All amounts are expressed in U.S. dollars, unless otherwise
indicated
TORONTO,
April 9, 2012 /PRNewswire/ -
IAMGOLD Corporation ("IAMGOLD" or "the Company") today
announced that it has filed a mineral resources report in form
43-101F1 that confirms the announcement on February 23, 2012 of a completed development
study of the Company's Westwood
development project in Quebec. All previously announced
information was confirmed by the report, with the exception of the
grade for the indicated mineral resources at Warrenmac which
changed from 8.6 to 8.5 g/t Au.
The early 2013 commercial 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 |
8.5 |
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 are calculated at an undiluted 6 g/t Au cutoff grade at
a minimum two metre width; furthermore panel grades of individual
lenses are capped at 15 g/t Au |
(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 work in 2011
also included 9,315 metres of lateral and vertical development.
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 Au cutoff over 3.0 metre minimum
width) to 3.4 million ounces (at a 6.0 g/t Au cutoff over 2.0 metre
minimum width). 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. Rather, the mine 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.
By utilizing spare hoisting and milling capacity, a good
opportunity exists to exploit lower-grade additional resources
located adjacent to lenses in the mine development plan. 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.
Notes to Investors Regarding the Use of Resources
Cautionary Note to Investors Concerning Estimates of
Indicated Resources
This news release uses the term "indicated resources". We advise
investors that while that term is recognized and required by
Canadian regulations, the SEC does not recognize that term.
Investors are cautioned not to assume that any part or all of
mineral deposits in that category 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
"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 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. 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.
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"). The report in
form 430101F1 referenced in this news release was prepared by
Patrice Simard, Bsc, Geo. who heads
the geology department at the Westwood Project. 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 NI
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 certain regions
in Canada, select countries in
South America and Africa.
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