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IAMGOLD puts construction of Canadian mine on ice

Work at the Côte project done in 2011. (Image provided by former owner Trelawney Mining and Exploration)

Canadian bullion producer IAMGOLD Corp. (TSX IMG), (NYSE: IAG) will not proceed with the construction of its Côté gold project, in Ontario, as it’s waiting for improved market conditions before going ahead with the $1.15-billion investment, it said Monday.

Chief executive Steve Letwin said his company had substantially de-risked the project, located in the Abitibi gold belt,  and that it continued to believe in its potential.

Commercial production at Côte Gold was scheduled to start in 2021, with an expected average annual output of 367,000 ounces over its 16-year life.

“However, we have decided to wait for improved, and sustainable, market conditions in order to proceed with construction,” Letwin said in the statement.

Building activities were slated to start in the first months of 2019, with pre-production beginning in late 2020, with an expected average annual output of 367,000 ounces of gold over its 16-year life.

An extended mine plan adds two years to the base case mine plan, increasing production to 372,000 ounces of gold a year.

The Toronto-based miner will continue to advance engineering and permitting work at Côté, a joint-venture with Japan’s Sumitomo Metal Mining.

It also said it would provide further details when reporting fourth quarter and full year 2018 financial results, which will be released after market hours on February 20.

Shares in IAMGOLD jumped 6.8% in pre-market trading in New York to $3.30, 21 cents more than their closing price on Friday.