Iamgold posts more quarterly profits

Vancouver — Markham, Ont.-based Iamgold (IMG-T) continues to post profits, thanks to record production during the third quarter.

The company holds a 38% stake in the Sadiola gold mine through Mali-based SEMOS (La Societ d’exploration des mines d’or de Sadiola). Its other joint-venture partners include AngloGold (AU-N), with 38%, the Malian government, with 18%, and International Finance, with 6%.

Iamgold posted net earnings of US$12.6 million (or 17 per share) on gold sales of US$51.9 million during the first nine months of 2000. This compares with net earnings of US$12.1 million (16 per share) on gold revenues of US$48.7 million during the year-earlier period. Iamgold’s cash position at the end of the third quarter was US$67 million and included US$39 million in discretionary cash.

During the third quarter, the mine produced a record 166,121 oz. gold at an average cash cost of US$87 per oz. and a total cash cost of US$107 per oz. In the corresponding period of the previous year, the figues were 157,234 oz. gold at an average cash cost of US$87 per oz. and a total cash cost of US$110 per oz.

Sadiola’s average realized gold price for the first nine months of the recent year came in at US$290 per oz. During this period, Sadiola cranked out 468,932 oz. gold at an average cash cost of US$98 gold per oz. and a total cash cost of US$118 per oz. Year-ago figures are: 409,979 oz. gold at an average cash cost of US$101 per oz. and a total cash cost of US$123 per oz.

Plant throughput at Sadiola during the first nine months of the recent year amounted to 3.9 million tonnes at an average head grade of 3.9 grams gold per tonne. Gold recovery was 96%. Sadiola’s record production during the third quarter reflects higher-than-expected grades. The mine’s production for the year is expected to approach 600,000 oz. at an average total cash cost of less than US$125 per oz.

The mine’s resource base stands at 7.7 million oz. gold comprising 4.5 million oz. in the proven and probable category plus 3.2 million oz. listed as indicated and inferred. The oxide pit has an anticipated life span in excess of 10 years.

The oxide resource 700 metres north of the current pit contains 2.3 million tonnes grading 2.3 grams gold per tonne, or 174,000 oz., in the inferred category. The sulphide material left under the operating pit consists of 7 million tonnes grading 3.1 grams gold, or 700,000 oz., in the indicated category and 35.4 million tonnes grading 2.08 grams gold, or 2.4 million oz., inferred.

Meanwhile, development of the gold heap-leach operation at Yatela, also in Mali, is on schedule, with gold production expected to begin by mid-year. Iamgold and its operating partner, AngloGold, each hold a 40% interest in the mine. The remaining 20% is held by the government of Mali.

The mine’s reserve stands at 12.3 million tonnes grading 3.6 grams gold, equivalent to 1.4 million contained ounces. Total resources are pegged at 37.6 million tonnes grading 2.1 grams gold, or 2.6 million contained ounces. Yatela is expected to treat 2.5 million tonnes of ore per year and produce 1.4 million oz. gold over a mine life of six years. Total cash costs are expected to average US$175 gold per oz.

On the exploration front, exploration drilling has resumed at Imagold’s Senegal-Bambadji project. Trenching in the area of the Boto 5 prospect cut a 17-metre zone assaying 35 grams gold. A drill hole intersection 50 metres below the trench ran 17.7 grams gold over 21.5 metres. In addition, Iamgold will drill-test geochemical anomalies along the major north-south structural corridor that hosts the Boto 5 prospect, as well as the Loulo and Yalea gold deposits. A splay fault from this structure is thought to control the gold mineralization at Sadiola.

Iamgold is meanwhile involved in a joint venture with AfriOre (AFO-V) at the Witwatersrand project in South Africa. A second drill hole should be nearing completion on a target that could potentially host Witwatersrand-type gold mineralization. The hole has a target depth of 2,500 metres. The partners’ first hole, drilled early last year, reached a depth of 2,000 metres and intersected a succession of Proterozoic-aged rock. Geological information combined with seismic data led to the identification of the current target. Once the program is completed, Iamgold will have vested a half-interest in the project area.

Farther afield, at the Retazos property in Ecuador, Imagold has received encouraging results from ongoing surface and underground mapping and sampling. These results have improved the company’s understanding of the structural and lithological controls of gold mineralization in oreshoots along the 15-km-long Portovelo-Zaruma-Minas-Nuevas vein system.

Surface drilling has tested favourable structural targets in the Malvos and Sesmo zones.

Meanwhile, at the Hockey Stick project, also in Ecuador, Iamgold and partner AngloGold have advanced one target to the drill stage. The target is an epithermal vein system in which channel samples along a vein yielded 18.1 grams gold per tonne over 3 metres, plus an additional 1.7 grams gold over 4.8 metres in the wall rock. A second channel sample, 450 metres along strike from the first, averaged 11.1 grams gold over two metres.

In Brazil, Iamgold is partnered with AngoGold on yet another joint venture. Geochemical sampling of termite mounds at the Tocantins project delineated anomalies in lateritic areas, and some of these anomalies are coincident with long structures identified from airborne geophysical surveys. The partners hope to move these prospects to the drill stage as quickly as possible.