Ontario Mining Association member Detour Gold is involved in one of the most significant projects in the province turning a former mine site into one of the largest gold mines in Canada. Detour Gold is investing more than $1.2 billion to bring the property into production by early 2013.
The mine is located at the end of a paved road approximately 150 kilometres east and north of Cochrane, Ontario, about 10 kilometres west of the Quebec border. Current studies indicate the property contains mineral reserves of 11.4 million ounces of gold. The feasibility study calls for a 16 year mine life with an average annual gold production of about 650,000 ounces. (Detour Gold has just announced an update on its mineral reserves to 14.9 million ounces, a 31% increase. This is expected to increase the mine life to 21 years. )
“Our team has advanced this mineral project in a responsible and efficient manner,” said Gerald Panneton, President and Chief Executive Officer of Detour Gold. “Construction of the mining facilities started in November 2010 on this important project for the economy of Northern Ontario, providing significant employment for local and surrounding communities.”
“The economic impact for Ontario over the life of the mine is projected to be in excess of $8 billion, using a gold price of $850 per ounce,” added Mr. Panneton. Detour gold’s exploration drilling programs have been successful at expanding reserves. The company is confident in reaching its goal of identifying more than 20 million ounces of gold in reserves within the next three to four years.
Infrastructure development is underway at the site for a construction camp to house 1,000 workers by April 2011, excavation of the plant site and installation of the powerhouse to reconnect the mine to Ontario’s electricity grid.
The mine is expected to employ 500 people during operations. Once in production and if the gold price continues to be strong, the company will evaluate the potential to increase mill throughput to 90,000 tonnes per day from 60,000, which would boost bullion production to more than 800,000 ounces annually.
It appears, in this case that the old saying that the best place to find a new gold mine is near an existing gold mine has more merit than ever. Along with technological advances being made in the industry, you have to look at economics. The price of gold today is more than $1,300 an ounce. During earlier production from Detour Lake (1983 to 1999), the price of gold fluctuated between about $500 per ounce and $250 per ounce.
The price was generally higher in the earlier years of the older mine’s operation and generally lower in the later years of its operation. Technological advances and changing economics and markets can turn old mineral properties into new mines, if individuals and companies have the vision and dedication to make it work.
Mr. Panneton is the founder of Detour Gold, which purchased the property for $75 million. With its headquarters in Toronto, Detour Gold became a public company in January 2007 and successfully found more ounces of gold. It is on track to become a gold producer in 2013 – in a six year period. Detour Gold has signed agreements with local Aboriginal communities including the Wahgoshig First Nation, Taykwa Tagamou Nation and Moose Cree First Nation.
From a historical perspective, the Detour Lake deposit was discovered in 1974 by Amoco Petroleum. The mine started production in 1983 with a small open pit from 1983 to 1987 and from underground until closing in 1999. Placer Dome produced 1.8 million ounces of gold over that period at the mine. The operation won the John T. Ryan Trophy for the best safety performance among metal mines in Canada in 1995 and 1996.
Detour Gold www.detourgold.com is and active and long serving member of the OMA. This article is the seventh in a series of profiles of OMA member companies and their contributions to the vitality of Ontario’s society and economy.
Before being founded in 1910, the site of Cochrane was used as a summer camp for Aboriginal peoples and a meeting place for fur traders. The population of Cochrane is about 6,000.
The town is named after politician and merchant Frank Cochrane. He was a former mayor of Sudbury, Minister of Lands and Forests in Ontario and federal Minister of Railways and Canals under the government of Robert Borden.