- - Friday, October 10, 2014

Toronto-based IAMGOLD Corporation is expanding its gold-mining operations in Suriname with a newly negotiated concession that increased the government’s stake in its operations despite falling gold prices.

IAMGOLD’s 10-year-old open-pit Rosebel Gold Mine operation -once a top performer in its gold-mining portfolio - has become less profitable as workers have reached increasing amounts of hard rock. As a consequence, IAMGOLD is expanding its operations to include potentially better performing mine pits near its original facility.

Suriname’s Parliament gave a green light to the deal in April 2013, and IAMGOLD also extended its partnership with the government until 2042. The government has a 5 percent stake in the Rosebel joint-venture, and receives royalties and taxes as well. It will have a 30 percent stake at the new site.

IAMGOLD, which operates five gold mines in Canada, South America, and Africa, announced last March this new phase of its gold-mining operations in mineral-rich Suriname, a former Dutch colony in South America’s northeast coast. Implementing the new agreement, publicly-traded IAMGOLD reported in a statement that it had finalized a five-year option agreement with gold-mining company Sarafina N.V. under which IAMGOLD’s subsidiary Rosebel Gold Mine would earn a 100 percent interest in Sarafina’s 24,710 acre mining concession located 15 miles from the Rosebel mine.

“Rosebel has been a great mine for IAMGOLD,” explained IAMGOLD’s president and CEO Steve Letwin. “In its first 10 years, Rosebel produced more gold than defined in its original mineral reserve. Its future reserves are becoming more challenging and expensive to process due to an increasing proportion of hard rock.”

The Sarafina property, on the other hand, “has the potential to yield new discoveries of higher grade,” he said. “The new agreement opens the opportunity to reinvent Rosebel, lengthen its reserve life, lower its unit operating costs and improve its contribution to the government of Suriname, the local community and our investors,” he added.

Under the agreement, Rosebel Gold Mine can purchase the property at any time for $1 million. To maintain that option, it must make option payments of $575,000 over five years. IAMGOLD also can terminate the agreement at any time; and if the project proceeds, Sarafina would be paid a 1.6 percent royalty for any gold that is produced.

As part of that deal, IAMGOLD also will be provided with lower-cost electrical power in order to increase its profitability at some mining operations. “The lower rate for power brings more gold mineral resources into economic viability for the mutual benefit of our shareholders and the people of Suriname,” Letwin said. “The agreement reflects a true spirit of partnership between the government and the company.”

The Rosebel mine produced 171,000 ounces of gold last year, reporting total costs of $745 per ounce and “all-in sustaining costs” of $1,100 per ounce during the first half of 2013.

IAMGOLD, in the statement regarding its potential new mining site, said it “intends to make exploration of this property a priority, with the aim of discovering additional softer ore to feed to the Rosebel mine in the coming years.”

This article was produced in conjunction with The Washington Times International Advocacy Department.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide