IAMGOLD’s (IAG) Rosebel mine is located in northeastern Suriname, South America. This mine started commercial production in 2004.
Rosebel’s production for 1Q16 was 68,000 ounces, an 11% fall year-over-year (or YoY). The fall was primarily due to lower grades, which resulted due to pit sequencing and lower throughput. The proportion of hard rock milled during 1Q16 was higher than during 1Q15, which led to lower throughput.
Cash costs fell
Despite lower production, Rosebel’s cash costs fell by 9.6% YoY to $768 per ounce in 1Q16. This fall was mainly attributable to lower fuel prices, the devaluation of the Surinamese dollar against the US dollar (UUP) (USDU), and lower labor costs following the reduction of the labor force in 2015.
While IAMGOLD benefited due to currency movements in 1Q16, the gains from this front going forward are expected to be muted as inflationary pressures build up in the import-driven economy of Suriname.
IAG’s all-in sustaining costs (or AISC) also fell in line with a reduction in cash costs. Rosebel reported AISC of $955 per ounce in 1Q16 compared to $1,037 per ounce in 1Q15. Lower operating costs and lower sustaining costs resulted in this YoY cost improvement
The proportion of harder rock at the Rosebel mine is generally increasing, which is leading to lower throughput. To address this concern, Rosebel is enhancing the performance of its grinding circuit, which includes the commissioning of a new flex drive that helps to increase the grinding capacity of hard rock. In addition, the operation is also focused on securing soft rock from in and around its operations.
The company is also shifting its focus toward more technology-based processes such as high-precision detonation in its drill and blast operations and high-precision GPS (global positioning system) loading unit control. These will help the company to control costs.