All amounts are expressed in U.S. dollars, unless otherwise indicated
TSX: IMG NYSE: IAG
TORONTO, Feb. 23, 2012 /PRNewswire/ - IAMGOLD Corporation ("IAMGOLD" or "the Company") today provided an update on its pipeline
of growth and development projects.
"IAMGOLD's suite of organic development and growth projects on three
continents provides a substantial opportunity to expand existing
production," said Steve Letwin, President and CEO of IAMGOLD. "We have
a unique ability to replace reserves and grow the business through
lower risk brownfields development, which can generate very attractive
returns. Coupled with our strong financial position and ability to
acquire additional value-added production, IAMGOLD is well-positioned
for profitable and sustainable growth."
PROJECT HIGHLIGHTS
-
Westwood - As confirmed by a recently completed development study,
Westwood is on track to begin production in early 2013.
-
Essakane - The expansion development study was completed at the end of
2011. Pending resolution of fiscal terms with the Government of Burkina
Faso, commencement of construction is planned for early 2012, with
completion in the second half of 2013.
-
Sadiola - Significant progress has been made to advance the Sadiola
Sulphide Project. The feasibility study completed in early 2011 is
being optimized and is awaiting final approval by the Company's joint
venture partner, AngloGold Ashanti. Permits are in place to begin
construction.
-
Rosebel - Ongoing capital projects are aligned with the previously
announced program to maintain mill throughput in the 12 to 14 million
tonne per year range as the operation moves to higher proportions of
hard rock. The Company will complete a feasibility study on various
aspects of this project during 2012. In parallel, a concept study will
be carried out with respect to incorporating additional satellite
resources.
-
Niobec - The Pre-Feasibility Study was completed in early 2012 and the
Company is advancing to a full feasibility study based on the block
caving mining option. The Pre-Feasibility Study confirms management's
view of the value of the asset, estimated to have an after-tax net
asset value of $1.6 to $1.8 billion.
-
Rare Earth Elements (REE) - IAMGOLD is evaluating options to determine
the optimum strategy for exploiting the large REE deposit situated one
kilometre north of Niobec as announced in February 2012. A concept
study will be completed by the third quarter of 2012 to provide a
preliminary economic assessment of the REE deposit.
GROWTH PROJECT UPDATES - GOLD
Canada - Westwood Project
The Westwood project in the Abitibi region of Quebec remains on track
for an early 2013 commercial start. The 2013 start-up date has been
maintained as the target since early 2008 when an accelerated
exploration and development program was launched at Westwood.
Key Metrics of the Westwood Project:
|
|
|
|
|
|
Classification
|
Tonnes
|
Grade
|
Contained Au
|
|
(g/t Au Undiluted)
|
(000s oz)
|
|
Indicated Mineral Resource1 (Warrenmac)
|
219,000
|
8.6
|
60
|
|
Indicated Mineral Resource1 (Zone 2 Westwood)
|
560,000
|
13.8
|
248
|
|
Inferred Mineral Resource1
|
9,411,000
|
11.3
|
3,407
|
|
Total Recovered Gold
|
3,480,070 oz.
|
|
Mine Life
|
19 years
|
|
Average Annual Gold Production
|
190,000 oz.
|
|
Average Cash Cost
|
$533 per oz.
|
|
Total Pre-production Capital2
|
$518 million
|
|
Sustaining Capital (life of mine)
|
$529 million
|
|
Operating Cash flow (after-tax)
|
$1,717 million
|
|
Estimated IRR (after-tax)
|
9-11%
|
|
Canadian/US Exchange Rate (2012 - 1.00)
|
1.05
|
|
Average Gold Price Assumption
|
$1,249 per oz.
|
(1) Mineral resources as of May 2011 at are calculated at an
undiluted 6 g/t Au cutoff grade at a minimum two metre width; panel
grades of individual lenses are capped at 15 g/t
(2) Includes remaining capital of $198 million (after tax credits)
for 2012
|
Work Completed in 2011
Construction
Project expenditures in 2011 totaled $124.3 million ($94.9 million spent
in 2010) for significant infrastructure preparation and construction,
including the completion of the fire detection system, the new pump
house, the waste silo, and commencement of ground support in the
six-metre diameter ventilation shaft. Shaft sinking reached a depth of
1,455 metres, with the installation of a spill pocket and the safety
bulkhead under the 104-0 level. Underground development work in 2011
totaled 9,315 metres of lateral and vertical.
Exploration
Over 75,000 metres of diamond drilling, at a cost of $9.6 million, were
completed during 2011 as part of the underground drill program. The
program was designed to identify additional inferred resources and
upgrade existing mineral resources to measured and indicated categories
in tandem with the on-going underground development and construction.
Four underground drills, working on the exploration drilling program
below the 132 level, drilled over 28,600 metres during 2011. In
addition, five drills focused on in-fill and delineation work, drilling
nearly 46,600 metres during the year. The Company has acquired
additional confidence in the inferred resources and the remaining
exploration potential.
Plan for 2012
The main project activities for 2012 are as follows, with an estimated
cost of $198.3 million, after tax credits:
-
Construction of a new surface administration and services building and a
new paste backfill plant;
-
Extensive refurbishment of the existing Doyon mill and installation of a
new sewage treatment plant;
-
Shaft sinking to a depth of 1,954 metres by the end of 2012;
-
Completion of permanent ground support for the six-metre ventilation
raise;
-
Excavation of a six-metre exhaust raise;
-
Completion of 89,000 metres of infill and step-out drilling for resource
development;
-
Completion of 15,000 metres of vertical and horizontal development; and
-
Commencement of mining in the Warrenmac zone for stockpiling ahead of
the 2013 start-up.
Resources
From 2007 to 2011, inferred resources have grown marginally from 3.3
million ounces (at a 3.0 g/t / 3.0 metre minimum width cutoff) to 3.4
million ounces (at a 6.0 g/t / 2.0 metre minimum width cutoff). Over
the same time period (and assuming the same cutoff parameters)
indicated resources have grown from 56,000 ounces to 308,000 ounces.
Despite the limited increase in inferred resources, there has been a
significant increase in the confidence level in these resources and a
significant reduction in the average drill hole spacing. In 2007, the
resource estimate was based on only 21 kilometres of drilling, whereas
the 2011 estimate is based on nearly 300 kilometres of drilling.
The Company`s understanding of the ore body has evolved from a simpler
original model with a few large continuous ore panels, to numerous
stacked and smaller mineralized lenses. At the same time, there has
been a decrease in the volume of shallow resources in the model,
replaced by deeper ore zones. On the plus side, new lenses are being
discovered within gaps in the resource model as step-out drilling
proceeds, improving the overall continuity of the deposit. The
Westwood deposit remains open both laterally and at depth.
The amount of indicated resources (currently slightly over 300,000
ounces) at Westwood is insufficient to characterize ongoing technical
studies as being at the feasibility level, or even the pre-feasibility
level, despite the advanced engineering incorporated into the studies.
Given the character of the Westwood deposit with its narrow,
high-grade, deep zones, it is not likely that the mine will be able to
carry significant amounts of indicated resources on an on-going basis,
but rather will typically operate with two to four years of production
in indicated resources in the mine plan and the remainder in the
inferred category.
Mining
The latest comprehensive mine plan for Westwood includes a change in
mining method from the planned long-hole open stoping to primarily
cut-and-fill mining. Open stoping will still be used initially to mine
the small satellite Warrenmac zone. As cut-and-fill is a more labour
intensive technique, the mining cost per tonne is estimated at $140 to
$150 per tonne which is $30 to $40 per tonne more than open stoping on
a comparative cost basis. Cut-and-fill mining also requires additional
development compared to open stoping, also affecting total costs.
Cut-and-fill mining offers a number of advantages over other methods:
-
With the nature of the ore body having changed to multiple, stacked ore
lenses, cut-and-fill mining will provide better ground stability versus
open stoping;
-
Provides greater operating flexibility versus the relatively rigid
production sequence that is inherent under the open stoping with
backfill scenario;
-
Average diluted ore grade estimated at 8.2g/t for cut-and-fill versus
7.1 g/t for open stoping as the average dilution is expected to be less
than 40% for cut-and-fill, with a reasonable opportunity to reduce
dilution further with experience, compared to more than 50% for open
stoping. This means production cost savings in hoisting and milling to
produce the same quantity of ounces;
-
Because cut-and-fill mining uses the same equipment for development and
stope production work, the mine will have the opportunity of fully
utilizing equipment as necessary to optimize the overall mine plan; and
-
In summary, cut-and-fill mining will lower the production and technical
risk for Westwood, providing greater certainty of achieving the
production plan.
Production and Cash Costs
Production start-up is scheduled for early 2013. Production in 2013 is
forecast at 120,000 to 140,000 ounces, ramping up over a three to four
year period to a nominal 200,000 ounces per year for the remainder of
its life.
Due to the refurbishing of the Doyon mill in 2012, production from the
nearby Mouska mine is being stockpiled during 2012 for processing in
2013, together with Westwood ore and additional production from Mouska
planned in 2013. Mouska is expected to contribute an additional 50,000
to 70,000 ounces of gold to IAMGOLD's Abitibi production during 2013.
Mouska is currently scheduled to wind down operations in 2014, with
marginal production in that year. However, exploration efforts
continue, with the goal of identifying additional resources to extend
the life of Mouska as has been done several times in its history.
Cash costs for Westwood are now forecast to average $533 per ounce over
the life of the operation, higher than previously forecast. The
increase is due to a number of factors, including the change in mining
method, high labour cost inflation in the Abitibi region, adverse
movement of the Canadian dollar/US dollar exchange rate, and increased
input costs including reagents, steel for grinding and ground support,
and fuel.
A number of opportunities will be evaluated in the coming years to
further improve productivity and profitability at Westwood. The
current cutoff grade of 6 g/t Au includes an assumption to cover all
development costs. A good opportunity exists to exploit additional
resources on a marginal added basis above the current production
profile in areas that will be developed to mine other lenses and by
utilizing spare hoisting and milling capacity. At a 4 g/t cutoff
grade, there is an estimated additional 1.0 million ounces of contained
gold in the ore body. Further potential improvements include: improved
development productivity, automation, reduced dilution, and adding
resources in proximity to the established resources.
Burkina Faso - Essakane Expansion
The original feasibility production scenario for Essakane was to process
soft rock for three years at an expanded rate of 7.5 million tonnes per
year, followed by a short transition period and proceeding with
processing of hard rock at 5.4 million tonnes per year. Following the
identification of additional reserves during the pre-production period
and minor modifications to the process plant design, the throughput
rate for soft rock was increased to 9 million tonnes per year, still to
be followed by hard rock processing at 5.4 million tonnes per year.
During 2010, a Concept Study was undertaken to review the opportunity
of expanding the plant to enable the processing of hard rock at a rate
of 10.8 million tonnes per year, double the original designed
throughput. The benefit of this scenario would be to maintain the gold
production profile going forward and reduce the consequential increase
in cash costs resulting from both the increased processing cost of the
hard rock and the increased impact of fixed costs at the lower
production rate.
Based on the results of the Concept Study announced in 2010, an
expansion development study was commissioned to bring the proposal to
the point of a construction decision. The development study to expand
the mine capacity at Essakane was completed in late 2011 and
construction is expected to commence in early 2012. Due to
pre-ordering of long lead items required for the expansion during 2011
(including haul trucks, excavators, and grinding mills), the
construction schedule will allow commissioning of the expanded plant
during the second half of 2013.
Key Metrics of the Essakane Expansion Development Study:
|
|
|
|
|
|
Classification
|
Tonnes
|
Grade
|
Attributable Gold
|
|
(millions)
|
(g/t Au)
|
(000s oz)
|
|
Probable Reserves
|
109.2
|
1.1
|
3,472
|
|
Measured Mineral Resource
|
-
|
-
|
-
|
|
Indicated Mineral Resource1
|
139.6
|
1.1
|
4,262
|
|
Inferred Mineral Resource
|
24.1
|
1.1
|
797
|
|
Mine Life
|
14 years
|
|
Average Annual Gold Production
|
350,000 oz.
|
|
Expansion Capital Expenditures (2011-14)
|
$362 million
|
|
Sustaining Capital (life of mine)
|
$69 million
|
|
Average Gold Price Assumption
|
$1,200 per oz.
|
|
(1) Indicated Mineral Resources are inclusive of Probable Reserves
|
The development study included extensive metallurgical testing and
characterization of the hard rock resources. Essakane's fresh ore was
determined to be significantly harder than previously thought, which
will require additional grinding and power generating capacity to
achieve the designed 10.8 million tonne per year throughput rate on
hard ores. Based on this new information, it was also determined that
the existing plant would not have been able to achieve the 5.4 million
tonnes per year as originally specified, with an estimated shortfall of
25% to 30%.
Drilling of inferred and other potential extensions of the ore body
model was carried out in late 2010 and through 2011 as part of the
development study with the objective of converting these areas to
reserves. Potential reserve and resource increases based on higher
gold prices, however, were negatively impacted by a modified geologic
model that resulted in a lower rate of resource conversion of inferred
resources, higher cost structure partly due to the harder rock
assumption, and more conservative pit slope angles determined as a
result of geotechnical analyses. Attributable mineral reserves and
indicated resources (inclusive of reserves) now stand at 3.5 million
ounces and 4.3 million ounces, respectively. Resources include about
240,000 ounces in the Falagountou pit, nine kilometres east of the
Essakane Main Zone.
Exploration potential at Essakane remains excellent. In 2012, more than
210,000 metres of reverse circulation and diamond drilling is planned
for both resource development works on the identified ore bodies as
well as for exploration on a number of satellite resources within
economic haul distance of the Essakane plant. Any additional reserves
identified at Essakane will positively enhance the economics of the
expansion project, especially if the new ore is softer saprolite ore
and/or of a higher grade.
Under the expansion plan, mining will be carried out using the same type
of equipment currently used at Essakane. The mining rate will climb to
50-55 million tonnes per year by 2014 and is expected to remain at that
rate for six years before decreasing gradually to the end of pit life.
The expansion project will include a new pre-crushing circuit and ore
handling system, a new SAG and Ball mill grinding line similar to the
existing plant, a pebble crushing circuit for both grinding lines, a
new leach tank section duplicating the existing section, a significant
expansion of the fuel-based power generation facility, and related
infrastructure elements including shops, offices and camp facilities.
No expansion is required for the existing tailings thickening system or
the tailings pond itself. The freshwater management and storage
facilities were expanded in 2011 and will be sufficient for the
expanded plant throughput. A diversion system for the Gorouol river to
access resources in the northern part of the Essakane Main Zone will
also be constructed concurrent with the plant expansion construction;
however, this diversion would eventually be required regardless of
expansion to access those resources.
Mali - Sadiola Sulphide Project
The feasibility study on the Sulphide Project to expand the processing
facility to treat hard rock in conjunction with soft rock was completed
in 2011. This project is primarily based on mining of hard sulphide ore
beneath the oxide zone in the existing Sadiola pit, at an overall
expanded milling rate. Current oxide reserves will continue to be
processed in the existing plant while the expansion is constructed and
for some time afterward. Once the oxide resources are exhausted, the
existing portion of the plant will be adapted to treat sulphide ores
together with the expansion section.
Detailed engineering and logistical planning are underway and orders for
long lead time equipment were issued during 2011. A memorandum of
understanding with the Government of Mali was signed covering power
supply terms for the expanded operation as well as the fiscal treatment
of the new project. Negotiations with the government have reached the
stage necessary to complete the definitive agreement on those issues.
Permits for mine site construction were received in 2011 and the permit
for power line construction is expected shortly.
Currently, a project optimization exercise is underway to incorporate
the latest capital and operating cost estimates, the latest mine plan
incorporating all oxide resources, along with new sulphide resources
identified during the past year. An internal peer review of the
project is being completed. A construction decision is expected in
2012 from the Company`s joint venture partner, AngloGold Ashanti.
Under the current project schedule, pre-stripping of the Sadiola main
pit to access the underlying sulphides will begin in 2013. Project
completion and start-up of the new process plant is scheduled for the
first half of 2014.
IAMGOLD's share of planned total capital expenditures over the next
three years is $300 million, of which $150 million is directly related
to the expansion project.
Suriname - Rosebel Plant Expansion
The current Rosebel mine expansion project was announced early in 2011
and is effectively an optimization of the mineral reserve. Without
expansion, Rosebel mill throughput would decline going forward as the
ore mix trends to higher proportions of hard rock, resulting in a
decline in gold production and an increase in cash costs.
Metallurgical test work and ore characterization completed in 2011
indicates that the transition to hard rock is coming sooner than
expected, and that the hardness of the ore is more than originally
anticipated. The mine is entering a transition period whereby the
proportion of hard rock in the mill feed will climb from a nominal 15%
currently to approximately 80% by 2016. As a result, it is necessary
to accelerate the expansion installations and to install additional
crushing and grinding equipment to maintain mill throughput at between
12 and 14 million tonnes per year, marginally higher than the rate
achieved in recent years, even with the increased hard rock volumes.
During 2012, a feasibility study will be carried out to provide greater
design detail around this 12 to 14 million tonne per year expansion
case.
During 2012, a third ball mill will be installed at Rosebel as well as a
temporary pre-crushing plant and a larger pebble crushing unit. The
construction of the expanded gravity recovery circuit will also be
completed this year. Additional mill equipment will be installed in
future years as the hard rock component of the ore feed increases.
Coupled with the investments in the mill, the capital spending program
includes sustaining capital to replace aging mine equipment, as well as
additional and larger mining equipment to increase annual mining
capacity to 100 million tonnes by 2014 from the current mining rate of
approximately 55 million tonnes. The increase in mining capacity is
necessary to optimize mill feed grades.
In addition to the current expansion project, strategic studies have
identified the potential opportunity for a more significant plant
expansion to bring in additional satellite resources in the Rosebel
region. This would provide an opportunity to potentially incorporate
different mining, processing, and power supply alternatives and would
result in economies of scale. In support of these larger capacity
expansion plans, the Company entered into a Heads of Agreement with the
Government of Suriname in December 2011 on the terms and conditions
governing the expansion and the incorporation of satellite resources.
A mutually beneficial definitive agreement is expected to follow later
in 2012. Concept study work, in parallel with the feasibility study
mentioned above, is planned for 2012 to further develop the
understanding and definition of the expansion potential and the cost,
gold price, and/or resource developments necessary to make a
significant expansion viable.
Planned capital expenditures over the next three years are estimated at
$550 million pending further studies and approval, and include project
capital, sustaining capital and capitalized stripping.
GROWTH PROJECT UPDATES - NON-GOLD
Canada - Niobec Expansion
In 2011, the Company launched a strategic initiative to unlock the value
of Niobec. The Company's business plan includes examining all available
options to optimize the value of this asset, which could include the
potential sale of a minority interest to a strategic investor. In 2011,
the Company established a financing framework to fund expansion without
reliance on cash flow from the gold business. This includes a line of
credit for $250 million established for Niobec Inc. in February 2012. (See February 22, 2012 News Release).
Based on the Pre-Feasibility Study completed in early 2012, the Company
will be proceeding with a Feasibility Study based on the block-caving
mining method. The Pre-Feasibility Study confirms management's view of
the value of the asset, estimated to have an after-tax net asset value
of $1.6 to $1.8 billion.
The planned transition from the current open stoping underground mining
method to block cave mining, as detailed in the Pre-Feasibility Study
is expected to approximately triple niobium production and improve
margins significantly. The Feasibility Study, planned for completion by
mid-2013, is intended to confirm this evaluation, to increase the
detail of engineering design and to improve the accuracy of estimates.
Activities planned as part of the Feasibility Study will include:
production of a detailed environmental and social impact assessment,
further conversion of the remaining mineral resources to the measured
and indicated categories, verification of specific design parameters
through further test work, production of a detailed mine design and
plan, a final evaluation of the construction costs and finalization of
the economic evaluation.
Pre-Feasibility Study Results
Five components were considered to produce the Pre-feasibility Study:
health and safety, technical feasibility, environmental, social and
economic aspects. Based on the outcome from a scoping analysis carried
out early in 2011, the Pre-feasibility Study fully evaluated the
potential of both underground (block caving) and surface (open pit)
exploitation with the intention of selecting a single mining scenario
to carry forward into the feasibility stage. Following the results of
the Study, the block caving scenario has been chosen as the most
attractive alternative from both an economic and operating risk
standpoint and will be used to develop the feasibility study.
Key Metrics of the Niobec Expansion Pre-Feasibility Study under the
Block Cave Scenario:
|
|
|
|
|
|
Classification
|
Tonnes
|
Grade
|
Contained Nb2O5
|
|
(millions)
|
(% Nb2O5)
|
(million kilograms)
|
|
Probable Reserves
|
419.2
|
0.42%
|
1,746
|
|
Measured Mineral Resource1
|
235.3
|
0.44%
|
1,028
|
|
Indicated Mineral Resource1
|
250.2
|
0.39%
|
986
|
|
Inferred Mineral Resource
|
155.4
|
0.35%
|
547
|
|
|
|
|
NAV (After-tax)
|
$1.6-$1.8 billion
|
|
Total Recovered Niobium
|
576 million kg Nb
|
|
Mine Life (does not include all resources)
|
46 years
|
|
Average Annual Niobium Production (post expansion)
|
13.5 million kg Nb
|
|
Mining Cost
|
$17 per kg Nb
|
|
Operating Margin
|
$28 per kg Nb
|
|
Pre-production Capital Expenditures
|
$976 million
|
|
Growth and Sustaining Capital over 46 years
|
$965 million
|
|
Operating Cash flow (pre-tax)
|
$15.2 billion
|
|
Estimated IRR (after-tax)
|
17 - 19%
|
|
Canadian/US Exchange Rate (2012 - 1.00)
|
1.05
|
|
Niobium Price Assumption
|
$45 per kg Nb
|
|
(1) Measured and indicated resources are 98% inclusive of probable
reserves. Under the block caving scenario around 2% of the measured and
indicated resources include in the probable reserves are slightly below
the cutoff of 0.20% Nb2O5 per tonne (before recovery) used for resource reporting. This material
represents only 5.8 million tonnes averaging 0.18% Nb2O5 for 10 million kilograms of Nb2O5 contained.
|
Mineral Reserves
IAMGOLD announced, based on the block caving scenario, probable reserves
at Niobec of 1.75 billion kilograms of contained niobium pentoxide
(419.2 million tonnes at an average grade of 0.42% Nb2O5).
The Study includes inferred mineral resources that are considered too
speculative geologically to have the economic considerations applied to
them that would enable them to be categorized as mineral reserves, and
there is no certainty that the assessment will be realized.
Additionally, while preparing the Pre-feasibility Study, sparse
drilling information, particularly in the lower west section of the
deposit, obliged modellers to fill the voids by increasing the area of
influence of diamond drill holes beyond normal practice at Niobec for
definition of inferred resources. This resulted in the addition of 21
million tonnes at 0.43% Nb2O5 for 89 million kilograms Nb2O5 for the purposes of the mine plan, which equates to 5% of the expected
tonnage processed over the 46 years. In 2012, $2.8 million in diamond
drilling will be undertaken to upgrade the classification of this
Inferred and surrounding mineralized material considered in the
Pre-Feasibility study to Measured or Indicated mineral resources.
To reflect the selected mining method, 11 million tonnes of barren
material coming from mine development and crown pillar were also
introduced as dilution. For the purposes of the evaluation, the cave
angle of the walls was assumed to be vertical. Approximately 34
million tonnes at 0.32% for 107 million kilograms of Nb2O5 were included as dilution.
Mineralization has been identified at Niobec from a 60 metre depth to as
deep as 1,200 metres. The Pre-feasibility Study considered only the
volume from surface to a 765 metre depth. The Niobec deposit remains
open at depth and along east and west extensions.
Capital Cost Estimate
The completion of the pre-feasibility study has provided more insight
into the timing of the expenditures. Pre-production capital
expenditures of $976 million are planned from 2013 through 2016. This
estimate includes permit applications, basic and detailed engineering,
development work, construction and start-up of the mine and the new
plant. The estimated cost of $30 million to complete the feasibility in
2012-2013 is not included.
The schedule of project expenditures is shown below:
|
|
|
|
Year
|
Capital Expenditures*
($millions)
|
|
2013
|
$90
|
|
2014
|
$220
|
2015
2016
|
$291
$375
|
|
* Excludes mine capital and feasibility study costs
|
Operation
Commercial production from the new processing facility is expected to
commence in 2016 or 2017, depending on permitting. The financial
analysis has conservatively assumed a 2017 start-up.
Total operating costs are estimated at $17 per kilogram of niobium, or
about $23.50 per tonne milled over the life of mine.
Block caving is a well understood underground bulk mining technique
amenable to large continuous ore bodies. It is characterized by
relatively high initial capital costs, followed by sustained low
operating costs. Block caving is currently used at dozens of mines
around the world and is becoming increasingly popular with several new
projects currently in development. The block caving scenario for
Niobec assumes a mining rate of approximately 27,000 tonnes per day.
There are a number of block caving mines in production today that have
mining rates double, triple, or even more than the contemplated Niobec
mining rate. As IAMGOLD has limited experience with the block caving
technique, a number of world experts were consulted during the
development of the underground scenario for the Pre-Feasibility Study
validating the amenability of the ore body to this technique and in the
design of the future mining operation.
The Niobec ore will be processed in a new 10 million tonne per year
facility. The process flow sheet for the new plant is based on the
existing Niobec facility which has evolved steadily in over thirty
years of operation. Niobium ore processing is complex and includes a
number of proprietary features developed over the years by Niobec. The
recovery parameters used in the study are based on historical data.
During 2012, production scale test work will be undertaken in the
existing Niobec process facility to validate the opportunity to apply
additional process enhancements and more modern equipment options for
inclusion in the new process facility.
Project Economics, Environmental and Social aspects
The Study assumes a niobium price of $45 per kilogram of niobium, based
on a third party market analysis completed in 2011. Additionally, the
Pre-Feasibility study assumes current market prices for all input
materials and a Canadian/U.S. dollar exchange rate of 1.00 in 2012 and
1.05 thereafter. The Study shows an estimated after-tax IRR of 17% to
19%, using a project start date of January 1, 2012.
Once completed, more than 200 new permanent jobs could be created at
Niobec. This will add to the already significant economic contribution
to the community. In 2011, the regional economic benefits generated by
the activities of Niobec reached close to $75 million.
In 2011, following the scoping study results, a community relations
office was opened in order to keep key regional stakeholders well
informed as to the many aspects of the project. Several committees were
formed together with representatives of the local community to
represent their interests. Preliminary social and environmental
baselines were completed within the potentially impacted area. The
permitting process is estimated to be completed between 18 to 24 months
following the project notice submission to the regulatory agencies.
NIOBIUM AND FERRONIOBIUM
Niobium is a metal with unique properties that make it highly valuable
in the production of a class of high-quality specialty steel known as
High Strength Low Alloy ("HSLA"). Niobec sells its niobium in the form
of ferroniobium, an important iron niobium alloy with a niobium content
of 65-70%. Ferroniobium is a critical component applied to strengthen
and lighten HSLA steel, primarily used in the manufacture of
automobiles, pipelines and structural steel products. Niobium is mined
from pyrochlore deposits, upgraded into a niobium pentoxide (Nb2O5)
concentrate and then converted into ferroniobium. Steel producers add
the ferroniobium to molten steel before casting to give it its
desirable physical characteristics.
Canada - Rare Earth Element (REE) Zone
On February 2, 2012, the Company announced the discovery of a large and
highly significant rare earth element (REE) deposit located only one
kilometre north of the Niobec mine. The resource demonstrates the
presence of a large, continuous, light rare earth deposit starting at
shallow depths of a few metres and remaining open at depth and to the
south and southwest.
IAMGOLD has initiated a number of actions as part of an aggressive
technical program in order to improve understanding of the value
potential offered by this major resource:
-
Further work is being initiated to test metallurgical and leach
performance
-
Detailed mineralogical studies to improve knowledge of the site geology
and distribution of pay minerals;
-
Marketing studies are underway to better understand future rare earth
supply/demand relationships;
-
price predictions, end uses, as well as downstream treatment
opportunities and costs for intermediate products;
-
A minimum 2,750 metre drill campaign was initiated in January 2012 to
improve definition of the deposit limits;
-
A preliminary concept study will be awarded to an experienced consulting
firm in the first quarter, with an objective of completing that study
by the third quarter of 2012;
-
A decline ramp from the Niobec mine is being considered to provide
improved drilling access and potentially provide bulk samples of the
REE zone.
The REE zone near Niobec offers a number of distinct advantages that
need to be evaluated through this technical program. It is adjacent to
an existing mining complex that will be expanded significantly in the
coming years. It is very close to significant industrial
infrastructure including deep water ports with access to the ocean.
Although the REE zone is distinct from the Niobec ore body, the geology
of the two deposits is similar. The extensive processing understanding
and proprietary knowledge gained at Niobec over many years should
accelerate the Company`s ability to address the processing challenges
posed by the REE mineralization. The Niobec deposit itself contains
lower concentrations of REE minerals and the REE deposit contains lower
concentrations of niobium, so the synergistic opportunities of
considering the two deposits together will also be evaluated.
The Company's business plan includes examining all available options to
optimize the value of this asset.
Notes to Investors Regarding the Use of Resources
Cautionary Note to Investors Concerning Estimates of Measured and
Indicated Resources
This news release uses the terms "measured resources" and "indicated resources". We advise investors that while those terms are recognized and
required by Canadian regulations, the SEC does not recognize them.
Investors are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into reserves.
Cautionary Note to Investors Concerning Estimates of Inferred Resources
This news release also uses the term "inferred resources". We advise
investors that while this term is recognized and required by Canadian
regulations, the SEC does not recognize it. "Inferred resources" have a
great amount of uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or
any part of an inferred mineral resource will ever be upgraded to a
higher category. Under Canadian rules, estimates of inferred mineral
resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. Investors are cautioned not to assume
that part or all of an inferred resource exists, or is economically or
legally mineable.
Scientific and Technical Disclosure
IAMGOLD is reporting mineral resource and reserve estimates in accordance with the CIM
guidelines for the estimation, classification and reporting of
resources and reserves.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission limits disclosure
for U.S. reporting purposes to mineral deposits that a company can
economically and legally extract or produce. IAMGOLD uses certain
terms in this news release, such as "measured," "indicated," or
"inferred," which may not be consistent with the reserve definitions
established by the SEC. U.S. investors are urged to consider closely
the disclosure in the IAMGOLD Annual Reports on Forms 40-F. You can
review and obtain copies of these filings from the SEC's website at http://www.sec.gov/edgar.shtml or by contacting the Investor Relations department.
The Canadian Securities Administrators' National Instrument 43-101 ("NI
43-101") requires mining companies to disclose reserves and resources
using the subcategories of "proven" reserves, "probable" reserves,
"measured" resources, "indicated" resources and "inferred" resources.
Mineral resources that are not mineral reserves do not demonstrate
economic viability.
A mineral reserve is the economically mineable part of a measured or
indicated mineral resource demonstrated by at least a preliminary
feasibility study. This study must include adequate information on
mining, processing, metallurgical, economic and other relevant factors
that demonstrate, at the time of reporting, that economic extraction
can be justified. A mineral reserve includes diluting materials and
allows for losses that may occur when the material is mined. A proven
mineral reserve is the economically mineable part of a measured mineral
resource demonstrated by at least a preliminary feasibility study. A
probable mineral reserve is the economically mineable part of an
indicated, and in some circumstances, a measured mineral resource
demonstrated by at least a preliminary feasibility study.
A mineral resource is a concentration or occurrence of natural, solid,
inorganic material, or natural, solid fossilized organic material
including base and precious metals in or on the Earth's crust in such
form and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a mineral resource are
known, estimated or interpreted from specific geological evidence and
knowledge. A measured mineral resource is that part of a mineral
resource for which quantity, grade or quality, densities, shape and
physical characteristics are so well established that they can be
estimated with confidence sufficient to allow the appropriate
application of technical and economic parameters, to support production
planning and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration, sampling and
testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes
that are spaced closely enough to confirm both geological and grade
continuity. An indicated mineral resource is that part of a mineral
resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed
and reliable exploration and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced closely enough for geological
and grade continuity to be reasonably assumed. An inferred mineral
resource is that part of a mineral resource for which quantity and
grade or quality can be estimated on the basis of geological evidence
and limited sampling and reasonably assumed, but not verified,
geological and grade continuity. The estimate is based on limited
information and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes.
Mineral resources which are not mineral reserves do not have
demonstrated economic viability.
Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.
A feasibility study is a comprehensive technical and economic study of
the selected development option for a mineral project that includes
appropriately detailed assessments of realistically assumed mining,
processing, metallurgical, economic, marketing, legal, environmental, social
and governmental considerations together with any other relevant
operational factors and detailed financial analysis, that are
necessary to demonstrate at the time of reporting that extraction is
reasonably justified (economically mineable). The results of the study
may reasonably serve as the basis for a final decision by a proponent
or financial institution to proceed with, or finance, the development
of the project. The confidence level of the study will be higher than
that of a Pre-Feasibility Study.
Gold and Niobium Technical Information and Qualified Person/Quality
Control Notes
The mineral resource estimates contained in this news release have
been prepared in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects ("NI 43-101") and
JORC. The "Qualified Person" responsible for the supervision of the
preparation and review of all resource estimates for IAMGOLD
Corporation is Réjean Sirois, Eng., Manager, Mining Geology. Réjean is
considered a "Qualified Person" for the purposes of National
Instrument 43-101 with respect to the mineralization being
reported on. The technical information has been included herein with
the consent and prior review of the above noted Qualified
Person. The Qualified person has verified the data disclosed, and data
underlying the information or opinions contained herein.
Forward Looking Statement
This news release contains forward-looking statements. All statements,
other than of historical fact, that address activities, events or
developments that the Company believes, expects or anticipates will or
may occur in the future (including, without limitation, statements
regarding expected, estimated or planned gold and niobium production,
cash costs, margin expansion, capital expenditures and exploration
expenditures and statements regarding the estimation of mineral
resources, exploration results, potential mineralization, potential
mineral resources and mineral reserves) are forward-looking statements.
Forward-looking statements are generally identifiable by use of the
words "may", "will", "should", "continue", "expect", "anticipate",
"estimate", "believe", "intend", "plan" or "project" or the negative of
these words or other variations on these words or comparable
terminology. Forward-looking statements are subject to a number of
risks and uncertainties, many of which are beyond the Company's ability
to control or predict, that may cause the actual results of the Company
to differ materially from those discussed in the forward-looking
statements. Factors that could cause actual results or events to
differ materially from current expectations include, among other
things, without limitation, failure to meet expected, estimated or
planned gold and niobium production, cash costs, margin expansion,
capital expenditures and exploration expenditures and failure to
establish estimated mineral resources, the possibility that future
exploration results will not be consistent with the Company's
expectations, changes in world gold markets and other risks disclosed
in IAMGOLD's most recent Form 40-F/Annual Information Form on file with
the United States Securities and Exchange Commission and Canadian
provincial securities regulatory authorities. Any forward-looking
statement speaks only as of the date on which it is made and, except as
may be required by applicable securities laws, the Company disclaims
any intent or obligation to update any forward-looking statement.
About IAMGOLD
IAMGOLD (www.iamgold.com) is a leading mid-tier gold mining company producing approximately one
million ounces annually from five gold mines (including current joint
ventures) on three continents. In the Canadian province of Québec, the
Company also operates Niobec Inc., which produces more than 4.5 million
kilograms of niobium annually, and owns a rare earth element resource
close to its niobium mine. IAMGOLD is uniquely positioned with a strong
financial position and extensive management and operational expertise.
To grow from this strong base, IAMGOLD has a pipeline of development
and exploration projects and continues to assess accretive acquisition
opportunities. IAMGOLD's growth plans are strategically focused in
West Africa, select countries in South America and regions of Canada.
Please note:
This entire news release may be accessed via fax, e-mail, IAMGOLD's
website at www.iamgold.com and through CNW Group's website at www.newswire.ca. All material information on IAMGOLD can be found at www.sedar.com or at www.sec.gov.
Si vous désirez obtenir la version française de ce communiqué, veuillez
consulter le http://www.iamgold.com/French/Home/default.aspx.
SOURCE IAMGOLD Corporation
