From Earlier: IAMGOLD Releases Update on Its Capital Development Projects

IAMGOLD Corporation

today provided an update on its pipeline of growth and development projects. The Westwood project in the Abitibi region of Quebec remains on track for an early 2013 commercial start. The 2013 start-up date has been maintained as the target since early 2008 when an accelerated exploration and development program was launched at Westwood. Project expenditures in 2011 totaled $124.3 million ($94.9 million spent in 2010) for significant infrastructure preparation and construction, including the completion of the fire detection system, the new pump house, the waste silo, and commencement of ground support in the six-metre diameter ventilation shaft. Shaft sinking reached a depth of 1,455 metres, with the installation of a spill pocket and the safety bulkhead under the 104-0 level. Underground development work in 2011 totaled 9,315 metres of lateral and vertical. Over 75,000 metres of diamond drilling, at a cost of $9.6 million, were completed during 2011 as part of the underground drill program. The program was designed to identify additional inferred resources and upgrade existing mineral resources to measured and indicated categories in tandem with the on-going underground development and construction. Four underground drills, working on the exploration drilling program below the 132 level, drilled over 28,600 metres during 2011. In addition, five drills focused on in-fill and delineation work, drilling nearly 46,600 metres during the year. The Company has acquired additional confidence in the inferred resources and the remaining exploration potential. From 2007 to 2011, inferred resources have grown marginally from 3.3 million ounces (at a 3.0 g/t / 3.0 metre minimum width cutoff) to 3.4 million ounces (at a 6.0 g/t / 2.0 metre minimum width cutoff). Over the same time period (and assuming the same cutoff parameters) indicated resources have grown from 56,000 ounces to 308,000 ounces. Despite the limited increase in inferred resources, there has been a significant increase in the confidence level in these resources and a significant reduction in the average drill hole spacing. In 2007, the resource estimate was based on only 21 kilometres of drilling, whereas the 2011 estimate is based on nearly 300 kilometres of drilling. The Company`s understanding of the ore body has evolved from a simpler original model with a few large continuous ore panels, to numerous stacked and smaller mineralized lenses. At the same time, there has been a decrease in the volume of shallow resources in the model, replaced by deeper ore zones. On the plus side, new lenses are being discovered within gaps in the resource model as step-out drilling proceeds, improving the overall continuity of the deposit. The Westwood deposit remains open both laterally and at depth. The amount of indicated resources (currently slightly over 300,000 ounces) at Westwood is insufficient to characterize ongoing technical studies as being at the feasibility level, or even the pre-feasibility level, despite the advanced engineering incorporated into the studies. Given the character of the Westwood deposit with its narrow, high-grade, deep zones, it is not likely that the mine will be able to carry significant amounts of indicated resources on an on-going basis, but rather will typically operate with two to four years of production in indicated resources in the mine plan and the remainder in the inferred category. The latest comprehensive mine plan for Westwood includes a change in mining method from the planned long-hole open stoping to primarily cut-and-fill mining. Open stoping will still be used initially to mine the small satellite Warrenmac zone. As cut-and-fill is a more labour intensive technique, the mining cost per tonne is estimated at $140 to $150 per tonne which is $30 to $40 per tonne more than open stoping on a comparative cost basis. Cut-and-fill mining also requires additional development compared to open stoping, also affecting total costs.