The National Post is Canada’s second largest national paper. Peter Koven is their mining reporter.
Detour Lake, Ontario – It will soon be Canada’s largest gold mine. For now, it is simply one of its busiest construction sites.
More than 900 people and 14 different contracting companies are hard at work at the mosquito-infested Detour Lake site at Northern Ontario, where construction on Detour Gold Corp.’s $1.3-billion gold mine is moving at impressive speed. It is the biggest of several promising gold projects that promise to make Ontario a much bigger player in the global gold sector as the metal continues to hit record highs.
“Managing 14 contractors to stay on time and on budget is always challenging. But so far, so good,” says Gerald Panneton, Detour Gold’s chief executive.
Like many other mining projects in Canada and around the world, Detour Lake is a past-producing property that is being revitalized as a new operation because of high prices. But what makes Detour unique is the stunning exploration success that its new owners have managed in a brief period of time. In five years, Mr. Panneton’s team has identified almost 15 million ounces of gold reserves, with more being added on a regular basis. Including resources, the project holds more than 25 million ounces.
Projects of this size and scale rarely get developed by junior companies, but Detour Gold is pulling it off: the company has raised all the necessary capital and built a mine development team while keeping its share count extremely low. Rival companies have had to issue massive amounts of shares to accomplish the same feat.
The project is expected to reach production in 2013 and create about 580 permanent jobs, with production of 649,000 ounces a year.
“It’s not bad in five years to go from one person to 580,” says Mr. Panneton, 53, who was formerly a senior executive at Barrick Gold Corp.
Despite the massive size and economic impact of Detour Lake, the project has been overshadowed in Ontario by the Ring of Fire, a promising but remote discovery play that is many years away from production. Even Michael Gravelle, Ontario’s minister of northern development and mines, thinks Detour should be getting more credit.
“They are an example of a company that is virtually a model for how one moves forward,” he says. “When one looks at the work they’ve done with the first nations in particular, it’s pretty exciting.”
First Nations relations have tripped up many a mining company in Ontario in the past. Detour Gold avoided this by reaching out to them in immediately in 2006. It eventually signed three separate impact benefit agreements that opened the door for development.
For the rest of this article, please go to the National Post/Financial Post website: http://business.financialpost.com/2011/07/26/ontario/