Big resource boost at Detour Lake (July 14, 2008)

Detour Gold (DGC-T, DRGDF-O) has more than doubled measured and indicated resources at its Detour Lake project, in northern Ontario, to more than 10 million oz. gold.

Up 125% over the last estimate in December 2007, the proposed open-pit operation now has a measured and indicated resource of 242.9 million tonnes grading 1.38 grams gold per tonne for 10.76 million oz. gold.

Inferred resources decreased by 20% to 63.9 million tonnes grading 1.19 grams gold per tonne for 2.45 million oz. gold.

The resource estimate was calculated using a US$700-per-oz. gold price, a strip ratio of 6.3, a cutoff grade of 0.5 gram gold per tonne and a capped grade of 20 grams gold.

Detour used more than 73,000 metres worth of new drill assays (40 by 40-metre spacing) for the estimate — slightly more than half the drilling done during the secondphase program.

The company decided to drill an additional 30,000 metres in 2008 for an upcoming feasibility study.

Detour is looking at an open pit that would extend 2.7 km in length and up to 650 metres deep. The company is looking at mining 30,000 tonnes per day for the first two years of operation, then moving up to 60,000 tonnes per day.

More potential exists for several kilometres along strike beyond the proposed pit west of the Calcite zone, which has been the focus of recent drilling, the company says.

Mineralization has not yet been fully tested in the hangingwall outside the main 200-metre-wide corridor.

The project is on a 242-sq.-km property near the past-producing Detour Lake mine. Previously operated by Placer Dome, the mine produced about 1.8 million oz. gold between 1983 and 1999.

In April, Detour decided to acquire a full 100% in the property from option holder Goldcorp (G-T, GG-N), which now holds a 1% net smelter return (NSR) royalty that can be bought for $1 million. Newmont Mining (NMC-T, NEM-N) holds a 2% NSR for some of the exploration ground as well as the mine option.

The company plans to order its long-lead items such as mill-related parts, within the next month and to file a National Instrument 43-101 technical report within the next 45 days.

Optimization studies for the pit and mill are ongoing and the company expects to finish an environmental impact assessment by early next year.