IAMGOLD To Sell Additional Assets For US$282 Million As It Works To Fund Cote Gold Project

IAMGOLD (TSX: IMG) continues to shed assets as it works to fund the development of its Cote Gold Project. The firm has revealed that it has entered into definitive agreements to sell exploration and development projects in Senegal, Mali and Guinea to that of Managem, collectively referred to as the Bambouk Assets.

Interim CEO Maryse Belanger indicated that the divesture is the “culmination of a comprehensive strategic review and sale process.”

The asset sale will see the firm receive US$282 million in cash on a combined basis for the sale of its Boto Gold project in Senegal, which it holds a 90% interest in, as well as its Diakha-Siribaya Gold project in Mali, and the Karita Gold project and related exploration properties in Guinea. Additionally, the early-stage properties of Boto West, Senala West, Daorala, and the Senala option earn-in joint venture found in Senegal are included in the sale to Managem.

The consideration reportedly includes a $30 million deferred payment to be made six months after the closing of the Boto Gold project, or at a time mutually agreed to by both parties.

READ: IAMGOLD Sees Executives Continue To Depart Company

The development follows the revelation last night that IAMGOLD has met an arrangement with Sumitomo Metal Mining Co, via SMM Gold Cote Inc, that will see the latter provide US$340 million in additional funding for the construction of the Cote Gold project. In exchange, SMM will see its stake in the project increase by as much as 10% as payments are made, which IMG will have an option to repurchase between November 2023 and November 2026.

The repurchase option amounts to IMG repaying the additional amounts advanced, plus certain adjustments related to production. An option fee equal to 3 month SOFR plus 4.00% on the amounts advanced during construction is also applicable, which is to be paid in cash quarterly beginning January 1, 2024.

That arrangement brings IAMGOLD’s stake in the project to as low as 60%, with the option to return to 70% ownership, which the company has indicated it intends to do when possible.

READ: BMO Cuts IAMGOLD’s Price Target On Rosebel Mine Divesture

“The proceeds of the sales, coupled with the financing agreement with Sumitomo announced last night, meet the remaining funding requirements for completion of construction at the Côté Gold Project, which is approximately 70% complete and on track for production in early 2024,” continued Belanger.

The sale of the Bambouk Assets remains subject to regulatory approvals, with the transactions expected to close early in Q3 2023.

IAMGOLD last traded at $2.50 on the TSX.

Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply