IAMGOLD sells Diavik royalty stream to Sandstorm Gold for US$56.8 million

IAMGOLD Corporation¬†(“IAMGOLD” or “the Company”) announced Monday it has completed an agreement with¬†Sandstorm Gold Ltd.¬†to sell the Company’s gross proceeds royalty over property in Lac de Gras in the¬†Northwest Territories, Canada, including property constituting the¬†Diavik Diamond Mine¬†(the “Diavik Diamond Royalty”).¬†The Diavik Diamond Mine¬†is owned, under an unincorporated joint venture structure, 60% byDiavik Diamond Mines Inc.¬†(“DDMI”), a subsidiary of¬†Rio Tinto plc, and 40% by¬†Dominion Diamond Diavik Limited Partnership, a subsidiary of¬†Dominion Diamond Corporation¬†and is operated by DDMI. The Diavik Diamond Royalty is being sold for total proceeds of¬†$56.8 million,¬†comprised of¬†$52.5 million¬†cash on closing and three million five-year warrants exercisable after initial production from the Diavik Diamond Mine’s A21 pipe at an exercise price of¬†$4.50, valued at¬†$4.3 million based on the Company’s internal valuation methodology.

“Given the quality of the Diavik Diamond Royalty we received very strong interest in the sale, which resulted in a satisfactory outcome for both parties,” stated¬†Steve Letwin, President and CEO of IAMGOLD.¬† “With the Sandstorm warrants, we are also positioned to benefit from the addition of this asset to their portfolio.¬† As a result of this sale, the previously completed sale of Niobec and ongoing initiatives to conserve cash,¬†IAMGOLD¬†is left in a very strong financial position with the ability to invest further in its existing portfolio of assets and to consider acquisition opportunities that will contribute to positive cash flow.¬†¬† Following completion of this transaction, all of¬†IAMGOLD’smines and projects are focused on its core business of producing gold.”

Sandstorm said the deal with IAMGOLD will add US$7 million to US$8 million per year in cash flow to its portfolio.

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