TORONTO (miningweekly.com) – Emerging midtier gold miner Detour Gold on Monday said that production could double at its flagship Detour Lake mine, in Ontario, to between 450 000 oz and 500 000 oz this year, and that cash costs would drop to between $800/oz and $900/oz.

The TSX-listed company also announced that it had secured a long-term electricity contract at a fixed rate, which is lower rate than the spot rate, for the Detour Lake mine. Detour said it expected to save C$20-million in power costs this year after it secured a six-year power contract at C$0.05/kWh with the Ontario Power Authority.

"We remain optimistic on further improvement in operational performance of the Detour Lake mine as evidenced by the 2014 guidance. It is our second year of operations and we expect 2014 to serve as a stepping stone towards further production increases and cost reductions.

"We are also very pleased, in an open market with fluctuating energy prices, that Ontario has created a programme for price stability and that the Ontario Power Authority has recognised the importance of the employment that Detour Gold has created in north-eastern Ontario,” interim CEO Paul Martin said.

Detour said its sustaining capital spending guidance for 2014 would total $131-million, more than what erstwhile president and CEO Gerald Panneton said last year was expected to be less than $100-million.

“This continues to reaffirm our belief that the company may need to complete a financing in the first half of 2014 to avoid its cash balance falling below $80-million,” Desjardins Capital Markets said in a statement to clients.

The Detour Lake mine was expected to process 19-million tonnes in 2014 at an average grade of 0.87 g/t with a recovery rate of 92% and a strip ratio of 3.3:1.

According to the 2012 year-end statement, the Detour Lake mine has proven and probable reserves of 15.6-million ounces of gold.

After the company released the positive news Detour’s TSX-listed stock rose to a high of C$6.44 on Monday, before settling at C$6.19 apiece.