Toronto-headquartered mining company Iamgold has announced a decision to proceed with the construction of the $1.3bn Côté gold project in Ontario, Canada.

Located in northern Ontario approximately 20km southwest of Gogama, the project is a 70/30 joint venture of Iamgold and Sumitomo Metal Mining.

Construction is expected to begin on the project in the third quarter of 2020, with activities ramping up in the following quarter.

The preparatory work on the project is expected to include fish salvage, construction camp preparation and road access development.

For its 70% share of project construction costs, Iamgold’s expected go-forward capital obligation is $875 – $925m.

The company plans to finance the capital spend on the Côté gold project through cash flows from its operations and balance sheet.

Iamgold president and CEO Gordon Stothart said: “The Côté Gold Project is transformational to the future of IAMGOLD. At a gold price of $1,700, Côté’s expected NPV (on a 100% basis) is over $2 billion, with a 22.4% IRR.

“The Project is anticipated to generate over 1,000 jobs during construction, 450 jobs during operations, C$5 billion in wages and more than C$10 billion in GDP over its lifespan. Côté is a world-class deposit located in Canada, with estimated contained gold reserves of over 7 million ounces and exploration potential.

“Today’s construction decision for the Project positions the Company well for the future by reducing overall operating costs (per ounce of gold), increasing total production capacity, increasing the number of operating mines and creating greater balance in our geographic diversity.”

Cote Gold mine has a production life of approximately 17 years

In January last year, the company announced that it would not move ahead with the construction of the Cote gold project in Canada, taking into account the prevailing market conditions.

Discovered in 2010, the Cote Gold deposit had seen extensive diamond drilling works for its delineation.

The project is estimated to hold reserves totalling 7.3 million ounces of contained gold in proven and probable reserve categories.

The open pit mine is expected to be in production for nearly 17 years.

Stothart said: “While we focus on building Côté, we will continue to apply our de-risking approach to the Boto Gold Project in Senegal, commencing with meaningful investment in local infrastructure.

“We are very excited about building our growth pipeline and the future of the Company. We look forward to providing you with updates on our progress.”