TORONTO (miningweekly.com) – Intermediate gold producer Detour Gold on Monday closed a C$10.18-million flow-through share financing, issuing 400 000 common shares on a flow-through basis at a price of C$25.47 apiece.

The TSX-listed company announced on Tuesday that the flow-through shares were subject to a four-month hold period in Canada.

Gross proceeds from the financing would be used to fund qualifying ongoing exploration activities on the company's large land position at Detour Lake.

The flow-through structure has been entrenched in the Canadian tax code since the late 1980s, but had existed in Canada in other iterations since the 1950s.

Under Canada’s Income Tax Act, there were two types of flow-through share investments – ‘regular,’ which entailed a 100% deduction write-off for exploration expenses (net of federal and provincial credits) and ‘super,’ which was similar, but added an additional 15% federal tax credit for grassroots exploration, as well as provincial and territorial deductions, and tax credits.

Canadian rules required a company that was renouncing, or flowing through, an exploration expense to an investor, to get out in the field and spend those exploration dollars within 24 months and, in certain circumstances, forcing exploration companies to get to work in the quickest timeframe.

IMPROVED PLAN
In January, Detour Gold announced a new life-of-mine plan for its Detour Lake mine, located in north-eastern Ontario.

Under the new plan, proven and probable openpit reserves had increased to 16.4-million ounces of contained gold, which the company expected to mine at an average rate of about 655 000 oz/y over the mine’s 23-year life. Output would rise to about 617 000 oz in next three years.

Mill throughput would rise from 56 000 t/d to 63 000 t/d in 2019.

The Detour Lake openpit gold mine was located 185 km north of the town of Cochrane, in the Timmins mining camp. It employed about 700 people.

The company held a large land package in the formidable gold-producing region and its initial exploration focus had led to the discovery of the world-class low-grade gold deposit at Detour Lake. The company had consolidated the area and now controlled about 630 km². Its exploration team had identified new opportunities that would potentially expand its reserve/resource base.