Iamgold revealed last August that it needed more funding than initially expected to complete its Côté Gold project in Ontario. On December 19, Iamgold shared that the project, which is co-owned 70/30 with Sumitomo Metal Mining, has secured the funding it needs to continue development of the project and meet its revised early 2024 production target.
Sumitomo will invest about $340 million in the project next year. In return, Iamgold will provide the company with an approximately 10% interest in Côté Gold.
Under the agreement, Sumitomo will provide up to $250 million to finance ongoing construction in exchange for expanding interest in the project. Once the $250 million limit is reached, the parties will contribute, based on their revised project ownership, towards construction costs, which Sumitomo estimated at $90 million.
Iamgold will have the option to repurchase the transferred ownership shares in the future. According to Maryse Bélanger, chairman of the board and interim president and CEO, Iamgold intends to restore its original 70 percent stake after the company improves its liquidity.
Akira Nozaki, President and Representative Director of Sumitomo, said: “The Côté Gold Project has the potential to become a world-class, low-cost, long-life gold mine and is one of the main pillars of Sumitomo Metal Mining’s growth strategy…. We believe this transaction will Further strengthening the friendly relationship between Iamgold and [Sumitomo] while ensuring that construction of the project will proceed without delay and ensure an early start of operations.”
Iamgold also announced the sale of its 90% interest in the Boto gold project in Senegal, the Diakha-Siribaya gold project in Mali, the Karita gold project in Guinea and other related exploration sites, as well as any other early-stage projects. Phase exploration sites for the above-mentioned project, offered to Morocco-based company Managem for approximately $282 million.
“The proceeds of the sale, together with the financing agreement with Sumitomo Corporation announced last night, cover the remaining funding requirements to complete construction of the Côté Gold project, which is approximately 70% complete and on track to start production in early 2024,” Bélanger said.
When construction was approved in 2020, capital expenditures were expected to be $1.3 billion, but in August, with the project nearly 60% complete, Iamgold estimated that $1.9 billion would be needed to complete construction. Once operational, the mine is expected to produce an average of 365,000 ounces of gold per year over 18 years.