Detour Gold Corporation--driving to production decision.
"My experience with Barrick is that the faster you bring a project towards production, the cheaper it will be to bring it into production," says Detour Gold president and CEO Gerald Panneton, who previously served in various senior roles at Barrick Gold Corporation.
"That's exactly our strength: to be organized."
Located 140 kilometres northeast of Cochrane, the 240-square-kilometre property was acquired by Detour Gold in 2006 from Pelangio Mines. The former company remains a 46 per cent shareholder.
The company first began drilling in January 2007, starting with four drill rigs and adding a fifth mid-way through the year. In fact, nearly $19 million was spent through 2007 to accomplish 110,000 metres of drilling to define the Detour Lake deposit, with an additional 6,000 metres of drilling to begin work on a feasibility study.
The company has a $14 million budget for 2008, of which $9 million is dedicated to deposit and expansion drilling. The remaining $5 million is earmarked for the feasibility study.
As a result, a sixth drill has since been added to the property in anticipation of completing 60,000 metres worth of drilling over the next five months.
This is expected to provide an updated mineral resource by June, which represents one of two major milestones Detour Gold will see in 2008, with the second being the completion of the feasibility study by the end of 2008. Combined, these two elements will allow the company to make a production decision on the property before 2009, in anticipation of bringing the project into production in 2011.
This extensive drilling marks a dramatic increase over the 30,000 metres Pelangio had drilled on the property over the previous three years, that helped to identify the three million-ounce resource that was said to be on the property upon its purchase by Detour Gold.
The increased drilling activity has stemmed largely from Panneton's confidence in the company's ability to double this resource. Detour Gold indeed accomplished this feat last year, growing the resource estimate to nearly 7.8 million ounces of gold.
While it's much too early to determine any details surrounding the potential mine, Panneton says the company is currently looking at an operation that would be between 20,000 and 40,000 tonnes per day. What's more, the resource is said to be largely near surface, meaning an open pit would be used in any future mining operations. At a potential depth of 500 metres, Panneton says it could become a "big super pit".
Also assisting the project's economics is the fact that the property hosts the former Detour Lake Mine, which produced 1.8 million ounces of gold under Placer Dome from 1983 until 1999, when low gold prices rendered production unfavourable. Some infrastructure still remains, including a permitted tailings facility, which Panneton says is a definite bonus for the project.
In order to better gauge the property's potential, 12,000 metres of exploration drilling is also due to take place to east and west of the gold deposit. This is especially important, Panneton says, as the mine trend has 10 kilometres of potential, of which two kilometres was drilled in 2007. In turn, this stands to create even more value on site, he says.
The rapid timeline of acquisition-to-potential-production being seen at Detour Gold represents a type of flashback for Panneton. As international director of advanced project evaluations, he helped to bring Barrick Gold's Tulawaka Mine in Tanzania from acquisition to production in less than five years, mirroring the anticipated schedule at Detour Lake.
He also credits one of his directors, Louis Dionne, with taking an active role in moving things along--an important helping hand, Panneton says, as Dionne served as Barrick's senior vice-president of underground operations for nearly 15 years.
"It's all about leadership and focus, and it's about having a timeline that makes sense," Panneton says.
Name: Detour Gold Corporation
Head office: Toronto, Ontario
President, CEO: Gerald Panneton
Projects: 1 (Gold)
Trading symbol: DGC: TSX
By NICK STEWART
Northern Ontario Business