Iamgold catapulted to status of gold producer

The first gold pour at the Sadiola Hill mine in western Mali has transformed Iamgold (IMG-T) into a producer.

“Prior to this event, we were a company with a mine under development. The first pour and the ongoing production of gold now move us into a producer category,” says Todd Bruce, president of Iamgold.

The company holds a 38% interest in the US$300-million, open-pit operation, which is expected to yield an average of 386,000 oz. per year during its first six years of operation. Operating costs during that period are pegged at US$138 per oz., whereas total cash costs are expected to average US$169 per oz., making Sadiola Hill one of the lowest-cost mines in the world.

South African-based Anglo American, which holds a 38% interest, is the mine’s operator; the government holds 18% and International Finance Corp., a member of the World Bank, holds 6%.

The project contains an overall resource of 8 million oz. gold. Reserves in the open pit stand at 49.2 million tonnes grading 2.86 grams gold, equivalent to 4.5 million contained ounces. Indicated and inferred resources there are estimated at 9.6 million tonnes grading 3.1 grams gold, equivalent to 960,000 contained ounces.

Development of the pit will occur over the next 13 years at a stripping ratio of 1.27-to-1. It will be dug along a north-south length of 1,800 metres, to a width of 750 metres, and to a maximum depth of 150 metres, where the saprolitic-bedrock interface is situated. Within this saprolitic zone, ore-grade mineralization occurs in oxidized and mixed oxide-sulphide material.

The ore and surrounding waste rock are altered and weathered to such an extent that the deposit will require little drilling and blasting.

Ore will be processed using carbon-in-pulp technology, which is expected to achieve a 93% recovery rate from the oxide ore and 70% from the mixed ore.

The processing plant is designed as two parallel circuits, each of which is capable of handling 2 million tonnes per year. The first pour, 472.3 oz., represents the successful test of the first processing line, which is expected to reach its full capacity of 167,000 tonnes per month by the end of February. Anglo will begin testing the second line by the end of the month.

The company expects full production by June.

The partners will soon begin a US$3.3-million program of deep drilling to test for primary sulphide mineralization in the underlying calcitic bedrock.

Previous drilling outlined a 1,100-metre zone of sulphide mineralization underlying the saprolitic zone. The deepest hole there reached a depth of 250 metres below surface.

The deposit also remains open along strike. Limited drilling north of the pit indicates that oxide mineralization continues for another 1,500 metres along strike. Anglo has calculated an inferred resource of 3-4.5 million tonnes averaging 2 grams for the first 300 metres of that zone.

In an effort to increase resources, the partners will drill-test an area 700 metres north of the pit’s outer limit.

The gold potential of the Sadiola Hill area was recognized in the late 1980s during a government-sponsored survey program. In 1990, Iamgold acquired the rights to explore the property, spending US$7 million over the ensuing two years. The company outlined a 3-million-oz. deposit before signing with Anglo American. Additional drilling by the partners in 1993 and 1994 resulted in the calculation of current reserves.