Soaring costs push back IAMGOLD project completion date to 2024
Surging global inflation is among the factors causing major problems for IAMGOLD's plans to develop a massive gold find about an hour south of Timmins.
The company is building the large-scale Côté Gold project on the property, which it acquired in 2012.
Construction began in 2020 and was expected to take three years and cost the company around $900 million. 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, starting in the fourth quarter of 2023.
However, rising costs and other challenges recently pushed back the opening to early 2024. IAMGOLD's share of the remaining costs to complete the project have soared from $750 million to an estimated $1.3 billion.
Further adding to the challenges is turnover of company executives. Chief financial officer Daniella Dimitrov left her position at the company Sept. 16, and is being replaced by the company's current vice-president of finance, Maarten Theunissen.
Dimitrov was named interim CEO when Gordon Stothart stepped down from the post in January. However, a major investor in the company, Resource Capital Fund VII, issued an open letter in February criticizing how the company was being run and calling for major changes to its board of directors.
"We have lost all faith in the current board during the past two weeks of our engagement," the letter said.
"Our attempts to reach a cooperative framework have been met with a pattern of disingenuous interactions. We no longer trust the current board to make any material decisions on IAMGOLD's future leadership that reflect the best interests of its shareholders."
The letter was also critical of the appointment of Dimitrov as interim CEO.
"The board does not have the credibility to attract and retain an appropriate turnaround CEO, nor to manage a strategic review and any consequential asset sales," the letter said.
"The most recent (interim) CEO appointment of Ms. Dimitrov is case in point and follows a predecessor that was another internal appointment who lasted less than two years with scant achievement."
IAMGOLD agreed to appoint three new members to the board -- Maryse Bélanger, David Smith and Ian Ashby – with Bélanger replacing Dimitrov as interim CEO in May.
Bélanger announced Dimitrov's departure Sept. 16 and announced Theunissen as the interim replacement.
"We would like to thank Daniella for her commitment and dedication to IAMGOLD and wish her the very best in the future," Bélanger said in the announcement.
"Maarten is an extremely capable and experienced finance professional and I am looking forward to working directly with him as we continue to advance the financing plan for Côté."
Last month, Bélanger said the revised cost estimates gave the company a much clearer picture on what is required to complete the project.
“Coté Gold is a project that is being advanced in an environment with significant headwinds, including COVID-19, inflation and other global events – and their impacts on global supply chains, labour availability and the associated costs of doing business,” she said in a statement.
"Given the importance of Coté Gold to achieve our goal of becoming a leading high-margin gold producer, we are actively pursuing various alternatives to increase liquidity to complete construction and deliver Coté on the updated schedule."
CTVNews.ca Top Stories
Quebec nurse had to clean up after husband's death in Montreal hospital
On a night she should have been mourning, a nurse from Quebec's Laurentians region says she was forced to clean up her husband after he died at a hospital in Montreal.
Cuban government apologizes to Montreal-area family after delivering wrong body
Cuba's foreign affairs minister has apologized to a Montreal-area family after they were sent the wrong body following the death of a loved one.
What is changing about Canada's capital gains tax and how does it impact me?
The federal government's proposed change to capital gains taxation is expected to increase taxes on investments and mainly affect wealthy Canadians and businesses. Here's what you need to know about the move.
'Anything to win': Trudeau says as Poilievre defends meeting protesters
Prime Minister Justin Trudeau is accusing Conservative Leader Pierre Poilievre of welcoming 'the support of conspiracy theorists and extremists,' after the Conservative leader was photographed meeting with protesters, which his office has defended.
Northern Ont. lawyer who abandoned clients in child protection cases disbarred
A North Bay, Ont., lawyer who abandoned 15 clients – many of them child protection cases – has lost his licence to practise law.
'One of the single most terrifying things ever': Ontario couple among passengers on sinking tour boat in Dominican Republic
A Toronto couple are speaking out about their 'extremely dangerous' experience on board a sinking tour boat in the Dominican Republic last week.
Boeing's financial woes continue, while families of crash victims urge U.S. to prosecute the company
Boeing said Wednesday that it lost US$355 million on falling revenue in the first quarter, another sign of the crisis gripping the aircraft manufacturer as it faces increasing scrutiny over the safety of its planes and accusations of shoddy work from a growing number of whistleblowers.
Bank of Canada officials split on when to start cutting interest rates
Members of the Bank of Canada's governing council were split on how long the central bank should wait before it starts cutting interest rates when they met earlier this month.
Fair in Ontario, flurries in Labrador: Weather systems make for an erratic spring
It's no secret that spring can be a tumultuous time for Canadian weather, and as an unseasonably mild El Nino winter gives way to summer, there's bound to be a few swings in temperature that seem out of the ordinary. From Ontario to the Atlantic, though, this week is about to feel a little erratic.