All amounts are in US dollars, unless
otherwise indicated.
TORONTO, June 5, 2017 /CNW/ - IAMGOLD Corporation
("IAMGOLD" or the "Company") today announced positive results from
a Prefeasibility Study ("PFS") for its Côté Gold Project (Project)
in Northern Ontario. The results,
which outline an economically viable project and confirm the
development concept previously set out in the Preliminary Economic
Assessment, clear the way for the Company to initiate a feasibility
study and to support the permitting process. Coinciding with this
news release the Company also announced a partnership with Sumitomo
Metal Mining in which they will acquire a 30% participating
interest in the Côté Gold Project.
PROJECT HIGHLIGHTS
- Proven and Probable Reserves of 5.9 million ounces
- Mine Life of 17 years with mill
throughput of 32,000 tpd
- Life of Mine (LOM) average annual production of 320,000 oz
- Average grade 0.94 g/t Au
- LOM cash costs of $605/oz and
all-in sustaining costs of $689/oz
- At $1,250/oz gold price,
after-tax Net Asset Value of $703M
(5% discount rate)
- After-tax Internal Rate of Return of 14%, with payback period
of 4.5 years
- Initial capital expenditures of $1,047M
Steve Letwin, President and CEO
of IAMGOLD, said "The robust project economics generated from the
PFS further validates our view that Côté Gold is an exceptional
organic growth project, particularly when our industry faces a
shortage of undeveloped gold deposits in attractive mining
jurisdictions with surrounding infrastructure. This is a project
with low operating costs and an attractive rate of return, that's
expected to deliver 320,000 ounces a year for 17 years. The
conversion of nearly six million ounces from resources to reserves
on a project basis and over 3.8 million ounces attributable to
IAMGOLD, representing an overall increase in our attributable
consolidated reserves by 49%1, stands out in an industry
challenged with reserve replacement. Additionally, Côté has
significant exploration upside potential with more than 500-square
kilometres of exploration rights-held property surrounding the
deposit. We are looking forward to working with Sumitomo to advance
the Côté Gold Project towards development."
The PFS was completed jointly by IAMGOLD, Amec Foster Wheeler
(Amec), and Roscoe Postle Associates Inc. (RPA), with inputs from
technical studies completed by other consultants. The PFS
represents a comprehensive study of the technical and economic
viability of a mineral project that has advanced to a stage where a
preferred mining method is established and an effective method of
mineral processing is determined.
IAMGOLD is using the PFS to identify the preferred development
option, to demonstrate economic viability of the Project, to
support Mineral Reserve disclosure, and to identify additional work
recommended to support the completion of a feasibility study. We
expect the feasibility study to be completed in the second half of
2018.
A technical report summarizing the PFS will be filed on SEDAR
within 45 days of the date of this news release.
1 Based on IAMGOLD's 2016 year-end reserves of 7.8
million ounces and the Company's attributed reserves of 3.8 million
ounces from the Côté Gold Project (based on IAMGOLD's 64.75% [70% x
92.5%] working interest in the Côté Gold Project).
PFS HIGHLIGHTS
|
Project Economics
and Key Parameters
|
|
|
Mining
Capacity
|
60 Mtpa
|
Milling
Capacity
|
32,000 t/d
|
LOM Average Annual
Gold Production
|
320,000
oz.
|
LOM Average Recovery
Rate
|
91.8%
|
Mine Life
|
17 years
|
LOM Average Total
Cash Costs
|
$605/oz
|
LOM Average
AISC
|
$689/oz
|
Average
Grade
|
0.94 g/t
Au
|
Average LOM Strip
Ratio
|
2.85:1
|
Estimated Capital
Expenditure (millions)
|
|
|
Initial
Capital*
|
$1,047
|
|
Sustaining
Capital
|
$418
|
|
Closure
Costs
|
$40
|
Gold Price Assumption
used in financial analysis
|
$1,250/oz
|
Pre-tax NAV (5%)
(millions)
|
$1,063
|
Pre-Tax
IRR
|
16.7%
|
After-tax NAV (5%)
(millions)
|
$703
|
After-tax
IRR
|
14.0%
|
Payback
Period
|
4.5 years
|
|
*excludes deferred
initial capital attributable to equipment leasing of $116M, net of
down payments and leasing payments.
|
USD Currency used
with exchange rate of: CAD$ = US$0.7692
|
MINERAL RESOURCES
The RPA Mineral Resource estimate used as the basis for the
study is summarized below.
Mineral Resource
Statement - May 26, 2017
|
Classification
|
Cut-off
Grade
(g/t
Au)
|
Tonnes
(000)
|
Grade
(g/t
Au)
|
Contained
Ounces
(000)
|
Indicated
|
0.30
|
281,171
|
0.89
|
8,037
|
Inferred
|
0.30
|
76,471
|
0.50
|
1,231
|
|
|
Notes:
|
|
1.
|
CIM Definition
Standards were followed for classification of Mineral
Resources.
|
2.
|
Mineral Resources are
reported at a cut-off grade of 0.30 g/t Au.
|
3.
|
Mineral Resources are
estimated using long-term gold price of $1,500 per ounce, and a
US$/C$ exchange rate of 1:1.25.
|
4.
|
Bulk density varies
from 2.69 t/m3 for tonalite to 2.75 t/m3 for
diorite, and 2.93 t/m3 for diabase.
|
MINERAL RESERVES
The tonnes, grades, and classification of the Mineral Reserves
captured within the PFS mine plan are summarized below.
Mineral Reserve
Statement - May 26, 2017
|
Classification
|
Tonnes
(000)
|
Grade
(g/t
Au)
|
Contained
Ounces
(000)
|
Proven
|
-
|
-
|
-
|
Probable
|
196,079
|
0.94
|
5,926
|
Proven &
Probable
|
196,079
|
0.94
|
5,926
|
Waste within Designed
Pit
|
559,155
|
|
|
Total Tonnage within
Designed Pit
|
755,234
|
|
|
|
|
Notes:
|
|
1.
|
Reserves estimated
assuming open pit mining methods
|
2.
|
Reserves are based on
a gold price of $1200/oz
|
3.
|
Fixed process
recovery of 92.5%
|
4.
|
Treatment and
refining costs, including transport and selling cost, estimated to
be $4.00/oz Au.
|
5.
|
Variable royalty
percentages by zone: 0.75% for zone 1, 1.00% for zone 2, 0.00% for
zone 3, 1.50% for zone 4, 0.75% for zone 5, 1.50% for zone 6, 0.75%
for zone 7, and 0.75% for zone 8. Only zones 2, 3, 5 and 6 have
Mineral Reserves.
|
6.
|
Processing costs:
$8.77/t. Include process cost: $6.58/t, G&A: $1.45/t,
Sustaining: $0.57/t, Closure: $0.18/t.
|
7.
|
Mining costs: $1.93/t
incremented at $0.035/t/12 m below 388m elevation. Average
mining cost: $2.39/t. Rehandling cost $0.84/t.
|
MINING AND PROCESSING
The PFS study identifies the preferred development option as
being a conventional truck and shovel open pit mining operation and
determined an effective method of mineral processing being 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 and uses less
crushing and grinding media. A thickened tailings management
facility is demonstrated and the mine site would be powered by a 44
km tap line connection to Hydro One's Shining Tree Substation. Key
parameters that provide the basis for the PFS and other
qualifications and assumptions are provided below:
Parameter
|
Value
|
Maximum Mining
Capacity
|
60 Mtpa
|
Stockpile
Capacity
|
25 Mt
|
Processing
Rate
|
32 Ktpd (11.7
Mtpa)
|
Metallurgical
Recoveries
|
91.8%
|
Open pit mining includes 40 Mt extracted during the two year
pre-production period followed by 16 years of production
mining. Stockpile reclaim extends the operation into Year 17.
The amount of rehandled mill feed over the life of the operation is
42 Mt. The average grade scheduled is 0.94 g/t Au and the LOM
stripping ratio is 2.85:1.
Unit Production Costs
Life of mine total cash costs are estimated at $605/oz of gold produced and all-in sustaining
costs at $689/oz of gold sold.
Capital Costs
Initial Capital costs are estimated at $1,047 million, life-of-mine Sustaining Capital
costs are estimated at $418
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
|
$M
|
Mine Site Prep and
Infrastructure
|
29
|
Mine
Equipment
|
59
|
Electrical &
Communications
|
31
|
Infrastructure
|
104
|
Process
Plant
|
252
|
Tailings Management
Facility Equipment
|
24
|
Tailings & Water
Management
|
47
|
Offsite
Facilities
|
25
|
Owner's
Cost
|
27
|
Indirects
|
198
|
Contingency
(20%)
|
170
|
Mining
Pre-production
|
80
|
|
1,047
|
|
|
Sustaining
Capital
|
|
Mining
|
74
|
Mine General Site
Works
|
11
|
Tailings & Water
Management
|
150
|
Tailings
Indirects
|
10
|
Capital
Leases*
|
155
|
Contingency
|
19
|
|
418
|
|
|
Closure
Costs
|
40
|
|
* total cost of
capital leases (initial + sustaining) including financing costs,
excluding down payments.
|
Operating Costs
Average operating costs per tonne processed are as follows:
Average Operating
Costs ($/tonne milled)
|
Mining
|
7.91
|
Processing
|
6.10
|
G&A
|
1.42
|
Total
|
15.43
|
Future Work
The PFS recommended the completion of a feasibility study to
validate and detail the elements of the development concept set out
in the PFS, and which would include additional drilling, stripping,
engineering studies and environmental studies, including
hydrological, hydrogeological and geotechnical analyses. The
recommended feasibility study is expected to be completed in the
second half of 2018. 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 2017 Côté Gold PFS was prepared by Amec Foster Wheeler and
incorporates the work of IAMGOLD and RPA Qualified Persons (QPs)
(as defined under National Instrument 43-101). Amec Foster Wheeler
and RPA 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
2017 Côté Gold PFS, upon which the technical report will be based,
are:
Amec Foster Wheeler QPs
- B. Wang, Ph.D., P. Eng., Design of surface watercourse
realignments, tailings management facility, mine rock areas and
seepage collection ponds
- A. Peralta, P. Eng., Mine design, capital and operating costs,
reserve estimate
- I. A. Lipiec, P. Eng., Process
design, capital and operating costs
- P. Baluch, P. Eng., Project infrastructure
- D. Dyck, P.Eng., Environmental studies, permitting and social
or community impact
- D. Smiley, P. Eng., Economic analysis
- J. Padilla, P. Eng., Project infrastructure, electrical power
supply/distribution
RPA QPs
- T. Ciuculescu, M.Sc., P.Geo. and L. Evans, M.Sc., P.Eng.,
Drilling, sample preparation and analysis and security, data
verification, and mineral resource estimate
IAMGOLD QPs
- A. Smith, M.Sc., P. Geo., Exploration, geological setting, and
deposit
- M-F. Bugnon, M.Sc., P.Geo., Property description, location,
accessibility, climate, infrastructure, physiography and
history
Other scientific and technical information in this news release
has been reviewed and approved by Geoffrey
Chinn M.Sc.(A)., 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 certified reference material 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, except, diabase dykes that occur within the sequence are
not sampled, aside for two one-metre shoulder samples at the upper
and lower contacts. The remaining half of the core is stored in
racks 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 Minerals, Val d'Or, Quebec.
All of the samples were analyzed using the FA-AA method. Samples
that assayed above the maximum limit using FA-AA were re-analyzed
with the FA-Gravimetric method.
Mr. Alan Smith, P.Geo., District
Manager Exploration for IAMGOLD, has made site visits to the Côté
Gold Project and surrounding exploration projects between
February 2013 and June 2017, the most recent site visit being
May 29 to June 02, 2017, where the
following areas were visited / inspected:
- a review of current regional exploration programs and results;
and
- an inspection of the core farm, core shack, and specific
outcrops of the Côté Gold Project.
Ms. Marie-France Bugnon, P.Geo.,
General Manager Exploration for IAMGOLD, has made site visits,
exploration reviews and legal and claims updates to the Côté Gold
Project between June 2012 and
May 2017, the most recent site visit
being on May18-19, 2017, where the following activities were
reviewed and inspected:
- 2017 winter diamond drilling program results and observations
for the King Errington and Weeduck Lake area of the Chester
property, and the Monella Point target area of the TAAC West
property;
- Participation in a site visit with RPA geologists; and
- Status on legal and assessment work requirements for the
maintenance of the Côté Gold district exploration properties
portfolio and updates.
Mr. Luke Evans, M.Sc., P.Eng.,
RPA Principal Geologist and Executive Vice President, Geology and
Resource Estimation and Mr. Tudorel
Ciuculescu, M.Sc., P.Geo., RPA Senior Geologist, visited the
Côté Gold site on May 18-19, 2017,
where the following activities were reviewed and inspected:
- Used a handheld GPS to confirm the location of a small number
of drill hole collars;
- Reviewed core samples from several drill holes and compared
them against the geology and assay tables; and,
- Reviewed geology of stripped outcrops within the conceptual pit
boundary.
RPA also carried out site visits on various occasions since
2007. It is the RPA QP's opinion that:
- The sample preparation, security, and analytical procedures are
adequate to support a Mineral Resource estimate on the Côté Gold
deposit, and
- 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.
Mr. Tony Lipiec, P. Eng., has
been involved in supervising the Côté Gold testwork since
October 2016 and has visited the
laboratories performing the work. He visited the facilities
at the University of British Columbia
in Vancouver, Canada on
January 16, 2017. He also
visited and reviewed work performed at COREM in Quebec City, Canada on March 9-10, 2017.
Dr. Bing Wang, P. Eng., visited the Côté Gold Project site on
several occasions: May 16,
October 4 and 31 to November 4, 2016 and April
13-14, 2017. The following areas were inspected:
- Property mineral lease boundaries;
- Topography and geographical features – lakes, rivers, protected
areas, etc.;
- Prior mine excavations, select bedrock outcrop locations, depth
of overburden;
- Exploration drill sites and representative drill cores,
potential for Acid Rock Drainage (ARD); and,
- Proposed location of open-pit, mine rock area, mill feed
stockpile, topsoil/overburden storage, tailings management
facility, property access, mine facilities, utility corridors,
water management structures.
Mr. Paul Baluch, P.Eng., visited
the Côté Gold Project site on two occasions: October 4, 2016, and April
13-14, 2017. The following areas were inspected:
- Existing project infrastructure such as the:
-
- Access roads
- Core shack area
- Mesomikenda camp
- Chester 1 site including the nearby Trelawney Aggregate Pit
#1
- Powerline corridor including Shining Tree substation area
- Areas of the proposed project infrastructure such as the:
-
- Permanent camp location
- Emulsion plant location
- Processing plant location including the truck shop and
warehouse area, coarse ore stockpile and electrical substation
area
- Tailings management facility area
- Topography and geographical features (water bodies, etc.)
Ms. Debbie Dyck, P. Eng., has
been involved in the Côté Gold Project baseline studies and EA
process since 2012, and last visited the site on April 13-14, 2017.
CONFERENCE CALL
A conference call will be held on Tuesday, June 6, 2017 at 8:30 a.m. (Eastern Daylight Time) for a
discussion with management regarding the IAMGOLD-Sumitomo
transaction and highlights from the Côté Gold prefeasibility study.
A webcast of the conference call will also be available through
IAMGOLD`s website - www.iamgold.com.
Conference Call Information: North America Toll-Free:
1-800-319-4610 or 1-604-638-5340.
A replay of this conference call will be accessible for one
month following the call by dialing: North America toll-free: 1-800-319-6413 or
1-604-638-9010, passcode: 1490#.
Forward-Looking Information
All Mineral Reserve and Mineral Resources estimates reported by
the Company were estimated in accordance with the Canadian National
Instrument 43-101 and the Canadian Institute of Mining, Metallurgy,
and Petroleum Definition Standards (May 10,
2014). 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 and Mineral Reserves;
|
(ii)
|
the PFS 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 and
Mineral Reserves 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, 2016 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