Iamgold study expands Essakane mine in Burkina Faso

A feasibility study has found that increasing the carbon-in-leach (CIL) plant capacity and postponing the heap leach operation to the end of the mine life is more economical than operating both a heap leach and the CIL in parallel at Iamgold’s (TSX: IMG; NYSE: IAG) Essakane gold mine in northeastern Burkina Faso.

Iamgold expects its 90% share of attributable gold production from the mine will reach between 380,000 and 390,000 oz. gold in 2019. The government of Burkina Faso retains a 10% ownership stake in the mine the country’s Sahel region, 330 km northeast of the capital, Ouagadougou.

The feasibility study recommends increasing CIL plant capacity to 11.7 million tonnes a year (at 100% hard rock), compared to the original nameplate capacity of 10.8 million tonnes a year, for a capital investment of US$9 million. The optimization of the CIL circuit will result in a reduction of the heap leach material throughput from 10 million tonnes to 8.5 million tonnes, without a significant change to the production profile due to improved recoveries of 67%, up from 55%.

The 57-megawatt thermal power plant at Iamgold’s Essakane gold mine in Burkina Faso. Credit: Iamgold.

Capital costs for the heap leach facility were cut by US$40 million to US$115 million under the new scenario, due to reusing existing CIL plant equipment, such as the primary and secondary crushing circuits at the end of the CIL life, and by optimizing the footprint of the heap leach pad.

Commissioning the optimization of the CIL plant is targeted to take place in the third quarter of next year.

The feasibility envisions average annual production of 433,000 oz. during the CIL operation, which represents a 4% increase above the CIL output from the prefeasibility study, including peak-year production exceeding 530,000 oz. using CIL.

The study projects annual production of 73,000 oz. per year of heap-leach production at the end of CIL production, achieving annual gold output from the heap leach operation that is similar to the previous study, but with 15% lower throughput.

The feasibility forecasts an after-tax net present value on a 100%-basis of US$874 million at a 6% discount rate, life-of-mine direct cash costs of US$778 per oz. and all-in sustaining costs of US$949 per ounce.

The feasibility study was based on the project’s indicated resource of 154.9 million tonnes grading 0.98 gram gold per tonne for 4.9 million contained oz. gold, and inferred resources of 12.8 million tonnes grading 1.1 grams gold per tonne for 454,000 contained oz. gold.

Essakane began commercial production in July 2010. The plant expansion to accommodate a substantial increase of hard rock was completed at the end of 2013.

Iamgold acquired Essakane via its acquisition of Orezone Resources in February 2009.

At press time, Iamgold was trading at $4.52 per share with a 52-week range of $3.08 to $5.55. The company has 468 million common shares outstanding for a $2.1-billion market capitalization.