IAMGOLD is teaming up with a Japanese mine developer to advance its Côté Gold Project toward the feasibility stage and eventually open-pit mining.
The Toronto-headquartered mid-tier miner announced June 5 that it’s signed a joint venture (J-V) agreement with Sumitomo Metal Mining of Tokyo in a $195-million partnership arrangement.
Sumitomo buys itself a 30 per cent stake in the northeastern Ontario project.
IAMGOLD will hold majority ownership and will be the operator during development and once the Côté open-pit mine is in operation.
This transaction is expected to close by the end of June.
“It will enable us to move the project into development and to significantly diversify our production profile as a result of future production from our Canadian operations," said IAMGOLD's President and CEO Steve Letwin in a statement.
The Côté Gold Project is located southwest of the community of Gogama and five kilometres west of Highway 144. It’s roughly situated halfway between Timmins (130 km north) and Sudbury (200 km south).
Simultaneous with the Sumitomo J-V announcement, IAMGOLD released the results of its positive pre-feasibility study (PFS) for the Côté Project.
The study shows low operating costs and a good rate return over a 17-year mine life with an average annual production of 320,000 ounces at an average gold grade of 0.94 grams per tonne.
The plan is for the mine to be a conventional truck and shovel open-pit mining operation.
The company is going the high-pressure grinding roll (HPGR) route on the processing side rather than the standard semi-autogenous grinding (SAG) mill.
They’ll be more than $1 billion in spending during the procurement, construction and mining ramp-up phases with equipment purchases ($59 million), infrastructure installations ($104 million), on-site processing plant ($252 million) and mining pre-production costs ($80 million).
"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,” said Letwin.
“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 per cent, stands out in an industry challenged with reserve replacement.”
Letwin likes the fact that Côté has “significant exploration upside” with more than 500-square kilometres of property surrounding the deposit.
IAMGOLD operates four operating gold mines in northwestern Quebec, Suriname, Burkina Faso and Mali.
Sumitomo brings considerable expertise in building and operating copper, gold, nickel and other precious metals mine. The company generated $7.3 billion in revenue in its fiscal year ending March 31.
Discussions between IAMGOLD and Sumitomo began last August and there have been multiple site visits by Sumitomo’s technical staff to the northeastern Ontario deposit ever since as part of the due diligence process.
IAMGOLD said they’ve landed a partner with deep pockets and mine-building expertise who will give them access to Japanese mining suppliers “which will complement, where needed, existing supplier networks within Ontario.”