IAMGOLD to Apply for Mining Concession for Boto Gold Project

IAMGOLD (TSX:IMG,NYSE:IAG) has released a feasibility study for its Boto gold project, saying that it represents “significant” improvements from a prefeasibility study put out in February.

According to the company, it will be able to use the feasibility study to support its application for a mining concession in the fourth quarter of this year.

The new study suggests that the project is “robust,” says IAMGOLD, with the ability to produce 140,000 ounces of gold a year for close to 13 years. Life-of-mine cash costs stand at US$714 per ounce, while all-in sustaining costs are calculated at US$753 per ounce.

“Boto Gold has evolved from a grassroots exploration discovery to a robust development project with nearly 2 million ounces in reserves. I congratulate the team for their success in improving the project economics by as much as they have,” stated Steve Letwin, president and CEO of IAMGOLD.

“This is a solid, low-cost project which is expected to deliver 140,000 ounces annually, on average, for nearly 13 years. While a final investment decision is yet to be made, and there is still permitting work to be done, we’re looking at a high-value project that adds to IAMGOLD’s already impressive growth profile.”

Boto is located in Senegal, West Africa, and IAMGOLD has a number of mines already operating on the continent. Its Sadiola and Yatela gold mines are in Mali, and Rosebel and Essakane gold mines are in Suriname and Burkina Faso, respectively.

The feasibility study was jointly completed by IAMGOLD and Lycopodium Minerals Canada, which calculated an after-tax internal rate of return (IRR) of 23 percent, with a payback period of 3.4 years.

Net present value (NPV) is set at US$261-million at a 6-percent discount and using a gold price of US$1,250 per ounce.

“The 23 percent after-tax IRR and the 151 percent increase in the NPV at a lower gold price assumption are marked improvements from those reported in the pre-feasibility study,” Letwin noted.

The feasibility study also bumps Boto’s proven and probable reserves up to 1.93 million ounces grading 1.71 g/t gold. That’s a rise of 0.51 million ounces from the February prefeasibility study.

As mentioned, IAMGOLD will use the feasibility study to support an application for a mining concession in the fourth quarter, with approval expected in the first half of 2019.

As of 11:45 a.m. EST on Tuesday (October 23), IAMGOLD was up 3.59 percent, trading at C$5.20.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.