Mining operations at Yatela will end Sept 30, 2013 (Company)

Mining operations at Yatela will end Sept 30, 2013 (Company)

IAMGOLD (IMG:TSX) has, with its JV partners AngloGold Ashanti (40%) and the government of Mali  (20%), decided to suspend mining at the Yatela mine in Mali effective September 30, 2013.  The company noted that they will begin dismantling the mine at the end of September, however, processing of leach pads and ore already mined will continue into 2016.  The mine first poured gold in 2001 and was slated for a six-year mine life, but they were able to find more economic ore given the increase in the gold price and expanded the mine life past 2007.

IAMGOLD President and CEO, Steve Letwin (BNN)

IAMGOLD President and CEO, Steve Letwin (BNN)

"The recent past has been challenging for everyone in Mali, but we are pleased to see that peace and order have returned and a democratic government restored," added President and CEO of Iamgold, Steve Letwin. "We thank the Malian government for their openness and support during the process of getting our joint operations in order. While circumstances have led to this decision to wind down the mining operations at Yatela, we are hopeful that a longer-term future can be forged with our partners at the nearby Sadiola mine. We are appreciative of the government's efforts to provide support for the transformation of Sadiola to process sulphide ore and help us find solutions to keep us engaged in mining within Mali."

Here’s the release: IAMGOLD and its Partners in the Yatela Mine in Mali to Suspend Mining Excavation Activities

This decision does not come as much of a surprise given the recent weakness in the gold price and the fact that their Q2/2013 operating cost per ounce came in at $1,388.  What is catching some investor’s off-guard is the fact that the company will be removed from the S&P/TSX 60 Index which will mean many millions of shares hitting the market from index funds.  This will occur on September 21, 2013 so watch for weakness on volume (here’s that release).  The company is reducing operating costs and focusing on high-margin projects and operations.

Here’s IMG’s 10-year chart (trading near 2008 lows):

IAMGOLD (IMG:TSX)

IAMGOLD (IMG:TSX) (Stockwatch)