Fri | Sep 29, 2023

Canadian firm Iamgold sells mining interests in Suriname

Published:Wednesday | October 19, 2022 | 12:06 AM

IAMGOLD Corporation of Canada announced on Tuesday that it has entered into a definitive agreement to sell its 95 per cent stake in the Rosebel mines in Suriname to Zijin Mining Group Company Limited of China.

In a statement, IAMGOLD, which also operates mines in Burkina Faso and Canada, said sale is for a cash consideration of US$360 million and includes the release of IAMGOLD’s equipment lease liabilities in Rosebel Gold Mines NV amounting to approximately US$41 million.

Rosebel Gold Mines NV holds 100 per cent interest in the Rosebel gold mine and a 70 per cent participating interest in the Saramacca mine, both located in Suriname. The remaining five per cent interest in Rosebel will continue to be held by the government of Suriname.

“Under the terms of the agreement, IAMGOLD will receive cash consideration of US$360 million for its 95 per cent interest in Rosebel, subject to certain working capital adjustments on closing. In addition, IAMGOLD’s obligations for certain equipment leases of Rosebel amounting to approximately US$41 million will be released on closing. The existing royalty on Rosebel held by Euro Ressources SA will remain an obligation of IAMGOLD,” the company said in a statement.

“This transaction represents a significant step forward in pursuing IAMGOLD’s strategy of disciplined portfolio management as we look to create value for shareholders through a focus on core assets,” said Maryse Bélanger, interim president and CEO and chairman of the board.

IAMGOLD intends to utilise the proceeds from the Rosebel sale to invest in the ongoing construction of its flagship Côté Gold project, which the company described as “a strong positive step towards addressing our funding commitments to deliver the Côté Gold project on the updated schedule for production in early 2024”.

Bélanger said IAMGOLD would work closely with Zijin to ensure a smooth transition.

The company said the transaction had the support of its syndicate of lenders, saying they have consented to the release of their security over Rosebel upon completion of the deal and the diversion of the full net sale proceeds towards the construction of the Côté Gold project.

The transaction is expected to close in the first quarter of 2023, subject to regulatory approvals, including relevant authorities in the People’s Republic of China and transfer of licences from the government of Suriname.