Monday, IAMGOLD Corp. (IAG,IMG.TO) said it secured an approval to go ahead with the $9 million deep sulphide feasibility Study from the Societe D'Exploitation Des Mines D'Or De Sadiola or SEMOS, the owner of the Sadiola Gold Mine in Mali, West Africa. The company also announced a tentative agreement with the International Finance Corporation for the purchase of the IFC 6% interest in SEMOS.
Joseph Conway, president and chief executive officer said, "Combining this approval with the announcement that the IFC has tentatively accepted our offer to purchase their share in the Sadiola Gold Mine creates a new focus for us in Sadiola, an attractive, long term asset."
The Toronto, Canada-based IAMGOLD indicated that the current Sadiola life of mine plan estimates production of 350,000 ounces of gold for 2009, declining over time going forward until end of mine life in 2015. The Pre-feasibility Study projects an increase in production at Sadiola to between 400,000 and 500,000 ounces per year with an end of mine life in 2019, increasing the total gold production at Sadiola by approximately 2.2 million ounces beyond the current mine plan.
IAMGOLD also said the pre-feasibility Study also reveals an after-tax project internal rate of return of 11%, at a gold price of C$800 per ounce and a breakeven gold price of approximately C$625 per ounce based on an initial investment of C$400 million for the treatment plant, mining fleet, waste pre-stripping, and various infrastructure elements.
IAMGOLD noted that the IFC's 6% share of production represents approximately 21,000 ounces of gold in 2009. Assuming positive results from the 11 month feasibility Study and the investment decision, construction would begin in late 2010, pre-stripping would commence in 2011 with the new fleet, and the new plant would begin operating in 2012.
IAG is trading on NYSE at $13.19, up $0.04 or 0.305%, on a volume of about 3.82 million shares.
The stock is trading at C$14.38, up C$0.02 or 0.14%, on a volume of about 1.75 million shares on TSX.
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