Iamgold Corp. will acquire Trelawney Mining and Exploration Inc. for $608 million. Trelawney is a Canadian junior mining and exploration company, focused on the development of the Côté Lake Deposit located adjacent to the Swayze Greenstone Belt in northern Ontario.

“The acquisition of Trelawney creates a larger and more geographically balanced portfolio of long-life gold assets for Iamgold,” said Stephen Letwin, president and CEO, Iamgold. “This transaction provides an accretive return on invested capital as we are effectively redeploying the cash proceeds from the sale of non-core assets last year into a Canadian gold project that significantly strengthens our future gold production profile. This is consistent with our strategy to invest in development projects that we own and operate so we can derive maximum benefit from leveraging our operational and development expertise.”

An updated report estimates the Côté Lake mineral resource at 35 million metric tons (mt) with 0.82 g/mt gold for 930,000 oz of indicated resources and 204 million mt at 0.91 g/mt gold for 5.94 million oz of inferred resources. Mineralization at Côté Lake has been intersected over a strike length of 1,200 m, a horizontal width of 100-300 m, and a depth extent of more than 500 m.

“This project has the potential to become a large bulk tonnage operation, with significant economies of scale at competitive cash costs,” said Gordon Stothart, executive vice president and COO, Iamgold. “I’m excited to have this asset as part of our portfolio. We believe the project has the potential and scale to significantly contribute to our future production and growth profile.”

Completion of the transaction is subject to customary conditions and is expected to close by the end of June.