January 29, 2009 / 4:11 PM / in 9 years

UPDATE 1-Iamgold 2008 gold production up 3 pct

Jan 29 (Reuters) - Canadian miner Iamgold Corp (IMG.TO) (IAG.N) posted a 3 percent rise in 2008 gold production, but forecast a drop in production levels for 2009 to partly reflect lower grades at two of its mines.

The mid-tier Canadian gold producer said it expected to record an impairment charge of $90 million to $125 million in 2008 related mainly to higher capital costs for mine development at its Buckreef project in Tanzania.

Iamgold’s production in 2008 reached 997,000 ounces. Cash costs are expected to be below the most recent forecast of $480 to $490 per ounce of gold and closer to the company’s earlier view of $455 to $470 per ounce of gold, Iamgold said.

For 2009, Iamgold expects to produce 880,000 ounces of gold at an average cash cost of $470 to $480 per ounce.

The 2009 production forecast reflects the completion of mining at Sleeping Giant in the third quarter of 2008, the closure of the Doyon mine by the middle of 2009 and lower grades at Sadiola and Mupane mines, the company said.

Production of Niobium, a key component in specialty high strength steels, in 2009 at Niobec is expected to be comparable to 2008 levels, the company said.

Capital expenditures are expected to total $216 million in 2009 or $435 million including the recent acquisition of Orezone Resources OZN.TO and its Essakane gold project in Burkina Faso, Iamgold said.

Additionally, the company said it was in the process of securing a $220 million project debt facility with a group of lenders familiar with the Essakane project.

Iamgold shares were trading up 16 Canadian cents at C$8.08 Thursday morning on the Toronto Stock Exchange. (Reporting by Krishna Chaithanya in Bangalore; Editing by Himani Sarkar)

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