Iamgold expects production at Westwood by 2013

The latest preliminary study on Iamgold’s (IMG-T, IAG-N) Westwood project 40 km east of Rouyn-Noranda, Que., says the underground operation should be able to produce an average of 191,000 oz. gold per year starting in 2013.

The mine is just 2km from the company’s Doyon gold ine, which produced 118,000 oz. gold in 2008.

Over the first five years of production, the diluted grade of the ore will be about 7.3 grams gold per tonne and cash costs will average US$352 per oz. The project has a mine life of 16 years during which time a total of 2.97 million oz. gold will be recovered.

“This study further confirms that Westwood will produce around 180,000 to 200,000 ounces of gold per year at well under industry average cash costs in one of the lowest political risk jurisdictions of the world,” said Iamgold president and CEO Joseph Conway in a statement.

The study is predicting a pretax cash flow of US$230 million and a pretax internal rate of return of 11.3% — calculated at Jan. 1, 2009, using a gold price of US$850 per oz. and a Canadian /US dollar exchange rate of 1.15.

Iamgold plans to spend US$102 million on development in 2010 and a total of US$315 million over the next three years. During 2009, Iamgold spent US$86 million at Westwood.

In the last year, the company has built the head frame, hoist room building and installed two hoists for the exploration shaft.

Shaft sinking began last July and should reach 500 metres depth by the end of the year.

An exploration ramp was extended by more than 2,200 metres and will give the company better drilling access to the upper part of the deposit above the 14th level exploration drift.

Last spring a 2.4-metre-wide shaft pilot hole was completed and a bulk sample was mined in July with positive grade and metallurgical results.

The plan for 2010 is to complete raise boring for ventilation, sink the shaft to 1,300 metres by the end of the year, 11,000 metres of lateral and vertical excavation, another 2,000 tonne bulk sample, the installation of production and service hoists and completion of surface facilities, 30,000 metres of exploration drilling and 41,000 metres of valuation and definition drilling.