Detour Gold Gets Tgt BoostDetour Gold Gets Tgt Boost At Paradigm After Project Update19 minutes ago - Dow Jones Newswires
TORONTO (Dow Jones)--Detour Gold Corp. (DGC.T) tends to "underpromise and overdeliver," Paradigm Capital Inc. said Wednesday in raising its target on Detour Gold's stock to C$30 from C$26.
Paradigm's move follows the company's release Tuesday of assay results from 27 more holes at its Detour Lake project in northern Ontario. The drilling is part of a Phase II program started in July 2007.
As reported, Detour Gold said it has completed 302 holes totaling 119,002 meters (including 19 abandoned holes), and has reported 187 holes totaling 68,428 meters (including 15 holes abandoned). There are four active drill rigs on site.
In a research report, Paradigm analyst Don Blyth said the latest results are positive and include numerous good intersections of higher grade material which help to raise the overall grade of the deposit.
Detour Gold said it's very confident it can meet its goal of outlining a mineral resource of more than 10 million ounces of gold at Detour Lake. Blyth said that's "setting the bar pretty low," adding that a total resource in the 12-15 million ounce range "should be an easily attainable goal."
Blyth said the company indicated the feasibility study will assume a development scenario starting at 30,000 tons a day, increasing to 60,000-ton-a-day throughput. He said the guidance is greater than expected, suggesting average annual production of more than 850,000 ounces a year. Paradigm had previously assumed a start at about 25,000 tons a day, ramping up to 45,000 tons daily.
Blyth said Detour Gold is on the "premium" end of Paradigm's emerging producer tier, and could emerge as an "instant" intermediate producer due to its production potential.
He also called Detour Gold a natural takeover target, citing its location in a very safe jurisdiction and the fact that the Detour lake project appears to have no unusual technical challenges.
Detour Gold is trading at C$21.49 in Toronto Wednesday, up 3.3%.
The company plans to release its mineral resource update for the project on July 2. Blyth said a feasibility study on the project is expected by the end of this year.
In a separate report, Paradigm raised its price target on Pelangio Mines Ltd. (PLG.T), which owns about 42% of Detour Gold on a diluted basis. Blyth said much of Pelangio's valuation is derived from its Detour Gold stake. His new target is C$7.65, up from C$6.65.
Pelangio is trading at C$4.66 in Toronto, up 3.6%.
Paradigm has an investment-banking relationship with Detour Gold. Blyth doesn't own shares of either Detour Gold or Pelangio.