(REUTERS) -- Canadian exploration and development company Detour Gold Corp said its Detour Lake gold project in northern Ontario has received a go-ahead from the federal government.

The Toronto-based company said late on Thursday that the environment ministry has determined that the project is not likely to cause significant adverse environmental effects and it has referred the project back to Fisheries and Oceans Canada and Natural Resources Canada, for the issuance of permits.

The proposed mine is expected to employ about 1,200 workers during the construction phase and about 500 employees once it goes into production.

The roughly $1.4 billion open-pit mine is expected to produce about 650,000 ounces of gold annually, over a mine life of about 20 years. The mine is expected to begin production in 2013, with its average operating costs pegged at about $450 per ounce.

The scale and attractive economics of the project, coupled with its location in a safe jurisdiction, have led many analysts and investors to peg Detour as a takeover target, with majors like Barrick Gold Corp and Goldcorp being named as possible suitors.

Detour itself, earlier this year, acquired exploration company Trade Winds for C$84 million, in a move aimed at consolidating its land holdings around its Detour Lake gold project.

We remain bullish on our outlook for Detour, said Haywood Securities analyst Kerry Smith, in a note to clients. Investors will continue to benefit from continued de-risking of the project, as the company remains on track with development work.

We also believe that the deposit's full-ownership, good infrastructure and status as Canada's largest gold pure play are also pluses, making the company a strong candidate for consolidation.