01:19 PM EDT, 07/21/2020 (MT Newswires) -- IAMGOLD Corporation (IMG.TO), Tuesday, announced the decision to proceed with the construction of the Cote Gold Project, together with its joint venture partner Sumitomo Metal Mining Co. The construction is expected to start in Q3 2020 and will gather pace by the fourth quarter of 2020.

Management estimates suggest that at a gold price of US$1,700, Cote's expected NPV (on a 100% basis) is pegged to be over US$2 billion with a 22.4% IRR. Further estimates anticipate that over 1,000 jobs could be generated during the construction phase, 450 operational jobs with an estimated $5 billion in wages, and $10 billion in GDP throughout its lifespan.

Reports hint that the Cote property has exploration potential and could contain gold reserves of over 7 million ounces. Through this project, the management hopes to leverage on a low overall operating cost per ounce of gold, increase the total output levels, and the number of mines.

IMAGOLD's anticipated go-forward capital obligation excluding sunk costs is between US$875 million to US$925 million for a 70% share of which US$77 million is expected in 2020 alone. The funding will be financed by the company's cash flows as it holds cash reserves of US$800 with an additional undrawn credit facility of US$500 million.

The earthwork & mining contracts are estimated to kick off in the second quarter of 2021. The commercial production could begin sometime in the second half of 2023.

Price: 6.52, Change: +0.30, Percent Change: +4.82