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
NEW Keeping these exotic pets is 'cruel' and 'dangerous,' Canadian animal advocates say
Canadian pet owners are finding companionship beyond dogs and cats. Tigers, alligators, scorpions and tarantulas are among some of the exotic pets they are keeping in private homes, which pose risks to public safety and animal welfare, advocates say.
NEW Life got in the way of one woman's reunion with her father, but a DNA test gained her a family
Anne Marie Cavner was the closest she'd ever been to meeting her biological father, but then life dealt her a blow. From an unexpected loss to a host of new relationships, a DNA test changed her life, and she doesn't regret a thing.
Doctors ask Liberal government to reconsider capital gains tax change
The Canadian Medical Association is asking the federal government to reconsider its proposed changes to capital gains taxation, arguing it will affect doctors' retirement savings.
How quietly promised law changes in the 2024 federal budget could impact your day-to-day life
The 2024 federal budget released last week includes numerous big spending promises that have garnered headlines. But, tucked into the 416-page document are also series of smaller items, such as promising to amend the law regarding infant formula and to force banks to label government rebates, that you may have missed.
Quebec farmers have been protesting since December. Is anyone listening?
Upset about high interest rates, growing paperwork and heavy regulatory burdens, protesting farmers have become a familiar sight across Quebec since December.
'Catch-and-kill' strategy to be a focus as testimony resumes in Trump hush money case
A veteran tabloid publisher was expected to return to the witness stand Tuesday in Donald Trump's historic hush money trial.
Quebec Health Department reports 28 cases of eye damage linked to solar eclipse
Quebec's Health Department says it has received 28 reports of eye damage related to the April 8 total solar eclipse that passed over southern parts of the province.
Psychologist becomes first person in Peru to die by euthanasia after fighting in court for years
A Peruvian psychologist who suffered from an incurable disease that weakened her muscles and had her confined to her bed for several years, died by euthanasia, her lawyer said Monday, becoming the first person in the country to obtain the right to die with medical assistance.
Diver pinned under water by an alligator figured he had choice. Lose his arm or lose his life
An alligator attacked a diver on April 15 as he surfaced from his dive, nearly out of air. His tank emptied with the gator's jaws crushing the arm he put up in defence.