VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/06/16 -- Detour Gold Corporation (TSX: DGC) ("Detour Gold" or the "Company") is pleased to provide an operational update at its flagship Detour Lake gold mine prior to its analyst and investor site visit on June 7, 2016.
Processing Plant (with new 410-conveyor)
The Company successfully installed and commissioned a new 410-conveyor system in the first half of April (refer to April 27, 2016 news release). The new system is proving more efficient and has been tested up to 4,600 tpoh versus the prior system's maximum rate of 3,800 tpoh. The tonnage shortfall resulting from the April shutdown (9 days) is expected to be recovered in the second quarter. The Company will also continue with additional adjustments to test its upper limit of 5,000 tpoh.
Pierre Beaudoin, Chief Operating Officer, added, "The constraint on the 410-conveyor system has now largely been lifted and the processing plant is performing at higher milling rates. In May, the plant recorded an impressive 2.0 Mt of ore processed, and while it is too early to confirm these rates for the long term, it is nevertheless a positive indication that we are on the right path to reach our target of processing 23 Mt of ore annually prior to 2019."
Following the planned shutdown, from April 21 to May 31, the processing plant has averaged a throughput of 64,462 tpd, including 13 days at above 70,000 tpd.
In the short term, in the event that the processing plant outperforms the mine output, the Company plans to supplement the plant with its large run-of-mine (ROM) medium grade stockpile, currently sitting at approximately 134,000 ounces (6.6 Mt at 0.63 g/t Au).
The gold production for the second quarter is forecast to be at the mid-point of our quarterly range guidance of 125,000 to 150,000 ounces.
Medium Grade Fines Test Underway
In parallel, the Company is currently running a test of 100,000 tonnes to enhance the grade by screening the fines (at minus 2") from the ROM medium grade stockpile (mentioned above). This test is expected to validate prior survey results where the grade was enhanced by approximately 100% with 30% of the mass. Final results, including productivity and operating costs, are expected in the third quarter. Subject to positive results, the Company may elect to screen and process the medium grade ore immediately (either from the existing ROM stockpiles or from direct feed).
Mine Output
For the second quarter to date, mining rates (Phase 1 and 2) are averaging 232,000 tpd, as the mine progresses through the pioneering part of Phase 2 and around the Campbell pit area. With the transfer of a rope shovel (CAT7495) into waste mining in June, the Company is targeting mining rates of between 250,000 and 270,000 tpd for the second half of 2016.
Lower Detour Drilling Program
The assay results from the 2016 winter drilling program at Lower Detour are expected to be released in July. The drilling program is expected to resume this summer to complete the remaining 25,000 metres of infill drilling at Lower Detour and other targets on the property.
Guidance
Detour Gold reiterates its 2016 guidance of between 540,000 and 590,000 ounces of gold at total cash costs of US$675 to $750 per ounce sold and all-in sustaining costs of US$840 to US$940 per ounce sold (see end of news release for non-IFRS measures).
Detour Lake Mine Tour Presentation
The Detour Lake Mine Tour presentation is posted on the Company's website on the home page and under Investor Centre at www.detourgold.com/investors-centre/events-calendar.
Technical Information
The scientific and technical content of this news release was reviewed, verified and approved by Drew Anwyll, P.Eng., Senior Vice President, Technical Services, a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
About Detour Gold
Detour Gold is an intermediate gold producer in Canada that holds a 100% interest in the Detour Lake mine, a long life large-scale open pit operation. Detour Gold's shares trade on the Toronto Stock Exchange under the trading symbol DGC.
Non-IFRS Financial Performance Measures
The Company has included certain non-IFRS measures in this news release. The Company believes that these measures, in addition to conventional measures prepared in accordance with IFRS, provide investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers.
Total cash costs
Detour Gold reports total cash costs on a sales basis. Total cash costs include production costs such as mining, processing, refining and site administration, agreements with Aboriginal communities, less non-cash share-based compensation and net of silver sales divided by gold ounces sold to arrive at total cash costs per gold ounce sold. The measure also includes other mine related costs incurred such as mine standby costs and current inventory write downs. Production costs are exclusive of depreciation and depletion. Production costs include the costs associated with providing the royalty in kind ounces.
All-in sustaining costs
The Company believes this measure more fully defines the total costs associated with producing gold. The Company calculates all-in sustaining costs as the sum of total cash costs (as described above), share-based compensation, corporate general and administrative expense, exploration and evaluation expenses that are sustaining in nature, reclamation cost accretion (also known as unwinding of the discount on decommissioning and restoration provisions), sustaining capital including deferred stripping, and realized gains and losses on hedges due to operating and capital costs, all divided by the total gold ounces sold to arrive at a per ounce figure.
Other companies may calculate this measure differently as a result of differences in underlying principles and policies applied. Differences may also arise to a different definition of sustaining versus non-sustaining capital.
Forward-Looking Information
This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as "forward-looking statements"). Specifically, this news release contains forward-looking statements regarding recovering in the second quarter the tonnage shortfall resulting from the April shutdown, being on the right path to reach Company target of processing 23 Mt of ore annually prior to 2019, planning in the short term to supplement the plant with its large run-of-mine (ROM) medium grade stockpile in the event that the processing plant outperforms the mine output, gold production forecast for the second quarter at mid-point of Company quarterly range guidance of 125,000 to 150,000 ounces, screening and processing the medium grade ore immediately subject to positive results from the medium grade fines test, targeting mining rates of between 250,000 and 270,000 tpd for the second half of 2016, and drilling program resuming this summer.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Detour Gold's ability to predict or control and may cause Detour Gold's actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, gold price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, general economic conditions and other risks involved in the gold exploration and development industry, as well as those risk factors discussed in the section entitled "Description of Business - Risk Factors" in Detour Gold's 2015 AIF and in the continuous disclosure documents filed by Detour Gold on and available on SEDAR at www.sedar.com. Such forward-looking statements are also based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the following: the availability of financing for exploration and development activities; operating and capital costs; the Company's ability to attract and retain skilled staff; the mine development schedule; sensitivity to metal prices and other sensitivities; the supply and demand for, and the level and volatility of the price of, gold; timing of the receipt of regulatory and governmental approvals for development projects and other operations; the supply and availability of consumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; the accuracy of reserve and resource estimates and the assumptions on which the reserve and resource estimates are based; market competition; ongoing relations with employees and impacted communities and general business and economic conditions. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are made as of the date hereof, or such other date or dates specified in such statements. Detour Gold undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.
Contacts:
Detour Gold Corporation
Paul Martin
President and CEO
(416) 304.0800
Detour Gold Corporation
Laurie Gaborit
Director Investor Relations
(416) 304.0581
