Kirkland Lake expects to drill over 270,000 metres at Detour Lake this year
A follow-up mine plan, expected next year, will include the results of company’s exploration program.
Starting in January 2021, the technical report forecasts an 18-year mine life, with 22 years of processing. These last few years would be dedicated to milling of low-grade stockpiles.
“Based on the new mine plan, Detour Lake is poised to become Canada’s largest gold producer and, with the potential for substantial growth in mineral reserves as our drilling programs continue, could very well become one of the largest and most profitable gold mines in the world,” Tony Makuch, Kirkland Lake president and CEO, said in a release. “The 2021 life of mine plan includes significant production growth and improved unit costs compared to past operating experience.”
Makuch added that the production growth is driven by higher mill throughputs and mining rates, lower strip ratios, better fragmentation and improved mill productivity.
Current forecasts guide for a three-year production decline before the mine reaches the 900,000 oz. a year run rate. Ahead of next year’s technical report, Kirkland Lake’s exploration and mine planning focus is on bridging this drop and potentially meeting the 900,000 oz. a year milestone earlier.
The economic analysis, based on $1,500 per oz. gold, forecasts an after-tax net present value estimate for Detour Lake of $3.8 billion, at a 5% discount rate. These numbers incorporate $3.6 billion in capital outlays over the life of the mine ($1.5 billion over the next five years) and are based on average all-in sustaining costs of $821 per oz. ($775 per oz. between 2021 and 2024).
Capital outlay forecasts include $65 to $75 million for a mill expansion, up to 28 million t/y with 22.2 million tonnes processed last year, additional equipment and a tailings facility expansion, among others.
Kirkland Lake expects to drill over 270,000 metres at Detour Lake this year.
“A key factor driving our interest in acquiring Detour Lake mine was the belief that we could substantially grow mineral reserves through extensive drilling. Results to date support our view that there is a large, continuous corridor of mineralization along the Detour Mine Trend that extends from the Main Pit, through the Saddle Zone and continues beyond the West Pit location,” Makuch added.
At the time of the deal announcement in November 2019, Kirkland Lake Gold’s all-share acquisition of Detour Gold had an estimated value of $4.9 billion.
(This article first appeared in the Canadian Mining Journal)
