Detour Gold Corporation (TSX: DGC) ("Detour Gold" or the
"Company") is pleased to report an updated National Instrument 43-101
compliant mineral resource estimate for its Detour Lake gold project in
northern Ontario based on a detailed engineered pit design.
Since its December 2007 mineral resource estimate, which included the
historical drilling and Phase I drill results (49,322 metres), the
Company has received assay results for an additional 73,469 metres of
diamond drilling from its ongoing Phase II (representing 54% of Phase
II) in the first half of 2008 that has resulted in a 125%
increase in measured and indicated gold resources from 4.8 million
ounces to 10.8 million ounces while inferred gold resources have
decreased 20% from 3.0 million ounces to 2.4 million ounces.
Based on a cut-off grade of 0.50 g/t gold and a gold price of US$700 per
ounce, the in-pit resources included in a detailed engineered pit
design are shown in Table 1.
Table 1. June 2008 Detailed Engineered Pit Design Resource
Estimate
Base Case US$700/oz
|
Tonnes
(millions) |
Grade Capped
at 20 g/t Au
(g/t Au) |
Gold Ounces
(capped)
(000's) |
Measured (M) |
38.8 |
1.68 |
2,099 |
Indicated (I) |
204.1 |
1.32 |
8,664 |
Total (M&I) |
242.9 |
1.38 |
10,763 |
Inferred |
63.9 |
1.19 |
2,452 |
Refer to notes under table 3. |
Gerald Panneton, President and CEO of Detour Gold commented: "We have
once more exceeded our objectives and demonstrated that Detour Lake is a
world-class gold deposit. There is excellent potential to further
increase the resource base especially to the west of the Calcite Zone
and below the former open pit. As a result, we have added 30,000 metres
of drilling to our program (Phase III) for 2008. The project is robust
at a US$700 per ounce gold price and we expect to deliver a positive
feasibility study as we proceed with a final pit design and reserve
estimates, possibly by year-end. It is our goal of making Detour Gold
the next premium intermediate gold producer."
The mineral resource increase is largely due to:
- An additional 73,469 metres of drilling completed throughout the
deposit, with a focus in the Calcite Zone (western end); also, the 40
metre by 40 metre drill spacing (from a 80 metre drill spacing) has
successfully improved the continuity of the deposit;
- Discovery of more mineralized zones in the hanging wall, north
of the known 200 metre wide corridor;
- Addition of known mineralization that was previously drilled
(prior to Detour Gold) into the new pit shell (below the previous 2007
US$575 pit shell);
- Increase in search radius for indicated and inferred resources
as a result of better continuity; and
- Gold price increase from US$575 to US$700 per ounce with a
cut-off grade of 0.50 g/t.
The proposed open pit extends 2.7 kilometres in length and up
to 650 metres in depth. There is excellent potential for additional
mineralization along strike, especially west of the Calcite Zone for
several kilometres. The mineralized system has also not been fully
tested to the north in the hanging wall outside of the main 200 metre
wide corridor. The deposit remains open below the former open pit where
significant gold mineralization was intersected in the footwall of the
chert marker horizon (CMH) (i.e. hole DG-07-194A).
Mineral Resource Estimate Method
The current block model was prepared by Thon Consulting ("Thon") of
Smithers, British Columbia. Mineral resources were estimated within a
Lerchs Grossman ("LG") optimized pit shell based on the concept of a
large-scale open pit with the following pit parameters to establish the
cut-off grade: gold price of US$700 per ounce, $5.50/t for milling,
$1.58/t for ore and waste mining and $1.00/t for general and
administration (G&A), gold recoveries of 92%, US$ exchange rate of
1.10, and pit slopes of 55 degrees. Pit parameters were provided by the
engineering firm of BBA Inc. ("BBA") of Montréal, Québec.
The block model mineral resources falling within the LG optimized pit
shell were subsequently audited by Watts, Griffis and McOuat Limited
("WGM") and validated by BBA before proceeding with the engineered pit
design. WGM has concluded from their work and review that the search
distance for both the indicated and inferred categories can be increased
from 20 to 30 metres and from 40 to 50 metres, respectively, as a
result of improved continuity of the deposit.
Gold assays are capped at 20 g/t as per the historic capping at the
former mine and the December 2007 mineral resource estimate.
Preliminary and ongoing independent geostatistical studies based on all
drill results to date indicated that a higher capping grade could be
used in the resource estimate.
The mineral resource estimate within the US$700 LG pit shell (using a
cut-off grade of 0.50 g/t gold) on 10X5X10 meter blocks is presented in
Table 2. The overall waste to ore stripping ratio is 5.7.
Table 2. June 2008 Mineral Resource Estimate prior to
Detailed Engineered Pit Design
(by Thon and audited by WGM)
Resource
Category |
Tonnes
(millions) |
Grade Capped
at 20 g/t Au
(g/t Au) |
Gold Ounces
(capped)
(000's) |
Measured |
44.5 |
1.71 |
2,446 |
Indicated |
217.2 |
1.33 |
9,309 |
Total (M&I) |
261.7 |
1.40 |
11,755 |
Inferred |
70.7 |
1.22 |
2,764 |
Refer to notes under table 3. |
Mineral Resources in Detailed Engineered Pit Design
The optimization and designs of the US$700 pit by BBA (Base Case --
Table 1) were based on the block model supplied by Thon. For the Base
Case, BBA used the economical input parameters presented above. The
design pit included an operational haul road and pit slope as per
recommendations from Golder Associates; benching arrangement and
configuration; and smoothing of pit walls and berms.
The mine operating cost established by BBA is based on a preliminary
mine schedule at a mining rate of 30,000 tonnes per day (tpd) for the
first two years of operation and 60,000 tpd in the subsequent years.
Although the preliminary estimates for projected costs (reported on page
2) are believed to be realistic, as they are based on projects of
similar (or lesser) production rates, they should be considered
preliminary and subject to a high degree of risk. BBA used an overall
gold recovery rate of 92% (metallurgical testwork completed by Melis
Engineering Ltd. yielded recoveries ranging from 91% to 95%).
The following are the main open pit design parameters used by BBA:
- Pit ramp of 10% gradient and 32 metres wide to support 2-way
haulage for 218 tonne capacity;
- Inter-ramp angles are 53o to 56 o in the hanging wall and 49 o
to 53o in the footwall based on recommendations by Golder; and
- Mining dilution is not incorporated in the resource estimate.
Based on those design parameters described above, BBA
generated an engineered pit containing the mineral resources shown in
Table 1, which is now considered the Base Case. The overall waste to ore
stripping ratio is 6.29.
Pit sensitivity analysis, using the same identical parameters, was
carried out using a gold price of US$575 and US$825 per ounce with a
cut-off grade of 0.60 g/t and 0.40 g/t gold, respectively. Results of
this study are presented in Table 3.
Table 3. June 2008 Engineered Pits Sensitivity to Gold Price
|
|
|
Measured
Category |
Indicated
Category |
Measured and Indicated
Categories |
Inferred
Category |
Gold Price
US$/oz |
Cut-off
Grade
(g/t Au) |
Strip Ratio |
Tonnes
(millions) |
Grade
(g/t Au) |
Tonnes
(millions) |
Grade
(g/t Au) |
Tonnes
(millions) |
Grade
(g/t Au) |
Gold Ounces
(000's) |
Tonnes
(millions) |
Grade
(g/t Au) |
Gold Ounces
(000's) |
$575 |
0.60 |
5.9 |
24.9 |
1.85 |
137.8 |
1.44 |
162.7 |
1.51 |
7,873 |
41.8 |
1.32 |
1,770 |
$700 |
0.50 |
6.3 |
38.8 |
1.68 |
204.0 |
1.32 |
242.8 |
1.38 |
10,763 |
63.9 |
1.19 |
2,452 |
$825 |
0.40 |
5.5 |
46.8 |
1.51 |
251.5 |
1.18 |
298.3 |
1.23 |
11,793 |
88.4 |
1.05 |
2,996 |
Notes:- The mineral resources are classified as measured, indicated and
inferred, and comply with the CIM mineral resource definitions
referenced in National Instrument 43-101.
- Base case assumes a gold price of US$700/oz gold and $US
exchange rate of $1.10.
- Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
- The quantity and grade of reported inferred resources in this
estimation are conceptual in nature and there has been insufficient
exploration to define these inferred resources as an indicated or
measured resource and it is uncertain if further exploration will result
in upgrading them to an indicated or measured resource category.
BBA also conducted a sensitivity analysis to generate a
resource estimate with no capping. As expected, the result of the
analysis as shown in Table 4 indicated a significant increase in the
gold grade for all categories.
Table 4. Capping Sensitivity for June 2008 Detailed
Engineered Pit Design
Resource Estimate - Base Case US$700/oz
Resource
Category |
Capping
at 20 g/t
(000's oz) |
Grade Capped
at 20 g/t Au
(g/t Au) |
No Capping
(000's oz) |
Grade
(g/t Au) |
Measured |
2,099 |
1.68 |
2,546 |
2.02 |
Indicated |
8,664 |
1.32 |
10,688 |
1.60 |
Total (M&I) |
10,763 |
1.38 |
13,234 |
1.67 |
Inferred |
2,452 |
1.19 |
2,890 |
1.41 |
Additional Information
- The database used for the current mineral resource estimate
comprised a total of 675,417 metres of drilling (5,309 holes) obtained
from surface and underground historical drilling and from 122,791 metres
of drilling (333 holes) completed and assayed by Detour Gold as of
early June 2008 (Phase I and 54% of Phase II).
- Raw assays were capped at 20 g/t Au, prior to 1 metre down-hole
compositing.
- Inverse Distance, Power of 3 (ID3) was used for the mineral
resource estimate with a block size of 10x5x10 metres.
- Measured (0 to 7.5 metres search ellipse distance) and
indicated (7.5 to 30 metres distance) categories required a minimum of
three (3) holes to establish continuity. The remaining estimates (from
30 to 50 metres maximum distance) were classified as inferred.
- The December 2007 near-surface gold mineral resource estimate
contained 1.2 million ounces in the measured category (19.7 million
tonnes grading 1.93 g/t), 3.6 million ounces in the indicated category
(70.2 million tonnes grading 1.60 g/t) and 3.0 million ounces of gold in
the inferred category (63.3 million tonnes grading 1.49 g/t), using a
US$575 per ounce gold price and a cut-off grade of 0.64 g/t gold. It
was contained within a LG open pit design, located in the area of the
former Detour Lake mine, which produced 1.8 million ounces of gold from
1983 to 1999.
Timeline
Release of the remaining Phase II drill results (approximately 65,000
metres) is expected over the next six months. With the encouraging
results obtained this far, another 30,000 metres of drilling (Phase III)
has been added to properly continue the infill of the deposit on a 40
metre by 40 metre grid and to expand the deposit to the west of the
Calcite Zone.
The Company is making good progress on its feasibility study. Detour
Gold plans to order its long-lead items (i.e. SAG and ball mills) within
the next month. Ongoing optimization studies are currently underway for
the design pit and process design flowsheet. Work is underway for the
Environmental Impact Assessment, which is expected to be completed by
early 2009.
NI 43-101 Compliant Report
The Company plans to file a NI 43-101 compliant Technical Report within
45 days. The fully designed and engineered open pit resource presented
in Table 1 was prepared by Patrice Live, Eng. of BBA. The costs
estimates used in the resource estimates were provided and reviewed by
BBA. The gold recovery stated in this release was reviewed by Lawrence
Melis, P.Eng. of Melis Engineering Ltd. The pit slope information used
in the designed and engineered open pit resource was provided by Luiz
Castro, P.Eng. of Golder Associates. All the names mentioned above have
reviewed the content of this news release and are Qualified Persons with
respect to the Company's mineral properties in accordance with NI
43-101 regulations.
The mineral resource estimate presented in Table 2 was prepared for the
Company by Thon Consulting and audited by Michael W. Kociumbas, P.Geo.,
Vice-President of Watts, Griffis and McOuat Limited ("WGM"), Consulting
Geologists and Engineers, based in Toronto, Canada. Both Mr. Kociumbas
and WGM are considered as independent Qualified Person(s). Mr. Kociumbas
has reviewed and approved the current resource estimate content of this
news release.
Quality Assurance and Quality Control ("QA/QC") Program
Detour Gold's exploration program is being managed by Project Manager,
Mr. Roger Aubertin, P.Eng., a Qualified Person within the meaning of
National Instrument 43-101. Mr. Aubertin has verified and approved the
information disclosed in this release. The Company has put in place a
rigorous QA/QC program using best industry practices, which was reviewed
and approved by Lynda Bloom, P.Geo., President of Analytical Solutions
Ltd. For additional information on Quality Assurance and Quality
Control, refer to the press release dated April 11, 2007.
Conference Call
Detour Gold will host a conference call for analysts and investors on Thursday,
July 3 at 10:00 a.m. E.T. (7:00 a.m. P.T.) to discuss the
mineral resource update. You may access the call by calling the operator
at 1-877-407-9210 (toll free access) or 201-689-8049 approximately ten
(10) minutes prior to the scheduled start time.
The call is being webcast and can be accessed at our website
www.detourgold.com or directly at http://www.investorcalendar.com/IC/CEPage.asp?ID=131530.
Those who wish to listen to a recording of the conference call at a
later time may do so by calling 1-877-660-6853 or 201-612-7415 (Replay
Passcodes: Account # 286, Conference ID # 290004). The instant replay
archive will be available until 11:59 p.m. July 17, 2008.
For further information, please contact:
Gerald Panneton, President and CEO
Tel: (416) 304.0800
Laurie Gaborit, Director Investor Relations
Tel: (416) 304.0581
Detour Gold Corporation, Royal Bank Plaza, North Tower, 200 Bay Street,
Suite 2040, Toronto, Ontario M5J 2J1
Forward-Looking Information
This press release contains certain forward-looking information as
defined in applicable securities laws (referred to herein as
"forward-looking statements"). Often, but not always, forward-looking
statements can be identified by the use of words such as "plans",
"expects", "is expected", "budget", "scheduled", "estimates",
"continues", "forecasts", "projects", "predicts", "intends",
"anticipates" or "believes", or variations of, or the negatives of, such
words and phrases, or statements that certain actions, events or
results "may", "could", "would", "should", "might" or "will" be taken,
occur or be achieved. Specifically, this press release includes
forward-looking statements regarding: the Company's planned drilling
program and estimate of the quantity and quality of its mineral
resources. Inherent in forward-looking statements are risks,
uncertainties and other factors beyond the Company's ability to predict
or control. These risks, uncertainties and other factors include, but
are not limited to, the uncertainties involved in interpreting
geological data and other risks involved in the gold exploration and
development industry as well as those risk factors listed in the
Company's Annual Information Form (AIF), Item 4.4 -- "Description of
Business - Risk Factors" filed on SEDAR. Readers are cautioned that the
list of factors included in the AIF is not exhaustive of the factors
that may affect the forward-looking statements. Actual results and
developments are likely to differ, and may differ materially, from those
expressed or implied by the forward-looking statements contained in
this press release. Such statements are based on a number of assumptions
which may prove to be incorrect, including, but not limited to, the
following assumptions: the Company's exploration and development
activities on the Detour Lake Property will proceed in accordance with
the Company's current timetables; and the Company's resource estimates,
geological and metallurgical assumptions (including with respect to the
size, grade and recoverability of mineral resources) and operational and
price assumptions on which the resource estimates are based, are
accurate. Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the Company'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. All forward-looking statements herein
are qualified by this cautionary statement. Accordingly, readers should
not place undue reliance on forward-looking statements. The Company
undertakes no obligation to update publicly or otherwise revise any
forward-looking statements whether as a result of new information or
future events or otherwise, except as may be required by law.
Information Concerning Estimates of Mineral Resources
This news release uses the terms 'measured', 'indicated' and 'inferred'
resources. Detour Gold advises investors that although these terms are
recognized and required by Canadian regulations (under National
Instrument 43-101 Standards of Disclosure for Mineral Projects), the
U.S. Securities and Exchange Commission does not recognize them.
Investors are cautioned not to assume that any part or all of the
mineral deposits in these categories will ever be converted into
reserves. In addition, 'inferred resources' have a great amount of
uncertainty as to their existence, and economic and legal feasibility.
It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the basis of
feasibility or pre-feasibility studies, or economic studies except for
Preliminary Assessment as defined under 43-101. Investors are cautioned
not to assume that part or all of an inferred resource exists, or is
economically or legally mineable.
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