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IAMGOLD raising $400 million to reacquire stake in Gogama mine

Four years after the start of construction, Côté mine enters commercial production this summer
Construction at IAMGOLD's Côté mine project (Company photo)

Gogama gold miner IAMGOLD is out to raise $409 million (US$300 million) to buy back its 70 per cent stake in the Côté Gold Mine.

The Toronto gold company announced its plan to divest 72 million shares at $4.17 each to repurchase a 9.7 per cent interest in the mine and restore its 70 per cent ownership at Côté. It operates the newly commissioned open-pit operation through a joint venture ownership with Sumitomo Metal Mining Company. The offering is scheduled to close May 24. 

The mine is located just off Highway 144, about halfway between Sudbury and Timmins and is 25 kilometres southwest of Gogama. 

The first gold pour at Côté was carried out on March 31.

Back in 2022, when IAMGOLD was struggling to raise cash, IAMGOLD had to lean on Sumitomo for a loan to finish Côté project. In exchange, Sumitomo’s interest in Côté increased from 30 per cent to 40 per cent. The loan agreement provided an opportunity for IAMGOLD to buy back its 70 per cent interest over a specified timeline.

The repurchase is expected wrap up by the end of this year.

In an update, the company said this month that construction is complete and construction crews are packing up. Achieving commercial production is expected in the company’s third quarter of this year with 90 per cent of the mining output to be achieved by year’s end.

The gold target for 2024 — known as guidance in industry vernacular — is set between 220,000 and 290,000 ounces. 

Since the start of construction four years ago, $2.9 billion has been spent at Gogama.