TSX: IMG NYSE: IAG
TORONTO, April 15, 2013 /PRNewswire/ - IAMGOLD Corporation ("IAMGOLD" or the "Company") announced on November 26, 2012 that it had reached a definitive agreement (the "Agreement") with the Government of the Republic of Suriname (the "Government") addressing future resource development and related power costs. On April 13, 2013, the Agreement was approved by the legislative authority of Suriname, the National Assembly. The Agreement will, once executed, amend the existing Mineral Agreement regarding the Company's Rosebel mine in Suriname.
IAMGOLD President and CEO, Steve Letwin, said, "The approval of this Agreement by Suriname's National Assembly validates the work over the last year and half by the Government and IAMGOLD to ensure a longer and stronger future for the Rosebel mine for the mutual benefit of the people of Suriname and the shareholders of the Company. Access to new concessions creates ample opportunity to add to the life of the Rosebel Gold Mine and to find softer ore which can be processed at lower cost. The lower rate for power brings more gold mineral resources into economic viability for the mutual benefit of our shareholders and the people of Suriname. The Agreement reflects a true spirit of partnership between the Government and the Company."
With this Agreement, IAMGOLD will maintain all of its existing entitlements in the Rosebel operations and in the Gross Rosebel exploitation concession and will extend the term of its existing Mineral Agreement by 15 years to 2042. The Agreement will further establish a new joint venture growth vehicle (the "JV") under which Rosebel would hold a 70% participating interest and the Government will acquire a 30% participating interest on a fully-paid basis.The Agreement will provide up to 300 x 10 6 kWh per year of additional power at a cost of 11 cents per kilowatt hour, which will apply to any production from the joint venture area. The JV area has been defined as a circular area extending 45 kilometres from the Rosebel mill, but excluding the Gross Rosebel concession, for a net JV area of approximately 6,190 km 2. The JV will be entitled to convert an additional 20,000 hectares or 200 km 2 to new rights of exploitation within the joint venture area, on a simplified and expedited basis, for processing at Rosebel. Under the terms of the Agreement all future production from the joint venture area will be allocated to the JV on a 100% basis. The JV will also allow both Rosebel and the Government to share on the same basis as above in any further significant expansion at Rosebel. Rosebel, which is also evaluating the expansion of its gold plant throughput capacity from 12 million to 14 million milled tonnes per annum, is planning to undertake a feasibility study on the potential for a further significant expansion which, if approved, the Government will have the right to acquire an interest through the JV at fair market value. Rosebel will be entitled to proceed with the expansion on its own if the Government does not participate through the JV, and in either case will have access to the lower cost power rate for the expansion.