IAMGOLD has made major progress in raising the roughly $1 billion it needs to complete its Côté Gold project.
The company is building the large-scale project about an hour south of Timmins, on property it acquired in 2012.
Construction began in 2020 and was expected to take three years and cost the company around $900 million. The lifespan of the mine is expected to be 16-18 years and produce 495,000 ounces of gold a year in its first six years.
Average production over the full 18 years is estimated at 365,000 ounces a year, starting in the fourth quarter of 2023.
However, rising costs and other challenges recently pushed back the opening to early 2024. IAMGOLD's share of the remaining costs to complete the project have soared from $750 million to an estimated $1.3 billion.
That meant the company needed to raise about $1.1 billion to complete the work.
Monday, IAMGOLD announced an agreement with Sumitomo Metal Mining worth $340 million, giving the Japanese company a 10 per cent stake in Côté.
The company can buy back its stake in the project on seven dates between Nov. 30, 2023, and Nov. 30, 2026.
"The financial support of Sumitomo demonstrates to all of our stakeholders the strong validation of the Côté Gold Project from our partner and our alignment to complete construction and commence production," Maryse Bélanger, interim president and CE, is quoted as saying in a news release.
"On behalf of the Board and IAMGOLD, I want to thank Sumitomo for their continued support and dedication as together we continue to build what will be Canada's third largest gold mine by production."
On Tuesday, IAMGOLD announced it was selling its Boto Gold project, located in western Africa, to Managem for $282 million. Managem is a mining company based in Morocco.
In addition, funds from the recent sale of a mine in South America will be plowed into Côté Gold. The company raised $360 million by selling its Rosebel Mine to a Chinese company, Zijin Mining Group Co. Ltd.
"The proceeds of the sales, coupled with the financing agreement with Sumitomo announced last night, meet the remaining funding requirements for completion of construction at the Côté Gold Project,” Bélanger said in a news release.
The project is about 70 per cent complete and should come into production in early 2024.
