IAMGOLD Corp. [IMG-TSX; IAG-NYSE] said Wednesday March 20 that the workforce at its Westwood Gold Mine in Quebec will be reduced by 32%, through a process which commenced this week.
The decision results from both planned reductions due to the stage of mine development as well as realignment reductions due to the previously disclosed production guidance, the company said in a press release.
As previously announced, Westwood production guidance for 2019 is 100,000 to 120,000 ounces, with workforce reductions intended as a stabilizing cost control measure.
IAMGOLD said it is developing a revised life-of-mine plan for Westwood and expects to provide an update in the fourth quarter of 2019.
“We sincerely regret that our valued colleagues are leaving us and we are providing redeployment assistance,” said IAMGOLD President and CEO Steve Letwin.
“We concluded that this difficult decision had to be made in conjunction with planned reductions after assessing the balance of production levels and costs,” he said. “We remain focused on developing a long term plan for Westwood that is both safe and profitable.”
On Wednesday, IAMGOLD shares eased 4.8% or $0.225 to $4.465 on volume of 1.58 million. The shares trade in a 52-week range of $3.63 and $8.20.
IAMGOLD is an intermediate gold producer with four operating mines in Burkina Faso (Essakane), Suriname (Rosebel), Canada (Westwood). The company is also engaged in a 41% joint venture in Mali (Sadiola).
Westwood is currently the smallest mine in a portfolio that is expected to produce 810,000 to 870,000 ounces of gold this year.
Westwood is located on the Doyon property, 2.5 km east of the former Doyon Gold mine in Bousquet Twp., approximately 40 km east of Rouyn-Noranda, Quebec.
The project covers 1,925 hectares and consists of 120 titles, one mining lease, one surface lease and three tailings leases. The project is held 100% by IAMGOLD.
Westwood began production in the first quarter of 2013. The mine reached the commercial production stage in July, 2014, producing 70,000 ounces in the first two quarters with an average diluted grade of 7.98 grams gold per tonne.
Westwood is currently IAMGOLD’s only underground mine. It is estimated to have a mine life of roughly 20 years in all the mining scenarios under consideration. Ore from the Westwood underground is hauled to the Doyon mill (2 km away) to be crushed and ground. The ore grinding circuit utilizes a SAG mill and a 1,000 HP ball mill.
In March 2017, Westwood received approval from provincial regulators in Quebec to resume mining activities in the 104 block that had been impacted by a seismic even in 2015.
Gold reserves at Westwood currently stand at 1.2 million ounces. Measured and indicated resources stand at 1.5 million ounces. On top of that is an inferred resource of 1.7 million ounces.
IAMGOLD recently said Westwood is planning a further 65 kmof drilling during 2019 to continue building reserves through conversion of resources.