Updated Detour Lake Life of Mine plan to add to ultraclass fleet

first_imgDetour Gold Corporation has reported the details of its updated life of mine plan (2018 LOM Plan) for its Detour Lake operation located in northeastern Ontario. The 2018 LOM Plan, in conjunction with a stronger leadership team dedicated to implementing several key operational improvement initiatives, represents an intensified commitment to optimise the Detour Lake operation.“Detour Gold is moving forward on an achievable plan to create long-term value for all of our shareholders, with whom we have always maintained an open dialogue. Our Board has made important changes and is committed to making further changes, as necessary, to ensure Detour Lake becomes a consistently profitable operation,” said Alex Morrison, Board Chairman. “With our new mine operating plan in place and a team led by our new Chief Operating Officer, Frazer Bourchier, to execute it, we are confident that we are on track to position the Company as a leading intermediate gold producer. Both management and the Board are highly focused on operational improvements. The impact of the changes we are making will not be evident immediately, but we intend to deliver consistent execution under Frazer’s leadership.”The 2018 LOM Plan includes all production and costs at the Detour Lake mine site and does not include costs for corporate, exploration and interest. Highlights are as follows:Proven and probable reserves of 16.0 million ounces of gold contained in 517 Mt grading 0.97 g/t over a mine life of approximately 23 years (as at December 31, 2017)Average annual gold production of approximately 659,000 oz over LOM at average total site costs of $843 per ounce soldFor the period 2019-2023, average annual gold production of approximately 608,000 ounces at average total site costs of $983 per ounce soldAnnual total material mined ramping up to 129 Mt by 2024Annual plant throughput maintained at 23 Mt starting in 2021Estimated LOM capital costs of $2.5 billion (excluding deferred stripping)Estimated LOM pre-tax cash flows of $8.4 billion at $1,300 per ounce and CAD/US exchange rate of 1.25After-tax NPV5% of $3.45 billion as at January 1, 2018Frazer Bourchier, COO, commented: “This updated mine plan generates a more consistent near and mid-term gold production profile with a cost structure based, in part, on realised performance to date while allowing flexibility for future permitting requirements. All input assumptions consider recent performance, current operational maturity and future planned operational improvements. It is the most prudent and achievable mine development approach for the Detour Lake operation.”The 2018 LOM Plan successfully reduces the large annual variation in projected gold production under the prior plan. Specifically, the gold production profile is more consistent over the next 12 years at approximately 614,000 oz per year and subsequently increases to approximately 725,000 oz per year for the next 10 years.The mine life of 22.6 years is based on the amended mineral reserves statement which is included at end of this news release. The mine production plan assumes the continued development of the Detour Lake pit, including successful attainment of required progressive permits, with the start-up of the West Detour pit in 2025 and the North pit in 2026. The majority of ore tonnes (88%) are sourced from the Detour Lake pit with the balance coming from the West Detour and North pits. Plant throughput capacity is maximized with the processing of LG Fines over the LOM (average grade of 0.59 g/t Au and representing less than 5% of total LOM mill feed).The mining rate for the Detour Lake pit gradually ramps up from 107 Mt in 2018 to 129 Mt in 2024. During this period, the waste to ore strip ratio will vary annually from 3.5:1 to 6.6:1. The ultra-class haulage truck fleet is projected to increase from the current 34 to 39 CAT 795 trucks in 2022 while no increase is expected for the current two electric rope shovels (CAT 7495) and five hydraulic shovels (CAT 6060).The mining phases have been subdivided into more contained geographic areas compared to the prior plan. The mining benches remain at approximately 120 m in width and 12 m in height with two access ramps for waste extraction servicing the upper portion of the pit. There is no change to the wall slope geometry and dilution assumptions. As reported on April 26, 2018, the company has already started on the mine sequencing changes with a focus on the south wall development of the Detour Lake pit.Production from the West Detour pit is scheduled from 2025 to 2036, starting at 8 Mt per year to a maximum mining rate of 31 Mt per year in 2028. It assumes a combination of small equipment (CAT 6030 excavators and CAT 777 haul trucks) and shared usage of the Detour Lake pit mining fleet. The company plans to use the West Detour pit, once depleted, for tailings and/or waste rock deposition. Production from the North pit is scheduled from 2026 to 2030, using a contractor at a maximum mining rate of approximately 6 Mt per year.The 2018 LOM Plan assumes a gradual ramp-up of the processing plant capacity, from 21.0 Mt in 2018 to 23.0 Mt starting in 2021. Overall gold recovery is expected to average 92.8% over the LOM plan.last_img

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