Toronto-based Iamgold plans to spend $18,4-million to expand the mill at its Rosebel gold mine, in Suriname, the company said on Wednesday.

The expansion will enable the company to increase the life-of-mine production to up to 305 000 oz/y, from a current 275 000 oz/y, and to reduce cash costs by about $35/oz.

"This programme will continue to improve production from Rosebel and bring down cash costs at the operation, resulting in a reduction of our overall cash costs," said president and CEO Joseph Conway.

Iamgold owns 95% of the Rosebel openpit mine and processing facilities and the government of Suriname owns the balance.

The expansion would increase mill throughput from 8-million tons a year of ore to 8,9-million tons a year, and would create the flexibility to increase throughput by as much as 25%, should the mine site and economic conditions support the use of increased capacity.

"Rosebel is our largest and most significant operation and there is considerable value yet to be realised there,” Conway said.

“We continue to evaluate and initiate programmes to expand the margins, convert existing resources and discover more ounces."

Iamgold bought fellow Canadian miner Cambior in 2006, after a proposed merger with gold major Gold Fields was rejected by the bigger company's shareholders a year earlier.

The company, which has budgeted $87,3-million for exploration and development this year, also plans to build new mines in Ecuador, Tanzania, Peru and Canada, as it seeks to boost gold resources, and stem production declines.

The miner's shares fell last week, after the firm said that it expected to produce 4,66% less gold this year than in 2007, and Iamgold took a further knock when it revealed that the French government had refused to approve the permits needed to start construction at its Camp Caiman project, in French Guiana.

Shares in Iamgold gained 1,72% on Wednesday, to C$7,71 a share by the close of trade in Toronto.

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