Iamgold poised to become African producer

The coming year promises to be busy for Toronto-listed International African Mining Gold, otherwise known as Iamgold. Construction has started at its 38%-owned Sadiola Hill gold mine in western Mali, and a US$7.5-million exploration effort, involving partner Ashanti Goldfields (TSE), is under way in the region.

The junior is one of the first Canadian companies to find and develop a gold mine in Africa. Iamgold’s African subsidiary discovered Sadiola Hill in Birimian rocks and then spent US$7 million proving up to 3 million oz. gold before inviting Anglo American of South Africa to fund, build and operate the mine in return for a 38% interest. The government of Mali holds an 18% stake, while 6% is held by a division of the World Bank.

The deposit contains proven and probable reserves of 4.5 million oz. Taking into account additional oxide resources and sulphide resources that underlie the oxide deposits, a resource of a further 3.5 million oz. has been calculated.

Sadiola Hill is expected to begin production in May 1997. Average annual production for the first six years is expected to be 386,000 oz., at a direct cash operating cost of US$138 per oz.

Oxide ores will be mined with open-pit techniques, at a waste-to-ore stripping ratio of 1.27 to 1. Because the mineralization is so weathered, drilling and blasting will be minimal. The mill includes a grinding circuit, cyanide leaching and carbon-in-pulp techniques to extract the gold.

Recoveries from oxide ores are expected to average 93%.

Under a separate agreement, Iamgold and Anglo American hold a land position of about 400 sq. km surrounding Sadiola Hill, which they are jointly exploring.

Iamgold has also entered into an arrangement with Ashanti Goldfields whereby the companies will jointly explore for and develop gold deposits in West Africa. Together, the partners hold concessions on more than 11,000 sq. km of prospective ground.

Drilling is already in progress at the Saoura concession in Niger, and will begin shortly at Bambadji in Senegal and Mandiana in eastern Guinea.

At least 5,000 metres of diamond drilling and 17,000 metres of reverse-circulation work are planned for the remainder of this year.

The program will test two large geochemical anomalies at Bambadji, one of which was previously drilled, returning gold mineralization averaging 1.6 grams gold per tonne between surface and 141 metres down the hole.

The mineralization consists

of sub-vertically volcaniclastic breccias, three of which average (in true widths): 1.1 grams from surface to 18 metres; 13.2 grams across 3 metres; and 2.4 grams across 20 metres.

The other anomaly is believed to be spatially related to a large ironstone formation. Previous drilling identified mineralized intersections, the best of which averaged 46.4 grams gold over 1 metre.

Drilling at Mandiana will test several anomalies, as well as numerous gold showings. This property was worked by local miners for years, and the discovery of large nuggets is said to be a frequent occurrence.

Drilling at the Saboura concessions in Niger will test a large geochemical anomaly that contains values in excess of 3 grams gold.

The partners hope to have drilled, by the end of this year, the Tinga and Bombouri concessions in Ghana, where geochemical anomalies continue to be defined.