TORONTO – Iamgold Corp. (TSX:IMG), a Toronto miner with operations around the world, says it has struck a deal with the government of Suriname in South America to expand the Canadian company’s Rosebel gold mine.
Details of the so called Heads of Agreement were not revealed Wednesday. But the deal will form the key elements for a definitive agreement to significantly expand the Rosebel operation.
“Reaching an initial agreement on the terms and conditions necessary for the expansion of Rosebel is a pivotal moment for us,” Iamgold president and CEO Steve Letwin said in a release before stock markets opened Wednesday.
“The next steps are to work expeditiously towards the conclusion of a definitive agreement and to complete a feasibility study.”
Get weekly money news
Iamgold has operations in Canada, west Africa and South America. The company’s two largest operations are the Rosebel mine and the Essakane mine in Burkina Faso, a country in west Africa.
This fall, the company said it produced 222,000 ounces of gold from continuing operations in its third quarter, up from 195,000 ounces in the same quarter a year earlier.
In its outlook for the year, Iamgold expects 2011 gold production from continuing operations to be within its guidance range of 870,000 to 930,000 ounces.
With the price of gold above US$1,600 an ounce and forecasts for even higher prices ahead, many gold producers are seeking to cash in by merging to get bigger or boosting production at existing operations.
That’s usually a much cheaper way than discovering fresh deposits and building new mines and processing mills from scratch.
Rosebel is an open pit mine that began operations in 2004 and produced nearly 400,000 ounces of gold in 2010. The mine is 95 per cent owned by Iamgold and five per cent by the Suriname government.
The Rosebel mine employs more than 1,200 people and is slated to operate until 2022.
Suriname is a former Dutch colony on the northern coast of South America bordering the Atlantic Ocean between French Guiana and Guyana.
In Wednesday trading on the TSX, Iamgold shares fell two cents to $16.64.
Comments