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Suriname, Iamgold reach agreement on mine expansion

Published:Friday | November 30, 2012 | 12:00 AM

The Suriname govern-ment says it has reached an agreement with Canadian company, Iamgold, to further expand the profitable Rosebel gold mine.

Iamgold owns a 90 per cent stake in the mine that produced 385,000 ounces of gold in 2011.

The new deal amends the existing mineral agreement and addresses future resource development and related power costs at the mine.

The two parties said they would keep the details of the accord confidential until the new agreement has been approved by the National Assembly.

"This is a mutually beneficial agreement that underscores the collaborative nature of our partnership with the Government of Suriname," said president and chief executive officer of Iamgold, Steve Letwin.

"We and the government have had ongoing discussions for over a year to achieve this landmark agreement, and through that process have significantly increased our understanding of each other's objectives and solidified a relationship from which we can build a prosperous future for both parties".

Suriname President Desi Bouterse said a deal had also been agreed with Newmont Mining Corp, which is part of a gold-mining joint venture with the local Suriname Aluminum Company, Suralco. He did not elaborate.

Iamgold initially invested in Rosebel in 2006 and is one of two companies that work government-issued mining concessions. The company also has mines in Canada, South America and Africa.

The Rosebel mine, one of the company's biggest, is located at some 80 kilometres south of the capital, Paramaribo.

Iamgold has previously floated plans for a seven-year expansion plan at Rosebel estimated at US$185 million.

The gold mining industry in Suriname has taken flight in recent years, producing more than US$1 billion in gold annually. Much of Suriname's current foreign currency reserves of US$950 million was earned from the gold sector.