All dollar amounts are expressed in $USD
IAMGOLD Corporation (TSX: IMG)(NYSE: IAG)(BOTSWANA: IAMGOLD)
("IAMGOLD") is pleased to announce positive results from the
updated Preliminary Assessment Study (the "Study") on its 100%
owned Westwood Gold Project located in Quebec, two kilometres east
of IAMGOLD's producing Doyon Mine. The Study was completed by
IAMGOLD's Project Development Group. The results of the Study
provide confidence for Westwood to move forward with a target for
production in early 2013, and with an $86 million budget approved
for 2009.
Joseph Conway, President & CEO of IAMGOLD said, "Westwood is
an important part of IAMGOLD's growth strategy. The Study shows
that Westwood has the potential to produce 200,000 ounces of gold
per year at a cash cost of $290 per ounce, well under industry
average and in one of the lowest political risk jurisdictions for
mining in the world. We have a strong and experienced team in this
area of Quebec to move the project forward into production. The
proximity to our producing Doyon and Mouska Mines is of great
advantage from the standpoint of operating experience, manpower and
infrastructure."
Project Update
In June 2008, the Westwood environmental and construction
permits were granted, and surface site preparation and
infrastructure construction began immediately, including work on
the exploration shaft and collar foundation. An exploration ramp,
west of the Bousquet Fault commenced in October and by year end had
been extended 340 metres. The ramp will provide better drilling
access to the upper levels of the deposit above the "14 level"
exploration drift.
The exploration shaft, with a planned depth of 2,000 metres,
commenced mid-August 2008 with the initial pilot hole being
completed at a depth of 837 metres. The subsequent raise bore
progressed upward 333 metres by year end. As part of the $38.1
million expenditures in 2008, an $11.6 million advanced payment was
made on three hoists, $4.9 million was spent on site preparation
and the head frame foundation, and $4.4 million was to commence the
raise boring for the shaft and for the ramp development. The
majority of the remaining 2008 expenditures relate to 68,000 metres
of drilling that were completed at Westwood during the year.
A 2009 budget of $86 million has been approved to advance
Westwood on a number of fronts:
1) Raise boring will continue and be followed by the
commencement of shaft sinking, which is expected to start in Q2 and
reach a depth of 500 metres by the end of 2009;
2) The ramp is to be driven a further 1,800 metres;
3) An 850 metre by 6 metre bored ventilation raise will be
started and completed in 2009;
4) An additional 5,000 tonne bulk sample will be collected from
the 14 level exploration drift that will be combined with 5,000
tonnes already collected and this will be sent for pilot testing at
the Doyon mill in the summer;
5) Installation will commence on the hoist, headframe and
support facility;
6) Development work will include about 2,000 metres of
drifting;
7) Exploration drilling is budgeted at 32,000 metres;
8) Valuation and definition drilling is budgeted at 41,000
metres.
This additional work is expected to advance Westwood towards a
definitive production decision with commercial production expected
in early 2013.
Results of the Preliminary Assessment Study
The Preliminary Assessment Study for an underground operation at
Westwood shows that during the first thirteen years, production
will average about 200,000 ounces of gold per year at an average
diluted grade of 8.1 g Au/t and with cash costs averaging $290 per
ounce. The operation will generate pre-tax cash flow of $287
million over the first five years.
Over a projected mine life of 15 years, based on current
resources, Westwood will produce an average of 187,000 ounces of
gold per year at an average cash cost of $298 per ounce, generating
a pre-tax operating cash flow of $665 million. The cash cost of
$298 per ounce shows considerable improvement over the US$360 cash
cost estimated in the initial scoping study, released in September
2007. Gord Stothart, IAMGOLD's COO said, "We were able to
significantly refine the mine design over the past year with the
result of reducing the projected mining dilution. This translates
into a significantly lower cash cost per ounce and more robust
economics for the Westwood project."
Capital expenditures to bring Westwood into production are
estimated at $329 million, including a $12 million contingency. The
Study shows a pre-tax Internal Rate of Return of 13.2% using a
$700/oz gold price.
Summary highlights of the Preliminary Assessment Study are shown
in the table below:
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Inferred Mineral Resource 11.3 Mt @ 8.7 g Au/t for 3,154,000 ounces
(undiluted, 4.0 g Au/t
cutoff)
Indicated Mineral Resource 313,000 tonnes @ 6.9 g Au/t for 70,000 ounces
(Warrenmac)
($80/tonne cutoff)
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Net Recoverable Gold (oz) 2,809,000
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Average Annual Gold
Production (oz) 200,000
(Years 1 to 13)
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Cash Cost per ounce (years 1
to 13) $290
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Pre-production Capital
Expenditures $329 M
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Sustaining Capital $185 M
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Operating Cash flow (pre-tax) $665 M
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IRR - pre-tax 13.2%
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Payback (after start-up) 69 months
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Mine Life 15 years
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Gold Price Assumption $700/oz
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Mineral Resources
In July 2008, IAMGOLD announced an increase in Inferred
Resources at Westwood to 3,154,000 ounces of gold, using a 4 g Au/t
cutoff and in the Warrenmac lens a new Indicated resource of 70,000
ounces of gold. These Inferred and Indicated resources as announced
July 17, 2008 form the basis for this Study, although additional
drilling has been subsequently completed.
Note: There has been insufficient work to date to define a NI
43-101 compliant Measured or Indicated Mineral resource for the
Westwood project. Due to the uncertainty that may be attached to
Inferred Mineral resources, it cannot be assumed that all or any
part of an Inferred Mineral resource will be upgraded to an
Indicated or Measured Mineral Resource with continued exploration.
The Study is preliminary in nature and includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as mineral reserves, and there is no certainty
that the preliminary assessment will be realized.
IAMGOLD acquired the Westwood Project in late 2006 as part of
the acquisition of Cambior Inc. Westwood is a "shear zone hosted"
gold deposit located within the well established
Doyon-Bousquet-LaRonde mining camp which hosts total production and
reserves of approximately 145 million tonnes at 5.49 g Au/t or
roughly 25.5 million ounces of gold. Westwood is well located, two
kilometres east of IAMGOLD's Doyon Mine and five kilometres west of
Agnico-Eagle's Bousquet/La Ronde Complex.
Upgrading Resources
Mineralization has been identified at Westwood from a 60 metre
depth to as deep as 2,200 metres, within three sub-parallel zones
that extend along a strike length in excess of 1.8 kilometres. An
important step to moving Westwood towards a commercial production
decision is to increase the confidence level of the current
resources and to establish geologic continuity. The conversion to
measured and indicated resources needs to be sufficiently advanced
to start commercial production in 2013, but requires a significant
amount of infill drilling.
In 2008, a total of 68,000 metres of drilling were completed at
Westwood, of which 22,000 metres tested within the known resources
and the remaining 46,000 metres were exploration holes both from
surface and from the underground exploration drift (at a depth of
900 metres).
In 2009, a further 73,500 metres are planned of which 41,200
metres will contribute to upgrading existing inferred resources
while the remaining 32,300 metres will systematically test the
highest priority exploration target areas.
Upside Exploration Potential
The Westwood deposit remains open both at depth and along strike
on the three main zones that have been identified to date. Very
significant intersections at a depth 800 metres below previously
identified mineralization were reported in December 2007 and
follow-up drilling is underway. Along strike, several key areas are
being tested that could significantly add resources. Given the
spatial extent of the mineralization identified to date and its
location within highly favourable geology, there is excellent
potential to expand the extent of the known Westwood resources both
along strike and at depth.
Scope of the Study
The current Study is classified as a Preliminary Assessment, to
a large extent due to the fact that the resources at Westwood are
Inferred, with a greater level of uncertainty than Measured and
Indicated resources which are required for a pre-feasibility or
feasibility study. However, it is important to note that the Study
includes mine planning, capital and operating cost estimation, rock
mechanics, metallurgical work and overall economic studies that are
quite advanced, especially given that IAMGOLD operates two similar
mines within five kilometres of Westwood.
Capital Expenditure Estimate
Pre-production capital expenditures are estimated at $329
million. These costs include preparation of all development
studies, permitting, completion of the feasibility study,
construction and start-up of the mine. The estimated accuracy is
+/- 25%. The capital expenditures include:
----------------------------------------------------------------------------
(US $ millions)
----------------------------------------------------------------------------
Exploration $19.9
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Mine Development $87.2
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Shaft $45.7
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Surface Facilities $52.6
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U/G construction $7.0
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Mobile Equipment $22.1
----------------------------------------------------------------------------
Inventory $3.5
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Studies and Support Activities (initial period) $71.6
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Indirect $8.0
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Subtotal $317.6
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Contingency $11.6
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Total $329.2
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The schedule of pre-production expenditures is shown below with
commercial production expected in 2013.
---------------------------------------------------------------------------
Year Capital Expenditures
(millions)
---------------------------------------------------------------------------
2009 $86
---------------------------------------------------------------------------
2010 $86
---------------------------------------------------------------------------
2011 $73
---------------------------------------------------------------------------
2012 $84
---------------------------------------------------------------------------
Operating Costs
Total operating costs are estimated at $298 per ounce or $70.21
per tonne milled over the life of mine. This includes: 1) mining
costs at $49.97 per tonne, including paste backfill costs; 2)
processing costs at $15.30 per tonne including transportation from
Westwood to the Doyon mill facilities, tailings operations and
power; and 3) General and administration costs estimated at $4.95
per tonne. With the purchase of the Doyon royalty from Barrick in
2008, no third party royalties remain to be paid against Westwood
production.
Mining
The preliminary mine plan recommends a longitudinal long hole
mining method, on 15-metre sublevels. This is a bulk mining method
which will require backfill for stability. The mine plan
incorporates two ramps, one on either side of the Bousquet fault.
The Warrenmac ramp, on the west side of the Bousquet Fault was
initiated in October 2008 and advanced 340 metres by year end
2008.
The production schedule per year is outlined below:
---------------------------------------------------------------------------
Year Tonnes Average Grade Gold Production Cash Cost
Milled (g/t Au) (oz) $/oz
---------------------------------------------------------------------------
2013 to 2025 (avg) 800,000 8.1 200,000 290
---------------------------------------------------------------------------
2026 730,000 5.3 112,000 388
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2027 800,000 4.3 97,000 384
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Total 11,930,000(i) 7.6(i) 2,809,000 298
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(i) tonnage and grade reflect an estimated 95% mine recovery, 24% mine
dilution and 96% plant recovery
The near surface Warrenmac zone at Westwood contains, in
addition to gold mineralization, sufficient zinc with elevated
copper and silver to allow for economic extraction at higher metal
prices. Over the life of mine, based on the current resources, it
is expected that base metal resources will contribute approximately
20,000 tonnes of zinc and 1,000 tonnes of copper as by-products and
this has been built into the economic model. IAMGOLD indicated in a
press release dated June 12, 2008 that it might commence early
production on the near surface zinc-rich Warrenmac zone, however
based on the current low metal prices it is economically superior
to await higher metal prices.
Mineral Processing
The Westwood ore will be processed at the nearby Doyon mill.
Mining at the Doyon and Mouska Mines will be completed by mid-2010,
prior to commencement of production from Westwood. The Doyon mill
is well suited as preliminary metallurgical testwork shows Westwood
ore to have similar characteristics to the Doyon mine. Recoveries
at Doyon have averaged 95% over the mine life, which has included
the processing of lower grade material. A 96% recovery rate has
been used for the Westwood Study.
The Doyon Mill is a conventional cyanidation circuit with a
combined carbon-in-leach and carbon-in-pulp (CIL-CIP) circuit
including a gravity circuit for free gold recovery. The mill
capacity of 3,500 tonnes per day, at a 95% plant availability, is
well over the estimated 2,200 tonnes per day required for Westwood.
A bulk sample from Westwood is currently being taken and will be
pilot tested in the Doyon mill circuit this summer to confirm the
process parameters. The existing paste backfill plant from Doyon
will be relocated near the Westwood shaft.
Certain gold zones at Westwood, including Warrenmac, have
associated zinc and copper sulphide mineralization. At some point
during the 15-year mine life, it is anticipated that base metal
prices will allow for the economic extraction of these
zinc-enriched gold zones. At such time, additional flotation
capacities will be added to the mill for the recovery of the
zinc.
Assumptions
The Study assumes a $700 per ounce gold price and current market
prices were applied for all input materials. Although only
applicable to certain zones within the Westwood deposit, the
copper, zinc and silver price used in the evaluation are $2.50 per
pound, $1.00 per pound and $8.00 per ounce respectively. A
Canadian/U.S. dollar exchange rate of 1.25 was applied.
Project Economics
The Preliminary Assessment Study shows an estimated Internal
Rate of Return (IRR) of 13.2%, before taxes, using a $700 per ounce
gold price.
The table below outlines the sensitivity of project economics to
various gold price scenarios:
---------------------------------------------------------------------------
Gold Price IRR(%) NPV at 0% discount
(pre-tax) (millions)
---------------------------------------------------------------------------
$ 560 (-20%) 6.3 $274
---------------------------------------------------------------------------
$ 700 (Base) 13.2 $665
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$ 840 (+20%) 18.7 $1,056
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This Preliminary Assessment Study shows that the Westwood
deposit provides strong potential returns in the current economic
environment.
ABOUT IAMGOLD
IAMGOLD is a leading mid-tier gold mining company producing
almost one million ounces from 7 mines on 3 continents. IAMGOLD is
focused on growth with a target to reach 1.8 million ounces gold
production by 2012. IAMGOLD is uniquely positioned, with a strong
financial base, together with the management and operations
expertise to execute on our aggressive growth objectives. IAMGOLD
is focused in West Africa, the Guiana Shield of South America and
in Quebec with a pipeline of development and exploration projects.
IAMGOLD continues to assess accretive acquisition opportunities
with a strategic fit. IAMGOLD is listed on the Toronto Stock
Exchange ("IMG"), the New York Stock Exchange ("IAG") and the
Botswana Stock Exchange.
Qualified Person/Quality Control Notes
The mineral resource estimates contained in this news have been
prepared in accordance with National Instrument 43-101 Standards of
Disclosure for Mineral Projects ("NI 43-101"). A Preliminary
Assessment is preliminary in nature, as it is based on inferred
mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that the preliminary assessment will be realized. The
technical information in this news release, including the
information that relates to geology, drilling, mineralization and
mineral resource estimates at the Westwood gold project is based on
information prepared under the supervision of, or has been reviewed
by Mr. Daniel Vallieres P. Eng., Manager - Underground Projects and
Mr. Rejean Sirois P. Eng., Manager - Mine Geology both working for
the Technical Services Group, and employed by IAMGOLD Corporation.
The foregoing persons are "qualified person" for the purposes of
National Instrument 43-101 with respect to the mineralization being
reported on. The technical information has been included herein
with the consent and prior review of the above noted qualified
person. The qualified persons have verified the data disclosed
underlying the information or opinions contained herein.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission (the "SEC")
permits mining companies, in their filings with the SEC, to
disclose only those mineral deposits that a company can
economically and legally extract or produce. We use certain terms
in this press release, such as "mineral resources", that the SEC
guidelines strictly prohibit us form including in our filings with
the SEC. U.S. investors are urged to consider closely the
disclosure in the IAMGOLD Annual Report on Form 40-F. A copy of the
2007 Form 40-F is available to shareholders, free of charge, upon
written request addresses to the Investor Relations Department.
Forward Looking Statement
This press release contains forward-looking statements. All
statements, other than of historical fact, that address activities,
events or developments that the Company believes, expects or
anticipates will or may occur in the future (including, without
limitation, statements regarding the estimation of mineral
resources, exploration results, potential mineralization, potential
mineral resources and mineral reserves) are forward-looking
statements. Forward-looking statements are subject to a number of
risks and uncertainties that may cause the actual results of the
Company to differ materially from those discussed in the
forward-looking statements. Factors that could cause actual results
or events to differ materially from current expectations include,
among other things, failure to establish estimated mineral
resources, the possibility that future exploration results will not
be consistent with the Company's expectations, changes in world
gold markets and other risks disclosed in IAMGOLD's most recent
Form 40-F/Annual Information Form on file with the US Securities
and Exchange Commission and Canadian provincial securities
regulatory authorities. Any forward-looking statement speaks only
as of the date on which it is made and, except as may be required
by applicable securities laws, the Company disclaims any intent or
obligation to update any forward-looking statement.
Please note:
This entire press release may be accessed via fax, e-mail,
IAMGOLD's website at www.iamgold.com and through Marketwire's
website at www.marketwire.com. All material information on IAMGOLD
can be found at www.sedar.com or at www.sec.gov.
Si vous desirez obtenir la version francaise de ce communique,
veuillez consulter le http://www.iamgold.com/fr/accueil.html.
Contacts: IAMGOLD Corporation Joseph F. Conway President &
CEO (416) 360-4712 or Toll Free: 1-888-IMG-9999 IAMGOLD Corporation
Elaine Ellingham Senior VP, Investor Relations (416) 360-4743 or
Toll Free: 1-888-IMG-9999 (416) 360-4750 (FAX) Email:
info@iamgold.com Website: www.iamgold.com Renmark Financial
Communications Inc. John Boidman: jboidman@renmarkfinancial.com
Henri Perron: hperron@renmarkfinancial.com (514) 939-3989 (514)
939-3717 (FAX) Website: www.renmarkfinancial.com
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