Iamgold set to buy back 9.7% stake in Ontario gold mine
Iamgold Corp [IMG-TSX, IAG-NYSE] said it has provided partner Sumitomo Metal Mining Co. Ltd. of Japan with the required 60-days formal notice of its intention to repurchase a 9.7% stake in the Cote Gold Mine in northeastern Ontario,
Iamgold has held the option to return to its full 70% interest by repaying $250 million in cash calls funded by Sumitomo, plus $90 million in capital expenditures plus other accrued fees and expenses as well as he value of gold production received by Sumitomo up to commercial production.
The 9.7% stake in the mine was transferred to Sumitomo as part of a joint venture funding and amending agreement that was entered into back in December, 2022. This transaction is expected to close on November 30, 2024 and will return Iamgold to its full 70% interest in the Cote gold mine.
Back in August, 2024, Iamgold said commercial production had been achieved at Cote Gold, which it is operating in a joint venture with Sumitomo Metal Mining.
Commercial production is defined as the achievement of reaching a minimum of 30 consecutive days of operations during which the mill operated at an average of 60% of nameplate throughput of 36,000 tonnes per day.
The company has said Cote marks a step forward in the evolution of modern mining because it was designed and built for a fully automated haulage fleet.
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.
“With commercial production behind us we continue to focus on improving plant availability towards our goal of exiting the year at 90% of nameplate throughput,’’ the company said. Production guidance from Cote for this year on a 100% basis is expected to come in at the lower end of the guidance range of 220,000 to 290,000 ounces of gold, as improvements to mill availability are made during the ramp up of operations.
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.
Cote Gold is currently owned 60% by Iamgold and 40% by Sumitomo and carries a 7.5% royalty. Iamgold has retained the option to return to a 70% ownership interest, an option the company has said it intended to exercise before it expires in 2026.
The cost to complete the project came in at over $1.9 billion.
Iamgold shares rose 2.25% or 16 cents to $7.25 in early trading Tuesday. The shares trade in a 52-week range of $7.55 and $2.71