Inflation has raised the cost of a big gold mine in northeastern Ontario by 13 percent, Detour Gold Corp. said Monday.
In June the Toronto-based company estimated total capital expenditures of its Detour Lake Gold Mine at about $1.28 billion (Canadian).
But with construction on the Detour Lake Gold Mine's infrastructure about 40 percent complete, the company now estimates pre-production capital costs at $1.45 billion.
The revised guidance is based on cost escalation since the June 2011 (price control estimate) driven mainly by higher key consumable input and labor costs, updated infrastructure requirements and increased expenditures to maintain the schedule to deliver first gold production in the first quarter of 2013, the company said in a statement.
The revised forecast of $1.45 billion is just above the plus-15 percent estimation accuracy of the feasibility study estimate, which is very acceptable compared to other large-scale projects being built today, CEO Gerald Panneton said in a statement.
Detour has completed 91 percent of the detailed engineering and 100 percent in equipment procurement.
Detour Lake Gold Mine is estimated to have a current mineral reserve of 14.9 million ounces of gold. The mine is expected to produce an average of 650,000 ounces of gold annually over a mine life of 21 years.