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IAMGOLD provides mineral resource update for Côté Gold and reports strongest quarter for production in 2012 with confirmed production guidance for 2013
By: PR Newswire
Jan. 22, 2013 05:40 PM
All amounts are expressed in US dollars, unless otherwise indicated.
TSX: IMG NYSE: IAG
TORONTO, Jan. 22, 2013 /PRNewswire/ - IAMGOLD Corporation ("IAMGOLD" or the "Company") today announced a mineral resource update for its Côté Gold project in northern Ontario along with the Company's production results for 2012 and guidance for 2013.
IAMGOLD's President and CEO, Steve Letwin said, "The resource update for Côté Gold demonstrates significantly higher confidence in both the geological and gold grade continuity of the deposit and reaffirms our decision to acquire this project.
"Our gold production in the fourth quarter was the strongest this year", continued Mr. Letwin, "enabling us to finish 2012 near the lower end of our guidance. While performance at our IAMGOLD operated mines has been solid, the underperformance at Sadiola has led us to re-assess our strategy with respect to our joint venture operations. Over the next five years, the combination of growth initiatives at our existing mines, the ramp-up to full production at Westwood and the expected start-up of Côté Gold in 2017 should drive production up 80% to 1.4-1.6 million ounces."
CÔTÉ GOLD MINERAL RESOURCE UPDATE
The mineral resource estimate for Côté Gold was prepared in accordance with National Instrument 43-101 and incorporates assay results from an additional 85 drill holes (47,325 metres) since the October 4, 2012 estimate. The new Côté Gold resource estimate consists of an Indicated Resource of 269 million tonnes averaging 0.88 grams of gold per tonne for 7.61 million ounces and an Inferred Resource of 44 million tonnes averaging 0.74 grams of gold per tonne for 1.04 million ounces. The updated resource estimate, based on a cut-off grade of 0.30 grams of gold per tonne, represents a 114% increase in Indicated Resources from the previous estimate, also based on a cut-off grade of 0.30 grams of gold per tonne. The updated Côté Gold resource estimate benefited from the infill drilling that substantially upgraded the quality of the estimate through conversion of Inferred Resources to Indicated Resources.
A positive attribute of the Côté Gold deposit is its accessibility for open-pit mining. The deposit locally outcrops at surface and, based on the extensive drilling program to date, the depth of the barren overburden averages 5.8 metres.
The mineral resource estimate was carried out by Roscoe Postle Associates Inc. ("RPA") and reported in accordance with National Instrument 43-101 requirements and CIM Estimation Best Practice Guidelines. The resource estimate was prepared by RPA Associate Principal Geologist Jamie Lavigne, P.Geo. with geostatistical input and verification provided by Mohan Srivastava, P.Geo., a consultant with IAMGOLD.
The table below presents the mineral resource at the 0.30 grams of gold per tonne cut-off as well as at several additional cut-off grades for comparison purposes.
The effective date of this resource estimate is December 31, 2012 and includes all validated drill results available as at December 31, 2012.This estimate is based on assay results from a total of 293 diamond drill holes (158,047 metres). Since the completion of the October 4, 2012 estimate, which was based on 208 diamond drill holes (110,722 metres), a further 85 diamond drill holes (47,325 metres) were available and validated as at December 31, 2012. Mineralized wireframes were interpreted and used to constrain grade interpolation by ordinary kriging.
2012 GOLD PRODUCTION
Attributable gold production for the fourth quarter 2012 was 214,000 ounces, bringing production for the full year 2012 to 830,000 ounces. Full year production was slightly below the lower end of the guidance range of 840,000 to 910,000 ounces primarily due to the Company's underperforming joint venture operations. The Company expects that average total cash costs (including royalties) per ounce will be around ± 3% of the upper end of the previously provided guidance range of $670 to $695 an ounce.
2012 NIOBIUM PRODUCTION
In 2012, IAMGOLD produced 4.7 million kilograms of niobium at an average margin of $15 per kilogram, which was within the guidance range of 4.6-5.1 million kilograms at an average margin of between $15 and $17 a kilogram.
PRODUCTION AND CASH COST GUIDANCE
Gold Production and Cash Costs
The Company confirms its previously announced gold production guidance of 875,000 to 950,000 attributable ounces for 2013. As in the past, production is expected to vary from quarter to quarter as a result of such factors as the rainy season in Suriname in the second quarter and the ramp-up in production at Westwood throughout 2013.
With the Westwood processing facility on track to begin gold production by the end of March, and development studies and permitting at Côté Gold expected to be completed in 2014 followed by a construction start the following year, the Company confirms its five-year production guidance with gold production expected to grow by approximately 80% to 1.4 to 1.6 million ounces by 2017.
At the Company's joint venture operations in Mali, which underperformed in 2012, the recent escalation of conflict in the country has not disrupted production nor has there been any interruption in supply chains. Although it is business as usual at the Sadiola and Yatela mines operated by the Company's joint venture partner and which are approximately 1,300 kilometres by road from the regions of conflict, the Company is reducing its exploration activity in the region at this time as a precautionary measure.
Total cash costs, including royalties, for 2013 are expected to increase to a range of between $850 and $925 an ounce. Approximately one third of the increase in cash costs per ounce is attributed to inflation while another third reflects the impact of lower ore grades on production costs. The balance of the expected year-over-year increase is due to both the transition to harder ore at the Company's mature mines and the higher unit costs at Westwood attributed to lower production in its first year of operation. The growing proportion of harder ore drives up stripping ratios and labour costs and exerts a greater demand on crushing and grinding capacity, which in turn increases energy consumption and the use of reagents.
Continued Mr. Letwin, "The lower grades of ore, combined with the energy- and labour-intensive nature of low-grade deposits, present a cost challenge in our industry. Whether existing projects or future developments, we have to explore more innovative ways of curbing cost escalation, and that applies to operating costs and capital expenditures. Sustaining operational excellence is key, so the one thing we're changing is the way we benchmark our performance. This has to be an ongoing process and not a quarterly event. In the ensuing months we plan to adopt a more broad-based measure of operating efficiency, and to refine those same cost elements, such as sustaining capital and general and administrative costs, for inclusion in the calculation of expected rates of return on our projects."
Guidance for 2013 is based on the following economic assumptions:
The Company expects to produce between 4.7 and 5.1 million kilograms of niobium in 2013 at a margin of between $15 and $17 a kilogram. The operations at Niobec remain strong.
2013 CAPITAL EXPENDITURE FORECAST
The Company previously announced that it was reducing its 2013 capital expenditure forecast due mainly to the delayed approval of the Sadiola sulphide project and the deferral of capital spending for the Niobec expansion. The timing of capital spending related to the Niobec expansion project will be aligned with the advancement of permitting and the outcomes derived from the completion of the feasibility study in the third quarter of 2013.
The Company is providing 2013 capital expenditure forecasts by operation upon completing a review of the key variables, including economic assumptions, incorporated in the life of mine plans and feasibility studies. As such, the Company`s 2013 capital spending forecasts for Westwood and Essakane are $100 million and $300 million, respectively. The forecast for Rosebel will be provided upon completion of the feasibility study, expected by the end of the first quarter 2013, and the Sadiola sulphide project is undergoing a strategy review. The Company is forecasting $80 million for capital spending at Niobec in 2013 for mine development, sustaining capital and the expansion feasibility study ($20 million).
2013 EXPLORATION PLAN
The Company's planned exploration spend for 2013 is $142 million, with approximately 54% earmarked for greenfield exploration, including ongoing exploration and feasibility work at the Côté Gold project. The modest reduction in the 2013 forecast from that of the previous year is due to reduced exploration activities in West Africa. The Company plans to carry out significant resource development programs at its Rosebel, Essakane and Niobec mines as well as at the Westwood development project, scheduled to begin production at the end of the first quarter 2013.
UPCOMING NEWS RELEASES
IAMGOLD will report its fourth quarter and year-end financial and operating results on February 20, 2013. The release of the Company's 2012 Mineral Reserves and Resources Statement is expected to be completed in February.
Cautionary Note to U.S. Investors
Forward Looking Statement
IAMGOLD (www.iamgold.com) is a leading mid-tier gold producer with five operating gold mines (including current joint ventures) on three continents. In the Canadian province of Québec, the Company also operates Niobec Inc., one of the world's top three producers of niobium, and owns a rare earth element resource close to its niobium mine. IAMGOLD is well positioned for growth with a strong financial position and extensive management and operational expertise. To grow from this strong base, IAMGOLD has a pipeline of development and exploration projects and continues to assess accretive acquisition opportunities. IAMGOLD's growth plans are strategically focused in certain regions in Canada, select countries in South America and Africa.
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/Home/default.aspx.
SOURCE IAMGOLD Corporation
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