TSX: IMG NYSE: IAG
TORONTO, March 6, 2014 /PRNewswire/ - IAMGOLD Corporation ("IAMGOLD" or the "Company") announced today that it has finalized a five-year option agreement with Sarafina N.V. (the "Agreement") under which IAMGOLD's subsidiary, Rosebel Gold Mine ("RGM") may earn a 100% interest in Sarafina's 10,000 hectare mining concession, located 25 kilometres from the Rosebel Gold Mine in Suriname.
The Company may exercise its right to purchase the property at any time for a cash purchase price of US$1 million. To maintain this purchase option, RGM is required to make scheduled option payments totaling US$575,000 over five years. IAMGOLD may elect to terminate the Agreement at any time. Should the project proceed to production, Sarafina N.V. shall be paid a NSR royalty of 1.6% for any gold produced from this property.
IAMGOLD's President and CEO, Steve Letwin, said, "Rosebel has been a great mine for IAMGOLD. In its first 10 years, Rosebel produced more gold than defined in its original mineral reserve. Its future reserves are becoming more challenging and expensive to process due to an increasing proportion of hard rock. The Sarafina property has the potential to yield new discoveries of higher grade, softer rock that could be mined with a lower stripping ratio than our current operations. The new Agreement opens the opportunity to reinvent Rosebel, lengthen its reserve life, lower its unit operating costs and improve its contribution to the Government of Suriname, the local community and our investors."The property lies within the Unincorporated Joint Venture ("UJV") area that was negotiated with the Government of Suriname in 2013, with the UJV owned 70% by RGM and 30% by the Government. In the UJV, RGM is eligible to benefit from the low power rate of $0.11/kWh for any material processed originating from the Sarafina property. IAMGOLD intends to make exploration of this property a priority, with the aim of discovering additional softer ore to feed to the Rosebel mill in the coming years. The Sarafina property lies within a northwest trending belt of sheared mafic volcanics immediately along strike of the previously discovered Saramacca gold deposit. The project has been the site of previous exploration and ongoing small scale mining and is believed to have exploration potential for the discovery of gold mineralization. IAMGOLD will complete a compilation of all historic exploration data to identify priority targets for follow up and will have its exploration team active on the site immediately.