TORONTO, ONTARIO--(Marketwired - Jan. 30, 2017) -
Detour Gold Corporation (TSX:DGC) ("Detour Gold" or the "Company") announces that given the current uncertainties associated with the permitting process for the West Detour project, it is no longer reasonable to assume that the permits required will be obtained in time to allow mining to commence in January 2018 (as per the current mine plan). As a result, the Company is preparing an alternative mine plan and will be filing a new life of mine ("LOM") plan and associated Technical Report under National Instrument 43-101 prior to the end of March 2017.
As explained below, the Company filed an Environmental Study Report ("ESR") with provincial authorities today. However, the Company was recently notified by one of its Aboriginal partners that it had made a request for a federal environmental assessment process. While the Company believes that the ESR meets both the provincial and federal environmental standards, the provincial process typically takes one year compared to two to three years for the federal process.
Paul Martin, President and CEO of Detour Gold stated, "Although we are disappointed with the permitting delay for West Detour, having the benefit of a large reserve base allows us to manage this schedule change. The Company is currently in discussions with the federal authorities and looks forward to concluding this matter shortly."
Filing of Environmental Study Report
The ESR was filed today with the Ministry of Natural Resources and Forestry ("MNRF") under the Ontario Environmental Assessment Act for a Class "C" Environmental Assessment for Resource Stewardship and Facility Development Projects. In addition, the ESR was distributed to both provincial and federal ministries and impacted Aboriginal communities for their review and comment.
While the Company has not yet obtained the support of all Aboriginal partners, it filed the ESR in order to trigger the commencement of the environmental assessment process. The Company will continue to engage with all of its Aboriginal partners throughout the environmental assessment process.
Request for Federal Environmental Assessment
The Company was notified by one of its Aboriginal partners that it had submitted a request to the Canadian Environmental Assessment Agency ("CEAA") to subject the West Detour project to the federal environmental assessment process under the Canadian Environmental Assessment Act, 2012 (the "Act"). The Company has received confirmation from CEAA that such a request has been made.
Although CEAA had advised the Company in 2015 that the proposed project was not a "designated physical activity" under the Act and therefore a federal environmental assessment process was not required, in light of CEAA's receipt of a formal request for a federal environmental assessment, it must review the request. CEAA has not indicated at this time how or when it will respond to the request.
New Mine Sequencing for West Detour
As a result of these events, the Company is reconfiguring its mine plan to determine the optimal timing to commence West Detour. In the base case plan currently being developed, the mining of the West Detour pit would not commence before 2021 to reflect the timing of a federal process, while including flexibility to reflect a shorter provincial process by providing an option to start the adjacent North satellite pit in 2019. In both cases, annual mining rates are projected to ramp up to approximately 120 million tonnes (Mt) from 100 Mt in 2017.
There is no change to the preliminary gold production guidance of 600,000 to 670,000 ounces for 2018. Gold production is expected to be lower in 2019 and 2020 as compared to the prior LOM plan due primarily to the delay of West Detour.
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."
Conference Call Details
The Company will host a conference call and webcast at 10:00 AM ET on Tuesday, January 31, 2017.
Webcast access: via the Company website at www.detourgold.com (details on home page)
- Toll-free (North America): 1-800-319-4610
- Toronto local and international: 416-915-3239
A playback will be available until March 1, 2017 by dialing 604-674-8052 or 1-855-669-9658 within Canada and the United States, using pass code 1141. The webcast and presentation slides will be archived on the Company's website.
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.
This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as "forward-looking statements"). Forward-looking statements relate to future events or future performance and reflect current expectations or beliefs regarding future event. All statements other than statements of historical fact are 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", "targets", or "believes", or variations of, or the negatives of, such words and phrases or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Specifically, this press release contains forward-looking statements regarding the preparation of an alternative mine plan and the filing a new LOM plan and associated Technical Report under National Instrument 43-101 prior to the end of March 2017; the provincial environmental assessment process typically taking one year and the federal environmental assessment process typically taking two to three years; concluding discussions concerning a federal environmental assessment process with federal authorities shortly; the Company continuing to engage with all of its Aboriginal partners throughout the environmental assessment process; uncertainty as to how and when CEAA will respond to the request for a federal environmental assessment; the mining of the West Detour pit not commencing before 2021; an option of starting the adjacent North satellite pit in 2019 subject to receiving the required permits; an annual mining rate of 100 Mt in 2017 and ramping up to approximately 120 Mt; preliminary gold production guidance of 600,000 to 700,000 ounces for 2018; and lower gold production in 2019 and 2020 as compared to the prior LOM plan.
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, the ability of the Company to refinance its convertible notes and credit facility on or before maturity (November 30, 2017 and August 31, 2017, respectively), gold price volatility, changes in debt and equity markets, a reduction in the company's available cash resources, the uncertainties involved in interpreting geological data, risks relating to variations in recovered grades and mining dilution, variations in rates of recovery, changes or delays in mining development and exploration plans, the success of mining, development and exploration plans, changes in project parameters, changes in the company's relationship with its aboriginal partners and other stakeholders, risks related to the receipt of regulatory approvals, 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 and related costs; the mine production schedule; the success and timing of the Company's mining and development plans, dilution control, sensitivity to metal prices and other sensitivities; the supply and demand for, and the level and volatility of the price of, gold; required regulatory approvals and the timing of the receipt of regulatory and governmental approvals for development projects and other operations; the timing and results of consultations with the Company's Aboriginal partners, the supply and availability of consumables and services; the exchange rates of the Canadian dollar to the U.S. dollar; energy and fuel costs; required capital investments; estimates of net present value and internal rate of returns, the accuracy of reserve and resource estimates, production estimates and capital and operating cost estimates and the assumptions on which such 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.