TORONTO (miningweekly.com) – Canadian gold-miner Iamgold will go ahead with a project to expand the mill and add a paste backfill plant at its Niobec niobium mine, in Quebec.

Niobium is used in specialty high-strength steels, and the Niobec operation currently produces about 10% of global consumption of the metal, according to Iamgold's website.

The company will spend $28-million to increase throughput at the Niobec mill by 24%, to 260 t/h, to match the existing hoisting capacity at the operation.

Construction will begin immediately and the project is scheduled for completion in the third quarter of 2010.

The company expects that the mill expansion will add about $20-million a year of cash flow to the mine, based on current niobium prices of approximately $35/kg.

At a conservative long term niobium price of $25/kg, which is what Iamgold uses for reserve calculations, the additional cash flow would amount to $11-million.

The Iamgold board has also approved $18,9-million in capital for a past backfill plant, which will enable the company to increase proven and probable reserves at Niobec by 36% and inferred resources by 72%.

The Niobec mine has traditionally been mined using a mining method of longhole open stoping without backfill, which means that significant levels of ore-grade rock is permanently left behind.

By changing to a different mining method using paste backfill, made from mill tailings mixed with cement and another binder, which is pumped underground, Iamgold will be able to achieve nearly complete extraction of the orebody, leaving behind almost no ore pillars, the company said.

For the lower block at Niobec, paste backfill will allow mining of ore that would have been left as pillars and not available with the current method.

Construction of the paste backfill plant and associated underground infrastructure will also begin immediately and is expected to be completed in the second quarter of next year.

“Our investment in this strong cash flow generating asset reflects management's commitment to improving our reserve profile and the company's long term profitability," said CEO Joseph Conway.

The Niobec mine produced 985 000 kg during the first quarter of this year.

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