IAMGOLD REPORTS FOURTH QUARTER AND FULL-YEAR 2013 RESULTS Refer to the annual Management Discussion and Analysis (MD&A) and audited consolidated Financial Statements for more information.
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD REPORTS FOURTH QUARTER AND FULL-YEAR 2013 RESULTS
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Refer to the annual Management Discussion and Analysis (MD&A) and audited consolidated Financial Statements for more information.
Toronto, Ontario, February 19, 2014 – IAMGOLD Corporation (“IAMGOLD” or the “Company”) reports consolidated financial and operating results for the fourth quarter and year ending December 31, 2013.
“Early in 2013, we recognized that the gold environment was deteriorating and took several critically important proactive steps to lessen the effect on our business and to better position IAMGOLD going forward,” stated Steve Letwin, President and CEO. “The 27% decline in the gold price created challenges for the gold industry and for our company. The lower price impacted many key areas of our business, including our financial results, mine plans and related reserves and resources, as well as our costs and asset values. The proactive steps I’m referring to included balancing our cost structure in light of lower earnings and production levels, reducing costs by $125 million, which contributed to us beating our cost guidance, focusing production on higher value ore, preserving our liquidity by lowering planned capital expenditures and suspending the dividend, and driving excellent results from our niobium operations. In the fourth quarter, we adjusted asset values to reflect our forecast of continuing relatively flat gold prices and took a non-cash charge to earnings. As a result of these actions, IAMGOLD remained profitable in 2013, excluding asset write downs and impairments. The Company ended the year with liquidity of more than $1 billion in cash, bullion and undrawn credit facilities.
“Given the gold price climate, our near-term focus is on mining profitable ounces, rigid cost containment, optimization of assets and economic returns and the preservation of liquidity,” continued Mr. Letwin. “Mine plan optimization will be geared towards maximizing positive cash flow rather than the number of ounces produced. Cash costs, capital and exploration expenditures will be managed prudently while preserving opportunity for future growth in an improved economic environment.”
OPERATING HIGHLIGHTS
- Cost reductions of $125 million; surpassing target by 25%.
- Total cash costs per ounce1,2 for the fourth quarter:
- Gold mines3 - $828 per ounce.
- IAMGOLD owner-operator mines - $749 per ounce.
- Total cash costs per ounce for full year 2013:
- Gold mines - $801 per ounce within guidance.
- IAMGOLD owner- operator mines - $743 per ounce beats guidance.
- All-in sustaining costs per ounce1 for the fourth quarter.
- Gold mines - $1,242 per ounce.
- IAMGOLD owner-operator mines - $1,213 per ounce.
- All-in sustaining costs per ounce for full year 2013:
- Gold mines - $1,232 per ounce within guidance.
- IAMGOLD owner-operator mines - $1,174 per ounce within guidance.
- Attributable gold production of 195,000 ounces for the fourth quarter.
- Commercial production of 175,000 ounces with attributable gold sales of 173,000 ounces.
- Attributable gold production of 835,000 ounces for full year 2013.
- Commercial production of 762,000 ounces with attributable gold sales of 740,000 ounces.
- Record niobium production of 5.3 million kilograms for 2013 with operating margin1 of $18 per kilogram, up 13% and 20%, respectively, from 2012.
FINANCIAL HIGHLIGHTS
- With no impact on cash, after-tax impairment charges of $772.8 million were recorded by the Company in the fourth quarter against the carrying amount of our mining assets, including the write-off of $256.7 million of goodwill.
- Reported net loss attributable to equity holders of $840.3 million ($2.23 per share) for the fourth quarter and $832.5 million ($2.21 per share) for 2013.
- Adjusted net earnings4 attributable to equity holders of $19.7 million ($0.05 per share4) for the fourth quarter and $137.3 million ($0.36 per share) for 2013.
share4) for the fourth quarter and $305.6 million ($0.81 per share) for 2013.
- Cash, cash equivalents, and gold bullion (at market value) of $384.6 million and undrawn credit facilities of $750 million as at December 31, 2013.
- Capital spending of $669 million in 2013 in line with guidance; guidance of $400 million ± 5% approximately 40% lower for 2014.
- Dividend suspended in December 2013.
FOURTH QUARTER AND FULL-YEAR 2013 HIGHLIGHTS
Non-Cash Impairment Charge
We reported after-tax impairment charges of $772.8 million, largely as a result of the lower short-term and long-term gold price assumptions related to Suriname, Essakane and the Doyon division.The gold price assumptions used in the most recent life of mine plans declined significantly in the fourth quarter 2013. The decrease was the primary cause of the impairment charges recorded against the carrying amount of mining assets and goodwill. After-tax impairment charges were recognized in the fourth quarter 2013 comprising $290.6 million for Suriname, $335.1 million for Essakane, and $147.1 million for the Doyon division. Included in the impairment charges for Suriname and the Doyon division were goodwill write-offs of $168.4 million and $88.3 million, respectively.
Financial Performance
- Revenues for the fourth quarter 2013 were $247.2 million, $151.4 million lower than the same prior year period. The decrease was mainly due to lower gold sales volume and a lower average realized gold price. Revenues for 2013 were $1,147.1 million, $306.3 million lower than the prior year, mainly due to a lower realized gold price ($181.2 million) and lower gold sales volume ($134.7 million), partially offset by higher niobium revenues ($9.1 million).
- Cost of sales for the fourth quarter 2013 was $196.1 million, down $14.0 million from the same prior year period due to lower production volumes, partially offset by higher depreciation. Cost of sales for 2013 was $807.0 million, up $32.8 million from the prior year. The increase was due to higher operating costs ($32.6 million) and higher depreciation expense ($19.5 million), partially offset by lower royalties due to lower realized gold prices ($19.3 million). Operating costs were higher primarily due to mine operating costs associated with Mouska ($43.3 million) and a non-current ore stockpile writedown at Essakane ($10.6 million), partially offset by lower operating costs at Rosebel, Niobec and Essakane.
- Net losses attributable to equity holders for the fourth quarter 2013 were $840.3 million compared to net earnings of $84.6 million for the same prior year period, mainly due to after-tax impairment charges on goodwill and mining assets ($772.8 million) and the other factors noted below explaining the yearover-year variance. Net losses attributable to equity holders for 2013 were $832.5 million compared to
net earnings of $334.7 million in 2012. The decrease mainly related to the $772.8 million of after-tax impairment charges recorded in the fourth quarter, lower revenue ($306.3 million), higher cost of sales ($32.8 million), higher share of net losses from associates and joint ventures ($114.1 million), impairment of investments ($45.0 million) and lower gains on sale of marketable securities ($24.7 million), partially offset by lower income taxes ($202.7 million) and lower exploration expenses ($38.8 million).
- Adjusted net earnings attributable to equity holders4 for the fourth quarter 2013 were $19.7 million ($0.05 per share4), compared with $89.8 million ($0.24 per share) in the same prior period 2012. Adjusted net earnings attributable to equity holders for 2013 were $137.3 million ($0.36 per share), down $178.3 million ($0.48 per share) from the prior year.
- Net cash from operating activities for the fourth quarter 2013 was $44.0 million, $56.7 million lower than the same prior year period. The decrease was mainly due to lower revenues partially offset by lower exploration expenses and lower income taxes paid. Net cash from operating activities for 2013 was $246.3 million, down $169.0 million from 2012. The decrease was mainly due to lower revenues ($306.3 million) partially offset by lower exploration expenses ($38.8 million) and lower income taxes paid ($85.6 million).
$54.7 million ($0.15 per share4) compared with $116.1 million ($0.31 per share) in the same prior year period. Net cash from operating activities before changes in working capital for 2013 was $305.6 million ($0.81 per share), down from $474.4 million ($1.26 per share) in 2012.
Financial Position
- Cash, cash equivalents and gold bullion (at market value) were $384.6 million at December 31, 2013, down $636.0 million from December 31, 2012. The decline was mainly due to capital expenditures on mining assets ($636.9 million), dividend and interest paid ($130.7 million), a decrease in the market value of the gold bullion ($61.0 million) and loans provided to related parties net of repayments ($47.7 million), partially offset by cash generated from operating activities ($246.3 million).
- As at December 31, 2013, no funds were drawn against our $750 million total unsecured revolving credit facilities.
Liquidity Planning
- Changes in the market price of gold significantly impact our liquidity. In 2013, we suspended the dividend to conserve cash and we reduced costs by $125 million.
- In 2014, we plan to look for further opportunities to reduce costs and improve the efficiency of business processes and systems. We plan to monetize a portion of the non-cash items within working capital, such as supplies and consumables inventory. We will also focus on optimizing our asset portfolio through the further evaluation of life of mine plans and the efficient allocation of capital and human resources. The undrawn credit facility of $750 million remains accessible to the Company.
Production, Costs and Margins
Gold Operations
- Attributable gold production, inclusive of joint venture operations, was 195,000 ounces in the fourth quarter, compared to 214,000 ounces in the same quarter 2012. The decline was mainly due to lower grades at Rosebel and Essakane, partially offset by increased production at the Doyon division. For the full year 2013, attributable gold production, inclusive of joint venture operations, was 835,000 ounces, up 5,000 ounces from 2012. The increase was due to pre-commercial production from the Westwood mine (73,000 ounces) and higher production at Mouska (59,000 ounces). This was partially offset by lower tonnes of ore mined due to pit sequencing combined with lower grades at Rosebel (46,000 ounces), lower grades as expected at Essakane (65,000 ounces) and lower grades at Sadiola (14,000 ounces).
- Attributable gold sales volume, inclusive of joint venture operations, for the fourth quarter 2013 was 173,000 compared to attributable commercial production of 175,000 ounces. Attributable gold sales volume, inclusive of joint venture operations, for 2013 was 740,000 ounces compared to attributable
gold commercial production of 762,000 ounces. The variance of 22,000 ounces was mainly related to timing differences.
- Total cash costs1,2 – gold mines3 for the fourth quarter 2013 were $828 per ounce, up 13% from the same prior year period mainly due to lower grades at Rosebel, Essakane and Sadiola. Total cash costs
- gold mines for 2013 were $801 per ounce, up 12% from the prior year. The increase was mainly due
to the impact of lower grades and the increased processing of hard rock together with inflationary cost pressures across all sites. This was partially offset by the benefits from the cost reduction program.
- All-in sustaining costs1 – gold mines3 for the fourth quarter 2013 were $1,242 per ounce up 14% from the same prior year period. All-in sustaining costs – gold mines for 2013 were $1,232 per ounce sold, up 16% from the prior year. The increases reflect higher cash costs, as noted above, as well as higher sustaining capital expenditures to support increased hard rock capacity levels at Rosebel and Essakane.
- All-in sustaining costs – total5 for the fourth quarter 2013 were $1,125 per ounce sold, up 3% from the same prior year period. All-in sustaining costs – total for 2013 were $1,153 per ounce sold, up 9% from the same prior year period. This measure includes the impact of the Niobec mine’s operating margin and its sustaining capital expenditures.
Niobium Operation
In the fourth quarter niobium production was 1.6 million kilograms, up 33% from the same prior year period. Niobium production for 2013 was a record 5.3 million kilograms, up 13% from the prior year. Niobec’s strong performance in 2013 was the result of improved recoveries and grades, along with an increase in mill throughput.
- The operating margin1 in the fourth quarter 2013 was $20 per kilogram, 33% higher than the same quarter in 2012. For the full year 2013, the operating margin was $18 per kilogram, up 20% from 2012. The higher margins reflect the increased production and the benefits from the cost reduction program.
- Niobec is one of three significant producers of ferroniobium in the world, with a market share of approximately 10% in 2013. The largest producer in the niobium market is a Brazilian producer whose dominant market position can impact market dynamics. Demand for niobium is largely tied to the steel industry. World steel production in 2013 was 3% higher than 2012 due to surging production in China. Niobium demand, however, was down slightly from the prior year due to the slowdown in steel demand in developed countries. The average realized sales price was marginally higher in 2013 when compared to the average realized sales price in the prior year.
Commitment to Zero Harm Continues
Regarding health and safety, the frequency of all types of serious injuries (measured as DART rate6) for 2013 was 1.01, compared to 1.08 for 2012, representing a 6.5% improvement. Unfortunately, we reported a death of a local contractor at Rosebel during the third quarter 2013.
2013 COST REDUCTION PROGRAM
In the first quarter 2013, we initiated a $100 million cost-reduction program. By the end of the year, we exceeded our target by 25% with a total savings of $125 million. While all sustainable cost reductions and productivity improvements have been rolled forward into 2014 as embedded savings, we continue to seek opportunities for further cost reductions and productivity improvements. The following table presents examples of how the cost reductions were achieved:
| Operations Examples | Reduced Power Costs and Consumption of Consumables Reduced power rates at Rosebel. Reduced consumption of energy and steel in the SAG and ball mill grinding process at Essakane through accelerated commissioning of the pebble crusher. Reduced fuel consumption at Westwood through a fuel and waste oil management program. |
|---|---|
| Target: $54 million | |
| Realized in 2013: | |
| $75 million |
| Reduced Labour Costs Reduced staffing requirements in mining and maintenance through business process and operating efficiency improvements and improved contract maintenance. Reduced the cost of consultants. Renegotiated Supplier Contracts Renegotiated supplier contracts, such as food and security at Essakane. Consolidated bus contracts for transporting workers to and from the Essakane mine. Improved Operating Efficiencies and Reduced Maintenance Costs Improved productivity at Rosebel through an aggressive dewatering process of the pits during the rainy season combined with better coordination of shifts for the drilling and blasting crews. Reduced the frequency and cost of preventive truck maintenance through the replacement of the oil renewal system. Redesigned mine roads, resulting in improved tire life and reduced hauling cycle times. Installed a potable water system at Essakane, eliminating the need for bottled water. Increased monitoring and management of tire wear at Westwood. | |
|---|---|
| Exploration Examples | Downsized exploration teams by 34% mainly in West Africa, Suriname, Brazil and Canada. Reduced drilling activities mainly in Mali, Burkina Faso, Peru and Suriname. Reprioritized projects and deferred others. Deferred or redesigned certain study elements related to the Côté Gold project and exploration program. |
| Target: $40 million | |
| Realized in 2013: | |
| $41 million | |
| Corporate Examples | Reduced use of consultants and renegotiated contractor/supplier agreements. Lowered stock based compensation. Increased reliance on communications technology resulting in less travel. |
| Target: $6 million | |
| Realized in 2013: | |
| $9 million |
RESERVES AND RESOURCES
(Additional detail behind the gold price assumptions used to determine reserves and resources can be found in the Reserves and Resources section of the MD&A)
At December 31, 2013:
- Total attributable proven and probable gold reserves were 10.1 million ounces compared to 11.3 million ounces at the end of 2012. The weighted average gold price assumption used to determine mineral reserves as at December 31, 2013 was $1,357 per ounce compared to $1,263 per ounce as at December 31, 2012. The weighted average gold price assumption for 2012 was lower than what would be expected given that its calculation included a gold price assumption for Rosebel of $1,200, which was unchanged from 2011 since the mine’s reserves were in the process of being reviewed and updated as part of the feasibility study that was underway.
- Total attributable measured and indicated gold resources (inclusive of reserves) were 23.4 million ounces compared to 22.6 million ounces at the end of 2012. The weighted average gold price assumption used to determine mineral resources as at December 31, 2013 was $1,540 per ounce compared to $1,584 per ounce as at December 31, 2012.
Note: In mining operations, measured and indicated resources that are not mineral reserves are considered uneconomic at the price used for reserves estimations, but are deemed to have a reasonable prospect of economic extraction.
- Niobium probable reserves were 1,707 million kilograms of contained niobium pentoxide (Nb2O5), compared to 1,768 million kilograms at the end of 2012.
- Niobium measured and indicated resources (inclusive of reserves) were 2,653 million kilograms of contained niobium pentoxide (Nb2O5), compared to 2,563 million kilograms at the end of 2012.
Note: Niobium mineral reserves have been estimated based on a Technical Report (NI 43-101) prepared in December 2013, using a block caving scenario using $45 per kilogram of Niobium and include dilution material. Niobium mineral resources have been estimated using a cutoff of 0.20% Nb2O5 per tonne (before recovery) under the block caving scenario. There is a large volume of the material within the planned block caving that has a measured resource classification. However, due to the uncertainty associated with estimating material movement within the cave, a probable classification has been applied to the reserve.
SUMMARY OF FINANCIAL AND OPERATING RESULTS
| Three months ended December 31, Years ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2013 Change | 20121 | 2013 Change | 20121 $1 ,453.4 $ 774.2 $ 679.2 $ 334.7 $ 0.89 $ 315.6 $ 0.84 $ 415.3 $ 474.4 $ 1.26 827 830 830 $ 1,667 $ 715 $ 952 | |||
| Financial Results ($ millions, except where noted) Revenues Cost of sales Earnings from mining operations 2 | $ 247.2 (38%) $ 196.1 (7%) $ 5 1.1 (73%) | $ 398.6 $ 210.1 $ 188.5 | $1 ,147.1 (21%) $ 807.0 4% $ 340.1 (50%) | |||
| Net earnings (losses) attributable to equity holders of IAMGOLD Net earnings (losses) per share ($/share) | $ (840.3) (1,093%) $ (2.23) (1,114%) | $ 8 4.6 $ 0 .22 | $ ( 832.5) (349%) $ (2.21) (348%) | |||
| Adjusted net earnings attributable to equity holders of IAMGOLD2 Adjusted net earnings per share2 ($/share) | $ 1 9.7 (78%) $ 0 .05 (79%) | $ 8 9.8 $ 0 .24 | $ 137.3 (56%) $ 0.36 (57%) | |||
| Net cash from operating activities Net cash from operating activities before changes in working capital2 Net cash from operating activities before changes in working capital ($/share)2 | $ 4 4.0 (56%) $ 5 4.7 (53%) $ 0 .15 (52%) | $ 100.7 $ 116.1 $ 0 .31 | $ 246.3 (41%) $ 305.6 (36%) $ 0.81 (36%) | |||
| Key Operating Statistics Gold sales - attributable (000s oz) Gold commercial production - attributable (000s oz) Gold production - attributable (000s oz)3 | 173 (25%) 175 (18%) 195 (9%) | 232 214 214 | 740 (11%) 762 (8%) 835 1% | |||
| Average realized gold price2 ($/oz) Total cash costs 2,4,5 - gold mines7 ($/oz) Gold margin2 ($/oz) | $ 1,273 (25%) $ 8 28 13% $ 4 45 (54%) | $ 1,704 $ 7 31 $ 9 73 | $ 1,399 (16%) $ 801 12% $ 598 (37%) | |||
| All-in sustaining costs 2,6 - gold mines ($/oz) All-in sustaining costs - total8 ($/oz) | $ 1,242 14% $ 1,125 3% | $ 1,090 $ 1,087 | $ 1,232 16% $ 1,153 9% | $ 1,064 $ 1,054 | ||
| Niobium production (millions of kg Nb) Niobium sales (millions of kg Nb) Operating margin2 ($/kg Nb) | 1.6 33% 1.3 18% $ 20 33% | 1.2 1.1 $ 15 | 5.3 13% 4.9 4% $ 1 8 20% | 4.7 4.7 $ 1 5 | ||
| Financial Position ($ millions) | December 31, 2013 Change | December 31, 20121 $ 1,020.6 $ 894.2 $ 5,295.6 $ 638.8 $ 750.0 | ||||
| Cash, cash equivalents, and gold bullion at market value at cost Total assets Long-term debt Available credit facilities | $ 384.6 (62%) $ 319.2 (64%) $ 4,190.4 (21%) $ 640.3 0% $ 750.0 0% | |||||
| 1 Refer to note 4(b) of the consolidated financial statements. 2 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A for the reconciliation to GAAP. 3 Balances related to 2013 include Westwood pre-commercial production for the three months and year ended December 31, 2013 of 20,000 and |
73,000 ounces, respectively.
4 The total cash costs computation does not include Westwood pre-commercial production for the three months and year ended December 31, 2013 of 20,000 and 73,000 ounces, respectively.
5 By-product credits are included in the calculation of total cash costs. Excluding these credits increases total cash costs – gold mines by $2 per ounce for the years ended December 31, 2013 and 2012 and $2 per ounce for the three months ended December 31, 2013 and 2012.
6 By-product credits are included in the calculation of all-in sustaining costs – gold mines. Refer to non-GAAP performance measures section of the MD&A for the reconciliation to GAAP.
7 Gold mines, as used with total cash costs and all-in sustaining costs, consist of Rosebel, Essakane, Mouska, Sadiola and Yatela on an attributable basis.
8 Total, as used with all-in sustaining costs, includes the impact of niobium contribution, defined as the Niobec mine’s operating margin and sustaining capital, on a per gold ounce sold basis. Refer to the all-in sustaining costs table in this news release.
ATTRIBUTABLE GOLD PRODUCTION AND TOTAL CASH COSTS
| Gold Production (000s oz) Total Cash Costs1 ($/oz) Three months ended Years ended Three months ended Years ended December 31, December 31, December 31, December 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 $ 6 71 603 137 637 1,076 1,337 1,134 715 - 715 | |
| Owner-operator Rosebel (95%) Essakane (90%) Doyon division2 (100%) | 70 59 15 | 100 77 - | 336 250 63 | 382 315 4 | $ 674 822 813 | $ 6 61 672 - | $ 718 753 832 | |
| 144 | 177 | 649 | 701 | 749 | 665 | 743 | ||
| Joint ventures Sadiola (41%) Yatela (40%) | 24 7 | 27 10 | 86 27 | 100 29 | 1,181 1,223 | 1,118 843 | 1,101 1,243 | |
| 31 | 37 | 113 | 129 | 1,191 | 1,046 | 1,136 | ||
| Total commercial operations | 175 | 214 | 762 | 830 | 828 | 731 | 801 | |
| Doyon division2 (100%) | 20 | - | 73 | - | - | - | - | |
| 195 | 214 | 835 | 830 | 828 | 731 | 801 | ||
| Cash costs1, excluding royalties Royalties | 770 58 | 632 99 | 729 72 | 624 91 $ 7 15 | ||||
| Total cash costs 3 | $ 828 | $ 7 31 | $ 801 |
1 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A for the reconciliation to GAAP.
2 In 2012, the Mouska mine, as planned, did not produce gold other than marginal gold derived from the mill clean-up process. In 2013, the Westwood mill began processing Mouska ore. While the ore from Mouska is commercial production, the ore from Westwood is at pre-commercial levels. Until Westwood achieves commercial production, the Westwood contribution from ounces sold will be netted against capital expenditures.
3 The total cash costs computation does not include Westwood pre-commercial production for the three months and year ended December 31, 2013 of 20,000 and 73,000 ounces, respectively.
GOLD SALES VOLUME AND REALIZED GOLD PRICE
| Gold Sales1 Average Realized Gold (000s oz) Price2 ($/oz) Three months ended Years ended Three months ended Years ended December 31, December 31, December 31, December 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 $ 1 ,667 $ 1 ,666 $ 1 ,667 | |
| Owner-operator (100%) Joint Ventures3 | 151 31 | 205 41 | 671 113 | 751 130 | $ 1 ,275 $ 1 ,267 | $ 1 ,703 $ 1 ,707 | $ 1 ,397 $ 1 ,413 | |
| Total | 182 | 246 | 784 | 881 | $ 1 ,273 | $ 1 ,704 | $ 1 ,399 |
1 Attributable sales volume for the fourth quarters 2013 and 2012 were 173,000 ounces and 232,000 ounces respectively, and for the years ended 2013 and 2012 were 740,000 ounces and 827,000 ounces respectively, after taking into account 95% of the Rosebel sales and 90% of the Essakane sales. 2 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A for the reconciliation to GAAP.
3 Attributable sales of Sadiola (41%) and Yatela (40%).
| ALL-IN SUSTAINING COSTS | |
| All-in Sustaining Costs1 ($/oz) Three months ended Years ended December 31, December 31, 2013 2012 2013 2012 Owner-operator Rosebel (95%) $ 1,104 $ 7 98 $ 1,063 $ 8 84 Essakane (90%) 1,242 1,083 1,177 937 Doyon division (100%) 822 - 889 1,059 All-in sustaining costs - owner-operator 1,213 1,034 1,174 998 Joint ventures Sadiola (41%) 1,351 1,445 1,476 1,300 Yatela (40%) 1,429 1,058 1,789 1,849 All-in sustaining costs - gold mines 1,242 1,090 1,232 1,064 Niobium contribution2 (117) (3) (79) (10) All-in sustaining costs - total3 $ 1,125 $ 1,087 $ 1,153 $ 1,054 |
| All-in Sustaining Costs1 ($/oz) Three months ended Years ended December 31, December 31, | ||||
|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 $ 8 84 937 1,059 998 1,300 1,849 1,064 (10) $ 1,054 | |
| Owner-operator Rosebel (95%) Essakane (90%) Doyon division (100%) | $ 1,104 1,242 822 | $ 7 98 1,083 - | $ 1,063 1,177 889 | |
| All-in sustaining costs - owner-operator | 1,213 | 1,034 | 1,174 | |
| Joint ventures Sadiola (41%) Yatela (40%) | 1,351 1,429 | 1,445 1,058 | 1,476 1,789 | |
| All-in sustaining costs - gold mines Niobium contribution2 | 1,242 (117) | 1,090 (3) | 1,232 (79) | |
| All-in sustaining costs - total3 | $ 1,125 | $ 1,087 | $ 1,153 |
1 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A for the reconciliation to GAAP.
2 Niobium contribution consists of Niobec mine’s operating margin and sustaining capital on a per gold ounce sold basis.
3 By-product credits are included in the calculation of this measure. Refer to the non-GAAP performance measures section of the MD&A for the reconciliation to GAAP.
CAPITAL EXPENDITURES1
| Ended December 31, 2013 Three months Twelve months | |||
| Development/ ($ millions) Sustaining Expansion | Total | Development/ Sustaining Expansion | Total |
| Gold segments Rosebel2 $ 34.0 $ 2.1 Essakane2 26.4 30.0 Westwood - 15.4 | $ 36.1 56.4 15.4 | $ 1 15.6 $ 1 8.0 114.9 171.0 - 118.1 | $ 1 33.6 285.9 118.1 |
| Total gold segments 60.4 47.5 Niobec 5.8 9.7 Corporate and other 1.2 - | 107.9 15.5 1.2 | 230.5 307.1 30.8 44.1 4.9 - | 537.6 74.9 4.9 |
| Total capital expenditures, consolidated 67.4 57.2 Joint ventures 3 3.3 3.5 | 124.6 6.8 | 266.2 351.2 33.1 18.1 | 617.4 51.2 |
| $ 70.7 $ 6 0.7 | $ 1 31.4 | $ 2 99.3 $ 369.3 | $ 6 68.6 |
1 Capitalized borrowing costs are not included.
2 On an attributable basis, sustaining capital expenditures for Rosebel (95%) and Essakane (90%) were $32.3 million and $23.8 million, respectively, for the three months ended December 31, 2013 and $ 109.8 million and $ 103.4 million, respectively, for the year ended December 31, 2013.
3 Attributable capital expenditures of Sadiola (41%) and Yatela (40%).
OPERATIONS REVIEW WITH FOURTH QUARTER HIGHLIGHTS
ROSEBEL MINE, SURINAME
| Rosebel Mine (IAMGOLD interest – 95%) | ||
|---|---|---|
| Summarized Results 100% Basis, unless otherwise stated | ||
| Three months ended December 31, | ||
| 2013 Change | 2012 3,857 14,416 786 2.9 3,275 1.04 96 105 100 110 | |
| Mine operating statistics Ore mined (000s t) Total operating material mined1 (000s t) Capital waste mined (000s t) Strip ratio2 Ore milled (000s t) Head grade (g/t) Recovery (%) Gold production - 100% (000s oz) Attributable gold production - 95% (000s oz) Gold sales - 100% (000s oz) | 4,163 8% 7,127 (51%) 9,596 1,121% 3.0 3% 3,125 (5%) 0.78 (25%) 95 (1%) 74 (30%) 70 (30%) 80 (27%) | |
| Performance measures Average realized gold price3 ($/oz) All-in sustaining costs 3 ($/oz) Cash costs3 excluding royalties ($/oz) Royalties ($/oz) Total cash costs 3 ($/oz) | $ 1,271 (25%) $ 1,104 38% $ 6 12 9% $ 62 (36%) $ 6 74 2% | $ 1,702 $ 7 98 $ 5 64 $ 97 $ 6 61 |
| 1 |
2 Strip ratio is calculated as capital waste and expensed waste material mined divided by ore mined.
3 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A for the reconciliation to GAAP.
- Attributable gold production of 70,000 ounces for the fourth quarter 2013 was 30% lower than the same prior year period primarily the result of the impact of lower grades and pit sequencing.
- Total cash costs1 in the fourth quarter of $674 per ounce were slightly higher than the same period in 2012 mainly due to lower production, partially offset by lower realized power costs as a result of the reduced power rate agreement with the Government of Suriname, and higher capitalized stripping. All-in sustaining costs of $1,104 per ounce in the fourth quarter were higher than the same period in 2012 due mainly to higher sustaining capital expenditures as well as the lower sales volume.
- Sustaining capital expenditures were $34.0 million in the fourth quarter and included capitalized stripping costs ($21.7 million), resource development ($2.7 million), capital spares ($5.0 million) tailings dam expansion ($2.0 million) and various other sustaining capital ($2.6 million).
ESSAKANE MINE, BURKINA FASO
| Essakane Mine (IAMGOLD interest—90%) | ||
|---|---|---|
| Summarized Results 100% Basis, unless otherwise stated Three months ended December 31, | ||
| 2013 Change | 2012 2,275 2,435 7,997 3.6 2,805 1.04 92 86 77 95 | |
| Mine operating statistics Ore mined (000s t) Total operating material mined1 (000s t) Capital waste mined (000s t) Strip ratio2 Ore milled (000s t) Head grade (g/t) Recovery (%) Gold production - 100% (000s oz) Attributable gold production - 95% (000s oz) Gold sales - 100% (000s oz) | 3,360 48% 4,357 79% 6,727 (16%) 2.3 (36%) 2,606 (7%) 0.88 (15%) 89 (3%) 65 (24%) 59 (24%) 60 (37%) | |
| Performance measures Average realized gold price3 ($/oz) All-in sustaining costs 3 ($/oz) Cash costs3 excluding royalties ($/oz) Royalties ($/oz) Total cash costs 3 ($/oz) | $ 1,274 (25%) $ 1,242 15% $ 7 72 34% $ 50 (47%) $ 8 22 22% | $ 1,706 $ 1,083 $ 5 78 $ 94 $ 6 72 |
| 1 |
2 Strip ratio is calculated as capital waste and expensed waste material mined divided by ore mined.
3 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A for the reconciliation to GAAP.
- Attributable gold production of 59,000 ounces was 24% lower than the same period in 2012, mainly due to the processing of lower-grade ore.
- Total cash costs1 in the fourth quarter of $822 per ounce were higher than the same period in 2012 mainly due to the impact of lower grades on gold production, higher energy prices and upward pressure on the price of consumables. All-in sustaining costs of $1,242 during the fourth quarter were higher compared to the prior year mainly due to higher cash costs and sustaining capital expenditures.
- Sustaining capital expenditures were $26.4 million and included capitalized stripping costs on the push-back of the pit ($17.5 million), resource development ($2.5 million), capital spares ($3.1 million) and other smaller projects ($3.3 million).
- The plant expansion at Essakane to accommodate an increasing proportion of hard rock was completed on time at the end of 2013, and commissioning is expected to be completed by the end of the first quarter 2014. We expect production to increase by approximately 25% in 2014 as the new processing line will be processing higher-grade hard rock. In 2013, ore grades were 10%-15% lower than the life of mine average, mainly due to the processing of lower-grade, softer ore stockpiled in prior years. The expected increase in grades in 2014 will help to mitigate the impact of the higher energy consumption required to treat harder ore. We are also exploring opportunities to reduce our power costs, including connecting to the national power grid in Ouagadougou.
DOYON DIVISION, CANADA
| Doyon Division (IAMGOLD interest – 100%) Summarized Results | ||
|---|---|---|
| Three months ended December 31, | ||
| 2013 Change | 2012 | |
| Mouska operating statistics Ore mined (000s t) Ore milled (000s t) Head grade (g/t) Recovery (%) Gold production - 100% (000s oz) Gold sales - 100% (000s oz) | 20 (13%) 34 100% 14.91 100% 93 100% 15 100% 11 100% | 23 - - - - - |
| Mouska performance measures Average realized gold price 1 ($/oz) | $ 1,310 100% | $ - |
| All-in sustaining costs 1 ($/oz) | $ 8 22 100% | $ - |
| Cash costs 1 excluding royalties ($/oz) Royalties ($/oz) Total cash costs 1 ($/oz) | $ 7 85 100% $ 28 100% $ 8 13 100% | $ - $ - $ - |
| Three months ended December 31, | ||
| 2013 Change | 2012 | |
| Westwood operating statistics Ore mined (000s t) Ore milled (000s t) Head grade (g/t) Recovery (%) Pre-commercial gold production - 100% (000s oz) Pre-commercial gold sales - 100% (000s oz) | 69 245% 78 100% 8.47 100% 95 100% 20 100% 20 100% | 20 - - - - - |
| 1 |
- Batch processing of ore from both Mouska and Westwood continued throughout the fourth quarter. Mouska produced 15,000 ounces in the fourth quarter 2013 compared to no production in the fourth quarter of 2012 when the mill was being refurbished.
- Mouska’s total cash costs1 of $813 per ounce and all-in sustaining costs of $822 per ounce are not comparable to the prior year when ore was being stockpiled during the refurbishment of the mill.
- Pre-commercial gold production from the Westwood mine was 20,000 ounces during the fourth quarter of 2013. The resulting sales of 20,000 ounces and the related costs were netted against capital expenditures.
- For the full year 2013 the combined production from Mouska and Westwood was 136,000 ounces.
- While the ore from the Mouska mine is in commercial production, the ore from Westwood is at precommercial levels. Until Westwood achieves commercial production, the contribution from the sale of ounces produced from Westwood will be netted against capital expenditures. The revenues and associated costs from the gold sold at Westwood after obtaining commercial production will be reported in the consolidated statements of earnings.
- The Westwood mine is expected to commence commercial production in the third quarter of 2014. The first half of the year will be mainly focused on underground development in preparation for the ramp-up
in the second half of the year. Rehabilitation of the zone impacted by the rockburst in August 2013 is on schedule, with access now being established in all of the affected sublevels.
- Close to 80% of gold production in 2014 at the Doyon division is expected in the second half of the year. Mouska production will be limited in preparation for closure at the end of the first quarter 2014. As a result, production from the Doyon division will be lower in the first half of the year. Our outlook for 2014 for the Westwood and Mouska mines combined is expected to range between 100,000 and 120,000 ounces, with a ramp-up of the Westwood mine to full capacity by the end of 2016.
SADIOLA MINE, MALI
| Sadiola Mine (IAMGOLD interest – 41%) Summarized Results 41% Basis | ||
|---|---|---|
| Three months ended December 31, | ||
| 2013 Change | 2012 | |
| Mine operating statistics Ore mined (000s t) Total operating material mined1 (000s t) Capital waste mined (000s t) Strip ratio2 Ore milled (000s t) Head grade (g/t) Recovery (%) Attributable gold production - (000s oz) Attributable gold sales - (000s oz) | 438 3% 2,161 (28%) 935 390% 6.1 (8%) 538 (1%) 1.39 (17%) 90 (3%) 24 (11%) 24 (20%) | 424 3,015 191 6.6 545 1.67 93 27 30 |
| Performance measures Average realized gold price3 ($/oz) All-in sustaining costs 3 ($/oz) Cash costs3 excluding royalties ($/oz) Royalties ($/oz) Total cash costs 3 ($/oz) | $ 1,269 (25%) $ 1,351 (6%) $ 1,102 10% $ 79 (31%) $ 1,181 6% | $ 1,703 $ 1,445 $ 1,003 $ 1 15 $ 1,118 |
| 1 |
2 Strip ratio is calculated as capital waste and expensed waste material mined divided by ore mined.
3 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A for the reconciliation to GAAP.
- Attributable gold production of 24,000 ounces for the fourth quarter 2013 was 11% lower than the prior year period due to lower grades.
- Total cash costs1 of $1,181 per ounce were higher in the fourth quarter than in the same quarter 2012 due to lower production. All-in sustaining costs of $1,351 for the fourth quarter were 6% lower than the same quarter in 2012 mainly due to timing of sustaining capital expenditures.
- The Company’s attributable portion of sustaining capital expenditures during the fourth quarter 2013 was $3.0 million.