IAMGOLD and the Tokyo-based mining company have agreed that Sumitomo will pay an aggregate C$195 million to IAMGOLD for a 30% undivided participating interest in IAMGOLD’s ownership interest in the Côté gold project in Ontario, Canada.
Under the terms of the investment agreement, on closing, Sumitomo will acquire a 30% undivided participating joint venture interest in IAMGOLD’s ownership interest in the Côté gold project for an aggregate $195 million, of which $100 million is payable upon closing.
IAMGOLD will be the operator of the Côté gold project during development and once in operation.
Each party will be responsible for funding its proportionate share of expenditures, including initial and sustaining capital expenditures for the Côté gold project.
“This transaction is significant for us as it validates the intrinsic value of the Côté gold project,” says IAMGOLD president and CEO, Steve Letwin.
“It will enable us to move the project into development and to significantly diversify our production profile as a result of future production from our Canadian operations,” he adds.
“After extensive due diligence by both parties, what solidified the relationship was the mutual trust and respect and the alignment around strategic priorities.
“In addition to providing us with the financial capacity to develop the Côté gold project, we are gaining a partner with business development and technical expertise who we can work with in the future to explore new possibilities,” continues Letwin.
The company began discussions concerning a potential strategic partnership with Sumitomo in August 2016. Since then, there has been extensive interaction between the two companies, with multiple site visits to Côté Gold involving Sumitomo’s senior management and technical teams.
During the due diligence period, the company visited the Hishikari Gold Mine in Isa, Kagoshima, and Letwin and Don Charter, chairman of IAMGOLD, spent time with Sumitomo’s president, Yoshiaki Nakazato, in Tokyo.
Sumitomo’s in-depth expertise in building and operating mines will complement the company’s proven track record as a successful mine builder and operator.
Additionally, it will benefit from Sumitomo’s access to Japanese suppliers to the mining industry, which will complement, where needed, existing supplier networks within Ontario.
Both companies have strong business development capabilities and reach and a common interest in seeking opportunities beyond Côté Gold, which will support the company’s objective to grow its production pipeline.