IAMGOLD/Sumitomo to build Cote gold mine
Iamgold Corp. [IMG-TSX; IAG-NYSE], 70%, and joint venture partner Sumitomo Metal Mining Co. Ltd., 30%, have made the decision to proceed with construction of the Cote gold project located approximately 20 km southwest of Gogama, 130 km southwest of Timmins, Northern Ontario. All figures US$ unless otherwise noted.
Construction will start in the third quarter of 2020. Cote construction will incorporate COVID-19 protocols.
Gordon Stothart, President and CEO of IAMGOLD, commented: “The Cote gold project is transformational to the future of IAMGOLD. At a gold price of $1,700/oz, Cote’s expected NPV (100% basis) is over $2-billion, with a 22.4% IRR. The project is anticipated to generate over 1,000 jobs during construction, 450 jobs during operations, $5-billion in wages and more than $10-billion in GDP over its lifespan.
“Cote is a world-class deposit with estimated contained gold reserves of over 7 million ounces and exploration potential. Today’s construction decision for the project positions the company well for the future by reducing overall operating costs (per ounce of gold), increasing total production capacity, increasing the number of operating mines and creating greater balance in our geographic diversity.”
IAMGOLD’s expected go-forward capital obligation (exclusive of sunk costs) is $875-million to $925-million for its 70% share of project construction costs, assuming the leasing of major mining equipment of approximately $80-million.
The company has signed impacts and benefits agreement with First Nations partners at Mattagami First Nation and Flying Post First Nation. IAMGOLD has received approval for the environmental assessment (EA) and closure plan as well as approval under the Federal Fisheries Act. Other required permitting is under way.
Over 60% of detailed engineering is complete. Anticipated construction schedule is 32 months with commissioning completed in Q3 2023 and commercial production in the second half of 2023. LOM is 18 years averaging 36,000 tpd and 367,000 oz/year at $1,700/oz gold.
Estimated reserves total 7.3 million oz contained gold (100% basis) Proven and Probable (calculated at $1,200/oz gold) and estimated resources (calculated at $1,500/oz) totalling 10.2 million ounces Measured and Indicated (including reserves), with a further estimated 3.8 million oz Inferred. The company is assessing district potential of its +500 km2 land package.
A new discovery was identified called the Gosselin Zone 1.5 km northeast of the Cote deposit, and is progressing drilling programs to support a maiden resource estimate, expected in 2021.