IAMGOLD secures $400M loan as it completes Côté Gold

IAMGOLD reported strong progress this week in its Côté Gold project, with 92 per cent of construction completed and the overall project 90.6 per cent complete. (File)

IAMGOLD has secured a five-year, $400 million loan from three lenders as it completes the construction, commissioning and ramp up of the Côté Gold project.

Located about an hour south of Timmins, construction of Côté Gold began in 2020 and was expected to take three years and cost the company around $900 million.

However, rising costs and other challenges pushed back the opening to early 2024. IAMGOLD's share of the remaining costs to complete the project soared from $750 million to an estimated $1.3 billion.

That meant the company needed to raise about $1.1 billion to complete the work.

In December, IAMGOLD announced an agreement with Sumitomo Metal Mining worth $340 million, giving the Japanese company a 10 per cent stake in Côté.

Also in December, IAMGOLD announced it was selling its Boto Gold project, located in western Africa, for $282 million.

That ensured IAMGOLD had the money it needed to complete the project, but left little room to manoeuvre should unforeseen events take place.

Renaud Adams, president and CEO of IAMGOLD, said in a news release that since raising the funds needed to complete Côté, “the company has continued to work on improving its balance sheet and liquidity.

“The announcement today is an important step for the company in its objectives of putting in place a more appropriate capital structure and position itself for an ultimate return to the 70 per cent ownership interest in Côté Gold in the future,” Adams said.

“Côté Gold remains on track for production in early 2024 and is a key pillar in our strategy to position IAMGOLD as a leading high-margin gold producer.”

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The construction budget and schedule of Côté Gold remains on track, with the project approximately 80 per cent complete as of the end of March 2023.

The lifespan of the mine is expected to be 16-18 years and produce 495,000 ounces of gold a year in its first six years.

Average production over the full 18 years is estimated at 365,000 ounces a year.