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Independent technical report confirms IAMGOLD’s niobium mine potential with a 691% increase in M&I resources and a net asset value up to $2 billion

IAMGOLD Corporation  (TSX:IMG)(NYSE:IAG) today announced the results of an independently prepared NI 43-101 compliant preliminary economic assessment (“PEA”) on the company’s wholly-owned Niobec niobium mine in the province of Quebec, Canada. The PEA shows a significant increase in the measured, indicated and inferred mineral resource estimates at Niobec with the potential for a significant production expansion. The PEA examined the impact of changing the existing underground mine to an alternative bulk mining method. IAMGOLD technical personnel then compared the economics of the open pit scenario and a block caving scenario. The work done on the PEA and the study will be advanced in a 2011 pre-feasibility study to confirm the potential upside of Niobec.

Highlights

  • A 691% increase in Measured and Indicated mineral resource to 1.93 billion kilograms of contained niobium pentoxide;
  • Potential threefold increase in the annual niobium production from current levels to 15 million kilograms per year, with the potential for further production increases;
  • A remaining mine life in excess of 40 years at the expanded production rate;
  • Based on higher metal prices and lower operating costs, the operating margin is estimated to increase from $18 per kilogram to $28 per kilogram of niobium, an increase of over 50%;
  • After-tax net asset value (“NAV”) in the range of $1.6 to $2.0 billion;
  • Initiation of exploration and metallurgical testwork to evaluate the potential of an underexplored Rare Earth Element (“REE”) zone; and
  • Significantly increases employment and economic benefits to the Saguenay region of Quebec.

“Niobec is a unique and highly attractive asset for IAMGOLD, as it is the only North American producer of niobium and one of only three producers globally. Early in 2011, we initiated a strategic plan to unlock the value of Niobec and our other assets for which the market was not attributing fair value,” said Steve Letwin, President and CEO of IAMGOLD.

“The results of this study demonstrate the value of Niobec and confirm our belief in its long-term potential. The niobium margins estimated in the study are consistent on a percentage basis with the realized margins from our gold business, making Niobec analogous to over 20 million ounces of gold equivalent resources.  Concurrent to the study we have been exploring opportunities to monetize the value of the asset. We have also identified several high-value rare earth elements that could further enhance the value of Niobec.”

To read the full press release click here