IAMGOLD Submits Notice to Sumitomo to Buy 9.7% Stake in Cote Gold Mine

In May 2024, IAMGOLD announced it had secured $300 million in funding that would be used to repurchase the 9.7% interest.

SEATTLE (Scrap Monster): IAMGOLD Corporation IAG has issued Sumitomo Metal Mining Co., Ltd. with a 60-day formal notice to exercise its right to repurchase a 9.7% interest in the Côté Gold mine. This will increase IAG’s stake to 70% in the mine, which is Canada’s third-largest one. The projected average annual gold production over the life of the mine is 0.365 million ounces. 

Côté Gold is operated as a joint venture between IAMGOLD (as the operator) and Sumitomo Metal Mining Co., Ltd., a subsidiary of Sumitomo SSUMY.

 IAMGOLD and Sumitomo Metal Mining entered into a joint venture funding and amending agreement on Dec. 19, 2022. Under the agreement that commenced in January 2023, Sumitomo had to contribute fund amounts to the Côté Gold Project. In exchange, IAMGOLD had to transfer its 9.7% interest in Côté Gold to Sumitomo Metal Mining. 

However, per the agreement, IAMGOLD had the right to repurchase the transferred 9.7% interest on dates between Nov. 30, 2023, and Nov. 30, 2026, to reinstate its 70% interest in the Côté Gold Project. IAMGOLD had to pay a repurchase option fee to Sumitomo Metal Mining per the terms of the agreement.

In May 2024, IAMGOLD announced it had secured $300 million in funding that would be used to repurchase the 9.7% interest.

 The joint venture started construction on the Côté Gold Project in the third quarter of 2020. IAMGOLD announced the first gold pour from the project on March 31, 2024. The company operates three active mines,  Cote Gold, Essakane in Burkina Faso and Westwood in Quebec, Canada.

The Côté Gold Project delivered its full quarter of production in the second quarter of 2024, contributing 20,000 ounces of gold. It started commercial production on Aug. 2, 2024. The project continues to be well-positioned to achieve the target of 90% throughput by the end of the year. 

The total gold production from Côté Gold is expected to be in the range of 220,000-290,000 ounces as improvements to mill availability are made during the ramp-up of operations. Of this, IAMGOLD’s share in the Coté Gold mine is expected to be near the lower end of 130,000-175,000 ounces. 

 This guidance was based on IAG’s current 60.3% stake in the project. We expect the contribution from the mine to IAG’s production in 2024 to be revised once this deal is completed.

In the first six years of operation, Côté Gold’s expected gold output will likely be 495,000 ounces. Over the life of the mine, it will average 365,000 ounces per year. In terms of production, the mine is the third top gold mine in Canada. 

The Côté Gold mine is expected to lead in terms of technology and will be mined by a fleet of 23 autonomous haul trucks, six autonomous drills and other supporting equipment. This will ensure efficiency, safety and lower costs. The company is also exploring the adjacent Gosselin pit to improve returns from the Côté Gold project.

Courtesy: www.msn.com

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