Iamgold starts production at its only mine in Ontario

Iamgold (TSX: IMG; NYSE: IAG) has declared commercial production at its 60%-owned Côté mine in northern Ontario, the company’s third producing gold mine and second in Canada.

The mine is forecast to produce 365,000 oz. gold over 18 years and cost $1.9 billion to build.   

In a release, Iamgold president and CEO Renaud Adams said rampup at the company’s newest mine was going well.

“Since achieving the first pour of gold on March 31, 2024, our teams have spent the last four months methodically and iteratively testing and ramping up all facets of the mine,” Adams said. “This process has required remarkable commitment, ingenuity and teamwork to bring all the systems online together to achieve this milestone.”

Commercial production means the mine has reached at least 30 consecutive days of operations at about 60% of its 36,000-tonne–per-day capacity, Iamgold said. 

The company will now continue its focus on improving plant availability towards Côté reaching 90% of nameplate throughput by the end of the year, Adams added.

Operated in a joint venture with Sumitomo Metal Mining, Côté, located 125 km southwest of Timmins, is expected to be among Canada’s largest gold mines. It’s the company’s third gold producer including its Essakane in Burkina Faso and Westwood in Quebec. It sold its Rosebel mine in Suriname to Zijin Mining for US$360 million in 2022.

Iamgold says all major equipment is proving capable of operating at or above design levels. After the first gold pour in the spring, Iamgold focused on testing the processing circuits to handle nameplate loads, with primary components responding well.

However, availability of the processing facilities’ dry-side was limited, specifically with crushing and screening circuits, Iamgold said. The company plans to shut down the facility for several days in September to address wear and tear impacts on the availability of circuits.

Though Iamgold has run the mine in a 60-40 joint venture with Sumitomo, it intends to use a US$300 million bought deal financing in May to repurchase a 9.7% interest in Côté in November from the Japanese miner. That will return its 70% stake in Côté, which it held until December 2022, when it sold a 10% interest to Sumitomo for US$340 million, part of a larger sale of its African assets it used to fund the Côté build.

Shares in Iamgold were down 5.8% to $5.36 apiece on Friday morning, valuing the company at about $3 billion. Its shares traded in a 52-week range of $2.71 and $6.24.