Iamgold hits 13-year high on Nelligan/Monster Lake assays in Quebec

[Ben Graham]

Iamgold (TSX: IMG; NYSE: IAG) says new assay results from Nelligan and Monster Lake in central Quebec deliver new high-grade hits that extend mineralization.

In zone 36 at Nelligan, drill hole NE-25-239 cut 20.6 metres grading 1.93 grams gold per tonne from 330 metres depth and 13.5 metres at 2.17 grams, including 1.5 metres at 6.62 grams gold, the company said Monday. The Renard zone featured hole NE-25-244 with 24.5 metres at 3.24 grams gold from 851 metres downhole.

At Monster Lake’s Megane zone, drill hole ML-25-29 returned 9 metres at 23.4 grams gold, including 5 metres at 40.7 grams gold, Iamgold said in a news release.

“The results continue to expand the mineralized envelope of Nelligan and intersect high-grade veins at Monster Lake, demonstrating the potential to expand the current resource,” BMO Capital Markets mining analyst Matthew Murphy said in a note on Monday. “This drill program continues to outline what could be a compelling organic growth option.’

The results underscore how Iamgold is looking beyond its primary Côté gold mine in Ontario to build a pipeline of advanced projects in Quebec. By expanding Nelligan’s broad mineralized envelope and hitting high-grade veins at Monster Lake, the company is demonstrating the potential to grow resources in a mining-friendly jurisdiction where majors are already active.

Shares peak

Shares in Iamgold rose 2.9% by mid-Monday in Toronto to a 13.5-year high of C$15.90, valuing the company at C$9.16 billion. They’ve traded as low as C$6.07 in the past 52 weeks. Like most gold miners buoyed by record bullion prices, they’ve almost doubled this year.

“These results confirm our decision to continue to increase our exploration activities within this camp,” Iamgold President and CEO Renaud Adams said in a release. “When you combine Nelligan with the high-grade satellite Monster Lake deposit, there are nearly 9 million oz. of resources in this mining camp already, positioning Nelligan among the largest gold projects in Canada with significant potential for further growth.”

Next steps include further step-out drilling at the Nelligan and Monster Lake camps, which lie about 15 km apart and are accessed via road some 60 km southwest of Chibougamau, a region about 700 km north of Montreal.

The company also plans infill drilling where spacing is wide, and refinement of geological and structural models to guide deeper, lateral and regional targets. Vertical and down-plunge potential at both Monster Lake’s high-grade veins and Nelligan’s mineralized horizons will be a focus.

Drilling program

Between January and April, Iamgold completed 11,583 metres of drilling across 27 diamond drill holes at Nelligan, of which 24 were infill within the resource shell and three were deeper holes testing down-plunge extensions at depth. Mineralization was intersected over a strike length of about 1.8 km and from vertical depths of about 350 to over 1,000 metres.

Additional highlights at Nelligan included drill hole NE-25-244 which intersected 7.5 metres at 4.28 grams gold from 682 metres depth in zone 36. At the Renard zone, drill hole NE-25-239 cut 13.5 metres at 3.15 grams gold from 616.5 metres downhole.

At Monster Lake, 16 diamond holes totalling 10,137 metres of drilling were completed between December and early June. This comprised 12 delineation holes around the existing resource block model and four deeper holes testing plunge and lateral extensions of the Megane zone and the Lower Shear zone.

Nelligan contains 102.8 million indicated tonnes at 0.95 gram gold for 3.1 million oz. of contained gold, and 166.4 million inferred tonnes at 0.96 gram gold for 5.2 million oz, as of the end of last year. Monster Lake’s resource, in an underground mining scenario, is reported as 239,000 indicated tonnes grading 11 grams gold for 84,200 contained oz., and 1.05 million inferred tonnes at 14.4 grams gold for 488,500 ounces.