Iamgold starts Essakane gold mine ahead of schedule

Iamgold‘s (IMG-T, IAG-N) first greenfield project in Africa — the Essakane gold mine in northeastern Burkina Faso — has been built six weeks ahead of schedule.

The company’s second flagship mine started processing its first ore in the third week of June and will be a long-life, low-cost operation.

The news sent Iamgold’s shares in Toronto up 20¢ or 1.8% to close at $18.76 per share with 2.6 million shares changing hands. (The Toronto-based gold producer has traded in a range of $9.99-$21.95 over the last year and has 371.5 million shares outstanding.)

Essakane is expected to produce more than 500,000 oz. gold from start-up to the end of 2011.

Life-of-mine production estimates remain at 315,000 oz. per year through to 2018 with average cash costs in the US$400 to US$410 per oz. range.

Commercial production will be achieved on the first of 30 consecutive days on which the amount of ore processed surpasses 445,000 tonnes or 60% of the plant’s design capacity.

Only soft oxide ore will be fed to the plant for the first few months. Construction of the primary crusher will be completed in about six weeks.

Pre-stripping has left a stockpile of about five million tonnes of ore, or six months worth of feed.

Iamgold owns 90% of Essakane with the government of Burkina Faso holding the remaining 10%.

This year the company is planning to complete 50,000 metres of delineation and resource expansion drilling in conjunction with 17,500 metres of exploration drilling.

Iamgold acquired the Essakane project in February 2009 through its acquisition of Orezone Resources.

Essakane is about 330 km northeast of the capital, Ouagadougou, and 42 km east of the nearest large town and provincial capital, Oudalan, Gorom-Gorom.

The property is made up of six exploration permits: Tassiri, Alkoma, Gomo, Gossey, Lao Gountouré, and Korizéna, covering about 1,069 sq km.

Landlocked Burkina Faso is surrounded by six countries: Mali to the north, Niger to the east, Benin to the south east, Togo and Ghana to the south, and Côte d’Ivoire to the southwest.