Iamgold pours first gold at Ontario mine, shares rise
Iamgold Corp [IMG-TSX, IAG-NYSE] said it has completed the first gold pour at its Cote Gold Mine in northeastern Ontario, which it is operating in a joint venture with Sumitomo Metal Mining Co. Ltd. of Japan. The company said Cote marks a step forward in the evolution of modern mining because it was designed and built for a fully automated haulage fleet.
It said the new mine is located in the District of Sudbury, approximately 25 kilometres southwest of Gogama, in area that will be a mining hub for decades to come, the company said.
“With Cote Gold online, Iamgold now has three operating mines, joining Essakane in Burkina Faso, West Africa and Westwood in Quebec,’’ said Iamgold President and CEO Renaud Adams.
With the first gold now achieved, the next step and focus for Iamgold is on the ramp up of the operation to commercial production in the third quarter towards the goal of exiting the year at a 90% throughput rate. Production guidance from Cote for this year on a 100% basis is unchanged at 220,000 to 290,000 ounces of gold, assuming the remaining milestones are achieved.
At a steady run rate, Cote Gold is expected to be among the largest operating gold mines in Canada with an expected mine life exceeding 18 years and significant opportunities for growth. On a project level, combining the Cote and Gosselin deposits, Cote has an estimated measured and indicated resource of 16.5 million ounces with an additional 4.2 million ounces of inferred gold, putting the project in exclusive company of large-scale Canadian assets.
Iamgold shares were active on the news, rising 7.3% or 33 cents to $4.85 on volume of 1.04 million. The shares currently trade in a 52-week range of $4.59 and $2.71.
Cote Gold is owned 60% by Iamgold and 40% by Sumitomo and carries a 7.5% royalty. Iamgold retains the option to return to a 70% ownership interest, an option the company has said it intends to exercise fore it expires in 2026.
In years one to six, production at Cote is expected to average 495,000 ounces annually. Life of mine average production is expected to be 365,000 ounces. The cost to complete the project came in at over $1.9 billion.
Iamgold was in the news recently when the company said it had struck a definitive deal to acquire all of the issued and outstanding shares of Vanstar Mining Resources Inc. [VSR-TSXV, VMNGF-OTCQX], 1V8-FSE], a company with properties in Northern Quebec at different stages of development.
Vanstar’s key asset is a 25% interest in the Nelligen joint venture project, held under an earn-in option agreement with Iamgold which holds 75%. Under the agreement, Iamgold can acquire an additional 5.0% by completing and delivering a feasibility study on the project.