TORONTO (miningweekly.com) – Canadian gold producer Iamgold believes there is a lot of potential to grow the reserves at its new Essakane project, in Burkina Faso, interim CEO Peter Jones said on Wednesday.

Iamgold said a couple of weeks ago that it plans to begin production next month at Essakane, which is between four and six weeks before the last start-up target, and a whole five to six months ahead of the original schedule when Iamgold took control.

Construction is now 94% completed, and the company is confident the ramp-up to commercial production can be achieved quickly and smoothly.

The $443-million mine is expected to produce 500 000 oz of gold from start-up until the end of 2011 and cash costs are forecast at an average of $400/oz to $410/oz a year over the life-of-mine.

“But the Essakane story does not end there,” Jones said at the company's annual shareholders meeting in Toronto.

“Early drilling results confirm it. We believe the upside is significant and there are many more years of profitable reserves yet to find at Essakane.”

The project currently has 3,9-million ounces of probable gold reserves, 4,3-million ounces (including reserves) of measured and indicates resources and 1,9-million ounces in the inferred category.

Iamgold took control of the Essake project last year by buying junior Orezone Resources.

The Toronto-based miner already produces gold from mines in Suriname, Canada, Botswana, Mali and Ghana, and has forecast output of between 940 000 oz and one-million ounces of gold this year.

It also operates a niobium mine, Niobec, in Quebec, and will complete two expansion projects at the operation during the third quarter of this year, Jones said.

The firm has been working on a mill expansion, as well as a paste-backfill plant at Niobec, and both will ramp up in the final quarter of 2010.

After Essakane, Iamgold's next greenfield project is its Westwood asset, also in Quebec.

The company is also studying a project to develop the large deep sulphide resource at the Sadiola mine, which it owns with AngloGold Ashanti.

While AngloGold is the operator of Sadiola, Iamgold has taken the lead on the deep-sulphide project.

A feasibility study and construction decision is expected by year-end, Jones confirmed.

The Sadiola deep-sulphide project will likely start contributing production in mid-2012, followed by output from Westwood in early 2013.