Under the terms of the amended agreement, Sumitomo will pay a share of IAMGOLD’s funding for the development of the Côté gold project, starting in January 2023

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IAMGOLD to advance Côté gold project. (Credit: Dominik Vanyi on Unsplash)

IAMGOLD has agreed to amend its Joint Venture agreement (JVA) with Sumitomo Metal Mining and SMM Gold Cote to procure additional financing for the Côté gold project.

Under the terms of the amended agreement, Sumitomo will pay a share of IAMGOLD’s funding for the development of the Côté gold project, starting in January 2023.

Sumitomo is expected to contribute around $340m over the course of 2023.

In exchange, IAMGOLD will transfer around a 10% stake in Côté to SMM, subject to its right to repurchase the transferred interests as per the agreement.

It will pay a repurchase option fee to SMM and shall have the right to exercise the repurchase option between 2023 and 2026 to return to its full 70% interest in the project.

The company can exercise its option by paying aggregate amounts advanced by Sumitomo in respect of the transferred interests.

The Canadian gold mining company will continue as the operator of the Côté Gold Project.

IAMGOLD chair, interim president, and CEO Maryse Bélanger said: “On behalf of the Board and IAMGOLD, I want to thank Sumitomo for their continued support and dedication as together we continue to build what will be Canada’s third largest gold mine by production.

“The Côté Gold project remains on track for gold production in early 2024, in line with the updated schedule and cost to complete as outlined on our most recent project update at the end of last quarter.

“It is Sumitomo’s and IAMGOLD’s intent for IAMGOLD to return to a 70% interest in the project, and the flexibility of the terms of the Agreement reflects that alignment.”

The Côté Gold Project is located in the Chester and Yeo Townships in the District of Sudbury, northeastern Ontario, Canada.

It lies around 25km southwest of Gogama, 125km southwest of Timmins, and 175km northwest of Sudbury, accessible through Highway 144.

The project is being constructed on the traditional lands of Mattagami First Nation and Flying Post First Nation, within the traditional harvesting area of the Métis Nation of Ontario.

Sumitomo said that the Côté gold project has the potential to become a world-class, low-cost, long-life gold mine, and is crucial for its growth strategy.

The transaction will further strengthen the relationship between IAMGOLD and Sumitomo Metal Mining, to ensure the construction of the project without any delay.

Goodmans served as legal advisor for IAMGOLD, while McCarthy Tétrault was the legal advisor and RCI Capital Group was the sole financial advisor to Sumitomo, on the transaction.