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Overbudget Côté requires another $1.9bn to complete – Iamgold

Iamgold chairperson and interim president Maryse Belanger

4th August 2022

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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Canadian gold miner Iamgold has provided a new cost to completion, economics and life-of-mine (LoM) plan for its overbudget Côté gold project, in Ontario, stating on Wednesday that the gold mine would require another $1.9-billion to bring into production. Iamgold’s share would be $1.3-billion.

The Toronto-listed miner suspended its 2022 and 2023 project cost guidance for Côté in May, after it became apparent that the project would require substantially more than the initial estimate range of $875-million to $925-million. At the time, it also brought in chairperson Maryse Belanger as interim president to address cost and liquidity challenges.

“The completion of the Côté gold project review, risk analysis and updated mine plan is the culmination of months of in-depth analysis of the project, based on first principles, by the company's management and project teams, EPCM contractor and technical experts,” said Belanger.

The project is about 75% complete and should enter production in early 2024.

“Côté is a project that is being advanced in an environment with significant headwinds, including Covid-19, inflation and other global events - and their impacts on global supply chains, labour availability, and the associated costs of doing business. We are very proud of our teams as they navigate these challenges to continue to advance the project for the benefit of our partners, stakeholders and our business,” she said.

Belanger stressed that Côté was “transformational” for Iamgold. Once in production, the project was projected to offer robust free cash flow generation, averaging 365 000 oz/y at an all-in sustaining cost of $854/oz for 18 years, based on the 7.2-million ounces currently estimated in mineral reserves.

There is also “tremendous potential” for future expansion, starting with the Gosselin deposit, located immediately adjacent to the Côté pit containing 3.4-million ounces in indicated mineral resources and an additional 1.7-million ounces in inferred resources. Gosselin has only been drilled to half the depth of Côté and remains open along strike.

“We believe that Côté Gold is not just a project, but the start of a district, with minimal historical exploration targeting Côté/Gosselin-style intrusion-hosted deposits within our 596 km2 land package,” said Belanger.

She stressed that Iamgold was actively pursuing various alternatives to increase liquidity to complete construction and deliver Côté on the updated schedule. We expect to address these near-term challenges to advance Côté and better position Iamgold as a more resilient, agile company for the current environment.”

Belanger, who is currently chairperson of Iamgold, has stepped in as interim president and CEO of the midtier miner to address “significant” near- and mid-term challenges, both at Côté development project and in terms of liquidity.

The company on Tuesday reported a costs blowout at Côté, stating that preliminary cost estimates from an ongoing risk analysis indicate that the project would require between $1.2-billion and $1.3-billion to complete.

As such, the TSX-listed miner suspended its 2022 and 2023 Côté project costs guidance and said it would provide a detailed updated costs and schedule estimate before the end of the second quarter.

Edited by Creamer Media Reporter

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