IAMGOLD

Source: Exec Digital Canada

Date :02/07/2007 17:13:58

Toronto gold producer IAMGOLD has staked numerous claims around the world in its search for nature’s currency

Written and produced by James Buchanan & Jason Wright

Mining for gold has come a long way from the days of the first American gold rush in the late 1840s, but the principles are still the same – get to where the gold is, stake a claim and begin digging.

For Toronto-based IAMGOLD, this means traveling the world in search of new opportunities, while building its capacities to draw more gold from the ground that holds it.

IAMGOLD is a mid-tier gold producer, with annual production at more than 1 million ounces from eight different mines located in North America, South America, and Africa.

The company is also actively pursuing five development projects and is the owner of two non-gold assets that provide cash flow for the company.

According to the company’s website, the core of its ability to move forward on these fronts is the team of professionals it has built — with technical expertise in exploration, development, and the operations of its existing gold mining operations and pursuit of new opportunities to grow shareholder value.

Among the company’s existing operations is the Rosebel mine, which the company says on its website is IAMGOLD’s most important asset.

The mine is located in Suriname, South America, less than 100 miles from the country’s capitol of Paramaribo. The company gained ownership of the mine through its acquisition in 2006 of Cambior.

Cambior had earned a 50 percent stake in the mine in 1994, and then acquired the remaining interest in 2002 from Golden Star Resources Ltd. In 2003, says IAMGOLD’s website, construction and development began in earnest, which was completed in February 11, 2004, at a cost of $95 million – on time, and on budget.

Today, IAMGOLD holds a 95 percent share in the mine, while the government of Suriname owns the remaining five percent. According to the Mineral Agreement between the government and the company, IAMGOLD is allowed to export and sell gold production as well as capital and profit repatriation. The agreement further stipulates that any disagreement between the two shall go before international arbitration.

The company’s 2006 outlook for the mine states that Rosebel was expected to produce 335,000 ounces of gold, at an estimated mining operation cost of $240 per ounce.

Equipment at the mine, says the company, includes a computerized truck dispatching system to control loading and hauling — which monitors the location of the equipment, assigns trucks to loading points and provides production data.

Excavation equipment is a mixed fleet of four-cubic meter backhoes, 10-cubic meter hydraulic shovels and a 10-cubic meter front end loader.

Hauling equipment includes twelve to fifteen 85-ton trucks.

Ore is processed through a crushing and grinding circuit, followed by a conventional gravity circuit, cyanidation circuit and carbon-in-leach plant, says the company’s website.

The company has also installed a fully functional effluent treatment plant, which will treat and discharge surplus water in full compliance with its Environmental Impact Assessment.

Further, 90 percent of the water used at the process plant is recycled, says the company’s website.

Power is supplied through the Government of Suriname’s electrical power grid from the Afobaka hydro-electric generating station approximately 30 miles from the mine.

While the company has done well with this particular mine, it has not come without its challenges. These include a work stoppage announced by the company in a January 26, 2007 press release.

In reaction to the stoppage, the company offered employees a substantial wage increase, increased vacation and benefits, and a lump sum payment to employees to reward the good work to date on the project, said a February 12 press release. The offer was the result of consultations and meetings between the union, the mediation board and Rosebel management.

“We want to continue to build a strong and highly trained workforce at Rosebel,” said Joseph Conway, president and CEO of IAMGOLD, in the press release. “We are hopeful that this generous offer is accepted by the union and employees so we can shift our focus back to the optimization of this operation. It is important to have a stable and committed workforce at Rosebel.”

The release went on to say that, prior to the work stoppage, the management at the mine thought they had worked out an agreement and were puzzled by the highly organized and intentional walkout. Events at the mine even got to the point where the Government of Suriname sent in assistance to ensure the protection of explosives and other lethal regents stored at the site.

According to the company’s first quarter 2007 results, released on May 15, 2007, the strike lasted approximately three weeks and ended after the workers accepted a three year labor agreement.

According to a press release issued February 19, operations at the mine shortly returned to normal after the agreement.

“The Rosebel strike has been resolved and we will now have a three year labor agreement,” said Conway. The company is looking forward to returning to normal relations with our workforce and resuming safe and productive operations at the Rosebel gold mine.”

Though relatively brief, the work stoppage had adverse effects on the company’s bottom line. According to the first quarter results release, standby charges of approximately $1.7 million were incurred during the period of the strike resulting in cost increases on the order of $35 per ounce.

However, during the same quarter the company announced a substantial increase in gold reserves and resources at the Rosebel mine.

“Reserves were increased from 3.2 to 3.8 million ounces,” reads the release, “measured and indicated resources increased from 5.1 to 6.3 million ounces and inferred resources increased from 2.2 to 4.3 million ounces.”

In a February 19 press release announcing the increase, Conway said, “The Rosebel total resource base is now over 10 million ounces. The increase in reserves represents at least an additional two years of mine life and we expect further increases as we undertake an aggressive exploration and reserve/resource development program on the Rosebel tenements during 2007.”

Other highlights of the first quarter results include net earnings for the company of $11.3 million, production of 218,000 ounces at a $416 per ounce cash cost of production with an average gold spot price of $650 per ounce.

In the first quarter results release, the company notes that the price of gold displayed considerable volatility. The price averaged $650 per ounce, but traded between $608 and $686 per ounce.

The company also produces Niobium, which is a strengthening element used in the manufacture of specialty steel alloys.

According to the release, “Like many other metals, ferroniobium prices have increased to levels never before attained. Demand is following a similar trend, supported by growth in China, high demand for pipeline steels, and favorable economic conditions worldwide. Demand is expected to remain strong for the foreseeable future.”

With its existing operations the company is in the process of developing a number of other projects.

The Camp Caiman Project is located approximately 40 miles southeast of Cayenne, the capital city of French Guiana. According to the company, it holds a 30 square kilometer mining concession that is valid for 25 years.

The company says the Camp Caiman deposit has probable mineral reserves of 12.3 million tons representing 1.1 million ounces of gold.

La Arena is located near Huamachuco, Peru, where the company holds a 21,971 hectare mining concession. Projected deposits, says the company, are 1.997 million ounces of gold and approximately 5.4 million tons of copper.

The Buckreef project is located south of Gieta, Tanzania, and contains measured and indicated resources of 934,000 ounces of gold.

Quimsacocha, located approximately 35 miles southwest of Cuenca, Ecuador, contains an indicated resource of 3.35 million ounces of gold, says the company. A pre-feasibility study for the project has been initiated, as well as other required studies.

As part of the company’s commitment to its employees it announced on May 3rd the launch of IAMRESPONSIBLE, a key set of health, safety and sustainability policies implemented in every aspect of the company’s business.

According to the company, the policies set out clearly and in simple terms, guiding principles that demonstrate the importance IAMGOLD attaches to the above issues.

These policies include an understanding that no task is so important that time cannot be taken to complete it safely, a safe and healthy workplace should be provided for all the company’s people, comply with relevant legislation and satisfy community expectations, and hold all of the company’s employees accountable for health and safety.

“Health, safety, and sustainability performance is one of the key pillars of our business,” said Conway in a press release announcing the policy. “Stakeholders expect our workforce to be injury free and that we make a tangible contribution to sustainable environmental, social and economic development in the countries in which we operate.

These policies provide clarity, internally and externally on the principles and standards that will be upheld throughout the organization. We expect to set an industry example and be among the leaders in this regard.”