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Record 4Q18 and FY18 production for Detour Gold

Published by , Assistant Editor
Global Mining Review,

Detour Gold Corporation (Detour Gold) reports strong 4Q18 and FY18 operating results for its Detour Lake mine located in northeastern Ontario. The company's fourth quarter and full year 2018 financial results will be released on 6 March 2019.

All 2018 numbers are preliminary figures, unaudited and subject to final adjustment.

2018 highlights

  • Gold production of 621 128 oz for the year, above the mid-point of the annual guidance.
  • Gold production of 158 200 oz for 4Q18, representing best ever quarterly production.
  • Annual average mill throughput of 56 594 tpd and fourth quarter average of 60 300 tpd.
  • Annual mining rate of 287 000 tpd and 4Q18 mining rate of 305 000 tpd.
  • Year-end cash and cash equivalents of approximately US$132 million.
  • Finishing the year with over 4 million hours without a lost time incident (LTI).

Frazer Bourchier, COO of Detour Gold, commented: "We surpassed our production target for 2018 with a strong finish to the year. The fourth quarter represented our third successive quarter with overall operational improvement with record total tonnes mined and gold production. Looking ahead, we will remain focused on continuing the momentum in making operational efficiency gains while reducing unit costs to meet our targets for 2019 and beyond.

Bill Williams, Interim CEO, added: "These recent results provide confirmation that the operational changes made throughout the year have had a positive impact. We look forward to reporting on further progress during the course of 2019 and to regaining investor confidence."

4Q18 and FY18 operational results

Fourth quarter gold production of 158 200 oz, bringing total gold production for the year to 621 128 oz, representing an increase of 9% from 2017.

Mill processed 5.6 million t of ore at a head grade of 0.98 g/t with recoveries of 90.9% in the fourth quarter. For the year, the mill processed 20.7 million t of ore at a head grade of 1.04 g/t and recoveries of 90.1%. Higher head grade reflected positive grade reconciliation. Advancements in fixed maintenance practices, along with progressing the plant capital projects, led to increased plant operating time and higher recoveries in the fourth quarter.

A total of 28.0 million t (ore and waste) was mined in the fourth quarter (equivalent to mining rates of 305 000 tpd), representing a third consecutive quarter of improvement and the most tonnes mined in a quarter since the commencement of operations. The month of December averaged 318 000 tpd. For the year, a total of approximately 105 million t was mined, in line with expectations.

The gold in-circuit inventory returned to normal levels during the fourth quarter.

Run of mine stockpiles stood at 5.5 million t grading 0.62 g/t (approximately 109 000 contained ounces) at year-end.

Total capital expenditures for 2018 are estimated to be below the guidance of US$265 - US$285 million. Sustaining capital expenditures are expected to be lower than guidance of US$206 million due to delays in the construction of Cell 2 of the tailing facility, deferral of other discretionary capital, and a weaker Canadian dollar than budgeted.

2018 year-end financial update

As of 31 December 2018, the company had US$312 million of zero-cost foreign exchange collars to hedge its Canadian dollar denominated costs whereby it can sell US dollars at an average rate of 1.27 and can participate up to an average of 1.35. This represents a hedge coverage ratio of approximately 50% for projected 2019 expenditures.

As of 31 December 2018, the company had a total of 30 million l of outstanding diesel fuel contracts at an average rate of CAN$0.85/l, which will settle on a net basis.

As of 31 December 2018, the company has approximately US$132 million of cash and cash equivalents and US$222 million available and undrawn from its US$500 million credit facility.

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