Monday, November 2nd, 2009
Iamgold to acquire stake in Sadolia gold mine in Mali
TORONTO - Iamgold Corp. (TSX:IMG) has a tentative agreement to acquire an indirect stake the Sadiola gold mine which, the Toronto-based company says, has the potential for substantially higher annual output and an extended mine life.
International Finance Corp. has agreed to sell its six per cent interest in Societe D'Exploitation Des Mines D'Or De Sadiola (SEMOS), owner of the Sadiola gold mine in Mali, to Iamgold.
The SEMOS board has also approved spending $9 million on a feasibility study to further refine an Iamgold-devised plan to expand and extend production of the mine.
The current Sadiola life of mine plan estimates production of 350,000 ounces of gold for 2009, declining over time going forward until end of mine life in 2015.
The pre-feasibility plan projects an increase in output to between 400,000 and 500,000 ounces of gold annually from 2013 through 2018, with an end of mine life extended by four years to 2019.
Sadiola would produce 2.2 million additional ounces due to the expansion, Iamgold said Monday.
The company said the Sadiola expansion would break even at US$625 per ounce, with an initial investment of $400 million for the treatment plant, mining fleet, waste pre-stripping, and various infrastructure elements. Average cash costs are projected to be $490 per ounce on a life of mine basis.
Under the purchase agreement with IFC, Iamgold would pay $12 million to receive the full six per cent interest in SEMOS plus an additional $500,000 per year in 2010, 2011 and 2012 if the average price of gold hits certain targets.
Iamgold would pay an additional $1 million when SEMOS and the Malian government approve the Sadiola deep sulphide deposit.
Two other partners in SEMOS, AngloGold Ashanti Ltd. and the Republic of Mali, have until mid-December to decide whether they want to take a proportionate share of IFC's interest the mining company.
Iamgold shares gained 33 cents to $14.68 on the Toronto Stock Exchange.
