IAMGOLD makes grass roots find in Guinea

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IAMGOLD Corp. [IMG-TSX; IAG-NYSE] on Wednesday October 2 announced a new grass roots gold discovery at its Karita Project in Guinea, West Africa. The discovery is located directly between the company’s Boto deposit in Senegal and its Diakha deposit in Mali. Highlight drill holes generally have grades around 2-3 g/t gold over widths of up to 20-30 metres at relatively shallow depths of up to 110 metres.

Highlight results include drill hole KRC19-001, which returned 13 metres grading 2.80 g/t gold and 16 metres grading 2.41 g/t gold, including 3.0 metres grading 9.84 g/t gold.

As with IAMGOLD’s previous discoveries at the Boto Gold Project, located 8 km to the north and Diakha-Siribaya Project, located 3 km to the south, the company has intersected multiple, wide zones of mineralization within altered metasedimentary units.

IAMGOLD shares advanced on the news, rising 2.8% or 13 cents to $4.77 on volume of 1.5 million. The shares are currently trading in a 52-week range of $3.08 and $5.55.

The Karita Project is wholly-owned by IAMGOLD and is held under an exploration permit that covers approximately 99.85 km2, located in the Birmian aged Kedougou-Kenieba inlier of the West African Craton region along the borders with Senegal and Mali.

The 2019 drilling program was designed to evaluate the geochemical anomaly for the presence of mineralization and involved the completion of wide-spaced lines of RC drilling over a 1.6-kilometre strike length of the anomaly.

The company said the results of this drilling program will be compiled and integrated with data from its adjacent Boto and Diakha-Siribaya projects to help guide future drilling programs with an objective to define the extents of the mineralization and evaluate the resource potential of this new discovery.

The program will include twinning RC holes with diamond holes to confirm the widths and orientation of mineralized intervals and help establish the structural and geological characteristics of the mineralizing system.

News of the grass roots find follows recent reports in several news outlets that the company is exploring the possible sale of all or part of the company amid a wave of consolidation in the gold sector.

IAMGOLD went on to say in a May 2019 press release that it regularly reviews strategic alternatives available to it and may engage in discussions regarding potential transactions.

IAMGOLD is an intermediate gold producer with four operating mines in Burkina Faso (Essakane), Suriname (Rosebel), and Canada (Westwood). The company is also engaged in a 41% joint venture in Mali (Sadiola).

When the company announced an adjusted loss of $2.2 million or $0.00 per share in the first quarter of 2019 it maintained its 2019 production guidance of 810,000-870,000 ounces. All-in sustaining costs per ounce sold is expected to be US$1,030 to US$1,080 per ounce this year.

However, in a report, Scotiabank said operating results were poor at all three of the company’s main assets.

The company said it is maintaining its full-year guidance for cost of sales per ounce of US$790-US$815 an ounce. However, it noted that a number of cost and productivity improvements initiatives are underway to mitigate the risk that these two targets may not be achieved by the end of the year.

For example, the company recently said it was reducing the workforce at its Westwood Gold Mine in Quebec by 32%.

“Guidance will be reviewed in the second quarter 2019 and updated as necessary,” IAMGOLD said.

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