold Zone, making the company an attractive buyout target. The company was eventually acquired by Lake Shore Gold (TSX: LSG) in 2009 in a deal valued at $424.

Much as he did with Timmins, Mr. Wagner is rapidly developing Balmoral’s portfolio of properties. As the company continues to prove up significant resources, it could become a buyout target for Detour Gold over the next few years.

Also active within the region is Midland Exploration (TSX.V: MD), XMet Inc. (TSX.V: XME) and Osisko Mining (TSX: OSK). However to date Balmoral has showed the greatest potential to develop a deposit of merit.

Shares of Detour Gold are traded on the TSX under the ticker symbol DGC. The company has 113 million shares issued and outstanding, $350 million in cash and a market cap of $2.5 billion.

http://www.juniorminingnetwork.com/mining-news/8026-detour-gold-shares-gain-7-as-production-looms-at-lake-gold-mine.html