Iamgold produces less gold in Suriname in 2nd quarter

(De Ware Tijd) PARAMARIBO — Iamgold warns that the gold production at Rosebel Goldmines (RGM) in Brokopondo was less than expected in the 2nd quarter of 2011 while the costs were higher. In spite of this, the multinational has decided to increase the annual dividends by 150% to US$ 0.20 per share. The company still expects it will reach a record production this year. Furthermore, the company will continue with its expansion investments of US$ 95 million in Brokopondo. It is striking that the company’s prognosis about a diminished production comes amidst criticism in Suriname about the lack of insight regarding the amount of gold the company really produces. As a result, the company and the government have agreed to have an independent accountant audit the

annual results. Even this was criticized by Parliamentarian Oesman Wangsabesarie who thinks the country should also witness the company’s production processes and decide its production afterwards. Some experts have their doubts about such an investigation and even call it “unprecedented”.

This is the DWT comment on this matter:

Iamgold says that the gold production from Brokopondo at Rosebel Goldmines (RGM) was below expectations and that the costs were higher in the 2nd quarter of 2011.

Still, the multinational has decided to increase the yearly dividends by 150% to US$ 0.20 per share. This will again stir up the discussion on the real gold production of Iamgold.

As there is no truthful idea of the figures and the State has insufficient instruments to put the figures to the test, the success story of Iamgold is music to the ears but simultaneously the somber picture of disappointing production results is accepted. In view of the strong language used by at least the NDP on stages during its election campaigns about hard negotiations with Iamgold about a bigger share in the profits and the possible breaking open of the deal that is considered bad, everything points out that Iamgold is prepared for this. Signals given by multinationals about disappointing results are not new. Usually,

they precede governments demanding a bigger share in the profits. Then problem is that the State lacks the tools and the authority to dissolve such signals with authority.

Investigation in the field into production processes should offer a better solution. Parliamentarian Oesman Wangsabesari perseveres that the company produces much more than it registers. His weakness is that he cannot provide hard evidence on what basis he has arrived at this

conclusion. Neither needs the explanation on the prognosis given by RGM-spokesman Roy van Aerde on the company’s website be valued. That story cannot be tested on the basis of objective figures; in any case the Surinamese government still lacks that certainty. That is exactly why an independent accountant will from now on screen the figures. A step in the right direction but the watchdog-character needs to go much further

than screening only figures. Among others field research, production processes and possible company-strange expenses will be added. Despite doubts that have not yet been taken away by the company, top executives of Iamgold have stated that the coming period is promising which puts us at ease.

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