Production exceeded forecasts and production costs came in under budget at Mali’s Sadiola Hill gold mine last year, and partners
Sadiola poured just under 543,000 oz. gold in 1999, far ahead of the forecast 450,000 oz. The operating success came largely as a result of better-than-expected head grades from the open pit, which hovered around 3.3 grams gold per tonne, compared with the expected 2.8 grams. Gold recovery and the amount of ore sent to the mill were close to the 1999 budget, but cash production costs were also cushioned by a lower stripping ratio than had been expected in the mine plan. Cash costs, forecast at US$132, actually came in at US$102, and total costs were US$124.
These bright results are permitting the Sadiola joint-venture company to distribute US$38 million to its shareholders: Anglogold and Iamgold, each with 38%, the Malian government, with 18%, and the World Bank’s International Finance Corp. with 6%.
The partners are now predicting the mine will produce 579,000 oz. from 5.3 million tonnes delivered to the mill in 2000, at a cash cost of around US$104 per oz. Total costs should clock in at US$126.
The joint venture spent US$2.6 million on the property in 1999, and exploration continues. Five targets were drilled, and Anglogold, the operator, is doing resource estimates on all five prospects. Another four prospects will be drilled in 2000.
Deep sulphide mineralization below the Sadiola open pit, which the joint venture drilled off in 1997 and 1998, is not slated for development yet.
At the Yatela property, which adjoins Sadiola’s northern boundary, full feasibility is now complete, and a production decision should issue from negotiations now under way with the government. Iamgold and Anglogold would each own 40% of a new mine, with the Malian government entitled to 20%.
If Yatela gets the go-ahead, contracts could be awarded as early as March and construction could start in June. The first gold would be poured in mid-2001. Anglogold would shoulder 67.5% of the costs and Iamgold the balance, with the government’s interest carried.
The feasibility study says that Yatela, with total resources of 37.5 million tonnes grading an average 2.1 grams per tonne, could go into production as an open-pit, heap-leach operation for a capital cost of US$69.2 million. Cash costs are estimated at US$154, and total costs at US$174 per oz., in a mine plan extending from 2001 to 2006.
The open-pit design, which has a stripping ratio of 5.4-to-1, takes out a minable reserve of 13.8 million tonnes of oxidized material with an average grade of 3.3 grams. The oxide mineralization requires no blasting, and gold recovery from the leach pads is expected to be around 85%.
A second deposit on the property, at Alamoutala, has a further 2 million tonnes of oxide mineralization grading 2.5 grams.
Iamgold had about US$31.9 million in cash at the end of 1999 and expects a profit distribution from Sadiola of US$14.4 million this year. Other expected cash receipts, and budgeted expenditures, should leave the company with about US$38.8 million at the end of 2000, so the company could conceivably finance its share to put Yatela into production out of its own bank account. President Todd Bruce told an analysts’ conference that Iamgold was willing to do that, but also that it would look at the cost of financing the Yatela budget.
Anglogold and Iamgold’s SADEX joint venture, covering western Mali and eastern Senegal in a 75-km radius around Sadiola, has a budget of US$800,000 this year, and work will be concentrated on “one or two selected targets.”
At the Bambadji, Daorala and Boto exploration projects in southeastern Senegal, outside the SADEX area, Iamgold has completed soil geochemistry, finding significant gold concentrations at several places along the Senegal-Mali fault zone. More work is planned, with a budget of US$441,000.
The FSC project in South Africa, a joint venture between Iamgold and Toronto-based junior
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