Iamgold Corp. (IAG,IMG.TO) announced that the legislative authority of Suriname, the National Assembly approved a definitive agreement regarding its Rosebel mine in Suriname.
The company in November 2012 announced that it had reached a definitive agreement with the Government of the Republic of Suriname or "Government" addressing future resource development and related power costs.
On April 13, 2013, the Agreement was approved by the legislative authority of Suriname, the National Assembly. The Agreement will, once executed, amend the existing Mineral Agreement regarding the Company's Rosebel mine in Suriname.
With this Agreement, The company will maintain all of its existing entitlements in the Rosebel operations and in the Gross Rosebel exploitation concession and will extend the term of its existing Mineral Agreement by 15 years to 2042. The Agreement will further establish a new joint venture growth vehicle under which Rosebel would hold a 70% participating interest and the Government will acquire a 30% participating interest on a fully-paid basis.
The company noted that the agreement will provide up to 300 x 106 kWh per year of additional power at a cost of 11 cents per kilowatt hour, which will apply to any production from the joint venture area. The JV area has been defined as a circular area extending 45 kilometres from the Rosebel mill, but excluding the Gross Rosebel concession, for a net JV area of approximately 6,190 km2. The JV will be entitled to convert an additional 20,000 hectares or 200 km2 to new rights of exploitation within the joint venture area, on a simplified and expedited basis, for processing at Rosebel. Under the terms of the Agreement all future production from the joint venture area will be allocated to the JV on a 100% basis.
The JV will also allow both Rosebel and the Government to share on the same basis in any further significant expansion at Rosebel. Rosebel is planning to undertake a feasibility study on the potential for a further significant expansion which, if approved, the Government will have the right to acquire an interest through the JV at fair market value. Rosebel will be entitled to proceed with the expansion on its own if the Government does not participate through the JV, and in either case will have access to the lower cost power rate for the expansion.
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