Iamgold boosts contained gold at Ontario’s Côté mine

A resource update for Iamgold’s (TSX: IMG; NYSE: IAG) main Côté operation in northeastern Ontario lifts contained gold by 12% through the integration of the nearby Gosselin zone.

Measured and indicated resources at Côté now total 838 million tonnes grading 0.75 gram gold per tonne for contained metal of 20.34 million oz., up from an estimated 18.2 million oz. as of Dec. 31, Iamgold said Monday in a statement. Inferred resources jumped 61% to 177.1 million tonnes grading 0.61 gram gold for 3.48 million oz. gold of contained metal.

“We view the update as positive given the larger higher-confidence resource inventory available for the fourth-quarter technical report and the first consolidated Côté-Gosselin resource model now in place for mine planning,” National Bank Financial mining analyst Mohamed Sidibé wrote in a note.

“That said, the technical report remains the gating item, with reserve conversion, mine sequencing, permitting, processing rate, capex, strip ratio and tailings assumptions to determine how much of the expanded resource base enters the mine plan.”

The resource update comes as the company works to complete an expansion technical report and updated mine plan, which are expected by year-end. The update is based on extensive diamond drilling and refined geological interpretations to better define the geometry and continuity of mineralization across the combined Côté and Gosselin zones, Iamgold said.

Plant expansion

Toronto-based Iamgold is pursuing a plan to expand the Côté plant’s capacity 40% to more than 50,000 tonnes. Iamgold predicts attributable gold production of between 270,000 and 310,000 oz. at Côté this year, compared with 279,900 oz. last year.

Located near Gogama, about 175 km northwest of Sudbury, Côté entered commercial production in August 2024 and quickly became one of Canada’s largest new gold mines. Iamgold operates Côté in a 70-30 joint venture with Japan’s Sumitomo Metal Mining.

Measured and indicated resources at the Côté deposit now amount to 12.76 million oz., compared with 7.43 million oz. for Gosselin, Iamgold says. The integrated model also outlined additional ounces within the saddle area linking the deposits.

Key changes to the update include higher gold price assumptions. Iamgold is now factoring in a price of $2,500 per oz. and a cut-off grade of 0.25 gram gold per tonne. This replaces the prior assumptions of $2,100 gold per oz. at Côté and $2,500 at Gosselin, as well as a previous cut-off grade of 0.30 gram gold.

Takeover target

The enhanced resource enhances Iamgold’s attractiveness for larger industry rivals, TD Cowen mining analyst Steven Green said.

“We continue to view Iamgold as a potential M&A target, as Côté evolves into one of the larger evolving projects in the sector,” Green said Monday in a note.

Côté accounts for about 67% of Iamgold’s net asset value, RBC Capital Markets estimates.

Crews at Côté are planning to carry out another 30,000 metres of diamond drilling this year, Iamgold says. The next phases will aim to infill and test the ability to further expand the mineralized envelope for 2027. 

Beyond Côté and Gosselin, Iamgold has identified multiple regional targets across its land package, including Jerome, Northshore and Monella Point. These targets “support the view that the broader Côté Gold district has the potential to host additional deposits that could, if successful, complement the existing operation,” Iamgold says.

Iamgold shares fell 4.7% to C$23.76 Monday morning in Toronto as broader markets declined, valuing the company at about C$13.7 billion ($9.9 billion).