Initial capital investment is estimated at $337 million, and payback time for the investment is estimated at 35 months. The level of accuracy of the capital investment estimate is ±25%.

Iamgold’s announcement of the prefeasibility study noted that during the second quarter of 2008, the government of Ecuador advanced the process of revising the country’s Mining Code by conducting an extensive review of policy recommendations made by the Constitutional assembly and through dialogue with international mining experts. On June 27, the Minister of Mines submitted a draft Mining Code to the President of Ecuador for review.

“The President of Ecuador has consistently maintained his commitment to developing a mining policy that allows for and promotes responsible largescale mining, while providing an equitable sharing of benefits between all stakeholders. The President of Ecuador has indicated his intention to publish the draft Mining Code and conclude the Constitutional assembly process before the end of August,” the Iamgold statement said.

Assuming all goes well, the Quimsacocha investment program is slated to start at the beginning of 2009, with commercial production to begin in the latter part of 2011.

Quimsacocha is a high sulphidation epithermal gold-copper-silver deposit located at an elevation of about 3,600 m in the Western Cordillera of the Andes. The project is accessible via a partly paved road from Cuenca, the third largest city in Ecuador, and from Machala, the second largest port in the country. The electrical power grid is accessible within 25 km of the project.

The pre-feasibility study is based on a recoverable mineral reserve of 8.1 million mt, grading 6.5 g/mt gold, 36.5 g/mt silver, and 0.42% copper.

Contained metal content totals 1.7 million oz of gold, 9.5 million oz of silver, and 75 million lb of copper. The preliminary Quimsacocha mining plan is based on a selective post pillar cut-and-fill mining method, with paste backfill. Two ramps from the surface will be developed to provide access to the lower portion of the deposit. About 15% of the ore-grade volume will be left in permanent pillars. A mining recovery factor of 95% has been applied to production volumes but not to development. Capital cost for mine equipment and facilities is estimated at $26.2 million.

A two-step process has been developed to optimize Quimsacocha gold recovery. A conventional 3,000-mt/d flotation concentrator at the mine site will recover copper and other sulphides containing gold and silver. The concentrate will be shipped to sea level for oxidation of the sulphide minerals in an autoclave, followed by gold recovery by carbon-in-leach and copper recovery by cementation on iron. Metallurgical testwork indicates recoveries of 90% for gold, 92% for copper, and 77% for silver. The capital cost estimate for processing facilities is $131.2 million.

The Quimsacocha pre-feasibility study was compiled by Iamgold’s project development group, with collaboration from Golder Associates, SNC Lavalin, Lakefield Research, Promas, Water Management Consultants, J. Kaehne Associates and Caminosca.

“Results of the study are highly encouraging, and Quimsacocha continues to demonstrate that it is a very solid project for us,” Iamgold president and CEO Joseph Conway said. “We have been working in Ecuador for the past 12 years developing community programs and building positive government relations. We will continue to partner with all stakeholders to create new economic and social benefits for the people of Ecuador within a responsible mining framework.”