IAMGOLD Reports Third Quarter 2022 Results
NEWS RELEASE
TSX: IMG NYSE: IAG
IAMGOLD REPORTS THIRD QUARTER 2022 RESULTS
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Toronto, Ontario, November 8, 2022 – IAMGOLD Corporation (NYSE:IAG, TSX:IMG) (“IAMGOLD” or the “Company”) today reported its financial and operating results for the third quarter ended September 30, 2022.
HIGHLIGHTS:
- Attributable gold production of 184,000 ounces in the third quarter and 528,000 ounces year-to-date (“YTD”) as a result of continued strong performance from Essakane and improvements at Rosebel.
- The Company expects that annual production will exceed the top end of the previous guidance range of 570,000 to 640,000 ounces and is revising guidance upwards to 650,000 to 705,000 ounces.
- Cost of sales per ounce sold of $1,140 ($1,102 YTD), cash cost1 per ounce sold of $1,126 ($1,087 YTD) and all-in sustaining costs1 ("AISC") per ounce sold of $1,559 ($1,550 YTD).
- The Company expects AISC1 to be below the bottom end of guidance range of $1,650 to $1,690 and revised guidance downwards to between $1,600 and $1,650 per ounce sold. Cash costs1 guidance for 2022 is revised downwards to be between $1,100 and $1,130 per ounce sold from the previous guidance range of $1,100 to $1,150 per ounce.
- Earnings before interest, income taxes, depreciation and amortization (“EBITDA”)1 of $(41.3) million ($195.0 million YTD) and adjusted EBITDA1 of $103.1 million ($350.6 million YTD).
- Mine-site free cash flow1 of $59.2 million ($189.3 million YTD).
- Net loss and adjusted net loss per share attributable to equity holders1 of $(0.23) and $(0.03), respectively; YTD net earnings (loss) and adjusted net earnings (loss) per share attributable to equity holders1 of $(0.20) and $0.01, respectively.
- Cash, cash equivalents and short-term investments of $536.1 million and liquidity1 of $636.8 million at September 30, 2022.
- As of September 30, 2022, the Côté Gold project was approximately 64.2% complete, with detailed engineering fully complete and construction in line with the updated technical report. The Company's share of remaining project spend to bring Côté Gold into production is estimated to be between $1.0 and $1.1 billion from October 1, 2022, net of leases and working capital.
- On October 18, 2022, the Company announced that it had entered into a definitive agreement with Zijin Mining Group Co. Ltd. to sell its interests in the Rosebel mine for cash consideration of $360 million plus working capital adjustments, as well as the release of approximately $41 million of IAMGOLD obligations related to equipment leases, on closing.
“IAMGOLD has continued to build upon its recent successes, reporting attributable gold production of 184,000 ounces, which represents the highest quarterly production for the Company in over 2.5 years, driven by record production from Essakane,” said Maryse Bélanger, Chair and Interim President and CEO of IAMGOLD. “On behalf of the Board and the executive team, we applaud the tireless efforts of the IAMGOLD team for this achievement and their continued commitment to operating safely and responsibly.
“The Côté Gold Project is approximately 64% complete and advancing well following the schedule and cost update released in the summer. With approximately 1,500 workers on site, the project is nearing peak capacity and has seen significant progress in the third quarter towards the target of production in early 2024. The announced sale of Rosebel to Zijin Mining last month represents the first significant step towards addressing the funding commitments to deliver Côté Gold. The remaining funding alternatives are well advanced and we expect to be able to provide further updates in the fourth quarter.”
QUARTERLY REVIEW
The following table summarizes certain operating and financial results for the three months ended September 30, 2022 (Q3 2022), June 30, 2022 (Q2 2022) and September 30, 2021 (Q3 2021) and the nine months ended September 30 (or YTD), 2022 and 2021 and certain measures of the Company's financial position as at September 30, 2022, June 30, 2022 and December 31, 2021:
| Q3 2022 | Q2 2022 Q3 2021 | YTD 2022 | YTD 2021 | ||
|---|---|---|---|---|---|
| Key Operating Statistics Gold production – attributable (000s oz) Gold sales – attributable (000s oz) Average realized gold price1 ($/oz) Cost of sales2 ($/oz sold) – attributable Cash costs1 ($/oz sold) – attributable AISC1 ($/oz sold) – attributable | 170 153 170 150 $ 1,799 $ 1,787 $ 1,130 $ 1,247 $ 1,119 $ 1,245 $ 1,604 $ 1,508 | 448 438 $ 1,788 $ 1,157 | |||
| 184 | 528 | ||||
| 187 | 538 | ||||
| $ 1,690 | $ 1,766 | ||||
| $ 1,140 | $ 1,102 | ||||
| $ 1,126 | $ 1,245 | $ 1,087 | $ 1,155 | ||
| $ 1,559 | $ 1,550 | $ 1,387 | |||
| Financial Results ($ millions, except where noted) Revenues Gross profit EBITDA1 Adjusted EBITDA1 Net earnings (loss) attr. to equity holders | $ 334.0 $ 294.1 $ 49.4 $ 6.9 $ 101.4 $ 19.6 $ 110.0 $ 82.5 $ (9.6) $ (75.3) $ (6.3) $ (20.1) $ (0.02) $ (0.16) $ (0.01) $ (0.04) $ 93.9 $ 79.6 $ 81.9 $ 78.5 $ 42.8 $ 31.9 $ 67.1 $ 26.4 $ 189.0 $ 113.0 | $ 857.1 $ 79.0 $ 220.5 $ 265.7 $ (60.3) $ (17.5) $ (0.13) $ (0.04) $ 217.0 $ 217.5 $ 121.6 | |||
| $ 343.3 | $ 1,033.9 | ||||
| $ 29.7 | $ 160.1 | ||||
| $ (41.3) | $ 195.0 | ||||
| $ 103.1 | $ 350.6 | ||||
| $ (108.3) | $ (94.1) | ||||
| Adjusted net earnings (loss) attr. to equity holders1 | $ (13.7) | $ 6.1 | |||
| Net earnings (loss) per share attr. to equity holders Adjusted EPS3 attr. to equity holders1 Net CFO4 before changes in working capital1 Net cash from operating activities Mine-site free cash flow1 Capital expenditures1,5 – sustaining Capital expenditures1,5 – expansion | $ (0.23) | $ (0.20) | |||
| $ (0.03) | $ 0.01 | ||||
| $ 108.8 | $ 336.6 | ||||
| $ 117.7 | $ 341.9 | ||||
| $ 59.2 | $ 189.3 | ||||
| $ 71.1 | $ 214.8 | $ 64.0 | |||
| $ 158.9 | $ 440.0 | $ 330.2 | |||
| September 30 | June 30 December 31 2022 2021 | September 30 | December 31 2021 | ||
| 2022 | 2022 | 2022 | |||
| Financial Position ($ millions) Cash, cash equivalents and short-term investments Long-term debt Net cash (debt)1 Available credit facility | $ 452.9 $ 552.5 $ 612.0 $ 464.4 $ (225.1) $ 16.3 $ 348.7 $ 498.3 | $ 552.5 $ 464.4 $ 16.3 $ 498.3 | |||
| $ 536.1 | $ 536.1 | ||||
| $ 844.6 | $ 844.6 | ||||
| $ (409.3) | $ (409.3) | ||||
| $ 100.7 | $ 100.7 |
1. This is a non-GAAP measure. See "Non-GAAP Financial Measures".
2. Throughout this news release, cost of sales, excluding depreciation, is disclosed in the cost of sales note in the annual consolidated financial statements.
3. EPS: “net earnings (loss) per share “
4. CFO: “cash from operating activities”
5. Starting in 2022, a higher portion of stripping costs are categorized as sustaining capital versus expansion capital, due to the particular areas that are scheduled to be mined and the stage of the life of mine aligning with World Gold Council guidelines. See "Non-GAAP Financial Measures section".
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Operating Results
Attributable gold production for the third quarter was 184,000 ounces, up 14,000 ounces or 8% from the prior quarter, primarily due to higher production at Essakane (8,000 ounces) and Westwood (5,000 ounces). Attributable gold sales of 187,000 ounces were slightly higher than production due to the timing of gold sales, with the average realized gold price of $1,690 per ounce reflecting the delivery of 37,500 ounces at $1,500 per ounce under the 2019 Prepay Arrangement.
Cost of sales (excluding depreciation) per ounce sold was $1,140 for the third quarter, up $10 per ounce or 1% from $1,130 per ounce sold in the prior quarter. Production costs per ounce sold were in line with the prior quarter with higher costs being offset by higher production. Included was the positive impact of realized derivative gains of $40 per ounce sold (second quarter 2022 - gains of $64 per ounce sold).
Cash costs per ounce sold in the third quarter were $1,126, up $7 per ounce or 1% from the prior quarter. Cash costs per ounce sold reflected higher cost of sales per ounce, partially offset by the exclusion of the long term NRV adjustment that is included in cost of sales. AISC per ounce sold of $1,559 was down $45 per ounce or 3% from the prior quarter, primarily due higher sales volume and a decrease in general administrative expenses.
Health and Safety
Health and safety is core to the Company’s relentless pursuit of its Zero Harm® vision. Through various programs, the Company continuously promotes a safe work environment and a wellness program at all sites. The DARTFR2 (days away, restricted, transferred duty frequency rate) was 0.27 (on YTD basis) at the end of the third quarter of 2022, tracking below the global annual target of 0.42, with a decreasing trend. The TRIFR2 (total recordable injuries frequency rate) was 0.72 (on YTD basis) at the end of the third quarter of 2022, tracking below the global annual target of 0.73, also with a decreasing trend. Côté Gold has surpassed over 6.9 million hours with no lost time injuries to date. The operations have been increasing focus on situational awareness and preventative activities related to work tasks.
The global COVID-19 pandemic continues to evolve and the management thereof remains a focus for the business. The Company continues to closely monitor developments and is taking necessary measures to manage the impact of the COVID-19 pandemic on its personnel, operations, construction and development projects and exploration activities. COVID- 19 detection and mitigation protocols at our sites are reviewed on an ongoing basis to adapt to the evolving situation.
Financial Results
For the third quarter ended September 30, 2022, net loss and adjusted net loss1 per share attributable to equity holders were ($0.23) and ($0.03), respectively. EBITDA1 was ($41.3) million and adjusted EBITDA1 was $103.1 million. Adjusted net loss per share attributable to equity holders and adjusted EBITDA include the reversal of an after-tax non-cash impairment charge of $74.0 million ($115.8 million before tax) related to the announced definitive agreement to sell IAMGOLD’s interests in the Rosebel mine to align the carrying value of the Rosebel cash generating unit with the sales price.
Mine-site free cash flow for the third quarter 2022 was $59.2 million, up $16.4 million, from the prior quarter, primarily due to higher free cash flow at Essakane ($20.2 million) and Westwood ($9.2 million) due to higher sales volume, partially offset by lower free cash flow at Rosebel ($13.0 million) primarily due to changes in working capital and lower average realized gold price.
Net cash from operating activities for the third quarter 2022 was $117.7 million, an increase of $35.8 million from the prior quarter, primarily due to decrease in income taxes paid ($22.4 million) and a net inflow in non-cash working capital movements ($20.9 million), partially offset by lower net cash earnings ($5.2 million) and lower settlement of derivatives ($1.7 million). Net cash from operating activities for YTD 2022 was $341.9 million, an increase of $124.4 million from the same prior year period, primarily due to proceeds from 2022 Prepay Arrangements ($177.0 million) and an increase of cash inflows from the settlement of derivatives ($21.9 million), partially offset by lower net cash earnings ($48.9 million), an increase in income taxes paid ($21.1 million), and a decrease in proceeds from insurance claim ($9.5 million).
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Net cash used in investing activities for the third quarter 2022 was $228.9 million, a decrease of $40.3 million from the prior quarter, primarily due to a decrease in capital expenditures for property, plant and equipment ($26.1 million) mainly related to the Cóté Gold construction and timing of financing costs paid and capitalized as borrowing costs ($9.8 million). Net cash used in investing activities for YTD 2022 was $658.6 million, an increase of $291.2 million from the same prior year period, primarily due to an increase in capital expenditures for property, plant and equipment ($261.1 million) mainly related to the Cóté Gold construction and an increase in financing costs paid and capitalized as borrowing costs ($8.8 million), partially offset by proceeds from the disposal of marketable securities ($25.1 million).
Net cash from financing activities in the third quarter 2022 was $217.4 million, an increase of $87.5 million from the prior quarter, primarily due to proceeds from the Credit Facility drawdowns ($80.0 million), proceeds from the equipment loans ($4.6 million), and decrease in dividends paid to non-controlling interest ($4.8 million) on the declaration of dividends from subsidiaries. Net cash from financing activities for YTD 2022 was $339.8 million, an increase of $381.4 million from the same prior year period, primarily due to proceeds from the Credit Facility drawdowns ($380.0 million).
Liquidity and Capital Resources
As at September 30, 2022, the Company had $535.6 million in cash and cash equivalents, $0.5 million in short-term investments and net debt1 of $409.3 million. Approximately $100.7 million was available under the Company’s secured revolving credit facility (“Credit Facility”) resulting in liquidity1 at September 30, 2022, of approximately $637 million.
The Côté Gold UJV required its joint venture partners to fund, in advance, two months of future expenditures. During the third quarter, the Côté UJV amended this requirement to two months from three months. The Company uses dividends and intercompany loans to repatriate funds from its operations and the timing of dividends may impact the timing and amount of required financing, including the Company's drawdowns under the Credit Facility. As at September 30, 2022, $237.8 million of cash and cash equivalents was held by Côté Gold and Essakane. The company has funded its portion of the Côté UJV funding cash generated from its operations and drawdowns on the Credit Facility. Restricted cash in support of environmental closure costs obligations related to Essakane, Doyon division and Côté Gold project totaled $47.2 million.
The following table summarizes the Company's outstanding long-term debt:
| ($ millions)1 | September 30 | June 30 December 31 2022 2021 | |
|---|---|---|---|
| 2022 | |||
| Credit Facility 5.75% senior notes Equipment loans | $ 380.0 | $ 150.0 $ — | |
| 447.5 | 447.4 | 445.7 | |
| 17.1 | 14.6 18.7 | ||
| $ 844.6 | $ 612.0 $ 464.4 |
1. Long-term debt does not include leases of $78.9 million as at September 30, 2022 (June 30, 2022 - $62.0 million; December 31, 2021 - $65.6 million),
Credit Facility
The Company has a $500 million Credit Facility, which was entered into in December 2017 and amended including in February 2021, to primarily extend the maturity date from January 31, 2023, to January 31, 2025, for $490 million of the available credit. During the nine months ended September 30, 2022, the Company drew down $380 million on the Credit Facility. As at September 30, 2022, the Company had letters of credit in the amount of $19.3 million issued under the Credit Facility to guarantee certain environmental indemnities and $100.7 million was available under the Credit Facility.
The Credit Facility is secured by certain of the Company's real assets, guarantees by certain of the Company’s subsidiaries and pledges of shares of certain of the Company's subsidiaries. The key terms of the Credit Facility include certain limitations on incremental debt, certain restrictions on distributions and financial covenants including Net Debt to EBITDA and Interest Coverage. The Company entered into an amendment in conjunction with entering into a definitive agreement to sell its interests in the Rosebel mine where the lenders under the credit facility provided consent to release their security over the Rosebel mine at the close of the transaction. The amendment requires that the proceeds from the sale be used for funding the Côté Gold project with certain exceptions.
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OUTLOOK
Liquidity Outlook
The remaining attributable spend to complete the construction of the Côté Gold project is estimated to be between $1.0 and $1.1 billion from October 1, 2022, net of leases and working capital (see “Côté Gold Project”). At September 30, 2022, the Company had $536.1 million in cash and cash equivalents (compared to $452.9 million at June 30, 2022) and $100.7 million available for draw down under the Credit Facility. As at September 30, 2022, $237.8 million of cash and cash equivalents was held by Côté Gold and Essakane.
On October 18, 2022, the Company announced that it had entered into a definitive agreement with Zijin Mining Group Co. Ltd. to sell its interests in the Rosebel mine for cash consideration of $360 million plus working capital adjustments on closing. The transaction is expected to close in the first quarter 2023 or earlier.
Based on the information currently available and prevailing market conditions, which impact project expenditures and operating cash flows, the Company will require additional liquidity in 2023, in addition to the proceeds expected to be received from the sale of Rosebel, to complete construction of the Côté Gold project and continues to seek a financing plan by the end of the year. The Company is actively pursuing various alternatives to increase its liquidity and capital resources including additional secured debt and/or royalties and streams, which could be provided by banks, private capital providers and/or institutional investors and specialist streaming or royalty companies, additional unsecured debt including unsecured and/or convertible notes, sales of common shares and the extension of the 2022 Prepay Arrangement. In addition, the Company continues to progress its strategic alternatives with respect to certain of its development and exploration assets in South America and West Africa (excluding Essakane), that may include the disposition of all or an interest in one or more of such assets.
There can be no assurance that the Company will be successful in achieving financing solutions in time and/or on terms acceptable to the Company or that the strategic evaluations discussed above will result in a transaction. In this case and in order to execute its plans for the foreseeable future, including financing alternatives, the Company has developed certain potential alternatives to defer or reduce its capital spending and various other expenditures. These alternatives may impact future operating and financial performance and/or could extend the Côté Gold project construction timeline and significantly increase project costs, and/or dilute the Company's interest in the Côté Gold project. Reductions in capital expenditures at the Côté Gold project requires approval from the Côté UJV oversight committee.
The Company’s financial results are highly dependent on the price of gold, oil and foreign exchange rates and future changes in these prices will, therefore, impact performance. The Company will be dependent on the cash flows generated from the Côté Gold project to eventually repay its existing and any additional indebtedness that it may incur to fund the remaining construction costs of the Côté Gold project. Readers are encouraged to read the “Caution Regarding Forward Looking Statements” and the “Risk Factors” sections contained in the Company’s 2021 Annual Information Form, which is available on SEDAR at www.sedar.com and the “Caution Regarding Forward Looking Statements” and “Risk and Uncertainties” section of the MD&A.
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Operating Guidance
| Updated Full Year Previous Full Year Guidance 20221 Guidance 20222 | |||
|---|---|---|---|
| Actual YTD 2022 | |||
| Essakane (000s oz) Rosebel (000s oz) Westwood (000s oz) | 334 | 410 – 430 360 – 385 175 – 200 155 – 180 65 – 75 55 – 75 | |
| 145 | |||
| 49 | |||
| Total attributable production (000s oz)3 | 528 | 650 – 705 570 – 640 | |
| Cost of sales3 ($/oz sold) Cash costs3,4 ($/oz sold) AISC3,4 ($/oz sold) Depreciation expense5 ($ millions) Income taxes paid | $ 1,102 | $1,100 – $1,130 $1,100 – $1,150 $1,100 – $1,130 $1,100 – $1,150 $1,600 – $1,650 $1,650 – $1,690 $305 – $315 $280 – $290 $69 – $79 $69 – $79 | |
| $ 1,087 | |||
| $ 1,550 | |||
| $ 237.4 | |||
| $ 59.0 | |||
| 1. | The updated full year guidance is based on the following 2022 full year assumptions, before the impact of hedging: average realized gold price of $1,792 per ounce, | ||
| USDCAD exchange rate of 1.30, EURUSD exchange rate of 1.04 and average crude oil price of $100 per barrel. | |||
| 2. |
USDCAD exchange rate of 1.25, EURUSD exchange rate of 1.20 and average crude oil price of $70 per barrel.
1 Consists of Essakane, Rosebel and Westwood on an attributable basis of 90%, 95% and 100%, respectively.
4. This is a non-GAAP financial measure. See "Non-GAAP Financial Measures".
5. The updated full year depreciation expense guidance includes an estimated $12 million of depreciation in the fourth quarter at Rosebel. Effective October 18, 2022, the Rosebel mine will be accounted for as held for sale, and its operating results will be reported as discontinued operations.
Production Outlook
The Company expects that annual attributable production will exceed the top end of the previous guidance range of 570,000 to 640,000 ounces due to stronger operating performance, particularly at Essakane, and is revising guidance upwards to 650,000 to 705,000 ounces.
Costs Outlook
Cash costs guidance for 2022 has been revised downwards to $1,100 and $1,130 per ounce sold and AISC guidance is revised downwards with costs expected to be between $1,600 and $1,650 per ounce sold, largely reflecting the higher sales expected for the full year, partially offset with higher costs from inflation. The estimates issued in January 2022 included an inflation assumption of 5% to 7% on key consumables, translating to an increase of 1% to 2% in cash costs and AISC (reflected in the previous guidance figures). During the first nine months of the year, higher production offset the additional cost pressures from systemic inflation, constrained global supply chains and the sanctions on trade with Russia that increased the average cost of key consumables such as oil, ammonium nitrate, grinding media, lime and cyanide. The impact of the above-mentioned cost pressures stabilized during the third quarter of 2022 when compared to the first six months of the year. The Company continues to work with its supply chain and seek alternatives to mitigate ongoing costs pressures, including the sourcing of appropriate alternatives as well as progressing productivity initiatives at its operations through the IAMALLIN operational improvement program. Increases in oil prices have been partially mitigated by the existing oil hedge program, see the “Market Risk” section of the Company’s Q3 2022 MD&A. For reference, excluding the impact of the Company’s hedging program, a $10/bbl increase in the oil price would translate to a $15 per ounce increase in cash costs; however, with current hedges in place, the same movement would equate to a $6 per ounce increase in cash costs. The Company notes that continued external cost pressures may result in an increase in costs and capital expenditures.
Income Taxes Paid
Income taxes paid guidance for 2022 is reaffirmed between $69 and $79 million.
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Depreciation Expense
Depreciation expense guidance for 2022 is expected to be in the range of $305 and $315 million, reflecting higher YTD 2022 production and sales at Essakane. The updated full year depreciation expense guidance includes an estimated $12 million of depreciation in the fourth quarter at Rosebel. Effective October 18, 2022, the Rosebel mine will be accounted for as held for sale, and its operating results will be reported as discontinued operations.
Capital Expenditures1
| ($ millions) | Actual YTD 2022 | Updated Full Year Guidance 2022 | ||
|---|---|---|---|---|
| Sustaining2 | Expansion3 | Total | ||
| Essakane Rosebel4 Westwood | $ 116.4 | $ 2.5 | $ 118.9 | $ 175 $ 5 $ 180 $ 165 $ 5 $ 170 105 30 135 105 35 140 30 5 35 40 10 50 |
| 75.0 | 23.4 | 98.4 | ||
| 22.5 | 2.7 | 25.2 | ||
| Boto Gold Corporate | 213.9 | 28.6 | 242.5 | 310 40 350 310 50 360 — 20 20 — 20 20 — — — — — — |
| — | 11.8 | 11.8 | ||
| 0.9 | — | 0.9 | ||
| Total5,6,7,8 | $ 214.8 | $ 40.4 | $ 255.2 | $ 310 $ 60 $ 370 $ 310 $ 70 $ 380 |
1. 100% basis, unless otherwise stated.
| 2. Sustaining capital includes capitalized stripping of (i) $18.6 million for Essakane and $15.6 million for Rosebel in Q3 2022 (ii) $65.7 million for Essakane and $35.4 million for Rosebel YTD 2022 and (iii) $110 million for Essakane and $45 million for Rosebel for both the revised and previous full year guidance. See "Outlook" sections below. | $18.6 million for Essakane and $15.6 m | illion for Rosebel in Q3 2022 | (ii) $65.7 million for Essakane and $35.4 | |
| million for Rosebel YTD 2022 and (iii) $110 million for Essakane and $45 million for Rosebel for both the revised and previous full year guidance. See "Outlook" | ||||
| sections below. | ||||
| 3. Expansion capital includes capitalized stripping of (i) $nil million for Essakane and $3.8 million for Rosebel in Q3 2022 (ii) $nil for Essakane and $18.6 million for | ||||
| Rosebel YTD 2022 and (iii) $nil for Essakane and $20 million for Rosebel for the both the revised and previous full year 2022 guidance. See "Outlook" sections | ||||
| below. |
4. Rosebel includes Saramacca at 70%.
5. Includes $10 million of capitalized exploration and evaluation expenditures also included in the Exploration Outlook guidance table.
6. Capitalized borrowing costs are not included.
7. In addition to the above capital expenditures, $22 million in total principal lease payments are expected.
8. See "Costs Outlook" section above.
Exploration
| ($ millions) | Actual YTD 2022 | Full Year Guidance 2022 Capitalized Expensed Total | ||
|---|---|---|---|---|
| Capitalized | Expensed | Total | ||
| Exploration projects – greenfield Exploration projects – brownfield1 | $ — | $ 19.5 | $ 19.5 | $ — $ 21 $ 21 10 4 14 |
| 5.2 | 3.4 | 8.6 | ||
| $ 5.2 | $ 22.9 | $ 28.1 | $ 10 $ 25 $ 35 |
1 Exploration projects - brownfield includes planned near-mine exploration and resource development of (i) 5.2 million YTD 2022, and (ii) $10 million for the full year 2022 guidance.
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OPERATIONS AND PROJECTS
Essakane Mine (IAMGOLD interest – 90%)1 | Burkina Faso
| Q3 2022 | Q2 2022 Q3 2021 | YTD 2022 | YTD 2021 | |
|---|---|---|---|---|
| Key Operating Statistics Ore mined (000s t) Waste mined (000s t) Material mined (000s t) – total Strip ratio2 Ore milled (000s t) Head grade (g/t) Recovery (%) Gold production (000s oz) – 100% Gold production (000s oz) – attributable 90% Gold sales (000s oz) – 100% Average realized gold price3 ($/oz) | 3,803 3,908 7,602 11,335 11,405 15,243 2.0 2.9 2,704 3,298 1.52 1.33 90 83 119 118 107 106 117 122 $ 1,882 $ 1,790 | 11,902 33,502 45,404 2.8 9,656 1.37 82 349 314 351 $ 1,794 | ||
| 3,259 | 10,894 | |||
| 9,357 | 28,305 | |||
| 12,616 | 39,199 | |||
| 2.9 | 2.6 | |||
| 2,978 | 8,844 | |||
| 1.50 | 1.47 | |||
| 90 | 89 | |||
| 129 | 372 | |||
| 115 | 334 | |||
| 133 | 381 | |||
| $ 1,739 | $ 1,833 | |||
| Financial Results ($ millions)1 Revenues4 | $ 218.8 $ 217.4 | $ 629.7 | ||
| $ 232.2 | $ 699.2 | |||
| Operating costs Royalties | (115.7) | (86.4) (101.1) (10.6) (10.9) | (292.5) | (303.3) (31.5) |
| (11.4) | (34.3) | |||
| Cash costs3 Other mine costs5 | $ (127.1) | $ (97.0) $ (112.0) (0.3) (0.3) | $ (326.8) | $ (334.8) (0.7) |
| (0.3) | (1.0) | |||
| Cost of sales4 Sustaining capital expenditures3,6 Other costs and adjustments7 | $ (127.4) | $ (97.3) $ (112.3) (31.1) (11.6) (2.0) (1.5) | $ (327.8) | $ (335.5) (28.3) (4.9) |
| (37.6) | (116.4) | |||
| (1.5) | (1.8) | |||
| AISC3 Expansion capital expenditures3,8 | $ (166.5) | $ (130.4) $ (125.4) $ (0.5) $ (27.2) | $ (446.0) | $ (368.7) $ (60.3) |
| $ (1.0) | $ (2.5) | |||
| Performance Measures9 Cost of sales excluding depreciation ($/oz sold) Cash costs3 ($/oz sold) AISC3 ($/oz sold) | $ 838 $ 925 $ 836 $ 923 $ 1,124 $ 1,033 | $ 956 $ 955 $ 1,051 | ||
| $ 954 | $ 860 | |||
| $ 952 | $ 858 | |||
| $ 1,248 | $ 1,171 |
1. 100% basis, unless otherwise stated.
2. Strip ratio is calculated as waste mined divided by ore mined.
3. This is a non-GAAP financial measure. See "Non-GAAP Financial Measures".
4. As per note 27 of the consolidated interim financial statements for revenues and cost of sales. Cost of sales is net of depreciation expense.
5. Other mine costs exclude by-product credits.
6. Includes sustaining capitalized stripping for the third quarter 2022 of $18.6 million (second quarter 2022 - $17.2 million; third quarter 2021 - $1.0 million) and YTD 2022 of $65.7 million (YTD 2021 - $1.0 million).
7. Other costs and adjustments include sustaining lease principal payments, environmental rehabilitation accretion and depletion and prior period operating costs, partially offset by by-product credits.
8. Includes expansion capitalized stripping for the third quarter 2022 of $nil (second quarter 2022 - $nil; third quarter 2021 - $21.8 million) and YTD 2022 of $nil (YTD 2021 - $43.9 million).
9. Cost of sales, cash costs and AISC per ounce sold may not be calculated based on amounts presented in this table due to rounding.
Essakane continued to deliver strong results and achieved attributable gold production of 115,000 ounces in the third quarter of 2022, higher by 8,000 ounces or 7% compared to the prior quarter and 9,000 ounces or 8% compared to the same quarter of the prior year. Higher production is attributed mainly to higher mill throughput when compared with the prior quarter and better head grade at higher recovery rates when compared to the same prior year period.
Mining activity of 12.6 million tonnes in the third quarter was higher compared to the prior quarter mainly due to the return of mining operations to full capacity during September as a result of mitigation efforts and an easing of supply chain challenges in the country.
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Mill throughput of 3.0 million tonnes in the third quarter, at an average head grade of 1.50 g/t Au and plant availability of 93%, was higher compared to the prior quarter due to improved grind size and mill availability. Mill recovery of 90% in the third quarter was similar to the prior quarter.
Cost of sales, excluding depreciation, and cash costs per ounce sold of $954 and $952, respectively, were higher by 14% compared to the second quarter 2022, primarily due to higher operating costs partially offset by higher production and sales. AISC per ounce sold of $1,248 was higher by $124 or 11% due to higher cash costs per ounce and higher sustaining capital expenditures.
Total capitalized stripping (sustaining and expansion) in the third quarter of $18.6 million was higher by $1.4 million or 8% and lower by $4.2 million or 18% compared to the prior quarter and same prior year period, respectively. Capitalized stripping was higher than the prior quarter as the impact of supply chain issues were mitigated towards the end of the quarter, while lower than the same prior year period due to the timing of stripping activities and the impact of the supply chain issues experienced in 2022.
Sustaining capital expenditures, excluding capitalized stripping, of $19.0 million included mobile and mill equipment of $8.0 million, capital spares of $4.4 million, tailings management of $1.9 million, airstrip extension of $1.6 million and other sustaining projects of $3.1 million. Expansion capital expenditures, excluding capitalized stripping, of $1.0 million primarily included capital projects associated with the community village resettlement project.
The Company reported on certain political developments in Burkina Faso in the third quarter (see news release dated October 3, 2022). All IAMGOLD personnel continue to be safe and Essakane continues to operate as per the business plan. The security situation in Burkina Faso continues at elevated risk levels and the Company continues to take proactive measures to ensure the safety and security of in-country personnel and is constantly adjusting its protocols and the activity levels at the site according to the security environment. The Company is furthering certain additional investments in security and supply chain infrastructure in the region and at the mine site, with the support of the government. The security situation continues to apply pressures to the in-country supply chain, however mitigation measures minimized impacts in the third quarter.
The IAMALLIN improvement project has continued the execution phase in the third quarter, with the focus continuing on improving mine productivity, mill feed optimization and supplies inventory management including lead time optimization.
Outlook
The guidance range for 2022 attributable gold production at Essakane has been increased to 410,000 to 430,000 ounces, reflecting the continued trend of positive grade reconciliation. The Company is investigating whether the updated block model may be underestimating grade as the complexity of mineralization has increased in the lower portions of the pit with higher amounts of coarse gold. The operation continues to execute on targeted operational improvements including improving mill throughput optimizing blast fragmentation and enhanced gravity circuit recoveries through the planned addition of a double deck screen. In the fourth quarter, Essakane's capital stripping program is expected to increase from current levels in order to secure the 2023 and 2024 production plan, assuming no significant disruptions in the supply chain resulting from the security situation described above.
Cash costs continue to be under pressure due to systemic inflation and constrained global supply chains, although these pressures have been partially offset through increased sales volumes and the weakening of the EURUSD exchange rate which lowers the cost of certain inputs, including labour. The Company continues to actively work with authorities and suppliers to mitigate potential impacts and manage continuity of supply due to the security situation noted above while also investing in additional security infrastructure.
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Rosebel Mine (IAMGOLD interest – 95%)1 | Suriname
| Q3 2022 | Q2 2022 Q3 2021 | YTD 2022 | YTD 2021 | |
|---|---|---|---|---|
| Key Operating Statistics Ore mined2 (000s t) Waste mined2 (000s t) Material mined2 (000s t) – total Strip ratio2,3 Ore milled (000s t) – Rosebel Ore milled2 (000s t) – Saramacca Ore milled2 (000s t) – total Head grade2,4 (g/t) Recovery2 (%) Gold production2 (000s oz) – 100% Gold production1 (000s oz) – owner operator Gold production (000s oz) – attributable 95% Gold sales1 (000s oz) – owner operator Average realized gold price5 ($/oz) | 1,500 1,432 13,965 9,703 15,465 11,135 9.3 6.8 1,572 1,719 629 956 2,203 2,675 0.88 0.68 92 82 57 47 51 42 49 40 54 36 $ 1,861 $ 1,779 | 3,781 | ||
| 1,361 | 4,449 | |||
| 12,346 | 37,439 | 25,569 | ||
| 13,707 | 41,888 | 29,350 | ||
| 9.1 | 8.4 | 6.8 | ||
| 1,139 | 4,266 | 4,771 | ||
| 679 | 2,067 | 2,667 | ||
| 1,818 | 6,333 | 7,438 | ||
| 1.06 | 0.90 | 0.67 | ||
| 95 | 93 | 84 | ||
| 58 | 170 | 135 | ||
| 52 | 152 | 118 | ||
| 50 | 145 | 112 | ||
| 52 | 155 | 106 | ||
| $ 1,726 | $ 1,824 | $ 1,770 | ||
| Financial Results ($ millions)1 Revenues8 | $ 101.9 $ 64.0 | $ 188.0 | ||
| $ 88.8 | $ 282.3 | |||
| Operating costs Royalties | (60.7) | (65.9) (60.0) (6.8) (5.1) | (184.6) | (151.2) (14.5) |
| (6.4) | (19.0) | |||
| Cash costs5,6 Other mine costs7 | $ (67.1) | $ (72.7) $ (65.1) (1.1) — | $ (203.6) | $ (165.7) — |
| (2.1) | (5.9) | |||
| Cost of sales8 Sustaining capital expenditures5,9 Other costs and adjustments10 | $ (69.2) | $ (73.8) $ (65.1) (27.7) (10.8) (1.1) (1.6) | $ (209.5) | $ (165.7) (28.9) (4.6) |
| (26.8) | (75.0) | |||
| (0.2) | (0.9) | |||
| AISC5 Expansion capital expenditures5,11 | $ (96.2) | $ (102.6) $ (77.5) $ (14.7) $ (12.8) | $ (285.4) | $ (199.2) $ (39.3) |
| $ (2.7) | $ (23.4) | |||
| Performance Measures12 Cost of sales excluding depreciation13 ($/oz sold) Cash costs5 ($/oz sold) AISC5 ($/oz sold) | $ 1,349 $ 1,808 $ 1,327 $ 1,808 $ 1,874 $ 2,156 | $ 1,559 $ 1,559 $ 1,875 | ||
| $ 1,346 | $ 1,355 | |||
| $ 1,305 | $ 1,316 | |||
| $ 1,873 | $ 1,845 |
1. Rosebel at 100% and Saramacca at 70%, as included in the consolidated interim financial statements, unless otherwise stated.
2. Includes Saramacca at 100%.
3. Strip ratio is calculated as waste mined divided by ore mined.
4. Includes head grade / tonne for the third quarter 2022 related to the Rosebel concession of 1.03 g/t and the Saramacca concession of 1.11 g/t (second quarter 2022 - 0.85 g/t and 0.94 g/t respectively; third quarter 2021 – 0.64 g/t and 0.76 g/t respectively).
5. This is a non-GAAP financial measure. See "Non-GAAP Financial Measures".
6. Cash costs include by-product credits.
7. Other mine costs include the add-back of non-cash long-term portion of stockpile inventory NRV write-downs for the third quarter 2022 of $2.1 million (second quarter 2022 - $1.1 million; third quarter 2021 - $nil) and the exclusion of by-product credits.
8. As per note 27 of the consolidated interim financial statements for revenues and cost of sales. Cost of sales is net of depreciation expense.
9. Includes sustaining capitalized stripping for the third quarter 2022 of $15.6 million (second quarter 2022 - $7.3 million; third quarter 2021 - $nil) and YTD 2022 of $35.4 million (YTD 2021 - $nil).
10. Other costs and adjustments include sustaining lease principal payments and environmental rehabilitation accretion and depletion, partially offset by by-product credits.
11. Includes expansion capitalized stripping for the third quarter 2022 of $3.8 million (second quarter 2022 - $11.3 million; third quarter 2021 - $8.4 million) and YTD 2022 of $18.6 million (YTD 2021 - $23.3 million).
12. Cost of sales, cash costs and AISC per ounce sold may not be calculated based on amounts presented in this table due to rounding.
13. Includes non-cash ore stockpile and finished goods inventories NRV write-down of $2.1 million for the third quarter 2022 (second quarter 2022 - $1.1 million; third quarter 2021 - $nil) and $5.8 million for YTD 2022 (YTD 2021 - $15.2 million), which had an impact on cost of sales per ounce sold for third quarter 2022 of $41 (second quarter 2022 - $21 per ounce sold; third quarter 2021 - $245 per ounce sold) and $38 per ounce sold for YTD 2022 (YTD 2021 - $142 per ounce sold).
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Rosebel achieved attributable gold production in the third quarter of 50,000 ounces, generally in line with the prior quarter and 10,000 ounces or 25% higher than the same prior year period. Rosebel continues to benefit from improved recovery as a result of mill upgrades and higher head grades, when compared to both prior quarter and the same prior year period, partially offset by lower throughput compared to both the prior quarter and the same prior year period.
Material mined of 13.7 million tonnes in the third quarter was 11% lower compared with the prior quarter and 23% higher compared to the same prior year period. Mining activity in the third quarter was lower due to reduced waste stripping at Rosebel. Mining activities focused on Saramacca to increase supply of higher grade soft ore and the advancement of waste stripping activities to secure access to higher grade zones. Ore mined at Saramacca remained in line with the prior quarter levels, while ore mined at Rosebel was 15% lower than the prior quarter. Ore from both the Rosebel concession and Saramacca were of higher grade than the prior quarter.
Mill throughput of 1.8 million tonnes in the third quarter was 17% lower than the prior quarter at an average head grade of 1.06 g/t. Throughput was impacted by planned mill shutdowns. Rosebel contributed 46% of the ore at an average head grade of 1.18 g/t, Saramacca contributed 28% at an average head grade of 1.29 g/t and the remaining 26% was sourced from ore stockpiles with an average head grade of 0.60 g/t. Mill recovery of 95% for the third quarter was higher than the prior quarter, continuing to benefit from improvements to the carbon adsorption/desorption circuit completed at the end of 2021.
Cost of sales, excluding depreciation, cash costs and AISC per ounce sold in the third quarter of $1,346, $1,305 and $1,873, respectively, were all in line compared to the second quarter 2022.
Total capitalized stripping (sustaining and expansion) in the third quarter of $19.4 million was higher by $0.8 million or 4% and $11.0 million or 131%, compared to the prior quarter and the same prior year period, respectively.
Sustaining capital expenditures in the third quarter, excluding capitalized stripping, of $11.2 million included capital spares of $3.0 million, mill equipment of $1.7 million, tailings management of $0.8 million, pit development at Saramacca of $0.7 million, mobile equipment of $0.5 million, and other sustaining projects of $4.5 million. Expansion capital expenditures, excluding capitalized stripping, of $1.1 million included the Saramacca project and other expansion projects.
The impact of illegal miners disrupting the operations remained stable in the third quarter. The Company is continuing its collaboration efforts with the government task force assigned to manage the security situation at the site as well as with village communities and other stakeholders around the mine site. The Collective Labor Agreement (CLA) expired in August and the Company is negotiating with the Union to renew the agreement.
Outlook
On October 18, 2022, the Company announced that it had entered into a definitive agreement with Zijin Mining Group Co. Ltd. to sell its interests in the Rosebel mine for cash consideration of $360 million plus working capital adjustments, as well as the release of approximately $41 million of IAMGOLD obligations related to equipment leases, on closing. The transaction is expected to close in the first quarter 2023 or earlier. It is subject to certain regulatory approvals, including approvals from the relevant authorities of the People’s Republic of China, the Government of Suriname, and other customary closing conditions. An after-tax non-cash impairment charge of $74.0 million ($115.8 million before tax) was recorded to align the carrying value of the Rosebel cash generating unit with the purchase price.
Attributable gold production at Rosebel in 2022 is now expected to be in the range of 175,000 to 200,000 ounces, primarily reflecting the continued improvement in mill recoveries. Year-to-date, additional cost pressures emerged as discussed above. Rising oil prices continue to be partially mitigated by the existing hedge program. The Company expects higher power costs to persist, compared to 2021, due to links to the price of gold and oil. The collective labour agreement expired in August 2022 and negotiations for a new agreement have continued, although in the past, these have been prolonged and, at times, disruptive to the operations.
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Westwood Mine (IAMGOLD interest – 100%) | Quebec, Canada
| Q3 2022 | Q2 2022 Q3 2021 | YTD 2022 | YTD 2021 | ||
|---|---|---|---|---|---|
| Key Operating Statistics Underground lateral development (metres) Ore mined (000s t) – underground Ore mined (000s t) – other sources Ore mined (000s t) – total Ore milled (000s t) Head grade (g/t) – underground Head grade (g/t) – other sources Head grade (g/t) – total Recovery (%) Gold production (000s oz) – 100% Gold sales (000s oz) – 100% Average realized gold price1 ($/oz) | 1,207 401 53 31 | 549 45 | |||
| 951 | 3,006 | ||||
| 61 | 177 | ||||
| 243 | 218 | 171 | 620 | 690 | |
| 304 | 271 | 202 | 797 | 735 | |
| 284 | 284 | 220 | 818 | 711 | |
| 6.82 | 4.01 | 4.17 | 5.68 | 4.26 | |
| 0.94 | 1.04 | 0.59 | 0.98 | 0.82 | |
| 2.23 | 1.62 | 1.11 | 2.00 | 1.03 | |
| 94 | 93 | 92 | 93 | 93 | |
| 19 | 14 | 7 | 49 | 22 | |
| 18 | 14 | 7 | 48 | 22 | |
| $ 1,730 | $ 1,854 | $ 1,779 | $ 1,814 | $ 1,790 | |
| Financial Results ($ millions) Revenues2 | |||||
| $ 31.4 | $ 27.1 | $ 12.7 | $ 89.3 | $ 39.4 | |
| Cash costs1 Other mine costs3 | $ (32.4) | $ (34.8) | $ (24.7) | $ (97.7) | $ (47.8) |
| (0.3) | (0.6) | — | (1.4) | (0.3) | |
| Cost of sales2 Sustaining capital expenditures1 Other costs and adjustments4 | $ (32.7) | $ (35.4) $ (24.7) (8.8) (3.8) (0.9) (0.4) | $ (99.1) | $ (48.1) (6.3) (0.2) | |
| (6.4) | (22.5) | ||||
| (0.7) | (1.7) | ||||
| AISC1 Expansion capital expenditures1 | $ (39.8) | $ (45.1) $ (28.9) $ (0.7) $ (0.8) | $ (123.3) | $ (54.6) $ (2.6) | |
| $ (1.5) | $ (2.7) | ||||
| Performance Measures5 Cost of sales excluding depreciation6 ($/oz sold) Cash costs1 ($/oz sold) AISC1 ($/oz sold) | $ 2,463 $ 3,512 $ 2,427 $ 3,500 $ 3,147 $ 4,087 | $ 2,205 $ 2,192 $ 2,501 | |||
| $ 1,817 | $ 2,043 | ||||
| $ 1,803 | $ 2,015 | ||||
| $ 2,208 | $ 2,541 |
1. This is a non-GAAP financial measure. See "Non-GAAP Financial Measures".
2. As per note 27 of the consolidated interim financial statements for revenues and cost of sales. Cost of sales is net of depreciation expense.
3. Other mine costs exclude by-product credits.
4. Other costs and adjustments include sustaining lease principal payments and environmental rehabilitation accretion and depletion, partially offset by by-product credits.
5. Cost of sales, cash costs and AISC per ounce sold may not be calculated based on amounts presented in this table due to rounding.
6. Includes non-cash ore stockpile and finished goods inventories NRV write-down of $1.1 million for the third quarter 2022 (second quarter 2022 - $3.3 million; third
| uarter 2021 - $4.8 million) a | nd $6.1 mi | llion for YTD 2022 (YTD 2021 - $7.8 million), which had an impact on cost of sales, excl |
| f $61 for third quarter 2022 (second quarter 2022 - $232; third quarter 2021 - $681) and $126 for YTD 2022 (YTD 2021 - $358). |
Westwood achieved gold production of 19,000 ounces in the third quarter, higher by 5,000 ounces or 36% compared to the prior quarter, as a result of higher volumes of underground ore at a higher grade. Underground production was on care and maintenance for the majority of the first half of 2021 with the ramp up of underground mining activities beginning in the third quarter of 2021.
Mining activities totaled 304,000 tonnes in the third quarter, with underground mining activities contributing 61,000 tonnes and the open pit mining at Grand Duc contributing 243,000 tonnes. Mining volumes were 12% higher than the prior quarter due to improved underground mine performance and supplemental tonnes from Grand Duc.
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