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Hiroshi Asahi, Director, Executive Officer, General Manager of Mineral Resources Div. of Sumitomo Metal Mining (left), Ed Thompson (middle), Don Charter, Chairman & Director of IAMGOLD Corporation
This award, named in honour of PDAC’s longest serving president, is given to an individual or organization demonstrating leadership in management and financing for the exploration and development of mineral resources.
IAMGOLD Corporation and Sumitomo Metal Mining Co., Ltd. – For demonstrating leadership in the financing and management of one of Canada’s largest undeveloped gold projects
In June 2017 Sumitomo Metal Mining purchased a 30% interest in the Côté Gold project in northeastern Ontario from IAMGOLD for US$195 million. The investment and subsequent 70-30 joint venture agreement was a breakthrough, allowing IAMGOLD to proceed toward development of a major gold project in a challenging financing environment.
Côté Gold would be the first new major open pit gold mine developed in northern Ontario in over five years and is expected to produce an average of 320,000 ounces of gold per year over a 17-year life span when it enters production in 2021.
The initial development proposal for Côté Gold came at a time when gold prices were declining. By envisioning a smaller project and reconfiguring the proposed surface facilities, IAMGOLD was able to halve the capital cost to just over US$1 billion and produce a much more compelling preliminary economic assessment (PEA).
The company also secured environmental approval from both provincial and federal ministries. Combined with a strengthening gold price environment, these achievements paved the way for joint venture discussions between IAMGOLD and Sumitomo.
A subsequent preliminary feasibility study (PFS) sealed the strategic partnership by confirming Côté Gold’s potential. With proven and probable reserves of 5.9 million ounces, the project has an after-tax net asset value of US$703 million, an internal rate of return of 14% and a payback period of 4.5 years.
In an industry challenged by reserve replacement, the mine will become one of IAMGOLD’s most productive assets and boost Sumitomo’s annual gold output to nearly 18 tonnes from 15 tonnes.
Côté Gold will benefit northeastern Ontario, a region suffering declines in both population and employment, and Canada as a whole. The project offers an estimated 19 years of employment through construction, operation and closure and will procure hundreds of millions worth of goods and services during the construction and operation phases.
Federal and provincial revenues are expected to total more than $1 billion through direct and indirect economic activity. Engagement with surrounding Indigenous communities continues.
The joint venture is a success story because it mitigates the risk of the Côté Gold project by giving IAMGOLD access to Sumitomo’s considerable financial resources and mine building and operating expertise. Together, the two companies are confident they can begin construction as early as 2019 and achieve commercial production by 2021 while ensuring a net positive impact on local and regional communities.