Q2 Production Results
posted on
Jul 09, 2013 07:13PM
Advancing North America's 4th Largest Gold Reserves Towards Development
Detour Gold Reports Second Quarter Production Results
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 prestripping 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
Recovery (%) 80 83
Availability (%) 66 68
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.
Cash position
As of June 30, 2013, the Company had approximately $207 million in cash and short-term investments.
Guidance
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.