June 15, 2009 / 2:52 PM / in 9 years

UPDATE 1-Iamgold raises gold reserve estimate for Essakane

* Raises probable reserves estimate at Essakane site

* Says construction at Essakane is ahead of schedule (In U.S dollars unless noted)

TORONTO, June 15 (Reuters) - Canada’s Iamgold Corp (IMG.TO) said on Monday it has increased the probable reserves estimate at its 90-percent owned Essakane gold project in Burkina Faso, West Africa.

The company increased the probable reserves at the site by 8 percent, or 245,000 ounces, to 3.37 million ounces of gold. It also announced an additional 201,000 ounces of in-pit indicated resources from the nearby Falagountou deposit.

Iamgold said construction progress at Essakane is ahead of schedule and on budget with initial production now expected in August 2010. The project was earlier expected to begin production only in late 2010.

Essakane is expected to produce up to 375,000 ounces of gold in its first 12 months of production.

On Feb. 25, Iamgold completed the acquisition of Orezone Resources and its 90 percent-owned Essakane gold project. The Orezone exploration properties, not related to the Essakane project were spun out into the new exploration company Orezone Gold ORE.TO, in which Iamgold holds a 16.6 percent stake.

The company said it expects total capital expenditures of about $219 million at the site in 2009 and $131 million in 2010, with a total capital cost for the project of $422 million.

Iamgold’s shares were down 10 Canadian cents at C$10.90 on the Toronto Stock Exchange on Monday morning.

$1=$1.13 Canadian Reporting by Euan Rocha; editing by Peter Galloway

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