Iamgold announced on July 21 that it would be resuming construction at its Côté joint venture with Sumitomo Metal Mining after previously halting construction over a year ago.

Work on the northern Ontario gold project was originally expected to begin in the first few months of 2019, with the mine entering pre-production in late 2020. However, an announcement from the company in January put construction on pause as former president and CEO Steve Letwin said at the time that the company would “wait for improved, and sustainable, market conditions to proceed with construction.” Then, the price of gold per ounce was around US$1,200.

A year and a half later, and those improved market conditions have arrived with the price of gold steadily increasing to a July 21 spot price of US$1,841. According to current Iamgold president and CEO Gordon Stothart, being able to complete the project would be extremely important to the company.

“The Côté gold project is transformational to the future of Iamgold…” he said. “Côté is a world-class deposit located in Canada, with estimated contained gold reserves of over seven million ounces and exploration potential. Today’s construction decision for the project positions the company well for the future by reducing overall operating costs, increasing total production capacity, increasing the number of operating mines and creating even greater balance in our geographic diversity.”

Related: Harte Gold will use financing from Appian Capital to restart its Ontario mine in July

According to Stothart, with a gold price of US$1,700, the project’s expected net present value, with a five per cent discount, would be over US$2 billion. Iamgold has a 70-per-cent stake in the project and Sumitomo the other 30 per cent. The mine would also generate over 1,000 jobs during construction and 450 jobs during operations.

According to Iamgold, the project contains Proven and Probable Reserves of 233 million tonnes grading at one per cent for 7.3 million ounces of gold.  

The mine is expected to produce 367,000 ounces per year over the course of an 18-year mine life, with average all-in sustaining costs of US$771 per ounce at a US$1,350 gold price and US$835 at a US$1,700 gold price.

Construction work on the project is scheduled to resume in the third quarter of 2020 and will last 32 months, with commercial production starting in the second half of 2023. On Iamgold’s end, the company expects to spend between $875 million and $925 million in initial capital costs for its share in the joint venture, to be funded by cash flows from the company’s operations and its balance sheet.