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Detour Gold on Target to begin production next year

September 1, 2012
by Sudbury Mining Solutions Journal
In: News with 0 Comments

Detour Gold Corporation’s Detour Lake open pit gold mine in northeastern Ontario remains on budget and on schedule for gold production to start in the first quarter of 2013.

Project construction reached the 75 per cent completion mark on June 30 and a 230 kV transmission line was connected to grid on July 19. Pre-stripping reached 10 million tonnes mined, the process plant mechanical contract was at 60 per cent completion and 1,550 workers were onsite.

“We have achieved another significant milestone with the successful connection of the 230 kV transmission line, which will allow for the full commissioning of the grinding mills to start as planned before year-end,” said Gerald Panneton, president and CEO of Detour Gold. “Our site and Cochrane team of 279 employees are actively preparing for the commencement of operations. The company remains on budget with sufficient cash to complete the project construction and on schedule for gold production to commence in the first quarter of 2013.”

Pre-production capital cost estimates for Detour Lake remain unchanged at $1.45 billion, of which approximately $969 million was been spent as of June 30, 2012, leaving $481 million still to be spent. Approximately $1.29 billion has been committed. The company has approximately $576 million in cash and short-term investments, sufficient to fully finance the remaining project expenditures. As part of its risk management strategy, it is seeking a $100 million secured credit facility to provide additional financial flexibility and working capital during the initial ramp-up period.

The project site has been connected to 115 kV source since October 2011. The 230 kV transmission line allows for the commissioning to start, providing more than the 85 MW of power consumption needed to service the entire Detour Lake mine operation once in full production.

A significant portion of the remaining construction activities are within the process plant building where over 800 workers are installing equipment and proceeding with the mechanical, piping, electrical and instrumentation (MPEI) contracts.

In addition, Detour Gold has commissioned all four wings (400 rooms) of the permanent camp, which brings the total to 1,700 rooms available onsite.

The 2012 pre-stripping operation is well underway in the Calcite Zone (western portion) of the Detour Lake deposit. The pre-stripping operation is supported by eight haul trucks, two hydraulic shovels and two additional excavators. The production rates are steadily increasing and have now reached a peak of nearly 120,000 tpd. The company is targeting to have up to three million tonnes of ore (at an average grade of 0.85 g/t Au) available for processing prior to the commencement of operations.

In preparation for the 2013 production plan, the company will have by year-end 2012 a fleet of 26 haulage trucks (20 X 320 tonnes and 6 X 100 tonnes) with four shovels (two of 28/34 m3 and two of 48 m3) and two smaller excavators (for the 100 t trucks). A significant portion of these deliveries will be leased under the company’s US$150 million lease facility with CAT Finance.

The operational readiness planning is progressing on schedule in preparation for commissioning and start-up activities. Detour Gold operation manpower is now at 279 employees with all 23 senior operational management positions filled. A significant percentage of employees are working on the open pit mine development. The company is meeting its planned hiring rate expectations and is confident about meeting its 400 permanent employee target by year-end.

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Sudbury Mining Solutions Journal is printed quarterly -- March, June, September and December. Circulation includes distribution to mining executives, consultants, suppliers, distributors, government officials and opinion leaders across Canada and around the world.

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