Organic growth opportunities
Iamgold (IAG) has multiple organic growth opportunities, and it’s pursuing expansion opportunities at existing deposits. The company expects initial resource estimates from some of these projects.
The chart below presents the timeline for IAG’s expected completion of various stages of its growth and expansion projects. Through these organic growth initiatives, the company expects to improve its annual production to 1.2 million–1.3 million ounces of gold by 2022 at all-in sustaining costs of ~$850 per ounce.
Saramacca: Reserve declaration expected in 2018
Of the key short-term catalysts, the preliminary reserve declaration from Saramacca is expected by the third quarter. On September 5, 2017, Iamgold announced a significant gold discovery at its Saramacca mine in Suriname.
The production is expected to start in the second half of 2019, and annual attributable production is estimated to be 70,000–90,000 ounces per year over 10–12 years.
Along with the Saramacca reserve declaration, the Boto feasibility study is expected in the third quarter. The construction decision on the project is expected next year.
There are many other growth opportunities available to Iamgold. Here are the keys to these opportunities:
- The Essakane oxygen plant commissioning is expected in the fourth quarter, which will help improve recovery at the mine.
- An initial resource is expected from the Gossey satellite prospect at Essakane in the fourth quarter.
- Another big catalyst will come in the form of the feasibility study of the heap leach project at Essakane in Q1 2019, with production expected to begin in 2020.
- The full ramp-up of the Westwood mine is expected by 2020, which would be a major catalyst.
IAG’s peers (JNUG) (GDX) have also increased their exploration efforts after years of underinvesting. Coeur Mining (CDE), Pan American Silver (PAAS), Hecla Mining (HL), and First Majestic Silver (AG) are among the players that have substantially stepped up their exploration efforts.
In the next and final part of this series, we’ll look at IAG’s valuations.