Iamgold Corp. said Monday a paste backfill system at its Niobec operation will double reserves at the northern Quebec niobium mine.

The announcement follows a feasibility study into using high-density material to fill mined-out cavities, a technique that maintains safe conditions as digging continues.

The feasibility study estimates capital costs at $8-million, with construction of the paste backfill system to be completed by mid-2010, coinciding with mining at lower levels.

The evaluation indicates a rate of return of more than 20 per cent at expected long-term prices for niobium, a rare soft metal used in steel alloys, welding, electronics, jewellery and the nuclear industry.

Currently, ore-grade material is left as support pillars, and as work proceeds to deeper levels the pillar size has to increase.

“The use of a paste backfill system would allow for more complete extraction of ore-grade material in these pillars,” Iamgold stated.

“Mining without backfill is designed to extract less than 40 per cent of the ore, while mining with backfill will push extraction rates above 90 per cent.”

Additional costs for cement and operation of the backfill system would be more than offset by reduced development costs and the additional mine life, Iamgold said.

“Other benefits include reduced environmental impact with a smaller footprint for surface tailings containment and reduced requirements for effluent treatment as well as lower future construction costs associated with tailings disposal and management.”

The optimization plan awaits approval from the company's board.

Iamgold also said Monday its Mupane gold mine in Botswana will convert its current contractor mining arrangement to owner mining, which is expected to reduce cash costs by at least $40 (U.S.) an ounce and make mining of some satellite pits economic.

Meanwhile, the Yatela mine in Mali, 40 per cent owned by Iamgold, is negotiating with a new mining contractor and expects to cut costs by $40 an ounce. – The Canadian Press