Oct 2 (Reuters) – Stephen Letwin is a man of conviction. The chief executive of mid-tier gold miner Iamgold Corp believes low-grade deposits are the future, whether the industry is ready or not.
With prices down and higher costs cutting into margins – already slim at many low-grade mines – explorers that once boasted about the size of their deposits are now wooing investors with tales of high-grade zones.
But Letwin, who was touting low-grade gold last year, before spot prices dropped more than 20 percent, sees no reason to change his tune. “I don’t care who you are – we are all migrating to lower grade,” he said in an interview. “It’s just a fact of life.”
Iamgold’s operations in Africa and South America have relatively low concentrations of gold. At the Rosebel mine in Suriname, for example, the reserve grade is one gram per tonne.
That is not far off the average reserve grades of the senior producers, but unlike some of those companies’ mines, Rosebel and Iamgold’s Essakane mine in Burkina Faso do not produce silver, copper or other valuable minerals that are often recovered with gold.
“Given that we’re a low-grade operation, we have to be the be the best that we can be, so we’re moving heaven and earth to do that right now,” said Letwin.
Iamgold has been pushing to improve productivity, using tactics like hot seating, which minimizes the time that equipment is left idle. Second-quarter adjusted earnings fell, but the company lowered its cost forecasts for 2013. It reports third-quarter results on Nov. 5.
Letwin joined the company in 2010 from oil pipeline company Enbridge Inc, a somewhat unusual background in an industry run by mining finance specialists, penny stock promoters and geologists.
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