What You Need to Know About High-Grade Gold

Investing in companies that mine higher-grade ore can mean great things for your portfolio.

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Extracting a higher grade of gold ore means extra profit for the same amount of work. Here are three companies that are having some success at finding higher grades.

1. Detour Gold

Detour Gold (TSX: DGC) plans to advance exploration of its large prospective land position. The company’s objective is to find high-grade gold mineralization and potentially increase its gold production. Detour is concentrating on completing the ramp-up of its Detour Lake gold mine in northern Ontario, of which it owns 100%.

Detour Gold is obtaining high grades from drilling approximately six kilometres south of the Detour Lake gold mine. The Lower Detour Lake area returned a best intersection of 12.74 g/t Au over 28.0 metres.

Detour extended its initial 8,000-metre drilling program to almost 15,000 metres because of encouraging results and a longer winter drilling season. It completed 14,874 metres in 40 holes. Currently, Detour Lake represents the largest pure gold reserve in Canada.

2. Eldorado Gold

Eldorado Gold (TSX: ELD)(NYSE: EGO) is having some success mining higher grades. It has its Efemcukuru operation in western Turkey. For Q1 2014, gold production at Efemcukuru was 36% higher year over year. This was the result of higher-average treated head grade and ore tonnes.

In addition,gold production at its Jinfeng mine in Guizhou Province, China was 90% higher year over year. This was primarily due to higher-average treated head grade. Furthermore, gold production at the White Mountain mine in Jilin Province, China during Q1 was 27%  higher year over year because of higher average-treated head grade and higher recoveries. At White Mountain, Eldorado Gold has had recent high-grade intersections from several step out holes.

3. Kinross Gold

Kinross Gold (TSX: K)(NYSE: KGC) has some of its operations producing higher grades. It has its Maricunga open pit mine in central-east Chile. For Q1 2014, results improved at Maricunga, with higher production and lower costs versus Q4 2013. This was the result of higher grades and improved productivity as well as other factors.

In Russia, Kinross acquired 100% of the high-grade Dvoinoye deposit and the Vodorazdelnaya property in 2010. These two properties are approximately 100 km north of the company’s Kupol operation. Its Q1 2014 production at the combined operation exceeded both previous year and previous quarter results. This was primarily because of the impact of processing higher-grade Dvoinoye ore in the expanded mill at Kupol. Gold grades at the combined operation increased 31% versus Q1 2013.

Gold mining companies look to be efficient while continually searching for the best grades. Consider these three companies with the potential to raise the standard of your stock portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Michael Ugulini has no positions in any of the companies mentioned in this article.

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