IAMGOLD says CÔTÉ Gold Project costs higher than expected

In a regular update to markets, IAMGOLD says it has adjusted costing forecasts for the Cote Gold Project south of Timmins. 

Construction at Côté, a 70:30 joint venture ("JV") between IAMGOLD, as the operator, and Sumitomo Metal Mining Co., Ltd. ("SMM"), continues with the earthworks contractors advancing road widening and overburden stripping and the commencement of work on water management infrastructure and the tailings management facility. Plant site concrete works have commenced including the commissioning of the concrete batch plant and the raft foundations for the ball mill. Construction of the permanent camp is progressing well with approximately 50% of the planned rooms complete. The Project is currently on schedule and is 27% complete at June 30, 2021. The Project schedule remains on track for commercial production in H2-2023. 

Costs Estimate Update

The Company has identified certain estimated project costs increases from a project review. The Company's 70% share of updated estimated project costs from July 1, 2020, net of leasing, is now estimated at $1,125 million to $1,175 million (exclusive of expenditures prior to such date) at a CAD:USD exchange rate of $1.30 compared to the previous estimate of $875 million to $925 million at a CAD:USD exchange rate of $1.35. In accordance with the terms of the joint venture, the updated capital costs will be reviewed by SMM.

The change was primarily driven by increased structural, mechanical, piping, electrical and concrete estimates for the process facility; increases to mine facilities costs; increases in earthworks materials and manpower estimates; certain scope changes; inflation (including pricing increases due to COVID-19 related supply chain challenges); changes in the currency exchange rate; and costs related to COVID-19. The project costs range increase includes new contingency amounts for the remaining expenditures estimate.

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