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Friday, 12th December 2008 (1616 views)

IAMGold and Orezone have signed a new agreement to combine the two businesses to create a new exploration firm.

Under the terms of the deal, IAMGold will acquire, via a plan of arrangement, all of the outstanding common shares of Orezone in a supported all-share transaction.

The two Canadian firms plan to re-establish Orezone as an exploration company and total consideration of the deal is valued at around $139 million (£93 million).

"This business combination with Orezone is consistent with our strategy and takes IAMGold to the next level," Joseph Conway, IAMGold president and chief executive, stated.

IAMGold is aiming to reach 1.8 million ounces of annual gold production by 2012 and lower its average cash cost by $40 to $50 per ounce.

The agreement will see IAMGold become a 16.5 per cent shareholder in New Orezone and its exploration assets, including the Bombore project and the four million ounce Essakane gold prospect in Burkina Faso, west Africa.

Construction commenced at the Essakane project in September 2008 and the mine is expected to contribute average gold production of over 300,000 ounces per year over a minimum nine-year mine life.

 

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