GOLD STUDY: Quimsacocha a step closer to production

ECUADOR — The pre-feasibility study prepared for the Quimsacocha gold project 480 km south of Quito is positive, says owner IAMGOLD of Toronto. The company estimates capital expenditures to bring the underground mine and 3,000-t/d mill into production at $337 million including a $45 million for contingency.

The study shows that during the first three years of production, Quimsacocha will produce on average 224,000 oz of gold per year at an average grade of 7.1 g/t Au and with cash costs averaging US$214/oz before royalties and profit sharing. The operation would generate, over the first three years, a pre-tax cash flow of $352 million. Over a projected mine life of 7.5 years, the current deposit would produce an average of 202,000 oz of gold per year at an average cash cost of US$272/oz (no royalties or profit sharing included), generating a pre-tax operating cash flow of $669 million. The study shows an internal rate of return, using undiscounted cash flow, of 21.3% (pre-tax and government royalties) and has an estimated payback within 35 months.

IamGold says the Quimsacocha property has a reserve of 8.1 million tonnes grading 6.5 g/t Au or 1.7 million contained ounces of gold. There is also a diluted mineral resource (equivalent to indicated) of 10.0 million tonnes grading 6.8 g/t Au or 2.08 million oz of gold. Calculations for both estimates were made using a cutoff of 3.0 g/t Au.

The company's homepage is at www.IamGold.com