Iamgold tables positive results from Yatela

Based on the results of a positive prefeasibility study, partners Iamgold (IMG-T) and Anglogold (AU-N) of South Africa have started financing discussions for the Yatela gold deposit in Mali.

The project is owned by SADEX, a 50-50 joint-venture between the two companies, though the Malian government holds a participation right that would reduce each company’s stake to 40%.

Yatela hosts 1.92 million oz. gold contained in 19.7 million tonnes of soft oxides averaging 3 grams gold per tonne, at a cutoff grade of 1 gram. Of this total, 17.9 million tonnes grading 3 grams are classified as drill-indicated.

The prefeasibility assessed several processing options for an open-pit operation, including heap leaching, a carbon-in-pulp (CIP) plant, and a toll-treatment option that would involve trucking ore 25 km to Sadiola Hill’s existing 5.2-million-tonne-per-year plant.

The heap-leach option was found to be the most financially viable, with a return of 16% at a gold price of US$280 per oz.

Capital and average production costs are estimated to be US$70.7 million and US$185 per oz. gold produced, respectively, for a 2.5-million-tonne-per-year, heap-leach operation with a mine life of at least five years. The average stripping ratio is expected to be 4.5-to-1, whereas recoveries of 85% are anticipated, based on testwork to date.

A final feasibility study for the heap-leach option is expected to be completed in September. If results are positive, commercial production could begin in early 2001.

Contributing to Yatela’s potential is its proximity to 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 and extend the life of the operation to 11 years.

Iamgold and Anglogold are already partners at the nearby Sadiola Hill gold mine, which achieved commercial production in March 1997. Last year, the US$303-million, open-pit operation performed exceptionally, churning out 506,113 oz. gold at an average cash cost of US$104 per oz. and a total cost of US$126 per oz. (T.N.M., Feb.1/99).

All the SADEX ground situated south of Sadiola will be acquired by the Sadiola mine, whereas all SADEX ground north of Sadiola will be acquired by the company that will be established to mine the Yatela deposit.

At Iamgold’s annual meeting, President Todd Bruce said any development at Yatela will be financed separately and will not encumber Sadiola cash flow. Chief Financial Officer Mahendra Naik added that Yatela’s development could be financed largely by debt, thereby minimizing equity contribution for Iamgold or use of the company’s cash.

In reference to an Ontario court decision favouring Kinbauri Gold (KNBR-C) in relation to a liability issue originating from an aborted 1990 amalgamation (T.N.M., June 7-13/99), Iamgold Co-chairman William Pugliese said his company will appeal the ruling and that “both Iamgold and its legal counsel feel confident that this decision will be corrected.”