Detour Gold has executed a term sheet with Caterpillar Financial Services pursuant to which Cat Financial has agreed to underwrite an additional mining fleet lease facility of some $40 million to fund its acquisition of additional Caterpillar mobile fleet equipment including two rope shovels for the Detour Lake gold project in northeast Ontario. This $40 million financing is in addition to the previously announced $105 million mobile fleet equipment financing provided by Cat Financial. The Detour Lake deposit contains an open pit mineral reserve of 11.4 Moz of gold. The results of the feasibility study indicated that Detour Lake will be capable of producing nearly 650,000 oz of gold annually over a mine life of 16 years.
The 376 km2 Detour Lake property is located on the northern most, relatively under-explored, Abitibi Greenstone Belt in northeast Ontario. Detour Lake is approximately 8 km west of the Ontario-Québec border and 180 km northeast of Cochrane, Ontario. Access to the property is available via the Detour Lake mine road, an extension of Highway 652 from Cochrane, as well as by air to the site’s gravel airstrip.
The term of the Additional Facility will be five years and will be secured by the Mobile Equipment. Title to the Mobile Equipment will transfer to the company at the completion of the lease. Closing of the transaction is anticipated to occur in the third quarter of 2011 and is subject to customary conditions including completion of final documentation and satisfactory completion of conditions precedent.
