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IAMGOLD cuts Westwood workforce by a third

IAMGOLD (TSX: IMG) has announced it will cut the workforce by 32% at its Westwood gold mine in Quebec as a cost control measure, while it develops a revised life-of-mine plan for the underground operation.
IAMGOLD cuts Westwood workforce by a third IAMGOLD cuts Westwood workforce by a third IAMGOLD cuts Westwood workforce by a third IAMGOLD cuts Westwood workforce by a third IAMGOLD cuts Westwood workforce by a third

Cost control measure as company revises mine plan for Westwood

Staff reporter

It said the decision resulted from both planned reductions due to the stage of mine development, as well as "realignment reductions" due to reduced guidance.

"We concluded that this difficult decision had to be made in conjunction with planned reductions after assessing the balance of production levels and costs," president and CEO Steve Letwin said.

The mine had produced 129,000 attributable ounces in 2018 and IAMGOLD has maintained Westwood's 2019 guidance of 100,000-120,000oz for this year.

The company had flagged the lower output in January for Westwood "as mining and development activity continues to ramp up, while respecting our safety protocols for mining in areas where seismicity is present".

Regulators had approved reopening the mining block affected by a May 2015 seismic event, the company said last year.

Letwin said IAMGOLD aimed to provide a revised mine plan in the fourth quarter. Westwood had been expected to ramp up to full production in 2020.

"We remain focused on developing a long term plan for Westwood that is both safe and profitable," he said.

Westwood's production in the September quarter was 3,000oz lower than the year before due to lower throughput and head grades, as a result of "transportation challenges" and using a greater proportion of marginal stockpiles to leverage available mill capacity.

The scaling back at Westwood follows the company recently shelving plans to build its majority-owned Côté gold project in Ontario until market conditions improve.

Its funds are set to be boosted in December by a US$170 million gold prepay arrangement struck in January in return for delivering 150,000oz in 2022.

IAMGOLD expects attributable output of 810,000-870,000oz this year after producing 882,000oz in 2018.

Its shares are trading at the lower end of its 52-week range of C$8.20-$3.635, closing yesterday at $4.69 to capitalise it about $2.2 billion.