Detour Gold continues to climb

VANCOUVER — Good gold grades continue to pour out of Detour Gold’s (DGC-T, DRGDF-O) Detour Lake project in northeastern Ontario’s Abitibi greenstone belt and its share price keeps on climbing.

Since mid-2007, the company has completed 302 holes for 119,000 metres of drilling in its second-phase program. The latest set of results included 22 holes from the Calcite zone, which constitutes the west side of the modelled pit, and 5 holes from the Gap zone, the area between Calcite and the West zone that makes up the pit’s eastern side.

In the Calcite zone, hole 267 encountered near-surface mineralization, returning 1.83 grams gold per tonne over 113.5 metres from 55 metres down-hole. Similarly, hole 265 cut 71 metres grading 1.37 grams gold from 77 metres.

Collared near the north edge of the Calcite zone, hole 282 returned 24 metres grading 0.9 gram gold from 199 metres down-hole, followed by 11 metres of 1.26 grams gold, 11 metres of 1 gram gold, 27 metres of 1.45 grams gold, 23 metres of 1.48 grams gold, and finally 7 metres of 12.29 grams gold.

Other holes in the Calcite zone returned comparable results. Some of the stronger intercepts from hole 295, for example, included 21 metres of 1.1 grams gold, 17 metres of 1.36 grams gold, 7 metres grading 2.84 grams gold, and 21.5 metres of 3.29 grams gold.

A previous set of results included 18 holes into the Calcite zone, most of which returned higher gold grades then previously encountered. Hole 247 cored 8 metres grading 9.89 grams gold as well as 20 metres of 9.36 grams gold; hole 266 returned 1.87 grams gold over 65 metres and 3.38 grams gold over 17.5 metres; hole 259 hit 69 metres grading 2.26 grams gold and 27 metres of 5.21 grams gold; and hole 270 returned 6.43 grams gold over 11 metres.

All five holes into the Gap zone hit mineralization. Hole 301, probing the hangingwall, cut 0.93 gram gold over 70 metres near surface. Hole 294, collared 40 metres east, hit 47 metres of 1.05 grams gold from the same structure.

In an earlier set of results, hole 245 returned 4.11 grams gold over 43 metres in the Gap zone as well as 1.85 grams gold over 29 metres, among other intercepts.

A January resource estimate boosted the deposit’s reserves by a whopping 243%, compared with a 2006 estimate. The new report pegs measured and indicated resources at 89.9 million tonnes of 1.67 grams gold for 4.83 million contained ounces, using US$575 per oz. gold and a cutoff grade of 20 grams gold per tonne. Inferred resources add 63.3 million tonnes at 1.49 grams gold for another 3 million contained ounces.

The boost came from a newly discovered mineralized zone in the hangingwall and the expansion of the modelled pit shell based on a higher gold price.

Now Detour is looking to remodel the shell again, this time considering a US$700-per-oz. gold price. An updated resource estimate is due out on July 2, based on a fully designed and engineered open pit supplying a 30,000-tonne-per- day operation for the first few years and increasing to 60,000 tonnes per day thereafter. The new estimate will incorporate results from roughly half of the current drill program, as well as all those from first-phase drilling.

A feasibility study for the project is under way, and expected to be finished by the end of the year.

Detour Gold says it is confident in meeting its objective of outlining a mineral resource of over 10 million oz. gold at Detour Lake. To that end, it exercised its option to acquire the property outright from Goldcorp (G-T, GG-N), which now holds a 1% net smelter return royalty on the site. Detour Gold can buy the royalty at any time for $1 million.

Initial metallurgical test work recently demonstrated that standard gravity-cyanidation treatment of Detour Lake’s ore gives gold recoveries of 91-95%. A large portion of the contained gold is present as free gold particles, meaning an initial gravity circuit grabs 30-45% of the gold. In the cyanidation circuit, reagent consumptions — both cyanide and lime — are low.

Detour Gold’s share price gained 79 to close at $20.80 on the news. When Detour Gold debuted on the market in early 2007, it was trading around $3.50. In the last year, it has gained some 340%. The company has 44.8 million shares issued.