IAMGOLD Corp. updated its shareholders on Nov. 16 with some results of the 2017 exploration program the miner is undertaking at Saramacca.
The Saramacca project is located in Suriname, 25 kilometres from the Rosebel Mine, one of Iamgold Corp.’s producing assets.
The company has already issued the results of the first part of the 2017 exploration program and these have culminated with the upgrade of Rosebel gold reserves. You can read one of my previous articles on Iamgold about the increase in reserves at Rosebel mine.
The exploration results that are highlighted below belong to a successive phase of the 2017 program that is called Phase II, which consists of drillings for 22,000 meters
To date the company has reported the results of 37 drill holes that the exploration team did at Saramacca for a total of 9.553 km of ground drilled.
These are the most important results:
“Infill Drill Holes:
SMDD17-181A: 39.0 metres grading 3.47 g/t Au
SMDD17-185: 57.0 metres grading 2.56 g/t Au
Expansion Drill Holes:
SMDD17-182: 6.0 metres grading 67.39 g/t Au (15.33 g/t Au capped)
SMDD17-196: 28.5 metres grading 3.85 g/t Au
SMDD17-202: 39.0 metres grading 3.06 g/t Au
SMDD17-213: 34.5 metres grading 4.50 g/t Au”
Source: Iamgold Corp’s new release
The most notable part of the results are structured in two groups of infill drill and expansion drill holes. This is because the 2017 exploration program Iamgold Corp. is undertaking at Saramacca – as any other exploration program – is divided into an infill drilling program and a step-out or exploration drilling program. With the step-out drillings, the miner defines the extension of the mineralized area while with the infill drillings, the company is looking for a confirmation of the mineralization’s presence between the expansion drill holes.
Let’s take one of these drilling results: the result that came from the infill drill hole number SMDD17-181A. With this hole Iamgold Corp.’s exploration team intersected a 39 metres wide part of the ore body at a depth of 261 metres from the crust. This interval is characterized by an average gold grade of 3.47 grams per ton of mineral. Drill hole number SMDD17-181A is one of the best the exploration team got from infill drillings together with hole number SMDD17-185 in terms of width of the interval intersected, depth and average grade. The latter metric measures the concentration of the precious metal in the mineralized rock.
Step-out drill holes also tell that Iamgold Corp. is extending the area to test for mineralization.
Why are these results important to investors of Iamgold?
Through the development of the Surinamese asset, Iamgold is clearly pursuing a strategy on value accretion for its shareholders with a contained increase in costs, because the company doesn’t need to build infrastructure. Iamgold will use the infrastructure of Rosebell, since Saramacca is practically adjacent to the Rosebell mine.
In addition, keep an eye on this gold stock that is also engaged in other mineral projects besides Saramacca. These results, once announced at the end of either an exploration program or just a phase of it, will for sure have a positive impact on the market value of Iamgold Corp as well.
Forthcoming exploration results will be supportive to Iamgold Corp.’s market value that as of today is $5.62 per share, with a market capitalization of $2.61 billion, a price-book (P/B) ratio of 0.97 and an EV to Ebitda of 2.54.
Year to date Iamgold Corp. already gained 45% and is currently trading below the 50-simple moving average line. The 52-week range is $3.16 to $7.25.
Disclosure: I have no positions in Iamgold Corp.
