Iamgold’s Lemelin thanks mentor for Africa option

Bruno Lemelin recalls his first boss at Iamgold (TSX: IMG; NYSE: IAG) more than a decade ago encouraging him to join the Essakane mine team in Burkina Faso just as regional politics began to unravel.

It wasn’t the first operations opportunity for Lemelin, who had worked previously for Xstrata and Falconbridge, but it was his debut managing a mining department of 800 people producing 400,000 oz. of gold a year in a remote area and he was glad to have a mentor like Gilles Ferlatte.

“He was like my brother, he helped me to develop my skills in operations and it was a great experience,” Lemelin said by phone in November. “It’s a massive operation, and in West Africa, so there was a lot of things to think about and plan.”

In hindsight, it seems there was something there about jumping from the frying pan into the fire that forged Lemelin’s mettle to become the company’s chief operating officer in 2023. He oversaw Iamgold build and hit commercial production at its main Côté mine, destined to be one of Canada’s biggest.

It has earned him the Northern Miner Group’s Operator of the Year Award sponsored by professional services firm EY.

“I feel very humble yet very grateful about this recognition,” Lemelin said. “It’s awesome. I won’t hide it. It’s more like a team effort, because we’ve been working very hard over the past few years to make it happen, the successful construction and ramp up of Côté.”

On target

The mine delivered a company-leading 106,000 oz. during the third-quarter as Iamgold remains on track to achieve its full-year forecast of 735,000 to 820,000 oz. including two other operations, Westwood in Quebec, and Essakane.

The African mine contributed 92,000 oz. while Westwood added 23,000 ounces.

Quarterly revenue reached nearly $707 million (C$992 million) from sales of 203,000 oz. at an average realized gold price of $3,492 per ounce. Year-to-date revenue totalled $1.76 billion. All-in sustaining costs averaged $1,956 per oz., placing the company at the upper end of its cost guidance.

Cost control is Lemelin’s top priority for the new year.

“While we’re working on expansion options at Côté, we want to make sure that steady state is coupled also with cost management and cost efficiency,” he said. “We enjoy the high gold price environment, but we want to protect our margin, and we want to make sure that we are disciplined and rigorous.”

Côté mine

The open-pit mine, located 125 km southwest of Timmins, Ont., made its first gold pour in April of 2024 after the project began for Iamgold with its 2012 takeover of Trelawney Mining.

Japan’s Sumitomo Metal Mining bought a 30% share in 2017 and construction was approved in 2020. Capital costs over the years totalled nearly $3 billion.

The processing plant operates at its capacity of 36,000 tonnes per day, drawing from Côté’s proven and probable reserves of 233 million tonnes grading 0.96 gram gold per tonne for 7.17 million oz. gold over an 18-year mine life.

Iamgold aims to make Côté one of Canada’s largest gold producers, averaging 365,000 oz. annually. During its first six years of operations, gold output could reach as high as 495,000 ounces.

Lemelin recalls getting all the moving parts aligned for each milestone, like from construction to pre-commissioning, commissioning, ramp up and commercial production to steady state output.

There were interfaces to smooth between the crushing facilities, the grindings, the wet process and the refinery.

“When you build a project, you look at each area, they all make sense. But you need to make sure that at the end the music sounds good. It’s like an orchestra. You want to make sure that all the musicians are playing well. And you need to make some adjustment over time. Like, to make sure that things are fully flowing beautifully without any false notes. So, yes, massive challenges, but it’s very rewarding when it works, the music sounds really good.”

Professor

Lemelin’s academic approach has a background. He has a doctorate in mineral economics after he completed degrees in engineering and finance at Laval University in Quebec City.

“Eventually I wanted to be a professor in mineral economics,” he said. “But fate has decided otherwise, as I was at that time working for Falconbridge which became Xstrata, and there was a lot of action before the 2008 crash and I got offered the job of engineering superintendent and never looked back after that, I stayed in the business.”

The combination of school and work experience bodes well for the planned expansion at Côté with the adjacent Gosselin deposit, due for a resource update and prefeasibility study by the end of 2026.

The company drilled 55 km of holes this year as it looks to increase throughput from 13 million tonnes a year to options of 15 million, 18 million and 20 million tonnes, Lemelin said.

“The best way to find a mine is near or underneath the existing mine, so Gosselin is just spitting distance, close enough that now we believe that we have a super-pit concept,” he said. “We’re going to finalize this technical report to see, hey, do we have, like 30 years or 40 years? And what should be the cadence [throughput] at which you operate?”

Gosselin’s drilling results have confirmed extensions of the deposit, indicating its potential to be similar in size to Côté.

Gosselin hosts 161.3 million indicated tonnes grading 0.85 gram gold for 4.4 million oz. of contained gold, according to a February 2024 resource. It has 123.9 million inferred tonnes at 0.75 gram for 3 million oz. of the yellow metal.

Lease renewal

At Essakane, the new year brings more drilling to expand the mine as it heads towards lease renewal in 2028, with a probable technical report due a year earlier, Lemelin said.

“We’re seeing good potential we have within the current existing area, like within the fence, we have been exploring quite aggressively, and we have projects right now, additional phases,” he said. “With the gold price environment right now supporting those phases, we’re going to be looking to extend the life of mine.”

However, the expansion will fall under the newer mining code established in 2024. It increases the Burkina Faso government’s stake in projects to 15% from 10% with an option to go as high as 30% while also calling for a certain amount of local processing and suppliers and limits on past tax exemptions.

It means a busy time ahead with lots of discussions with officials from the junta and communities, the COO said.

Nelligan

Back in Quebec, Iamgold in October agreed to buy Northern Superior Resources for $267.4 million in cash and stock as well as Mines D’Or Orbec for $12.3 million.

The deals nearly triple Iamgold’s footprint in the Chibougamau region 700 km by road north of Montreal as it considers developing a processing hub on the Nelligan property fed by multiple mining areas.

“It’s a very promising, very prospective area, and it’s good when you build an asset like Côté, it’s so transformative, but there’s always ‘OK, but what’s next?’ And we’re very fortunate to have Nelligan in our drawing board pipeline.”

Lemelin, who is based in Toronto with two teenage sons on basketball teams and adept at modern technologies, wants to attract youth to the industry.

He plans to integrate transformative advances like artificial intelligence – perhaps in a new playful version of a mentor like he had with Gilles Ferlatte – and sees the autonomous vehicles at Côté as a first step.

“For young people who like to play video games like Fortnite and everything, you literally have the whole fleet within your control in the control room,” he said. “It’s super fun.”