Big resource boost at Detour Lake (July 03, 2008)

Detour Gold (DGC-T) has more than doubled measured and indicated resources for 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 considered using a US$700 per oz. gold per 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 (40×40-metre spacing) for the estimate; slightly more than half the drilling done during the phase II program this year.

The company has 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 for 2.7 km in length and up to 650 metres in depth. 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 after that.

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

Mineralization has also not yet been fully-tested to the north in the hanging wall outside the main 200-metre wide corridor.

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

In April, Detour decided to acquire a full 100% in the property from option holder Goldcorp, which now holds a 1% net smelter return royalty, which can be bought for $1 million. Newmont 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 a National Instrument 43-101 technical report should be ready 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 2009.

Detour shares were down almost 11% today or $2.55 to $21.25 on a trading volume of 348,000 shares. Shares have an 52-week rolling high of $25.40 and a low of $5.11.