Iamgold enjoys added Yatela production

Iamgold‘s (IMG-T) share of production from the Sadiola and Yatela gold mines in western Mali, reached a record 256,077 oz. in 2001.

The bulk of production came from Sadiola, which poured 536,047 oz. (Iamgold’s share was 203,698oz.) of the yellow metal at a total cash cost of US$143 apiece. Sadiola beat most of its budget estimates, including: tonnes milled at more than 5.3 million oz.; ounces produced; and recovery rates 94% (90% budgeted).

Iamgold expects the good times to continue at Sadiola and projects 2002 production to hit 547,000 oz. at an average total cash cost of US$158 per oz. The recovery rate from 5.3 million tonnes of ore treated is pegged at 85%. The company has budgeted US$8.1 in capital expenditures at the project for the year, including US$6.6 million for exploration.

Through the end of 2004, Sadiola has a total of 85,000 oz. of gold under forward sales contracts at an average of US$271 per oz. The company has also sold call options on 90,00 oz. at an average of US$385 per oz. The hedge book is non-recourse to Iamgold.

Currently, modifications to the plant at Sadiola are underway and are slated for completion in March, when the oxygen plant is commissioned.

At Dec. 31, 2001, Sadiola’s total proven and probable reserves were reported at 36 million tonnes of 3.3 grams gold for 3.8 million contained ounces. Of that, 5.4 million tonnes of stockpiled proven material runs 1.8 grams gold per tonne. Sadiola’s reserves were based on an 85% recovery rate from sulphidic saprolite. Based on a review of metallurgical testwork, reserves will be recalculated base on an 80% recovery rate. Overall, total measured and indicated resources (including reserves) are pegged at 50.1 million tonnes of 2.4 grams gold per tonne.

The Yatela gold mine began commercial production in early July, and has since produced 130,948 oz. (Iamgold’s share was 52,379 oz.) at US$158 per oz., including US$2 per oz. for pad preparation costs. In 2002, the company expects the mine to pump out 270,000 oz. at US$173 per oz. The company plans to spend US$3.2 on exploration at the mine this year. The mine’s production is unhedged.

Year-end total reserves at Yatela were 12.3 million tonnes of 3.6 grams gold for 1.4 million contained ounces. Total measured (stockpiled) and indicated resources amounted to 17 million tonnes grading 3 grams gold.

Of the consolidated reserves at Sadiola and Yatela, Iamgold’s share stood at 2 million oz. at the end of 2001.

Iamgold and AngloGold (AU-N) each hold 38% interests in Sadiola; the government of Mali owns 18%, and International Finance Corp. has 6%. Iamgold and AngloGold each have a 40% stake in Yatela, with the government holding the remaining 20% stake.

On the exploration front, US$2.8 million is earmarked for exploration of satellite oxide targets around Sadiola. Another US$1.8 million will go toward Sadiola pit exploration. At Yatela, US$1.5 million will be used to test for possible northern extensions of the pit mineralization.

In Senegal, at the Bambadji project, Iamgold continues a program of in-fill termite mound sampling and geological mapping in the structural corridor east of the regional Senegal-Mali fault system. Drill testing is slated for April.

In Argentina, five closely spaced holes aimed at a possible payshoot at the southern end of one of the epithermal veins on the Las Mellizas property failed to cut significant mineralization. Iamgold plans further surface work and drilling to test about 8 km of veins identified on the property.

Trenching and channel sampling at the Cerro La Mina and Dos Lagunas targets in the Los Menucos area returned encouraging gold grades in breccias and veins. A 2,200-metre core and reverse circulation drilling program to test the targets is planned for early March.