IAMGOLD’s (IAG) Rosebel mine is located in northeastern Suriname, South America. This mine started commercial production in 2004.
Rosebel’s attributable production for 3Q16 was 72,000 ounces, a 2.8% rise year-over-year (or YoY). This was, however, mostly flat quarter-over-quarter. The small incremental rise was due to higher grades and higher throughput.
IAG’s chief operating officer, Gordon Stothart, mentioned during the company’s 3Q16 earnings call that despite the proportion of soft rock falling from 40% to 20% in Rosebel, throughput rose slightly during the quarter. He also mentioned that the mine’s proportion of hard rock is expected to be higher in 4Q16 compared to 3Q16.
IAMGOLD is on track to install a secondary crusher in 4Q16, with further optimization expected in 2017. This will help the Rosebel site to keep its production rate steady as the proportion of hard rock rises.
Cash costs fell
Rosebel’s cash costs fell 16% YoY to $728 per ounce in 3Q16. This fall was mainly due to lower fuel prices, the devaluation of the Surinamese dollar against the US dollar (UUP) (USDU), lower labor costs following the reduction of the labor force in 2015, and higher capitalized stripping.
IAG’s all-in sustaining costs (or AISC), on the other hand, rose $72 per ounce to $1,182 per ounce in 3Q16 due to higher sustaining expenditure. Going forward, the installation of a secondary crusher should help the company to lower costs. The operation is also focused on securing soft rock from in and around Rosebel’s operations.
During 3Q16, IAG acquired the Saramacca property near Rosebel. IAG’s CEO, Stephen Letwin, said during the company’s 3Q16 earnings call that this property could become a significant source of soft rock for Rosebel, helping it to increase production and lower costs going forward.
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 measures should help the company to control costs.