Third-quarter earnings for
In the same period, the project’s last completion tests were passed, allowing the mine’s owners — Iamgold, the Malian government, and South African house
Iamgold earned US$535,000 on revenue of $14.4 million in the third quarter, and US$5.3 million on revenue of $43.9 million in the first nine months of 1998. In 1997, third-quarter earnings were US$3.8 million on revenue of $15.4 million, and 9-month earnings were US$3.4 million on revenue of $30.3 million.
The lower third-quarter earnings are partly the result of writeoffs taken on several exploration projects in West Africa and South America, and low gold prices that have induced the company to write off exploration expenditures on the properties rather than capitalizing them.
In addition, the declining value of the Canadian dollar compared to the U.S. greenback dealt the company a loss of US$1.6 million, which has been taken into account on Iamgold’s books even though the loss is unrealized. The company, which was holding a large stack of Canadian dollars from a recent financing, only plans to buy U.S. dollars as they are needed to fund operations.
The last of the project completion tests — the submission of a report on the relocation of two villages to build the mine — was accepted by the project’s lenders in the third quarter. Sadiola has also passed financial tests that will allow subordinated debt, held by Anglogold, to be repaid.
Feasibility work on the Yatela exploration concession, immediately north of the Sadiola property, is expected to be completed by mid-1999. Additional drilling, to the tune of 6,000 metres, has been approved, allowing the Yatela deposit to be drilled at 50-by-50-metre centres over a 1.25-km strike length.
About 20,000 of the planned 27,000 metres of drilling are complete, and a resource estimate is scheduled for the early part of 1999. Interim results show grades averaging 2.9 grams gold per tonne. Indications are that the rock at Yatela is generally rippable, as it is at Sadiola, which will save on blasting costs.
Some metallurgical testing has been done, showing recoveries near 95% in carbon-in-pulp or carbon-in-leach cyanidation processes. The mineralization is in oxidized material and the gold is believed to be free. The existing mill at Sadiola is expected to be able to take the Yatela mineralization without significant modifications.
Drilling on the Sadiola deposit itself continues to intersect gold mineralization in the unoxidized zone at depth. Four more holes drilled into the deep sulphides intersected gold mineralization with grades of 2.1-6.9 grams gold per tonne, including multiple zones in two holes.
A 76-metre intersection in drill hole SD-22 graded an average 6.9 grams per tonne and a 34-metre interval contained in the 76 metres graded 9.5 grams. Interpretation of earlier results from another hole suggests that mineralization in the new and old holes may be part of a shoot developed at the intersection of the main Sadiola fracture zone with a smaller fault oblique to the main one. The interpretation has been supported by evidence found from structural mapping in the open pit.
The shoots suggest that Sadiola may have several plunging ore structures that continue to depth.
Iamgold is also negotiating to acquire a gold property in Brazil, with a drill-indicated resource, and has projects in Argentina and Ecuador it means to drill in 1999.
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