Japan's Sumitomo Obtains Stake In Iamgold's C??t?(C) Gold Project
(Kitco News) -Iamgold Corp. (NYSE: IAG;TSX: IMG) and Japan's Sumitomo Metal Mining Co., Ltd. have entered into a jointventure to develop the C??t?(C) gold project in Ontario, the companies reported late Monday.
Iamgold also announcedwhat it termed "positive results" from a prefeasibility study for the project,which clears the way to initiate a feasibility study and to support thepermitting process.
Sumitomo will pay $195 million to Iamgold for a 30% interest in C??t?(C), Iamgold reported,with $100 million payable upon closing. The remaining $95 million will be payable 18 months after closing or else the date ofpublic filing of a feasibility study for C??t?(C), whichever comes first. Closingof the transaction is expected to occur before the end of the month.
Iamgold will be operatorof C??t?(C), the company said. Each party will be responsible for funding itsshare of expenditures, including initial and sustaining capital expenditures.
"This transaction issignificant for Iamgold as it validates the intrinsic value of theC??t?(C) gold project," said Steve Letwin, chief executive officer of Iamgold. "Itwill enable us to move the project into development and to significantlydiversify our production profile as a result of future production from ourCanadian operations."
He later added: "Inaddition to providing us with the financial capacity to develop the C??t?(C) gold project, we are gaining a partner with businessdevelopment and technical expertise who we can work with in the future toexplore new possibilities."
Iamgold said it began discussionsfor a potential partnership with Sumitomo last August. Besides benefitting from one another'sexpertise, Iamgold said it will benefit from Sumitomo's access to Japanese suppliers to the mining industry.
Meanwhile, Iamgold saidhighlights of the C??t?(C) prefeasibility show proven and probable reserves of5.9 million ounces of gold, a mine with alife of 17years, with mill throughput of 32,000 tonnesper day, and average annual production of 320,000 ounces.The prefeasibility study also came up with life-of-mine cash costs of $605 per ounce of gold and all-in sustaining costsof $689. Initialcapital expenditures were put at a littleover $1 billion.
"The robust projecteconomics generated from the PFS further validates our view that C??t?(C) Gold isan exceptional organic growth project, particularly when our industry faces ashortage of undeveloped gold deposits in attractive mining jurisdictions withsurrounding infrastructure," Letwin said.
The CEO also said C??t?(C) has "significantexploration upside potential" with more than 500-square kilometers ofexploration rights-held property surrounding the deposit.
By Allen SykoraFor Kitco News
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