Detour Gold Corporation

Detour Gold Corporation

May 26, 2009 21:03 ET

Detour Gold Reports an Updated Mineral Resource Estimate on Block A Joint Venture Property

TORONTO, ONTARIO--(Marketwire - May 26, 2009) - Detour Gold Corporation (TSX:DGC) ("Detour Gold" or the "Company") reports the results of an updated independent mineral resource estimate on the Block A property, a 50/50 joint venture between Trade Winds Ventures Inc. ("Trade Winds") (operator of the JV) and Detour Gold, located near Detour Gold's Detour Lake gold project in northern Ontario. This updated estimate contained within an open pit shell was completed by Watts, Griffis and McOuat Limited ("WGM"), Consulting Geologists and Engineers of Toronto, Canada and complies with National Instrument 43-101 ("NI 43-101") Standards of Disclosure for Mineral Projects.

In-pit Mineral Resource Estimate for Block A (100%)
(at a cut-off of 0.5 g/t Au)

Resource Category Tonnes Grade Capped Gold Ounces
(millions) (g/t Au) (000's)

Indicated 36.4 1.02 1,200
Inferred 8.3 1.04 277

(1) The mineral resources are classified as indicated and inferred, and
comply with the CIM mineral resource definitions referenced in National
Instrument 43-101.
(2) Base case assumes a gold price of US$700/oz gold and US$ exchange rate
of $1.18.
(3) Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
(4) The quantity and grade of reported inferred resources in this estimation
are conceptual in nature and there has been insufficient exploration to
define these inferred resources as an indicated or measured resource and
it is uncertain if further exploration will result in upgrading them to
an indicated or measured resource category.
(5) The tonnages and grades quoted are undiluted. Gold grades were capped
at values ranging from 10 g/t to 100 g/t based on statistical analysis.

This mineral resource estimate is an update of Trade Winds' December 2006 Technical Report by Golder Associates Ltd. and contains data from an additional 53 diamond drill holes totaling 13,095 metres completed in 2007. The 2007 drilling program targeted near-surface gold mineralization of the M Zone in the eastern portion of the deposit, which enabled the use of a Lerch-Grossman optimized pit shell to generate a preliminary in-pit mineral resource.

The mineral resources described above are contained within two pit shells: the M Zone pit and the North Walter Lake pit. The North Walter Lake pit is located approximately 300 metres to the north of the M Zone pit and contains 2.7% of the total mineral resources reported above. The North Walter Lake pit contains 37,500 ounces of gold in the indicated category (1.4 million tonnes grading 0.86 g/t Au (capped)) and 2,500 ounces of gold in the inferred category (0.1 million tonnes grading 0.69 g/t Au (capped)).

Both the M Zone pit and North Walter Lake pit cross the claim boundary on the eastern side of Block A onto Detour Gold's Detour Lake property (mining lease). The portion of the mineral resources of both pits within Detour Gold's property includes 114,000 ounces of gold in the indicated category (3.3 million tonnes grading 1.09 g/t Au (capped)) and 31,000 ounces of gold in the inferred category (1.0 million tonnes grading 0.97 g/t Au (capped)). These specific mineral resource figures are excluded from those reported above for Block A.

Gold Price and Cut-off Grade Sensitivity Analysis

A gold price sensitivity analysis was completed applying identical input cost parameters at the US$700/oz base case. Gold prices of US$575/oz, and US$825/oz were used to create discrete pit shells with operational cut-off grades of 0.50 g/t, 0.40 g/t and 0.30 g/t Au. Results of this study are presented below.

Indicated Inferred
Category Category
Gold Gold
Cut-off Ounces Ounces
Gold Price Grade Strip Tonnes Grade Capped Tonnes Grade Capped
US$/oz (g/t Au) Ratio (millions)(g/t Au)(000's)(millions)(g/t Au)(000's)
$575 0.50 3.90 26.2 1.08 908 3.1 1.28 127
0.40 2.95 32.4 0.96 997 3.9 1.11 138
0.30 2.17 40.3 0.84 1,086 5.0 0.94 150
$700 0.50 4.68 36.4 1.02 1,200 8.3 1.04 277
0.40 3.37 46.7 0.90 1,348 11.4 0.88 322
0.30 2.37 60.5 0.77 1,502 15.0 0.75 362
$825 0.50 5.61 42.5 1.00 1,361 13.0 1.00 421
0.40 4.00 55.5 0.87 1,548 17.9 0.85 490
0.30 2.77 73.2 0.74 1,746 24.2 0.72 560

Mineral Resource Estimate Parameters and Method

- The block model mineral resources was estimated within a Lerch-Grossman pit shell using MineSight® software based on the concept of a large-scale open pit with the pit parameters indicated below. The cost estimates used in the study were compiled by WGM utilizing public information from similar operations and from various suppliers and contractors.

Exchange Rate C$ 1.18 equals US$ 1.00
Recovery 91%
Ore Mining Costs C$ 1.70/tonne
Waste Mining Costs C$ 1.60/tonne
Processing Costs C$ 6.38/tonne
G & A C$ 1.38/tonne
Refining Costs US$ 6.00/oz
Royalty 2%

- Detailed metallurgical work has not been completed on Block A. For the purposes of the mineral resource estimate, WGM utilized gold recovery rates compiled from public information from Detour Gold and other similar deposits.

- An overall pit wall angle of 24 degrees for overburden and 48 degrees for bedrock were used in the study. This overall angle considered a 35 metre wide ramp system within the angle calculation.

- A three-dimensional (3D) geological and block model was generated using GEMS(C) software. The block model matrix size of 10x15x10 metres (width x length x height) was selected with consultation with the engineering team from WGM and was based on the size that was deemed suitable for an open pit mining scenario. A MineSight® model was created with the exact parameters for use with the Lerch-Grossman algorithm.

- The database used for this mineral resource estimate comprised 602 diamond drill holes totalling 114,951 metres of drilling completed by Trade Winds from 2003 to 2007 and 112,464 metres of historical drilling completed by Placer Dome and prior operators.

- All drill holes are diamond drill core with the majority of the samples collected and assayed at approximately 1 metre sample intervals.

- The composite interval selected was 3 metres downhole.

- Densities were determined for representative rock samples using industry standard methods. The average value for each domain was applied to the block model with a background density of 2.80 tonnes/metre3 for areas outside the domain boundaries.

- Geological rock type coding in the drill hole database led to the development of the 3D lithological domain models. These domains were utilized in the grade variography studies and in the grade interpolation constraints.

- For the treatment of outliers, each statistical domain was evaluated separately. The statistical domains were capped at values ranging from 10 g/t Au to 100 g/t Au in combination with search restrictions on values greater than 20 g/t Au for some of the domains. The procedure used allows the deposit to retain the high grade assays while limiting their influence during the interpolation.

- Ordinary Kriging was used for all domains and grade interpolation at the domain boundaries relied upon the soft/hard boundary determination from the statistical grade contact profiles.

- The interpolation was carried out in multiple passes with increasing search ellipsoid dimensions. Classification for all models was based primarily on the pass number followed by an adjustment to the class model, based on a diamond drilling density map (core area and at depth) and the distance to the closest sample used in the interpolation using the variography results for guidance.

Quality Assurance and Quality Control ("QA/QC") Program

Trade Winds has implemented a quality control program to ensure best practices in sampling and analysis of the core samples. The core is first logged then sawn in half during the sampling process with the remaining half being retained for verification and reference purposes. During sample collection and assaying, there is an established QC procedure for using standards, duplicates and blanks. The core samples were divided into batches of 20 prior to shipment. In each batch, there would be a minimum of one standard, one duplicate sample and one blank sample. It is Trade Winds' policy that duplicates are inserted after high grade gold mineralized samples, especially those with visible gold. The samples are delivered in sealed bags direct to ALS-Chemex Laboratories preparation facility in Rouyn-Noranda, Quebec, Canada. Sample pulps are shipped from there to ALS-Chemex Laboratories in Mississauga Ontario, Canada for analysis. Trade Winds used Chemex AU-AA23, which is a 30 g fire assay with AA finish similar to the analytical technique used by Rocklabs Ltd. supplier of the QA/QC standard. Samples returning greater than 10 g/t Au were automatically processed using a fire assay-gravimetric finish. Total metallic assays for gold were also performed on selected intervals. All sample batches assayed by Chemex included a standard multi-element ICP package. The coarse rejects are kept in Rouyn-Noranda for re-assaying purposes for a period of six months and then returned to the Trade Winds site where they are stored in a locked shipping container at the exploration site.

NI 43-101 Compliant Report

The mineral resource estimate block model was completed by Pierre Desautels, P.Geo, a Senior WGM Associate Geologist. The Lerch-Grossman pit shells and final mineral resource estimates were completed by Gordon Zurowski P.Eng, a Senior WGM Associate Mining Engineer. The material in this news release has been reviewed and approved by Mr. Desautels and Mr. Zurowski of WGM, both Qualified Person as defined by NI 43-101 and by Stephen Wallace, P.Geo, VP Exploration of Trade Winds, also a Qualified Person as defined by NI 43-101. The complete NI 43-101 Technical Report will be filed on SEDAR at within 45 days.

Forward-Looking Information

This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as "forward-looking statements"). Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of, such words and phrases, or statements that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Specifically, this press release includes forward-looking statements regarding: the Detour Gold/Trade Winds Joint Venture's estimate of the quantity and quality of its mineral resources. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Detour Gold's ability to predict or control and may cause Detour Gold's actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, gold price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, general economic conditions and other risks involved in the gold exploration and development industry, as well as those risk factors discussed in the section entitled "Description of Business - Risk Factors" in Detour Gold's 2008 annual information form. Such forward-looking statements are also based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions about the following: the availability of financing for exploration and development activities; the estimated timeline for the development of the Detour Lake Project; the supply and demand for, and the level and volatility of the price of, gold; the accuracy of resource estimates and the assumptions on which the resource estimates are based; market competition; ongoing relations with employees and local communities; and general business and economic conditions. Accordingly, readers should not place undue reliance on forward-looking statements. Detour Gold undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law.

Information Concerning Estimates of Mineral Resources

This news release uses the terms 'indicated' and 'inferred' resources. The Company advises investors that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

Contact Information

  • Detour Gold Corporation
    Gerald Panneton
    President and CEO
    (416) 304.0800
    Detour Gold Corporation
    Laurie Gaborit
    Director Investor Relations
    (416) 304.0581
    Detour Gold Corporation
    Royal Bank Plaza, North Tower,
    200 Bay Street, Suite 2040,
    Toronto, Ontario M5J 2J1