Sitting on a goldmineLike many gold mining companies, IAMGOLD faces the constant challenge of ensuring continued growth as well as fulfilling its responsibilities towards the environment and local communities.
When put together, the words ÔÇÿgoldmineÔÇÖ and ÔÇÿAfricaÔÇÖ evoke images of swash-buckling adventures and the re-tracing of historic journeys; the story of IAMGOLD Corporation fits this model well.
The company started 20 years ago, when a geologist, a lawyer and a businessman set out for West Africa on a quest to discover the truth behind the story of Mansa Mousa, a 14th century king from Mali. Legend had it that after Mousa had travelled to MeccaÔÇöhanding out vast amounts of gold en-route to his pilgrimageÔÇöhe needed to borrow money to return home. This of course, gave credence to the belief that Mali may be gold-rich and was the starting point for our three intrepid explorersÔÇÖ journey to fame and fortune.
By 1991, it was a quest that had led to the discovery of gold at Sadiola and the creation (by Larry Phillips, Mark Nathanson and William Pugliese) of the multi-national, publicly traded International African Mining Gold CorporationÔÇöIAMGOLD. Today, IAMGOLD is a leading mid-tier gold mining company producing almost one million ounces annually from eight mines on three continents. With a rich pipeline of development and exploration projects, IAMGOLD employs roughly 4,000 workers and operates out of Senegal in West Africa; the Guiana Shield of South America; and Quebec.
The company, although headquartered in Toronto and listed on the Canadian Stock Exchange, still has a great focus on Africa; and while mining gold remains a priority, today it places its emphasis on building sustainable communities across the African continent and taking care of the environment.
IAMGOLD is naturally looking at expansion and opportunities all the time; but it also prioritises working closely with local communities, with the aim of helping to build better lives. Its activities bring leadership and money to towns; but it would be impossible for the company to achieve its goals without the help of local people.
Perhaps the best illustration of this emphasis on community spirit can be found in IAMGOLDÔÇÖs latest mining acquisition at Essakane in Burkina Faso. The site was acquired as part of the purchase of Orezone for $500 million in February of last year. Production should begin there by late August 2010; and it is hoped that the mine will produce up to 400,000 ounces of gold per year. However, to make any of this possible, IAMGOLD needed to re-house an entire community that previously lived on the mining areas.
At the time, Ron Little, CEO of Orezone stated: ÔÇ£IAMGOLD brings the capital required to bring Essakane into production in these difficult markets. This transaction also results in a very positive outcome for those dedicated to the development of the Essakane Project, including the people of Burkina Faso, especially the Essakane community and the construction team that Orezone has established.ÔÇØ
That benefit has resulted in the creation by IAMGOLD of a brand new village comprising 2,200 new homes, a new medical clinic, a school and a church. The traditional mud houses with thatched roofing have been replaced by concrete buildings with corrugated steel roofs. The first occupants have now moved in and provided very positive feedback on the changes.
The purchase of Orezone is just one of a number of acquisitions made by IAMGOLD, whose acquisitions policy serves as part of a wider four-pronged expansion strategy. In essence, the business aims to grow in four ways: through organic growth, by building on existing operations and increasing plants; through mergers and acquisitions, thereby acquiring existing operations (such as Essakane); through exploration (which includes joint ventures like the Sadiola project); and through grass-roots explorationÔÇöthe company has more than 60 exploration professionals, based in nine countries in Africa and the Americas, carrying out both greenfields and near-minesite (brownfields) exploration.
Mining is not a short-term endeavour and in Africa, IAMGOLD produces just shy of half a million ounces of gold per yearÔÇöroughly 50 per cent of the corporationÔÇÖs production. It has now committed to more than doubling that figure in Africa by the end of 2012.
The prospects for achieving this goal are very good. West Africa is an excellent area for prospecting; the challenge for IAMGOLD is to work well with local people and politicians and to bring its expertise and commitment to local communities through job creation and training.
Training includes an emphasis on safetyÔÇöevery meeting at head office includes safety on its agenda. In order to ensure that policies are implemented in a uniform manner across all of its sites, IAMGOLD has developed a health and safety management framework and a management framework for sustainability. In 2008, IAMGOLD instituted the PresidentÔÇÖs Awards for Health & Safety, recognising the outstanding achievements of a site, development or exploration project in successfully incorporating the key elements of its frameworks.
Environmental sustainability is also high on IAMGOLDÔÇÖs agenda, with the company adopting Canadian standards (or higher), to reduce the impact of its activities.
All of this is a far cry from those first steps on the trail of Mansa Mousa. With gold prices at an all-time high, it seems there is a golden future for IAMGOLD, with further acquisitions almost inevitable.
