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IAMGOLD takes out loan to complete Gogama pit project

Financiers provide US$400 million to push Côté project toward finish line
Autonomous haul track at IAMGOLD's Côté Gold Project near Gogama (Company photo)

IAMGOLD said it’s now fully cashed up to complete and commence operations at its Côté Gold Project near Gogama in northeastern Ontario. 

The Toronto mid-tier mining company announced May 16 that it has entered into a five-year term loan for US$400 million from three institutional lenders. 

The loan, the company said in a news release, is part of its ongoing initiatives to boost the balance sheet during the construction, commissioning and ramp-up of Côté. 

Oaktree Capital Management is the lead lender with participation by Värde Partners and CI Global Asset Management.

IAMGOLD is building an open-pit gold mine halfway between Sudbury and Timmins, that, when operating in early 2024, will be Canada’s third largest gold mine and the company’s flagship operation.

The life of mine is pegged at 18 years but the company said there's more gold in the ground and believes this is can be longer lasting district-scale operation.

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Company executives said last week that the construction budget and the project schedule remains “on track” as the project sits at 80 per cent completion as of the end of March.

IAMGOLD’s joint venture partner in this endeavour is Sumitomo Metal Mining Company. Last December, facing a cash issue, Sumitomo loaned IAMGOLD US$340-million ($463.5 million) to move the pit and mill project toward the finish line. In exchange, Sumitomo increased its stake in Côté from 30 per cent to 40 per cent. 

IAMGOLD wants to buy back that 10 per cent and regain its 70 per cent interest in the project.

In a statement, company president-CEO Renaud Adams called the loan an important step to put a “more appropriate capital structure” toward regaining its 70 per cent stake in Côté Gold. Their cash-raising efforts also involved selling a mine in Suriname.

Adams said with those transactions out of the way, the company has enough funding to finish and ramp up Côté and improve the balance sheet and its liquidity.