As of early June 2008, a construction start for the backfill system was awaiting approval from the Iamgold board.

The company said adoption of the paste backfill system at Niobec will enable the extraction of more ore-grade material and will increase reserves to more than 20 years at current mining rates. Currently, ore-grade material is left in support pillars as part of the mining sequence. As mining moves to deeper levels, pillar size will increase. The use of the paste backfill system will allow more complete extraction of ore-grade material in these pillars. Mining without backfill is designed to extract less than 40% of the ore, while mining with backfill will push extraction rates above 90%.

Project evaluation of the paste backfill system indicates a rate of return above 20% at long-term niobium prices. Additional operating costs for cement and operation of the backfill system will be offset by reduced development costs and increased mine life. Other benefits will include reduced environmental impact, with a smaller footprint for surface tailings containment; reduced requirements for effluent treatment; and lower future construction costs associated with tailings disposal and management.

The Niobec mine is located 15 km northwest of Chicoutimi, Quebec, and is Iamgold’s only non-gold producing mine. Daily milling capacity stands at 4,500 mt. The mill produces a niobium pentoxide concentrate that is converted on site into standard grade ferroniobium grading 66% niobium using an aluminothermic process. The mine currently supplies about 10% of world niobium demand.