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Chinese taking over Suriname gold mine

October 19, 2022
The Rosebel gold mine in the Brokopondo district of Suriname. (CMC)

CMC – The Canadian-based IAMGOLD Corporation (IAMGOLD), which operates the Rosebel gold mines in Suriname, Tuesday announced that it has entered into a definitive agreement with the Chinese-based Zijin Mining Group Co. Ltd. to sell its 95 per cent interest in Rosebel Gold Mines N.V.

In a statement, IMAGOLD, which operates mines in Burkina Faso and Canada, said the acquisition is for cash consideration of US$360 million and release of IAMGOLD’s equipment lease liabilities amounting to approximately US$41 million.

Rosebel holds a 100 per cent interest in the Rosebel Gold Mine and a 70 per cent participating interest in the Saramacca Mine, located in Suriname. The remaining five per cent interest in Rosebel will continue to be held by the Government of Suriname.

“Under the terms of the agreement, IAMGOLD will receive cash consideration of US$360 million for its 95 per cent interest in Rosebel, subject to certain working capital adjustments on closing. In addition, IAMGOLD’s obligations for certain equipment leases of Rosebel amounting to approximately US$41 million will be released on closing. The existing royalty on Rosebel held by Euro Ressources S.A. will remain an obligation of IAMGOLD,” the company said in a statement.

“This transaction represents a significant step forward in pursuing IAMGOLD’s strategy of disciplined portfolio management as we look to create value for shareholders through a focus on core assets,” said Maryse Bélanger, chair of the board and interim president and chief executive officer.

“The proceeds of the sale will be invested in the ongoing construction of our flagship Côté Gold project, a strong positive step towards addressing our funding commitments to deliver the Côté Gold project on the updated schedule for production in early 2024.

“Rosebel has been an important contributor to IAMGOLD and we are pleased that a company with the capabilities and reputation of Zijin, a leading global mining company, will be taking over this operation for the benefit of all stakeholders. We will work closely with Zijin to ensure a smooth transition,” Bélanger added.

The statement said that the transaction has the support of IAMGOLD’s syndicate of lenders who have consented to the release of their security over Rosebel upon completion of the transaction, and to the use by IAMGOLD of the full net sale proceeds towards the construction of the Côté Gold project.

The transaction is subject to certain regulatory approvals including the receipt of approvals from the relevant authorities in the People’s Republic of China, approval for transfer of licenses from the government of Suriname, as well as other customary closing conditions.

The statement said the transaction is expected to close early in the first quarter of 2023 or earlier, subject to closing conditions being met.

Workers’ strike 

Meanwhile, workers at Rosebel Gold Mines took industrial action on Tuesday hours after IAMGOLD announced it had entered into a definitive agreement with the Chinese-based Zijin Mining Group Co. Ltd. to sell its 95 per cent interest in Rosebel Gold Mines N.V.

The action by the workers resulted in a number of operations at the plant and the mine in Brokopondo, located on the west shore of the Suriname River, coming to a standstill.

Like the rest of  Surinamese society, workers were surprised by the news, and said they were unaware of their status going forward. 

They claim they have not been briefed by their union.

Government, which owns five per cent of the Rosebal Gold Mines, has not made any public statement on the sale.

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