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Detour Gold Releases Update on Operations at Detour Lake Gold Mine

Detour Gold Corporation is pleased to provide an operational update at its flagship Detour Lake gold mine prior to its analyst and investor site visit on June 4, 2015.

The Detour Lake mine operation continued to make positive progress towards achieving steady state and has exceeded budget rates for both mill throughput capacity and mining rates over the last three months.

Highlights

  • Mill throughput rates averaged 59,370 tpd over last three months, exceeding design capacity of 55,000 tpd
  • Mining rates averaged 271,000 tpd over last three months, exceeding annual budget rate of 238,000 tpd
  • Gold production for the second quarter is expected to be within guidance of 110,000 to 120,000 ounces

"I am proud to report the accomplishments of our entire team towards achieving operational stability; it has been a challenging environment but perseverance and hard work has paid off," said Pierre Beaudoin, Chief Operating Officer. "We remain on target for achieving our first quarter at the design throughput rate, equivalent to processing 5 million tonnes of ore. At the mine, we continue to see the benefits of our efforts in improving our production drilling rates which have resulted in significantly increased blasted inventory and higher shovel productivities. The progress achieved at the operation in the last three months gives us further confidence that we can now target higher levels at both the mine and mill."

Operational Update

On the mining side, production drilling rates have exceeded 3 kilometres per day over the last three months, contributing significantly to higher blasted inventory levels and higher shovel productivities. This has resulted in mining rates (Phase 1 and 2) averaging 271,000 tpd over the same three month-period, approximately 14% above the annual budget rate of 238,000 tpd. At the end of May, mineable broken and drilled inventory in the pit stood at 5.2 Mt as compared to 2.7 Mt at the end of 2014.

The mill facility has operated at 59,370 tonnes per day (tpd) over the last three months with 5.5 Mt of ore processed. With no scheduled shutdowns during that period, mill operating time reached 91%, within 1% of design levels. Milling rates averaged approximately 2,700 tonnes per operating hour (tpoh), exceeding the annual budget of 2,600 tpoh and the design levels of 2,500 tpoh. For June, with a four day planned shutdown to replace the SAG mill liners on both lines, the mill facility will be operating at lower levels. As a result, the mill is still expected to process approximately 5 million tonnes (Mt) of ore at grade of between 0.75 and 0.80 g/t for the second quarter, both in line with budget.

For the remainder of 2015, the Company is now targeting mining rates of between 250,000 and 290,000 tpd. At these higher mining rates, access to the higher grade ore is now anticipated to start in the third quarter versus the fourth quarter. As a result, approximately 10,000 to 15,000 ounces from the fourth quarter production is targeted to be processed in the third quarter.

2015 Guidance

Detour Gold reconfirms its 2015 guidance of between 475,000 and 525,000 ounces of gold at total cash costs of US$780 to $850 per ounce sold(1) and all-in sustaining costs of US$1,050 to US$1,150 per ounce sold. The Company will provide a further update for the second half of 2015 with its second quarter results.

Life of Mine Plan Update

The objective of the life of mine (LOM) plan update is to maximize returns for next 5 to 10 years and optimize NAV while optimizing capital allocation of the mining fleet. The Company is currently evaluating five mine plan scenarios ranging from 105 to 140 Mt annually (equivalent to mining rates of 288,000 to 385,000 tpd). In the new LOM plan, Block A pit development is planned to commence no earlier than in 2018 and is also being considered as a tailings impoundment (potentially removing the need for Cell 3) and waste disposal for the Detour Lake pit.

The LOM plan update is expected to be completed in the fourth quarter of 2015 and be released along with the 2016 guidance.

Source: http://www.detourgold.com/

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