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Iamgold cuts production guidance due to Rosebel suspension, stock down 14%

Rosebel gold mine in Suriname. Image courtesy of Iamgold Corp.

Iamgold Corp. (TSX: IMG) has reduced its production guidance for the year, mostly to reflect the suspension of its Rosebel mine in Suriname, where an illegal miner died last week, the Toronto-based gold miner said in Wednesday’s Q2 results release. As well, the company expects lower production from both its Essakane mine in Burkina Faso and Westwood mine in Canada.

Attributable gold production guidance for 2019 is now in the range of 765,000-810,000 oz, compared with the company’s previous forecast of 810,000-870 000 oz. Production guidance for Rosebel alone has been trimmed from 315,000-330,000 to 240,000-260,000 oz.

Cost guidance has also been revised upwards to align with the company’s recent developments. Guidance for cost of sales and total cash costs have been raised to $910-$960/oz and $860-$910/oz, respectively, while guidance for all-in sustaining costs (AISC) is set at $1,090-$1,130/oz.

Shares of Iamgold had plunged by more than 14% at market close Thursday. The company has a market cap of C$2.14 billion.

Underground potential at Saramacca

On the same day, Iamgold also announced initial drilling results for its Saramacca joint venture project, outlining its potential for underground mining.

Located 25 km southwest of the Rosebel operation and 125 km south of Paramaribo, Suriname, Saramacca is 70% owned by Iamgold subsidiary Rosebel Gold Mines and 30% by the Suriname government.

The reported assay results, highlighted by 9.67 g/t gold over 24 m, are “very encouraging” and justify the need for additional drilling, the company says.

The Saramacca project, based on an open-pit mining scenario, hosts an estimated 1.5 million ounces of contained gold in the proven and probable mineral reserves category.

Drilling will continue at Saramacca, and the results will be used to support a concept study to demonstrate the economic viability of a potential underground development.