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Mining Rate Going Forward a Question Mark

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SsMurry   Thursday, 11/20/14 05:42:51 PM
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Mining Rate Going Forward a Question Mark

There has been mixed impact on Detour Gold Corp, according to analyst Daniel Earle.

In Q3/14, mining rates averaged 206 ktpd, which was the sort of depressed rate that Daniel Earle had expected given the elevated level of overburden, till and other difficult mining the company was doing in the quarter. Daniel Earle expected to learn the mining rate for October, after this difficult mining had been completed, as that would give us a read on 2015. The company did note that after opening up the pit this year, it only needed to mine an average of 245 ktpd to achieve gold production of 540 koz in 2015 – Daniel Earle would suggest this was previously known.

While the company did not disclose the mining rate for October, it did suggest that following the significant overburden and till removal program that ended in July, mining rates did not improve as expected, primarily due to low drilling productivity and delays in explosive loading, which impacted shovel productivity and utilization. To a lesser extent, shovel availability also contributed to lower mining rates (availability of 81% versus 85% target).

The company went on to say that it is working towards a step-up phase to gradually improve mining rates, which includes improving quality assurance and controls for drilling and blasting procedures. Daniel Earle believes additional improvement is needed to average 245 ktpd next year. Finally, Daniel Earle note that the colder temperatures over the next two quarters should help mining rates.

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