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IAMGOLD says cost overruns at Cotè in new SEDAR filing

Aug 15, 2022

IAMGOLD has filed an updated technical report for the Coté Lake Gold Mine project south of Timmins. The latest report updates the most recent report which was filed 15 months ago.

Some of the highlights include: 

Project construction is 53% complete as of May 1, 2022, and is on track for H2 2023 first gold production. Risks to Mineral Resource and Mineral Reserve estimates, or to projected economic outcomes, are low in comparison to advanced properties undergoing engineering studies. 

Due to the substantial capital expenditures involved in mine development projects, developments are prone to cost overruns versus budget. Construction costs at Côté have been impacted by a wide variety of factors, several of which are beyond the control of IAMGOLD. The capital expenditures and long time period required to develop new mines or other projects are considerable and changes in costs and market conditions or unplanned events or construction schedules can affect project economics. The Project may still experience further increases in capital expenditures, although given the stage of advancement, the risk is reduced. In addition, construction and permitting delays could result in a prolonged schedule and increased project costs, and delay impacting mining activity or commissioning of the mill plant, which ultimately could impact the timing of production. 

To mitigate some of these risks, operational and economic reviews are in place, with a focus on project budget, future cash flows, profitability, and results of operations.

Geology and Mineral Resources

• Côté Measured and Indicated Resources total 365.5 million tonnes (Mt) at an average grade of 0.87 g/t Au, containing 10.20 million ounces (Moz) Au. An additional 189.6 Mt at an average grade of 0.63 g/t Au, containing 3.82 Moz Au are estimated in the Inferred Mineral Resource category.

The Mineral Resources are estimated at a 0.3 g/t Au cut-off grade, based on a gold price of US$1,500/oz Au, and have an effective date of December 19, 2019.

• Gosselin Indicated Resources total 124.5 Mt at an average grade of 0.84 g/t Au, containing 3.35 Moz Au. An additional 72.9 Mt at an average grade of 0.73 g/t Au, containing 1.71 Moz Au are estimated in the Inferred Mineral Resource category. The Mineral Resources are estimated at a 0.3 g/t Au cut-off grade, based on a price of US$1,500/oz Au, and have an effective date of October 4, 2021.

These estimates remain unchanged from the previous Technical Report.

Construction Progress

As of May 1, 2022, overall project progress reached 53%, with: • Physical construction progress is estimated at 37% complete.

 Fabrication of equipment is estimated at 70% complete.  Detailed Engineering is progressed at 97% complete. Construction was significantly impacted by COVID in late 2021 and early 2022. Further, a fire in late February 2022 and a labour strike of Operating Engineers and Carpenters during the month of May, affected the project capacity to execute. The Ontario union labour strike had an impact on the Project of approximately eight weeks delay, considering the consequence of lengthened construction activity durations, due to some work shifting to Winter 2023 season.


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