POSITIVE PRELIMINARY ECONOMIC ASSESSMENT
AND GOVERNMENT APPROVAL OF ENVIRONMENTAL
ASSESSMENT
All amounts are in US dollars, unless
otherwise
indicated.
TORONTO, Jan. 26, 2017 /CNW/ - IAMGOLD Corporation
("IAMGOLD" or the "Company") today announced the positive results
of a Preliminary Economic Assessment ("PEA") for its Côté Gold
Project (Project) in Northern
Ontario. The Company also received approval of the Project's
provincial environmental assessment from the Ontario Ministry of
Environment and Climate Change on January
25, 2017, which follows the positive decision on the federal
environmental assessment issued by the Federal Minister of
Environment and Climate Change in April
2016. Positive decisions on the federal and provincial
environmental assessments for the Project clear the way for the
Company to initiate applications on permits to support development
following the completion of a pre-feasibility study.
Steve Letwin, President and CEO
of IAMGOLD, said "The Côté Gold Project provides us with an
exceptional option for future growth. Since acquiring Côté several
years ago we have been focused on de-risking the project. Our
drilling program, since IAMGOLD took over the Project, has led to a
nine-fold increase in the indicated resource to eight million
ounces with another one million ounce inferred resource. The
positive results of the PEA demonstrate the potential for Côté Gold
to be a low-cost, 21-year mine with attractive returns. The
pre-feasibility study is in progress to validate the development
concept set out in the PEA.
"Côté Gold is one of Canada's
largest undeveloped gold deposits," continued Mr. Letwin, "so
securing positive decisions on both the federal and provincial
environmental assessments for the Project is a major regulatory
milestone that confirms we can build and operate an environmentally
sustainable mine that aligns with our Zero Harm goals. I thank all
the many individuals and organizations for participating in these
environmental reviews. By considering environmental and social
impacts early in the mining process, we have been able to plan a
mine that will benefit shareholders and indigenous communities,
along with other stakeholders. We will continue to closely engage
our indigenous partner communities and other stakeholders as we
move the project forward, and to seek further opportunities for
improvement as a responsible miner."
The PEA was completed jointly by IAMGOLD and Amec Foster
Wheeler, with inputs from technical studies completed by other
consultants. The PEA represents a conceptual study of the potential
viability of the mineral resources that have been defined to date
on the Project, where the accuracy of the cost estimates is
-30%/+50%. The purpose of the PEA study was to assess the potential
development alternatives available with an improved land position
following the acquisition of additional ownership interests and
claims, and to reduce the energy requirements of the Project while
minimizing infrastructure development needs. The PEA study also
identified additional testwork required to support a
pre-feasibility study. We expect the pre-feasibility study to be
completed by the end of the second quarter 2017.
Based on the PEA, the Project outlines an economically viable
project that at a $1,200 per ounce
gold price would generate an estimated 12.9% after-tax internal
rate of return. The Project would have a 21-year mine life,
producing on average 302,000 ounces of gold a year at average total
cash costs of $564/oz and all-in
sustaining costs of $686/oz.
A technical report summarizing the PEA will be filed on SEDAR
within 45 days of the date of this news release.
PEA HIGHLIGHTS
|
|
Project Economics
and Key Parameters
|
|
|
|
Mining
Capacity
|
Years 1-3
|
60 Mtpa
|
Years 4-14
|
50 Mtpa
|
Years
15-18
|
15 Mtpa
|
Milling
Capacity
|
29,000 t/d
|
LOM Average Annual
Gold Production
|
302,000
oz.
|
Targeted Recovery
Rate
|
91.9%
|
Mine Life
|
21 years
|
LOM Average Total
Cash Costs
|
$564/oz
|
LOM Average
AISC
|
$686/oz
|
Average
Grade
|
0.97 g/t
Au
|
Average LOM Strip
Ratio
|
2.66
|
Estimated Capital
Expenditures (millions)
|
|
|
Initial
Capital
|
|
$1,031
|
|
Sustaining
Capital
|
|
$440
|
|
Closure
Costs
|
|
$40
|
Gold Price Assumption
used in financial analysis
|
$1,200/oz
|
Pre-tax NPV (6%)
(millions)
|
$851
|
Pre-Tax
IRR
|
15.4%
|
After-tax NPV (6%)
(millions)
|
$543
|
After-tax
IRR
|
12.9%
|
Payback
Period
|
5.2 years
|
USD Currency used with exchange rate of: CAD$ =
US$0.74
The above results of the PEA are preliminary in nature, and
include Inferred Mineral Resources which are considered too
speculative geologically to have the economic considerations
applied to them in a way that would enable them to be categorized
as mineral reserves, and there is no certainty that the PEA will be
realized. Mineral resources are not mineral reserves and do not
have demonstrated economic viability.
MINERAL RESOURCE BASIS FOR THE PEA
The Mineral Resources used as the basis for the study are those
disclosed in the Company's current Mineral Resource and Reserve
statement (Feb. 17, 2016 news
release) and are summarized below.
Mineral Resource
Estimate – December 31, 2015
|
Classification
|
Cut-off
Grade (g/t Au)
|
Tonnes (000)
|
Grade (g/t
Au)
|
Contained
Ounces (000)
|
Indicated
|
0.30
|
289,183
|
0.90
|
8,354
|
Inferred
|
0.30
|
66,894
|
0.55
|
1,174
|
Notes:
- CIM Definition Standards were followed for classification of
Mineral Resources.
- Mineral Resources are reported at a cut-off grade of 0.30 g/t
Au.
- High grade assays are capped from 15 g/t to 60 g/t Au depending
on sub-domain.
- Bulk density of 2.72 t/m3 was used for all
rocks.
- The Mineral Resource estimate is constrained within a Whittle
pit shell that assumes a gold price of $1,500 per ounce and metallurgical recovery of
93.5%.
- Mineral Resources are reported on a 100% basis. IAMGOLD
owns 92.5% of the Côté Gold Project.
- Raphael Dutaut Msc. Géo is the Qualified Person for this
estimate.
MINERAL RESOURCES INCLUDED IN THE PEA MINE PLAN
The tonnes, grades and classification of the mineral resources
captured within the PEA mine plan are summarized below. A
relatively small amount (15.3%) of the tonnes scheduled in the mine
plan are Inferred Resources.
Classification
|
Tonnes (000)
|
Grade (g/t Au)
|
Indicated
|
187,237
|
1.03
|
Inferred
|
33,887
|
0.61
|
Notes:
- Mine plan is constrained by a design pit that assumes
$1,200/oz gold price and 91.9%
metallurgical recovery.
- Mine plan uses a variable cut-off grade.
- Assumes 1% mining losses and 5% waste dilution @ 0 g/t Au
MINING AND PROCESSING
The PEA study envisions a conventional truck and shovel open pit
mining operation using a processing circuit incorporating primary
crushing, secondary crushing, tertiary High Pressure Grinding Roll
crushing, ball milling, gravity concentration and cyanide leaching,
followed by gold recovery using carbon-in-pulp, stripping and
electrowinning. The crushing-grinding circuit being utilized is
more energy efficient than a standard SAG or a pre-crush
circuit. A thickened tailings management facility is
considered and the mine site would be powered by a 44km tap line
connection to Hydro One's Shining Tree Substation. Key parameters
that provide the basis for the PEA and other qualifications and
assumptions are provided below:
Parameter
|
Value
|
Maximum Mining
Capacity
|
60Mtpa
|
Stockpile
Capacity
|
30Mt
|
Processing
Rate
|
29Ktpd/10.6Mtpa
|
Metallurgical
Recoveries
|
91.90%
|
Pit mining includes 40 Mt extracted during the one year
pre-production period followed by 19 years of production
mining. Stockpile reclaim extends the operation into Year
22. The amount of rehandled mill feed over the life of the
operation is 65 Mt. The average grade scheduled is 0.97 g/t
Au and the LOM stripping ratio is 2.66:1.
Unit Production Costs
Life of mine total cash costs are estimated at $564/oz of gold and all-in sustaining costs at
$686/oz of gold.
Capital Costs
Initial Capital costs are estimated at $1,031 million, life-of-mine Sustaining Capital
costs are estimated at $440 million, and Closure costs
are estimated at $40 million, with
details below. Costs assume leasing of the mine production fleet
and some other major equipment components.
Capital Cost
Estimate Summary
|
Initial
Capital
|
$M
|
Mine
Equipment
|
35
|
Electrical &
Communications
|
91
|
Infrastructure
|
60
|
Process
Plant
|
345
|
Tailings & Water
Management
|
25
|
Indirects
|
219
|
Contingency
(25%)
|
175
|
Mining
Pre-production
|
81
|
|
1,031
|
|
|
Sustaining
Capital
|
|
Mining
|
122
|
Tailings & Water
Management
|
125
|
Capital
Leases
|
193
|
|
440
|
|
|
Closure
Costs
|
40
|
Operating Costs
Average operating costs per tonne processed are as follows:
Average Operating
Costs ($/ tonne milled)
|
Mining
|
8.62
|
Processing
|
6.20
|
G&A
|
1.34
|
Total
|
16.16
|
Future Work
The PEA recommended the completion of a further pre-feasibility
study to validate and detail the elements of the development
concept set out in the PEA, and which would include additional
drilling, engineering studies and environmental studies, including
hydrological, hydrogeological and geotechnical analyses. As
previously disclosed, a feasibility study had been underway on an
initial development scenario, which will now await the outcome of
the pre-feasibility study and selection of the development scenario
for further study. The recommended pre-feasibility study is
underway and we expect it to be completed by the end of the second
quarter 2017. In addition, we continue to conduct exploration
activities within our more than 500-square-kilometre property
surrounding the Côté Gold deposit, the objective being to develop
and assess targets that could further maximize our flexibility with
respect to future development decisions.
Qualified Persons
The 2016 Côté Gold PEA was prepared by Amec Foster Wheeler and
incorporates the work of IAMGOLD Qualified Persons (QP's) (as
defined under National Instrument 43-101). Amec Foster Wheeler
Qualified Persons are independent of IAMGOLD and have reviewed and
approved this news release. IAMGOLD Qualified Persons are not
independent of IAMGOLD and have reviewed and approved this news
release. The affiliation and areas of responsibility for each
Qualified Person involved in preparing the 2016 Côté Gold PEA, upon
which the technical report will be based, are:
Amec Foster Wheeler QP's
- B. Wang, Ph.D., P. Eng., Design of surface watercourse
realignments, tailings management facility, mine rock areas and
seepage collection ponds
- L. Elgert, P. Eng., Mine design, capital and operating
costs
- I. A. Lipiec, P. Eng., Process
design, capital and operating costs
- S. Allard, P. Eng., Economic analysis
IAMGOLD QP's
- A. Smith, P. Geo., Exploration
- M-F. Bugnon, P.Geo., Property description, location,
accessibility, climate, infrastructure, physiography and
history
- V. Blanchet, P. Eng., Geological setting, mineralization,
drilling and sampling
- R. Dutaut, P. Geo., Data validation and resource estimate
Other scientific and technical information in this news release
has been reviewed and approved by Geoffrey
Chinn P.Geo., IAMGOLD, project manager, a Qualified Person
under the terms of National Instrument 43-101. Mr. Chinn has
verified the technical data disclosed in this news release.
Data Verification
IAMGOLD technicians and geologists on site follow a sample
preparation protocol to ensure quality control before sending
samples to the assay laboratory. Most of the drill holes are
sampled at one-metre intervals and consist of one-half the drill
core. Sample intervals are tagged by the geologist. All
sample intervals are logged with a unique number in a sample book
by the geologist. The borehole number and sample interval are
transferred to one of the tags and recorded in the logs. One tag is
placed in a plastic sample bag with the sample and the second is
stapled in the core box beneath the remaining representative half
core sample. During this procedure, the location for the insertion
of standards and blanks into the sample sequence is noted. Core is
sawed by geotechnicians following the orientation line drawn by the
geologist. The entire length of a drill hole is sampled. Diabase
dykes that occur within the sequence are not sampled, except for
two one-metre shoulder samples at the upper and lower contacts of
the dyke. The remaining half of the core is stored in racks or
pallets at the core farm facilities located on site.
For quality assurance/quality control (QA/QC) purposes, IAMGOLD
inserts control samples after every twelfth sample interval. The
control samples consist either of a Certified Reference Material
(CRM) or a blank sample. IAMGOLD inserts control samples as a
standard procedure. The primary laboratory sets aside the pulp from
one out of every 10 samples to be sent to a second laboratory as a
check assay. Between 2012 and 2014, check assays were completed at
ActLabs, Ancaster, Ontario. During
the 2015 drilling campaign, check assays on pulps were completed by
ALS Mineral, Val d'Or, Quebec. All
of the samples were analyzed using the FA-AA method. For samples
that returned values of between 2 g/t Au and 5 g/t Au, another pulp
was taken and fire assayed with a gravimetric finish. Samples
returning values greater than 5 g/t Au were reanalyzed by pulp
screen metallic fire assay analysis.
Mr. Vincent Blanchet, P. Eng.,
has been involved in the Côté Gold Project drilling campaigns in
2014 and 2015, and last visited the site on July 19, 2015 and took these steps to verify the
information used in his part of the study:
- Reviewed the drill hole logging and sampling procedures;
and
- Reviewed and reported upon the QA/QC procedures and
results.
It is the QP's opinion that the sample preparation, security,
and analytical procedures are adequate to support a Mineral
Resource estimate on the Côté Gold deposit.
Mr. Raphael Dutaut, P. Geo., has
visited the Côté Gold property several times since 2013; the most
recent being April 2015 to inspect
data verification for the mineral resource estimate, and took these
steps to verify the information used in his part of the study:
- Reviewed exploration information, drill collar positions (using
GPS spot checks), logging, and sampling procedures. Drill core
logs, outcrop mapping and geological interpretation were also
reviewed during site visits; and
- Randomly selected samples from the assay database from drill
holes were compared with original assay certificates, representing
approximately 5% of the database. Additionally, the QP checked for
abnormal extreme values, missing intervals or sample numbers,
interval lengths and zero grades. Visual checks of the drill hole
traces were performed to spot abnormal deviations.
It is the QP's opinion that the logging, sampling procedures,
and data entries were completed to industry standards. It is the
QP's opinion that the database is adequate to support a Mineral
Resource estimate on the Côté Gold deposit.
Dr. B. Wang, P. Eng. visited the
Côté Gold Project site on May 18-19,
2016 and inspected the following areas:
- Property mineral lease boundaries;
- Topography and geographical features – lakes, rivers, protected
areas;
- Prior mine excavations, select outcrop locations, depth of
overburden;
- Exploration drill sites and representative drill core,
potential for acid rock drainage; and
- Proposed locations of open-pit, mine rock dumps, mill feed
dumps, soil/muskeg storage, tailings management facility, property
access, mine facilities, utility corridors, and water management
structures.
Mr. L. Elgert, P. Eng. reviewed
the mining design criteria, mining capital and operating cost
models, and pit and production scheduling optimization as part of
his data verification.
Mr. I. Lipiec, P. Eng. took these
steps to verify the metallurgical and mineral processing
information used in his part of the study:
- Reviewed the selection of the samples provided for
metallurgical testwork;
- Reviewed the metallurgical test procedures used for comminution
and cyanidation testwork; and
- Reviewed the test results produced from the testwork for
consistency and interpretation.
Forward-Looking Information
All Mineral Reserve and Mineral Resources estimates reported by
the Corporation were estimated in accordance with the Canadian
National Instrument 43-101 and the Canadian Institute of Mining and
Metallurgy Definition Standards. These standards differ
significantly from the requirements of the U.S. Securities and
Exchange Commission. Mineral Resources which are not Mineral
Reserves do not have demonstrated economic viability.
This document contains "forward-looking information" within the
meaning of Canadian securities legislation and "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995. This information and
these statements, referred to herein as "forward-looking
statements" are made as of the date of this document.
Forward-looking statements relate to future events or future
performance and reflect current estimates, predictions,
expectations or beliefs regarding future events and include, but
are not limited to, statements with respect to:
(i) the estimated
amount and grade of Mineral Resources;
|
(ii) the PEA
representing a viable development option for the
Project;
|
(iii) estimates of
the capital costs of constructing mine facilities and bringing a
mine into production, of sustaining capital and the duration of
financing payback periods;
|
(iv) the estimated
amount of future production, both produced and metal recovered;
and,
|
(v) estimates of
operating costs and total costs, net cash flow, net present value
and economic returns from an operating mine.
|
Any statements that express or involve discussions with respect
to predictions, expectations, beliefs, plans, projections,
objectives or future events or performance (often, but not always,
using words or phrases such as "expects", "anticipates", "plans",
"projects", "estimates", "envisages", "assumes", "intends",
"strategy", "goals", "objectives" or variations thereof or stating
that certain actions, events or results "may", "could", "would",
"might" or "will" be taken, occur or be achieved, or the negative
of any of these terms and similar expressions) are not statements
of historical fact and may be forward-looking statements.
All forward-looking statements are based on IAMGOLD's or its
consultants' current beliefs as well as various assumptions made by
them and information currently available to them. The most
significant assumptions are set forth above, but generally these
assumptions include:
(i) the presence of
and continuity of metals at the Côté Gold Project at estimated
grades;
|
(ii) the geotechnical
and metallurgical characteristics of rock conforming to sampled
results; including the quantities of water and the quality of the
water that must be diverted or treated during mining
operations;
|
(iii) the capacities
and durability of various machinery and equipment;
|
(iv) the availability
of personnel, machinery and equipment at estimated prices and
within the estimated delivery times;
|
(v) currency exchange
rates;
|
(vi) metals sales
prices and exchange rate assumed;
|
(vii) appropriate
discount rates applied to the cash flows in the economic
analysis;
|
(viii) tax rates and
royalty rates applicable to the proposed mining
operation;
|
(ix) the availability
of acceptable financing under assumed structure and
costs;
|
* anticipated mining
losses and dilution;
|
(xi) metallurgical
performance;
|
(xii) reasonable
contingency requirements;
|
(xiii) success in
realizing proposed operations;
|
(xiv) receipt of
permits and other regulatory approvals on acceptable terms;
and
|
(xv) the fulfillment
of environmental assessment commitments and arrangements with local
communities.
|
Although management considers these assumptions to be reasonable
based on information currently available to it, they may prove to
be incorrect. Many forward-looking statements are made assuming the
correctness of other forward looking statements, such as statements
of net present value and internal rates of return, which are based
on most of the other forward-looking statements and assumptions
herein. The cost information is also prepared using current values,
but the time for incurring the costs will be in the future and it
is assumed costs will remain stable over the relevant period.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and
risks exist that estimates, forecasts, projections and other
forward-looking statements will not be achieved or that assumptions
do not reflect future experience. We caution readers not to place
undue reliance on these forward-looking statements as a number of
important factors could cause the actual outcomes to differ
materially from the beliefs, plans, objectives, expectations,
anticipations, estimates assumptions and intentions expressed in
such forward-looking statements. These risk factors may be
generally stated as the risk that the assumptions and estimates
expressed above do not occur as forecast, but specifically include,
without limitation: risks relating to variations in the mineral
content within the material identified as Mineral Resources from
that predicted; variations in rates of recovery and extraction; the
geotechnical characteristics of the rock mined or through which
infrastructure is built differing from that predicted, the quantity
of water that will need to be diverted or treated during mining
operations being different from what is expected to be encountered
during mining operations or post closure, or the rate of flow of
the water being different; developments in world metals markets;
risks relating to fluctuations in the Canadian dollar relative to
the US dollar; increases in the estimated capital and operating
costs or unanticipated costs; difficulties attracting the necessary
work force; increases in financing costs or adverse changes to the
terms of available financing, if any; tax rates or royalties being
greater than assumed; changes in development or mining plans due to
changes in logistical, technical or other factors; changes in
project parameters as plans continue to be refined; risks relating
to receipt of regulatory approvals; delays in stakeholder
negotiations; changes in regulations applying to the development,
operation, and closure of mining operations from what currently
exists; the effects of competition in the markets in which IAMGOLD
operates; operational and infrastructure risks and the additional
risks described in IAMGOLD's Annual Information Form filed with
SEDAR in Canada (available at
www.sedar.com) for the year ended December
31, 2015 and in the Corporation's Annual Report Form 40-F
filed with the U.S. Securities and Exchange Commission on EDGAR
(available at
https://www.sec.gov/edgar/searchedgar/companysearch.html. IAMGOLD
cautions that the foregoing list of factors that may affect future
results is not exhaustive.
When relying on our forward-looking statements to make decisions
with respect to IAMGOLD, investors and others should carefully
consider the foregoing factors and other uncertainties and
potential events. IAMGOLD does not undertake to update any
forward-looking statement, whether written or oral, that may be
made from time to time by IAMGOLD or on our behalf, except as
required by law.
About IAMGOLD
IAMGOLD (www.iamgold.com) is a mid-tier mining company with four
operating gold mines on three continents. A solid base of strategic
assets in North and South America
and West Africa is complemented by
development and exploration projects and continued assessment of
accretive acquisition opportunities. IAMGOLD is in a strong
financial position with extensive management and operational
expertise.
Please note:
This entire news release may be accessed via fax, e-mail, IAMGOLD's
website at www.iamgold.com and through CNW Group's website at
www.newswire.ca. All material information on IAMGOLD can be found
at www.sedar.com or at www.sec.gov.
Si vous désirez obtenir la version française de ce communiqué,
veuillez consulter le
http://www.iamgold.com/French/accueil/default.aspx.
SOURCE IAMGOLD Corporation