Iamgold‘s (IMG-T, IAG-N) Mupane gold mine in Botswana will get a few extra months of production as result of the company cancelling its contract mining arrangement to manage the operation itself.
The company expects operations at Mupane to last for an additional four to six months, translating into an additional 30,000 to 70,000 oz. of gold. On top of that, cash costs will be reduced by about US$40 to less than US$450 per oz. The company expects to be mining until the second quarter of 2012.
Finding equipment won’t be a problem; Iamgold has shipped idle equipment from French Guiana to Botswana. The company expects to have the equipment up and running by the end of the month.
Reserves have increased 3.8 million tonnes grading 2.2 grams gold per tonne for 274,000 oz. gold up from 247,000 oz. gold.
“The increase in reserves is a direct result of Iamgold’s aggressive cost and production initiatives,” said Iamgold president, Joseph Conway, in a statement. “Our lower operating costs will allow for profitable mining of satellite deposits that had been previously excluded from the original mine plan.”
Conway says the company will continue to study mining costs to see if there are other ways to develop more resources and extend the mine life.
The lower operating costs will allow the company to mine satellite deposits that it has never considered before.
Iamgold shares were down 2% or 13 in Toronto today to $6.27 each on a trading volume of 498,000 shares.
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