Remember a couple of years ago, Premier Dalton McGuinty said this province
could no longer count on “pulling stuff out of the ground” for jobs? All goes to
show just how wrong he was. And how out of touch, not just with northern Ontario,
but with the economy. (Christina Blizzard – June 10, 2011)
Mining companies spending billions here in search of riches. So why did Dalton McGuinty blow them off?
Skyrocketing world gold prices are providing a boost to this province’s northern economy, as mining companies look to old mines in search of the precious metal.
Detour Lake gold mine, near Cochrane, will be the largest gold mine in Canada when it starts production in 2013. Based on today’s spot gold price, it will generate more than $1 billion a year for 21 years, says Detour Gold President and CEO Gerald Panneton.
And while the price of gold, like all resources, fluctuates, he says gold’s been around for 6,000 years and it’s here to stay. “People have tried to push it away and then get rid of it, but it always came back,” Panneton said in an interview.
Gold is tough to replace and is the most versatile, malleable element you can find. “If you try to accumulate value in silver or copper or zinc, you’ll need a huge warehouse,” he said.
“Whether it’s for medical purposes, for conductivity, for reflecting the sun on airplanes, it’s always had its use and always will,” he said.
It’s also used around the world as the best method of cross-cultural payment between countries.
As well, China is now investing in gold. Last year it was the second largest investor in gold. Ten years ago, investment in gold was forbidden in that country.
While Detour Lake has created an economic boom in Cochrane, the whole of the Timmins and Kirland Lake area will benefit from the $1.2-billion investment.
Detour bought the property in 2006 for $75 million, when gold was about $400 an ounce. It had previously been operated by Placer Dome, who shut down operations several years earlier when the precious metal bottomed out at around $250 an ounce.
“Our rate of return is 15% at $850 gold and we have 21 years of mine life,” Panneton said.
Detour bought there because, as he put it, “it’s easier to find gold where there is gold.”
Panneton was previously with Barrick Gold and a lot of Detour’s workers have similar backgrounds.
“When you explore or try to put a gold deposit together in the middle of nowhere, it will be tough. But if you buy an asset like Detour Lake where there is already 1.7 million ounces of resource, you know there is gold.
“You know there was a mine there before where they mined 1.8 million ounces — well, maybe there is a chance for more,” he said.
For the rest of this article, please go to the Toronto Sun website: http://www.torontosun.com/2011/06/09/an-ontario-gold-rush