IAMGOLD Corporation

IAMGOLD Corporation

May 11, 2006 17:45 ET

IAMGOLD's Quimsacocha Preliminary Assessment and Operations Update

TSX Trading Symbol: IMG
NYSE Trading Symbol: IAG
ASX Trading Symbol: IGD
Fully Diluted Shares Outstanding: 178.9MM

TORONTO, ONTARIO--(May 11, 2006) -

- Quimsacocha Preliminary Assessment indicates positive economics

- Production increases by 16% with $2 per ounce decline in costs relative to Q1/05

- Yatela Mine life extended to 2009

- Reduction in resources at Sadiola, no change in reserves

- Buckreef development plans on schedule

"2006 has already been a great year for IAMGOLD. Our operations have been
performing well, the life at the Yatela Mine is extended and the results from
the Quimsacocha preliminary assessment are very positive. The reduction in
resources at Sadiola is disappointing, but will have no impact on the mine
plan or the Deep Sulphides," commented Joe Conway, President and CEO, "IAMGOLD
will continue to build value for shareholders through the development of our
quality exploration portfolio and existing operations."

Quimsacocha Preliminary Assessment

The preliminary assessment of the Quimsacocha deposit in Ecuador has been
completed. The assessment was commissioned to determine the economic potential
of the deposit and evaluated several options for mining, processing and waste
management. The study was completed by SRK Consulting with the metallurgical
and processing component completed by J.R. Goode and Associates, and was based
on the Technical Report by Roscoe Postle and Associates finalized in November
2005. The 43 - 101 technical report, available at www.sedar.com - "Quimsacocha
Gold Project, Preliminary Assessment Report", indicates that both open pit and
underground mining methods are viable for various processing options. Whole
ore pressure oxidation ("POX") continues to be the most favorable processing
method evaluated to date and will be the only option presented here.

Key conclusions of the preliminary assessment are summarized in the table below:

Open Pit Whole Underground Whole
--------------- ------------------
Total Tonnes (000's) 14,702 7,754

Grade Au (g/t) 4.94 5.95
Ag (g/t) 30.7 37.1
Cu (%) 0.19 0.22
Processing Rate
(000 tonnes/year) 1,750 1,050

Capital Cost ($ millions) 263.9(i) 137.1

Processing Costs ($ per tonne milled) 22.23 24.86

Mining Costs ($ per tonne mined) 0.90 15.00
Operating Strip ratio(xx) 5.9 -
G & A and Other
($ per tonne milled) 5.13 3.20
LOM Sustaining Capital
($ millions) 51.6 28.1
Recovery (%) Au 97 97
Ag 45 45
Cu 98 98
Annual Production Au (oz) 281,159 203,186

Ag (oz) 810,332 588,382

Cu (tonnes) 3,398 2,361
Total LOM Au Production
(000 oz) 2,277 1,443
Pre Tax NPV ($ millions) $209.5 $149.4
($400 gold @ 0% discount)
IRR ($400 gold) 14.4% 16.4%
Life of Mine 8.4 Years 7.4 years
(i) includes $63 million for pre-stripping 70 million tonnes waste
(xx)excluding pre-strip waste

This study was based on $400/oz gold, $1.25/lb copper and $5.50/oz silver.

This project would provide at least 250 jobs directly for people in the
region as well as ancillary employment arising from the purchase of goods and
services, locally and regionally. There would also be a significant infusion
of tax dollars paid throughout the mine life which will be subject to the tax
revenue sharing provisions set out in the Government of Ecuador's mining and
fiscal policies. These policies ensure tax revenue is specifically shared with
the regional and local governments in surrounding areas. The development of
this project would also include additional infrastructure to support the mine
and the surrounding community. All stakeholders should benefit from the
additional infrastructure. Finally, the project would be developed in a manner
that applies best practices for environmental and water management.


IAMGOLD was recently informed by its joint venture partner and operator
at the Sadiola mine, AngloGold Ashanti that an error was made when calculating
and reporting the December 31, 2005 Mineral Resources for the Sadiola mine.

AngloGold Ashanti reports that the error was a result of incorrect
manipulation of data between various software programs used in the mineral
resource estimation and reporting procedure. This allowed a resource pit shell
to be generated that was much larger than should have been generated.
Procedures have been put in place to ensure that this error is not repeated,
including independent audits of the mineral resources and reserves.

This error affects only the mineral resources at the mine. It does not
affect the proven and probable ore reserves at the mine which are used for
mine planning purposes. This error does not effect the Sadiola Deep Sulphide
Pre-Feasibility study, completed by Hatch and Digby Wells & Associates (Pty)
Ltd who independently estimated the mineral resources for that study.

The previously reported and corrected resources are:

Sadiola Mine(i) Previously Corrected Difference

Measured Tonnes (000) 18,401 18,394 (7)
Grade (g/t) 1.5 1.5 (0.0)
Ounces (000) 887 885 (2)

Indicated Tonnes (000) 62,566 45,381 (17,185)
Grade (g/t) 2.4 2.6 1.9
Ounces (000) 4,823 3,779 (1,044)

Measured &
Indicated Tonnes (000) 80,967 63,775 (17,192)
Grade (g/t) 2.2 2.3 1.9
Ounces (000) 5,709 4,664 (1,045)

Inferred Tonnes (000) 88,874 33,052 (55,822)
Grade (g/t) 1.9 2.1 1.7
Ounces (000) 5,316 2,179 (3,138)

(i) 100 % Basis

Work continues on the Sadiola Deep Sulphide Pre-Feasibility study. The
initial conclusions of the study showed marginal economics using the current
mill configuration and mining and energy costs, based on a $451/oz gold price.
A 2.5 tonne sample of the deep sulphide material has been shipped to South
Africa for further metallurgical testwork. Preliminary metallurgical results
are expected in the third quarter of 2006. This test work will focus on pre-
concentration of the sulphides and a treatment circuit for this concentrated
product, including fine grinding and oxidation. In parallel with the
metallurgical test work, studies have been initiated and are directed towards
lowering the operating costs. These include switching to heavy fuel oil for
power generation and converting to owner mining. The results from these
studies are also expected in the third quarter.

Engineering work is concurrently underway to install a gravity separation
circuit to capture coarse gold in the grinding circuit. Initial test work has
shown that an overall increase in gold recovery of 3% is possible.

During the first quarter of 2006, the Sadiola operation performed well.
Mined volumes and milled tonnage were slightly behind the fourth quarter of
2005, mainly due to fewer operating days in the first quarter of 2006 as
compared to the fourth quarter of 2005. Throughput was lower in the first
quarter of 2006 due to planned maintenance shutdowns.

Gold production in the first quarter of 2006 was on track at 111,000
ounces. This combined with direct cash costs of $31.6 million resulted in Gold
Institute cash costs of $273 per ounce.


Production at Yatela exceeded expectations both in terms of tonnage
processed and gold produced. High availability in the crushing plant allowed
record tonnage to be stacked. Mining took place in the higher grade bottom
portion of the pit, which increased the stacked grade. The resulting 119,000
ounces that were produced was a quarterly record for the mine. Mining volumes
were down for the quarter due to less waste mining and access restrictions at
the bottom of the pit. The good gold production resulted in Gold Institute
cash costs falling to $207 per ounce.

An additional pushback at the Yatela main pit has recently been approved,
with pre-stripping scheduled to begin in May. This pushback will allow access
to deeper ore in the pit as well as additional ore in the southwest portion of
the pit wall. This pushback will add an additional 350,000 ounces over the
life of the mine and will extend the mine production by at least 15 months
into the first half of 2009. The capital required for the pushback is $5.7
million dollars.


Tarkwa performed well during the quarter. Mine production increased and
the CIL plant, commissioned in 2005, performed well above its nameplate
capacity. The CIL plant had record throughput of 1.3 million tonnes for the

Additional waste stripping commenced at the Teberebie pit in order to
pre-strip sufficient ore material for the CIL plant. This additional stripping
is being capitalized.

During the first quarter, preliminary engineering began for the expansion
of the CIL plant. The feasibility study on this CIL mill expansion is expected
to be completed in late October. This potential expansion could, at least,
double mill throughput and increase the ultimate life of mine production. The
construction to expand the North Heap leach facility continued during the

Total gold production was 192,000 ounces during the quarter at a Gold
Institute cash cost of $304 per ounce. The operational strip ratio increased
to 3.4 from 3.3 last quarter, and combined with higher fuel, cement and
cyanide prices, resulted in the increased costs.

The owner mining fleet continued to perform well, with record ore volume
being mined during the month of February.


Damang continued to perform well during the quarter, with good volumes
mined and mill recovery and throughput. A total of 62,000 ounces were produced
during the quarter.

The main Damang pit cut back, started in the third quarter of 2005,
remains ahead of schedule. Work continued on raising the walls of the east
tailings dam.

Gold Institute cash costs were $345 per ounce, up from the previous
quarter, mainly attributable to increased operating strip ratios.


Mupane underperformed during the quarter with gold production totaling
18,119 ounces. Head grades were 10% below budget due to a short term change in
the mine plan in order to sustain consistent ore feed to the mill. Milled
tonnage was below expectations due to feed problems to the milling circuit and
due to the processing of sulphide ore.

The flotation plant was commissioned during the quarter, ahead of
schedule. While this has increased the head grades, mill throughput has been
limited due to the high oxygen demand of the sulphide ore. The present oxygen
plant is insufficient to meet the oxygen demand. An additional plant will be
constructed and other short-term alternatives for oxygen supply are being
sourced. Mined volume has been reduced to be in line with the mill capacity
which resulted in additional fixed charges by the mining contractor.

Gold Institute cash costs for the quarter were $461 per ounce. Costs were
higher due to the increase in the mining unit cost and increases in fuel and
reagent costs including cyanide and grinding media and due to the shortfall in

Plant performance is expected to improve as throughput and oxygen supply
issues are resolved. Costs will also improve. For the remainder of 2006,
Mupane is expected to produce 70,000 ounces at a cash cost, as defined by the
Gold Institute, of US$330/oz.

Exploration at Mupane has focused on testing extensions to the south east
of the current operation at Mupane and at Signal Hill. Results at Signal Hill
have been encouraging with a new zone of mineralization being confirmed in
recent drill results. Once the final assay results have been received, an
examination of the economics of the Signal Hill zone will begin. Drilling has
also commenced at Jim's Luck and a new RC rig is arriving in mid May to begin
an extensive drilling program planned for the Shashe Mining Lease.


The activities at the Buckreef Development project during the first
quarter of 2006 were focused on reassessment and confirmation of the existing
resource. This reassessment has provided for a greater understanding of the
gold mineralization occurrences and has subsequently generated additional
drilling targets. Infill drilling continued in Buckreef North and was
completed during the quarter to upgrade resources to a higher confidence
category. Drilling also occurred at Buckreef and Bingwa to further delineate
the resource. Targets were also tested north of Bingwa. During the second half
of 2006, step out drilling from Busolwa is planned as well as drilling on
targets identified by the reassessment earlier in the year. It is anticipated
that up to four drill rigs will be on site to by July 2006.

A geological review also occurred during the quarter and will result in a
revised geological model, scheduled for completion by the end of the third
quarter. A preliminary review of geotechnical conditions was initiated to
evaluate mining options at Buckreef and Busolwa is scheduled to continue in
the third quarter. Test work on metallurgic samples will begin in June by
Independent Metallurgical Laboratories (IML) in Perth Australia on each
mineralized zone. A regional hydrological study commenced at Busolwa during Q1
2006. The preliminary portion of this was successful and further testing is
scheduled for completion during the second quarter of 2006.

URS Australia Pty Limited commenced work on the Environmental Impact
Assessment (EIA) during the quarter and completed a Phase 1 Contaminated Land
Assessment study which documented the existing conditions within the project
area and recommended that future work will be required.

A plan for conducting a Social Impact Assessment was developed for the
project. The University of Dar Es Salaam was contracted to complete this
assessment report and is expected to be completed in Q2 2006.

Resource estimates for Buckreef and Busolwa will be updated as part of
the revised geological models to be completed in Q3 2006. Once complete, a
positive review of these models would lead to the commencement of a bankable
feasibility study during the fourth quarter.

Please note:

This entire press release may be accessed via fax, e-mail, IAMGOLD's website at www.iamgold.com and through CCNMatthews' website at www.ccnmmathews.com. All material information on IAMGOLD can be found at
www.sedar.com or at www.sec.gov.

Contact Information

  • IAMGOLD Corporation:
    Lisa Doddridge
    Investor Relations
    Tel: (416) 360-4710
    Fax: (416) 360-4764
    Toll-free: 1-888-IMG-9999