Lady Luck may nudge a few mining companies into the spotlight, but keeping them there isn’t part of the deal. That’s why
While still a private company, Iamgold had the good fortune to tie up a substantial land package in Mali, a West African nation with a golden past but no modern mining industry. The company and partner
Sadiola Hill is owned by SEMOS, a Malian company held 38% by each of Anglogold and Iamgold. The government has an 18% stake, while 6% is held by International Finance Corp.
With this solid startup behind it, and a long minelife ahead of it, Iamgold could have sat back, collected dividends, and coasted through the industry downturn. Instead, the company and Anglogold plan to advance a second mine, Yatela, and explore joint-venture ground surrounding Sadiola Hill for other satellite deposits. On its own, Iamgold will have work crews exploring nearby properties not subject to the partnership agreement.
“This is the first year we’ve launched regional exploration programs in our 75-km exclusion zone around Sadiola Hill,” Iamgold President Todd Bruce told The Northern Miner in a recent interview. “We have plenty of other targets and, in our opinion, believe we’re sitting on an unexplored gold province.”
The success of Sadiola Hill has overshadowed Iamgold’s exploration efforts in Mali and elsewhere, as well as progress at the nearby Yatela deposit, owned by SADEX, a 50-50 joint venture between the company and Anglogold. But analysts are taking notice now that a resource estimate has been announced for Yatela, based on 455 boreholes totalling 21,381 samples.
The initial estimate of 1.9 million oz. gold is contained in 20.5 million tonnes of soft oxides grading 2.9 grams gold per tonne, at a cutoff grade of 1 gram. Of this total, 17.9 million tonnes grading 3.1 grams are designated as drill-indicated.
Iamgold purchased Yatela from an Australian contract miner for $7.5 million and then took on Anglogold as a senior partner. Last spring, a prefeasibility study began, based on an initial resource of just under 1 million contained ounces. Subsequent work included 254 diamond drill holes at a grid density of 50 metres by 50 metres over the Main zone, which now comprises the drill-indicated portion of the deposit. The balance of 201 reverse-circulation and diamond drill holes were drilled prior to the start of the feasibility study.
Dennis Jones, Iamgold’s vice-president of exploration, says Yatela has some geological similarities to Sadiola Hill with respect to primary mineralization. But because it is a secondary deposit largely formed by erosion and remobilization, Yatela has differences on surface. It is not as homogeneous as Sadiola Hill, though it will be largely free-digging.
“We view the existing resource as quasi-minable because it has a cutoff grade and was applied to a preliminary open-pit shell,” Bruce said.
Even so, ongoing feasibility work will endeavour to upgrade the initial resource categories to proven and probable reserves and measured resources. The current resource estimate may be revised as the open-pit mine plan is enhanced and optimized.
Iamgold and Anglogold are assessing four main options for production, the most obvious being a plan to transport Yatela ores by road to Sadiola Hill for treatment in the existing 5.2-million-tonne-per-year plant.
However, as resources expand at Yatela, and at Sadiola Hill, this base-case option may create a bottleneck in the existing plant, which uses conventional milling and carbon-in-pulp technology. Expanding the modular plant at Sadiola is another option, while a third is treatment on site in either a carbon-in-pulp (CIP) or carbon-in-leach (CIL) plant. The fourth option is a heap-leach operation.
Metallurgical testwork suggests that 95% recoveries can be achieved either at Sadiola, or in a CIP/CIL plant on-site at Yatela. Kappes Cassiday is carrying out initial heap-leach testwork on a 2-tonne, core bulk sample at its facilities in Nevada. “It’s an extremely oxidized deposit,” Bruce added, “and a real pleasure for processing, as orebodies go.”
Close by is the Alamoutala deposit, which hosts a drill-inferred resource of 2 million tonnes of soft oxides grading 2.5 grams gold per tonne using a 1 gram cutoff. This contained resource of 160,000 oz. gold will be factored into any operation established to exploit Yatela.
The partners expect to choose a processing option this April, and incorporate that choice into Anglogold’s feasibility study, which is expected to be completed this summer. If positive, mine development would begin immediately, and take 18-24 months to complete.
In the meantime, exploration will continue at Sadiola Hill, with some of this work aimed at exploring its deep sulphide potential.
“The sulphide drilling is key to understanding the deposit,” Jones said. “The cores give us more information on the mineralization below the planned open pit, the structural controls, and the potential for underground mining.
“We’ve gone through a number of models,” he continued. “But our thinking now is that [Sadiola] is a mesothermal, shear-related deposit, with good depth potential. We’ve found mineralization at 700 metres, our deepest hole.”
Jones said the higher-grades are typically found in areas where the Sadiola fracture zone (the main structural control) intersects smaller faults and fracture zones. While current thinking is that some of the deeper, higher-grade mineralization may be exploitable by deepening the open pit, the partners will look at the feasibility of underground mining in areas where previous drilling returned higher grades — such as 76 metres of 6.9 grams and 42 metres of 4.5 grams. Other results from sulphide drilling include 6 metres of 9.9 grams, 5 metres of 8.7 grams, 34 metres of 9.5 grams, 10 metres of 5.8 grams and 6 metres of 9.4 grams.
Being early days, the partners haven’t determined what processing modifications will be required to treat the sulphide mineralization. However, as the sulphide content is generally low, fine-grinding of concentrates may do the trick. If not, options such as bio-oxidation may be examined.
Sadiola Hill is expected to produce 450,000 oz. gold this year at an average cash cost of US$132 per oz., and an average total cash cost of US$153 per oz. Cash costs are higher than in the early years, owing to higher stripping ratios and lower head grades, as well as lower recoveries from the eventual introduction of mixed ores. The mine has sufficient oxide reserves to operate until at least 2007, or longer as new resources are found and upgraded into reserves.
The 1999 exploration effort is largely aimed at finding more oxides for the existing plant. SEMOS spent close to US$1 million last year on mine site exploration, identifying five targets for follow-up work this year. The partners plan to spend $2.2 million in 1999, which includes 37,500 metres of drilling and a Spectrem airborne geophysical survey.
The SADEX program, which focuses on concessions other than Sadiola Hill (including Yatela and Alamoutala), has a budget of US$1.2 million for 1999. Beyond that, Iamgold plans to have its own crews do reconnaissance work on its other concessions.
The company has other properties in Africa, including seven concessions being explored as part of a joint-venture alliance with
r), Mandiana (Guinea) and Mako (Senegal). More drilling is planned for the Bambadji concession in Senegal, where numerous gold anomalies, spatially related to the fault zone running through Sadiola Hill, have been identified.
Less recognized, but no less interesting, is Iamgold’s generative work on selected properties in South America. The company began work there in 1995 and, by 1997, had formed an aggressive exploration team.
In southern Ecuador, the company has assembled ground that appears to have geological and structural similarities to the Yanacocha gold district of Peru. Numerous gold occurrences and geochemical anomalies, as well as more advanced targets, have already been identified at the company’s Hockey Stick project, and more work is planned.
“I’d equate the parallel here [Peru and Ecuador] as being similar to Chile and Argentina,” Jones said. “Good geology doesn’t recognize borders. I think significant deposits will be found in Ecuador, similar to ones found in Peru.”
In southern Brazil, the company is negotiating to joint-venture a large land package where previous drilling has indicated the presence of Archean gold deposits (similar to McIntyre and Hollinger in Ontario) and gold-rich, volcanogenic massive-sulphide systems. Due diligence work is under way on a former base metal target where a gold resource already exists.
One of the more interesting generative projects is taking place in the Puna region of northern Argentina, near the border with Chile and Bolivia. Work is focused on evaluating an 180-km-long belt believed to be prospective for slate-belt-hosted gold deposits, similar to the huge Muruntau deposit in Uzbekistan and Sukhoi Log in far-eastern Russia.
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