Cote Lake project
The Cote Lake project is located in northern Ontario, Canada. IAMGOLD mentioned during its earnings call that since acquiring this project in 2012, the estimated indicated resources has grown from less than 1 million ounces to more than 8 million ounces.
The company has been working to move resources into measured and indicated (or M&I) category for the last three years. At the end of 2015, M&I resources were estimated at 8.4 million ounces and inferred resources at 1.2 million ounces.
Balancing geographical profile
IAMGOLD mentioned that in 2Q15, it received a positive decision from the federal government on the environmental assessment work. This should pave the way for the company to obtain the necessary permits.
The company is exploring options around project construction and operations to increase its flexibility with respect to future development decisions. This could be one of the core assets for the company going forward as it intends to grow in the Americas to balance its geographical profile.
Interest in Cote Lake development
IAMGOLD noted that it is getting a lot of interest from other gold companies to partner on this project. Without jeopardizing its balance sheet, the company could move forward with the project if the gold price environment remains benign.
Along with Sadiola expansion, the Cote Gold project could help IAMGOLD to replace its depleting production in the medium- to long-term, as well as reduce its operating costs at the same time.
IAG’s peers, including Eldorado Gold (EGO) and New Gold (NGD), are also trying to extend the lives of their assets. Investors can get exposure to gold by investing in the iShares Gold Trust ETF (IAU) and the SPDR Gold Shares ETF (GLD), both of which track gold prices.