IAMGOLD Reports Second Quarter 2023 Results
NEWS RELEASE
TSX: IMG NYSE: IAG
IAMGOLD REPORTS SECOND QUARTER 2023 RESULTS
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Toronto, Ontario, August 10, 2023 – IAMGOLD Corporation (NYSE:IAG, TSX:IMG) (“IAMGOLD” or the “Company”) today reported its financial and operating results for the second quarter ended June 30, 2023.
HIGHLIGHTS:
Operations
- Attributable gold production from continuing operations was 107,000 ounces.
- Revenues from continuing operations were $238.8 million from sales of 121,000 ounces (111,000 ounces on an attributable basis) at an average realized gold price of $1,973 per ounce.
- Cost of sales per ounce sold from continuing operations was $1,376, cash cost1 per ounce sold from continuing operations was $1,372 and all-in-sustaining-cost1 ("AISC") per ounce sold from continuing operations was $1,912.
- Attributable gold production guidance for 2023 is unchanged and is expected to be in the range of 410,000 to 470,000 ounces. Full year costs are expected to come in at the top end of the guided ranges of between $1,125 and $1,175 per ounce sold for cash costs1 and between $1,625 to $1,700 per ounce sold for AISC1.
- In health and safety, for the six months ended June 30, 2023, the Company reported a DARTFR (days away, restricted, transferred duty frequency rate) of 0.39 and a TRIFR (total recordable injuries frequency rate) of 0.68, with a decreasing trend since the last quarter.
Financial
- Net earnings attributable to equity holders1 of $92.6 million or $0.19 per share and adjusted net loss attributable to equity holders1 of $3.3 million or $0.01 per share.
- Net cash from operating activities was $23.2 million. Net cash from operating activities, before movements in noncash working capital and non-current ore stockpiles1 was $21.8 million.
- Earnings before interest, income taxes, depreciation and amortization ("EBITDA")1 from continuing operations was $166.2 million and adjusted EBITDA1 was $63.8 million.
- Mine-site free cash flow1 from continuing operations was $14.6 million.
- The Company has available liquidity of $1,200.2 million comprised of cash and cash equivalents of $747.7 million and the available balance of the secured revolving credit facility ("Credit Facility") of $452.5 million as at June 30, 2023.
Côté Gold
- As of June 30, 2023, the Côté Gold Project was estimated to be 85.7% complete.
- Since commencement of construction, $2.23 billion ($1.56 billion at 70%) of the planned $2.965 billion ($2.08 billion at 70%) of project expenditure has been incurred.
- The estimated cost to complete the Côté Gold Project on a 100% basis is $665 to $735 million ($465 to $515 million at 70%) on an incurred basis assuming a USDCAD rate of 1.32, with the top end of the range approximating the planned $2.965 billion.
- Sumitomo Metal Mining Co., Ltd. and SMM Gold Cote Inc. ("Sumitomo" or "SMM") funded the final $61.0 million of the Company's funding obligation and an incremental $18.0 million based on its increased ownership during the second quarter 2023 as per the Joint Venture Funding and Amending Agreement ("JV Funding and Amending Agreement"), reducing the Company's interest in the unincorporated joint venture to 60.3%.
- On a 100% basis at the UJV level, the Côté Gold Project incurred project expenditures1 of $270.1 million ($189.1 million at 70%) in the second quarter 2023. IAMGOLD is expected to fund $425 to $475 million during the remainder of 2023 based on its 60.3% ownership in Côté Gold unincorporated joint venture. See “Côté Gold Project”.
Corporate
- On April 25, 2023, the Company completed the sale of its 90% interest in the Boto Gold Project in Senegal and its 100% interest in the early-stage exploration properties of Boto West, Senala West, Daorala and the vested interest in the Senala Option Earn-in Joint Venture, also in Senegal ("Senegal Assets") for aggregate gross cash proceeds of $197.6 million. See "Bambouk Assets".
- On May 16, 2023, the Company announced that it had entered into a five-year second lien secured term loan (the "Term Loan") of $400 million from three institutional lenders. The Term Loan proceeds have been used to pay down amounts drawn under its existing revolving Credit Facility, increasing liquidity and flexibility during the completion of construction, commissioning and ramp up of Côté Gold, as it allows for the Credit Facility to be available to support working capital and additional liquidity in case of unforeseen changes in the operating or macroeconomic environment.
- On August 1, 2023, the Company entered into an agreement to sell its 100% interest in the Pitangui Project, a greenfield exploration property located in Brazil, as well as its interest in the Acurui Project, to Jaguar Mining Inc. (“Jaguar”) via a share purchase agreement. The Company will receive 6.3 million common shares from Jaguar, for an aggregate value of $9.0 million. The Company will also retain a net smelter returns royalty on both projects. The transaction is subject to customary closing conditions, including the approval of the TSX. The transaction is expected to close in the third quarter 2023.
“As we move into the second half of 2023, IAMGOLD is proud of its achievements so far this year,” said Renaud Adams, President and Chief Executive Officer of IAMGOLD. “Gold production from continuing operations year to date is 220,000 ounces at cash costs of $1,234 per ounce sold. We have seen remarkable progress and a transformation of Côté Gold as project activities begin the critical transition from bulk construction to finishing activities and operational readiness, including a steady ramp up of autonomous mining activities towards production early next year. The project is now over 86% complete and the remaining capital outlay is in line with our estimates. At Essakane, we saw the mine return to full mining and milling capacity in the second quarter, as our teams worked tirelessly to manage the in-country supply chain while commencing the next phase of mining in the pit. On health and safety, the company has seen an improving trend with improvements year over year, though we will continuously work to achieve our goal of Zero Harm® for the people and the places where we operate.”
“As we look to the end of this year, we see IAMGOLD is well on track to meet its gold production guidance targets of 410,000 to 470,000 ounces. We are currently forecasting costs to come in on the upper end of our guidance ranges, due to sustained higher costs of doing business from cooling, yet still present, inflationary pressures and associated complexities in the regions in which we operate. We are excited about where IAMGOLD is positioned today, as when Côté Gold comes online, the Company will have a significantly higher production base and lower cost profile, providing a strong foundation of cashflow and growth opportunities in Canada,” added Mr. Adams.
Page | 2 of 32
QUARTERLY SUMMARY
The following table summarizes certain operating and financial results for the three months ended June 30, 2023 (Q2 2023), June 30, 2022 (Q2 2022) and the six months ended June 30 (or YTD) 2023 and 2022 and certain measures of the Company's financial position as at June 30, 2023 and December 31, 2022. Financial results of Rosebel include the one month period ended January 31, 2023, prior to the closing of the sale to Zijin Mining Group Co. Ltd. ("Zijin") that was announced on October 18, 2022.
| Q2 2022 | YTD 2022 | |||
|---|---|---|---|---|
| Q2 2023 | YTD 2023 | |||
| Key Operating Statistics Gold production – attributable (000s oz) - Essakane - Westwood Total from continuing operations - Rosebel Total gold production – attributable (000s oz) Gold sales – attributable (000s oz) - Essakane - Westwood Total from continuing operations - Rosebel Total gold sales – attributable (000s oz) Cost of sales1 ($/oz sold) – attributable - Essakane - Westwood Total from continuing operations - Rosebel Total cost of sales1 ($/oz sold) – attributable Cash costs2 ($/oz sold) – attributable - Essakane - Westwood Total from continuing operations - Rosebel Total cash costs2 ($/oz sold) – attributable AISC2 ($/oz sold) – attributable - Essakane - Westwood Total from continuing operations - Rosebel Total AISC2 ($/oz sold) – attributable Average realized gold price ($/oz) - Continued operations - Discontinued operations Total average realized gold price ($/oz) | 107 14 | 219 30 | ||
| 88 | 180 | |||
| 19 | 40 | |||
| 107 | 121 49 | 220 | 249 95 | |
| — | 25 | |||
| 107 | 170 104 14 | 245 | 344 223 30 | |
| 93 | 181 | |||
| 18 | 39 | |||
| 111 | 118 52 | 220 | 253 98 | |
| — | 24 | |||
| 111 | 170 | 244 | 351 | |
| $ 1,274 | $ 838 | $ 1,171 | $ 810 | |
| 1,909 | 2,463 | 1,773 | 2,176 | |
| $ 1,376 | $ 1,034 | $ 1,277 | $ 974 | |
| — | 1,349 | 949 | 1,359 | |
| $ 1,376 | $ 1,130 | $ 1,245 | $ 1,081 | |
| $ 1,273 | $ 836 | $ 1,122 | $ 807 2,141 | |
| 1,896 | 2,427 | 1,761 | ||
| $ 1,372 | $ 1,028 | $ 1,234 | $ 967 1,321 | |
| — | 1,327 | 949 | ||
| $ 1,372 | $ 1,119 | $ 1,206 | $ 1,066 $ 1,129 2,738 | |
| $ 1,587 | $ 1,124 | $ 1,377 | ||
| 2,903 | 3,147 | 2,689 | ||
| $ 1,912 | $ 1,485 | $ 1,719 | $ 1,434 1,832 | |
| — | 1,874 | 1,358 | ||
| $ 1,912 | $ 1,604 | $ 1,684 | $ 1,545 $ 1,781 1,873 | |
| $ 1,973 | $ 1,773 | $ 1,933 | ||
| — | 1,861 | 1,905 | ||
| $ 1,973 | $ 1,799 | $ 1,930 | $ 1,806 |
1. Throughout this news release, cost of sales, excluding depreciation, is disclosed in the cost of sales note in the consolidated interim financial statements.
2. This is a non-GAAP measure. See "Non-GAAP Financial Measures" disclosure at the end of this news release for a description and calculation of these measures.
Page | 3 of 32
| YTD 2022 | ||||
|---|---|---|---|---|
| Q2 2023 | Q2 2022 | YTD 2023 | ||
| Financial Results ($ millions from continuing operations) Revenues Gross profit EBITDA1 | $ 497.1 $ 105.1 | |||
| $ 238.8 | $ 232.1 | $ 465.0 | ||
| $ 26.6 | $ 34.1 | $ 69.7 | ||
| $ 166.2 | $ 101.4 | $ 249.0 | $ 236.3 | |
| - Continuing operations | $ 166.2 | $ 71.7 | $ 234.6 | $ 181.9 |
| - Discontinued operations | $ — | $ 29.7 | $ 14.4 | $ 54.4 |
| Adjusted EBITDA1 | $ 63.8 | $ 110.0 | $ 170.6 | $ 247.5 |
| - Continuing operations | $ 63.8 | $ 81.8 | $ 147.2 | $ 192.5 |
| - Discontinued operations | $ — | $ 28.2 | $ 23.4 | $ 55.0 |
| Net earnings (loss) attributable to equity holders | $ 92.6 | $ (9.6) | $ 104.5 | $ 14.2 |
| - Continuing operations | $ 92.6 | $ (22.2) | $ 98.9 | $ (6.2) |
| - Discontinued operations | $ — | $ 12.6 | $ 5.6 | $ 20.4 |
| Adjusted net earnings (loss) attributable to equity | $ (3.3) | $ (6.3) | $ 36.6 | $ 19.8 |
| holders1 | ||||
| - Continuing operations | $ (3.3) | $ (14.6) | $ 22.0 | $ 1.8 |
| - Discontinued operations | $ — | $ 8.3 | $ 14.6 | $ 18.0 |
| Net earnings (loss) per share attributable to equity holders - continuing operations Adjusted net earnings (loss) per share attributable to equity holders1 - continuing operations Net cash from operating activities before changes in working capital1 - continuing operations Net cash from operating activities | ||||
| $ 0.19 | $ (0.05) | $ 0.21 | $ (0.01) | |
| $ (0.01) | $ (0.03) | $ 0.05 | $ — | |
| $ 21.8 | $ 67.0 | $ 77.5 | $ 175.7 | |
| $ 23.2 | $ 81.9 | $ 52.0 | $ 224.2 | |
| - Continuing operations | $ 23.2 | $ 33.9 | $ 36.6 | $ 149.9 |
| - Discontinued operations | $ — | $ 48.0 | $ 15.4 | $ 74.3 |
| Mine-site free cash flow1 | $ 14.6 | $ 42.0 | $ 23.2 | $ 128.7 |
| - Continuing operations | $ 14.6 | $ 36.4 | $ 17.3 | $ 123.3 |
| - Discontinued operations | $ — | $ 5.6 | $ 5.9 | $ 5.4 |
| Capital expenditures1,2 – sustaining Capital expenditures1,2 – expansion | $ 46.3 | $ 39.4 | $ 81.3 | $ 95.5 |
| $ 173.5 | $ 170.8 | $ 332.6 | $ 250.8 | |
| June 30 | December 31 | June 30 | December 31 2022 | |
| 2023 | 2022 | 2023 | ||
| Financial Position ($ millions) Cash and cash equivalents Long-term debt | $ 407.8 $ 918.7 $ (605.6) $ 26.6 | |||
| $ 747.7 | $ 407.8 | $ 747.7 | ||
| $ 837.3 | $ 918.7 | $ 837.3 | ||
| Net cash (debt)1 | $ (280.3) | $ (605.6) | $ (280.3) | |
| Available credit facility | $ 452.5 | $ 26.6 | $ 452.5 |
1. This is a non-GAAP measure. See "Non-GAAP Financial Measures" disclosure at the end of this news release for a description and calculation of these measures.
2. Capital expenditures represent incurred expenditures for property, plant and equipment and exploration and evaluation assets, and exclude right-of-use assets.
Page | 4 of 32
Operating Performance Outlook
| Actual YTD 2023 | Full Year Guidance 20231 | ||
|---|---|---|---|
| Essakane (000s oz) Westwood (000s oz) | 180 | 340 – 380 70 – 90 | |
| 40 | |||
| Total attributable production (000s oz)2 | 220 | 410 – 470 | |
| Cost of sales2 ($/oz sold) Cash costs2.3 ($/oz sold) AISC2,3 ($/oz sold) Depreciation expense ($ millions) Income taxes4 paid ($ millions) | $1,277 | $1,125 – $1,175 $1,125 – $1,175 $1,625 – $1,700 $245 – $255 $70 – $80 | |
| $1,234 | |||
| $1,719 | |||
| $91.0 | |||
| $43.0 | |||
| 1. 2. 3. 4. | The full year guidance is based on the following 2023 full year assumptions, before the impact of hedging: average realized gold price of $1,650 per ounce, USDCAD | ||
| exchange rate of 1.32, EURUSD exchange rate of 1.10 and average crude oil price of $91 per barrel. | |||
| Consists of Essakane and Westwood on an attributable basis of 90% and 100%, respectively. | |||
| This is a non-GAAP financial measure. See "Non-GAAP Financial Measures". | |||
| The income taxes paid guidance reflects continuing operations and does not include the cash tax obligation arising as part of the Bambouk sales process. See | |||
| "Bambouk Assets" for additional details. |
Production Outlook
Attributable gold production guidance for 2023 is unchanged and is expected to be in the range of 410,000 to 470,000 ounces.
Costs Outlook
The Company expects full year costs to come in at the top end of the guided ranges of between $1,125 and $1,175 per ounce sold for cash costs1 and between $1,625 to $1,700 per ounce sold for AISC1.
At Essakane, the landed cost of fuel has increased due to the measures taken to reduce the impact of the security situation on the supply chain which allowed for a return to full mining and milling capacity during the quarter. In addition, heavy fuel used for power generation is periodically substituted with more expensive light fuel due to availability, further increasing the cost of producing energy used in the mill.
At Westwood, the level of ground support required for the development and rehabilitation work increased relative to the annual plan; however, productivity rates are higher than plan and allowed for an increased rate of underground rehabilitation and repair work thereby advancing a portion of the 2024 scope of work into the current year to de-risk future years.
The Company notes that continued pressures on the Essakane supply chain and costs may result in an increase to costs and capital expenditure guidance estimates and will provide further updates as warranted.
Capital Expenditures
Sustaining capital expenditures¹ for 2023 have been revised upwards to approximately $230 million (± 5%) of which the majority is related to capitalized stripping at Essakane and underground development and rehabilitation work at Westwood. At Westwood, the sustaining capital guidance is being raised by $35 million as underground rehabilitation and development has been progressing ahead of schedule due to better than planned productivity rates moving some of the 2024 work into 2023 and reducing the work required in 2024, while some of the rehabilitation work requires more ground support increasing costs (as outlined above). During the second quarter of 2023, Essakane ramped up its stripping program in line with the mine plan. The Company expects that Essakane will be able to complete its capital stripping program for the year should the fuel supply remain stable, reversing the impact of lower stripping in the first quarter due to supply chain issues encountered at the time. (see quarterly update on "Essakane, Burkina Faso" and "Westwood, Canada").
Page | 5 of 32
Expansion capital1 and project expenditures¹ for 2023 are expected to be approximately $830 to $880 million, on an incurred basis, including approximately $825 to $875 million of project expenditures for Côté Gold, on a 70% basis (see also “Côté Gold Project") and consists of capital expenditures, right of use assets purchased through leasing, supplies inventory and the cost to build the ore stockpile. Other expansion capital expenditures¹ (excluding Côté Gold) are expected to be approximately $5 million (± 5%) at Essakane in fulfillment of the relocation commitment to the Essakane village.
| ($ millions) | Actual YTD 2023 | Full Year Guidance 20232 | ||||
|---|---|---|---|---|---|---|
| Sustaining3 | Expansion | Total | Sustaining3 | Expansion | Total | |
| Essakane Westwood | $ 46.6 | $ 1.0 | $ 47.6 | $ 150 $ 5 $ 155 80 — 80 | ||
| 34.4 | 0.2 | 34.6 | ||||
| Côté Gold4,5 Corporate | $ 81.0 | $ 1.2 | $ 82.2 | $ 230 | ||
| — | 359.8 | 359.8 | ||||
| 0.3 | — | 0.3 | ||||
| Total6,7,8 | $ 81.3 | $ 361.0 | $ 442.3 | $ 230 $ 830 – 880 $ 1,060 – 1,110 |
1. 100% basis, unless otherwise stated.
2. Capital expenditures guidance (±5%) at Essakane and Westwood. Sustaining capital expenditure guidance at Westwood increased by $35 million. Côté Gold expansion capital guidance narrowed from $800 - $875 million to $825 – $875 million.
3. Sustaining capital includes capitalized stripping of (i) $14.3 million for Essakane and $1.2 million for Westwood in the second quarter 2023, (ii) $20.7 for Essakane and $3.9 million at Westwood YTD 2023, and (iii) $90 million for Essakane and $6.0 million for Westwood for the full year guidance. See “Outlook” sections below.
4. 70% basis.
5. Represents Côté Gold project expenditures of $359.8 million (see Côté Gold Project) that consists of capital expenditures of $331.4 million, right of use assets of $34.8 million, supplies inventory and the cost to build the ore stockpile, less certain cash and non-cash corporate level adjustments included in capital expenditures.
6. Includes $3.0 million of capitalized exploration and evaluation expenditures also included in the Exploration Outlook guidance table.
7. Capitalized borrowing costs are not included.
8. See “Costs Outlook” section above.
Exploration Outlook
Exploration expenditures for 2023 are expected to be approximately $18.0 million, including $3.0 million on the Gosselin resource delineation drilling program, as well as other near-mine and greenfield programs.
| ($ millions) | Actual YTD 2023 | Full Year Guidance 2023 Capitalized Expensed Total | ||
|---|---|---|---|---|
| Capitalized | Expensed | Total | ||
| Exploration projects – greenfield Exploration projects – brownfield | $ — | $ 5.7 | $ 5.7 | $ — $ 13 $ 13 3 2 5 |
| 2.1 | 1.0 | 3.1 | ||
| $ 2.1 | $ 6.7 | $ 8.8 | $ 3 $ 15 $ 18 |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
IAMGOLD is committed to maintaining its culture of accountable mining through high standards of ESG practices and the principle of Zero Harm® in every aspect of its business, with particular emphasis on respecting the natural environment, building strong community partnerships and putting the health and safety of the Company's employees, contractors and consultants first. The Company will issue its 16th annual Sustainability Report in the third quarter of this year.
Health and Safety
Health and safety is core to the Company’s relentless pursuit of its Zero Harm® vision. Through various prevention programs, the Company continuously promotes a safe work environment and a wellness program at all sites. The DARTFR was 0.39 for the six months ended June 30, 2023, with a decreasing trend since the last quarter (compared to 0.31 for the same period ended June 30, 2022). The TRIFR was 0.68 for the six months ended June 30, 2023 (compared to 0.85 for the same period ended June 30, 2022). At Côté Gold, total project hours worked reached 11.5 million hours with an LTIFR (lost time injury frequency rate) of 0.03.
During the month of June, wildfires contributed to regional adverse air quality at Côté Gold and Westwood. Air monitoring stations at our sites recorded values for particulate matter that exceeded recommended limits with notifications provided to the respective Ministries of the Environment, Conservation and Parks.
Page | 6 of 32
Environment
The Company recognizes that mining activities are energy intensive and generate significant greenhouse gas (“GHG”) emissions. To this end, IAMGOLD began working on each operation in 2022 to develop site-specific emissions reduction roadmaps. That work continues and is expected to culminate in a corporate roadmap, accompanying targets, and the publication of a TCFD report by the fourth quarter of 2023.
At Côté Gold, permitting efforts continued in the second quarter 2023 with permit amendments received allowing for additional temporary camp infrastructure to support an increase in workers on site during construction. A Notice of Material Change to the Closure Plan was also filed in March 2023 to update financial assurance and consolidate the existing Côté Gold and Chester mine closure plans. During the quarter, the Company’s environment department prepared the site for freshet conditions, continued to work closely with the construction and operational readiness teams and is developing the departmental strategy to lead into operations.
At Essakane, progress has been made in the studies and the action plan for the update of the mine closure plan, in consultation with government authorities. The updated closure plan is scheduled to be completed by mid-2023.
At Westwood, the 2021 closure plan update is currently under review by the Quebec Ministry of Natural Resources and Forestry (MRNF), with the MRNF engaging the Company with a list of questions in accordance with their ongoing analysis.
Social and Economic Development
The Company is continuously exploring opportunities for investing and partnering with the communities impacted by its continuing operations.
At Essakane, the Company continued its participation in the Mining Fund for Local Development in Burkina Faso, a program established by the government, pursuant to which the Company committed to contribute 1% of its annual revenues. The contribution for the second quarter 2023 is estimated at $2.0 million and $3.9 million for the six months ended June 30, 2023. During the second quarter, the United Nations Development Programme (“UNDP”) launched calls for tenders for the selection of companies to carry out the work in the areas of implementation of the FAMAGODO project, a two year partnership program with the UNDP for the implementation of a local development initiative to benefit local communities, fostering youth employment, reducing poverty, strengthening local infrastructure, and supporting capacity as well as local governance. Essakane also continued its direct community investment initiative. Also, as part of the community health program, medicines were distributed to the health districts of Zone 1 and to the Regional Hospital Center of Dori.
At Côté Gold, various meetings were held (Impact Benefit Agreement (“IBA”) Committee, Environmental Management Committee, Employment and Training sub-Committee and Socio-economic Management and Monitoring Committee) as part of the implementation of the IBA between the Company and its First Nation Partners Mattagami First Nation and Flying Post First Nation. In May, an annual environmental session was held at Mattagami First Nation to share information about the environmental management best practices employed at Côté Gold.
At Westwood, the second monitoring committee meeting for Fayolle was held on June 15 and the Grand Duc monitoring committee met on June 22. Scholarships were awarded to students of the Cégep in Abitibi-Témiscamingue while financial support was given to the Defi IAMGOLD fundraiser event to help raise a record amount of $185,326 benefiting local sick children (Comité de soutien à la pédiatrie de l’Abitibi-Témiscamingue).
Governance
The Board of Directors of IAMGOLD (the “Board”) adopted new diversity and renewal guidelines in 2021, reflecting governance best practices. Currently, women represent approximately 44% of the directors and 50% of the independent directors. The average tenure of directors on the Board is less than two years. On June 20, 2023, Audra Walsh was appointed to the Company's Board as an independent director.
Page | 7 of 32
OPERATIONS – CONTINUING
Essakane Mine (IAMGOLD interest – 90%)1 | Burkina Faso
| Q2 2022 | YTD 2022 | |||
|---|---|---|---|---|
| Q2 2023 | YTD 2023 | |||
| Key Operating Statistics1 Ore mined (000s t) Grade mined (g/t) Waste mined (000s t) Material mined (000s t) – total Strip ratio2 Ore milled (000s t) Head grade (g/t) Recovery (%) Gold production (000s oz) – 100% Gold production (000s oz) – attributable 90% Gold sales (000s oz) – 100% Average realized gold price3 ($/oz) | 3,803 1.05 7,602 11,405 2.0 2,704 1.52 90 119 107 117 $ 1,882 | 7,635 1.05 18,948 26,583 2.5 5,866 1.45 89 243 219 248 $ 1,883 | ||
| 2,697 | 4,354 | |||
| 1.12 | 1.39 | |||
| 10,818 | 15,446 | |||
| 13,515 | 19,800 | |||
| 4.0 | 3.5 | |||
| 3,084 | 5,259 | |||
| 1.11 | 1.32 | |||
| 89 | 90 | |||
| 97 | 200 | |||
| 88 | 180 | |||
| 103 | 201 | |||
| $ 1,975 | $ 1,935 | |||
| Financial Results ($ millions)1 Revenues4 Cost of sales4 Production costs (Increase)/decrease in finished goods Royalties Cash costs3 Sustaining capital expenditures3,5 Expansion capital expenditures3 Total capital expenditures Earnings from operations | $ 218.8 97.3 | $ 467.0 200.4 | ||
| $ 203.8 | $ 390.3 | |||
| 131.4 | 236.0 | |||
| 128.0 | 93.0 (6.3) 10.6 | 225.4 | 173.9 3.6 22.9 | |
| (6.9) | (9.2) | |||
| 10.3 | 19.8 | |||
| 131.2 | 97.0 31.1 0.5 31.6 61.9 | 226.1 | 199.7 78.8 1.5 80.3 152.1 | |
| 29.5 | 46.6 | |||
| 0.5 | 1.0 | |||
| 30.0 | 47.6 | |||
| 30.4 | 74.0 | |||
| Performance Measures6 Cost of sales excluding depreciation ($/oz sold) Cash costs3 ($/oz sold) AISC3 ($/oz sold) | $ 838 $ 836 $ 1,124 | $ 810 $ 807 $ 1,129 | ||
| $ 1,274 | $ 1,171 | |||
| $ 1,273 | $ 1,122 | |||
| $ 1,587 | $ 1,377 |
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 29 of the consolidated interim financial statements for revenues and cost of sales. Cost of sales is net of depreciation expense.
5. Includes sustaining capitalized stripping for the second quarter 2023 of $14.3 million (second quarter 2022 - $17.2 million) and $20.7 million for YTD 2023 (YTD 2022 - $47.1 million).
6. Cost of sales, cash costs and AISC per ounce sold may not be calculated based on amounts presented in this table due to rounding.
Operations
Attributable gold production in the second quarter 2023 was 88,000 ounces lower by 18% or 19,000 ounces compared to the same prior year period, primarily as a result of lower grades, partially offset by higher throughput.
Mining activity of 13.5 million tonnes in the second quarter 2023 was higher by 2.1 million tonnes or 19% compared to the same prior year period as the mining fleet returned operations to full capacity. Mine volumes were lower in the prior period due to supply chain constraints in-country and abroad. Mining activity in the second quarter 2023 completed the transition to Phase 5, resulting in a higher strip ratio – in line with expectations as the operation moves to new mining phases.
Page | 8 of 32
Mill throughput in the second quarter 2023 was 3.1 million tonnes at an average head grade of 1.11 g/t, with throughput 14% higher than the same prior year period. The increase in throughput during the quarter is primarily due to increased plant availability resulting from the processing of harder rock material and supply chain constraints in the prior period. The head grade was lower than the prior period due to lower grade from the initial ore from the new mining phases and the processing of lower grade material from stockpiles.
The mill achieved recoveries of 89% in the second quarter 2023 slightly lower than the same prior year period, due to ore complexity from the new mining phases that also include higher concentrations of graphitic carbon and sulfur.
The continued deteriorating security situation in Burkina Faso continues to be a focus for the Company. Terrorist related incidents continue unabated in the country, the immediate region of the Essakane mine and, more broadly, the West African region. The Company was able to return to full mining and milling capacity during the quarter, however, the security situation in Burkina Faso and its neighboring countries continues to apply pressures to supply chains and continued security incidents and concerns could have a material adverse impact on future operating performance. 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. Combined with its program to make investments in security and supply chain infrastructure in the region and at the mine site in addition to the cost of these investments, the measures have increased the cost of bringing employees, contractors, supplies and inventory to the mine.
Financial Performance
Production costs in the second quarter of $128.0 million were higher by $35.0 million or 38% primarily due to higher volumes of operating waste resulting from increased strip ratios as the mine enters new phases, increases to the landed cost of fuel due to the impact of the security situation on the supply chain and higher labour costs due to the appreciation in the local currency. In addition to the fuel pricing pressures, power generation costs increased as heavy fuel used normally for power generation was periodically substituted with more expensive light fuel in order to maintain operations during the periods where supply was limited.
Cost of sales, excluding depreciation, of $131.4 million was 35% higher than the prior year period primarily due to higher production costs in the second quarter 2023. Cost of sales per ounce sold, excluding depreciation, of $1,274 was higher by $436 or 52% primarily due to higher production costs as well as lower production and sales.
Cash costs of $131.2 million were higher by $34.2 million or 35% due to higher production costs in the second quarter 2023. Cash costs per ounce sold of $1,273 were higher by $437 or 52% primarily due to higher production costs as well as lower production and sales.
AISC per ounce sold of $1,587 was higher by $463 or 41% due to higher cash costs per ounce sold and higher sustaining capital expenditures.
Total capitalized stripping of $14.3 million was lower by $2.9 million or 17% due to higher proportions of operating waste in the current mining sequences.
Sustaining capital expenditures, excluding capitalized stripping, of $15.2 million included capital spares of $6.4 million, tailings management of $3.7 million, mobile and mill equipment of $2.1 million, resource development of $1.1 million and other sustaining projects of $1.9 million. Expansion capital expenditures of $0.5 million were incurred in support of fulfilling the community village resettlement commitment.
Outlook
Attributable gold production at Essakane in 2023 is expected to be in the range of 340,000 to 380,000 ounces. Mining activity is expected to maintain normal operating levels in the second half of the year, including increased levels of waste stripping. The mill feed will consist of a combination of direct feed and stockpiles as the mine fleet sequences through the targeted phases of waste stripping.
Capital expenditures are expected to be approximately $155.0 million, with increased volumes of capitalized waste in the second half of the year to provide access to mining areas in support of the 2024 and 2025 production plan, assuming no significant disruptions in the supply chain resulting from the security situation described above.
Page | 9 of 32
The Company plans to file an updated NI 43-101 compliant technical report during the fourth quarter of 2023 detailing the life of mine plan for Essakane and the updated mineral reserve and mineral resource. The technical report will incorporate the decision to forego a capital-intensive heap leach project in favour of processing through the existing CIL circuit the 9.9 million tonnes of the previously stockpiled material over the life of mine.
Westwood Mine (IAMGOLD interest – 100%) | Quebec, Canada
| Q2 2022 | YTD 2022 | |||
|---|---|---|---|---|
| Q2 2023 | YTD 2023 | |||
| Key Operating Statistics Underground lateral development (metres) Ore mined (000s t) – underground Ore mined (000s t) – other sources Ore mined (000s t) – total Grade mined (g/t) – underground Grade mined (g/t) – other sources Grade mined (g/t) – total Ore milled (000s t) Head grade (g/t) – underground Head grade (g/t) – other sources Head grade (g/t) – total Recovery (%) Gold production (000s oz) Gold sales (000s oz) Average realized gold price1 ($/oz) | 1,207 53 | 2,055 116 | ||
| 1,381 | 2,875 | |||
| 56 | 124 | |||
| 156 | 218 | 349 | 377 | |
| 212 | 271 | 473 | 493 | |
| 7.56 | 4.18 | 6.89 | 5.22 | |
| 1.18 | 1.03 | 1.33 | 0.98 | |
| 2.86 | 1.65 | 2.79 | 1.97 | |
| 251 | 284 | 506 | 534 | |
| 7.32 | 4.01 | 6.89 | 5.06 | |
| 1.19 | 1.04 | 1.27 | 1.00 | |
| 2.53 | 1.62 | 2.65 | 1.88 | |
| 94 | 93 | 93 | 92 | |
| 19 | 14 | 40 | 30 | |
| 18 | 14 | 39 | 30 | |
| $ 1,958 | $ 1,854 | $ 1,923 | $ 1,864 | |
| Financial Results ($ millions) Revenues2 Cost of sales2 Production costs (Increase)/decrease in finished goods Cash costs1 Sustaining capital expenditures1,5 Expansion capital expenditures1 Total capital expenditures1 Earnings/(loss) from operations | ||||
| $ 34.9 | $ 27.1 | $ 74.5 | $ 57.9 | |
| 33.8 | 35.4 | 68.3 | 66.4 | |
| 36.7 | 37.0 (1.6) | 72.5 | 68.7 | |
| (2.9) | (4.2) | (2.3) | ||
| 33.5 | 34.8 | 67.8 | 65.3 | |
| 16.6 | 8.8 0.7 9.5 (14.1) | 34.4 | 16.1 1.2 17.3 (19.1) | |
| 0.2 | 0.2 | |||
| 16.8 | 34.6 | |||
| (4.2) | (9.4) | |||
| Performance Measures3 Cost of sales excluding depreciation4 ($/oz sold) Cash costs1 ($/oz sold) AISC1 ($/oz sold) | $ 2,176 $ 2,141 $ 2,738 | |||
| $ 1,909 | $ 2,463 $ 2,427 $ 3,147 | $ 1,773 | ||
| $ 1,896 | $ 1,761 | |||
| $ 2,903 | $ 2,689 |
1. This is a non-GAAP financial measure. See "Non-GAAP Financial Measures".
2. As per note 29 of the consolidated interim financial statements for revenues and cost of sales. Cost of sales is net of depreciation expense.
3. Cost of sales, cash costs and AISC per ounce sold may not be calculated based on amounts presented in this table due to rounding.
4. Includes non-cash ore stockpile and finished goods inventories NRV write-down of $2.6 million for the second quarter 2023 (second quarter 2022 - $3.3 million) and $3.2 million for YTD 2023 (YTD 2022 - $5.0 million), which had an impact on cost of sales, excluding depreciation, per ounce sold of $148 for the second quarter 2023 (second quarter 2022 - $232) and $84 for YTD 2023 (YTD 2022 - $165).
5. Includes sustaining capitalized stripping for the second quarter 2023 of $1.2 million (second quarter 2022 - $nil) and $3.9 million for YTD 2023 (YTD 2022 - $nil).
Page | 10 of 32
Operations
Gold production in the second quarter 2023 was 19,000 ounces, higher by 5,000 ounces or 36% compared to the same prior year period. Higher production is due to the higher grade material extracted from both the underground mine and the Grand Duc open pit.
Mining activity in the second quarter 2023 was 212,000 tonnes of ore, a 22% decrease from the same prior year period. Mining activity in the second quarter 2023 was impacted by heavy wildfire smoke in the vicinity of the mining operations requiring for multiple underground shifts to be cancelled to ensure the continued safety of the workforce. Despite the impact on mining activity, the underground ore tonnes mined exceeded the same prior year period due to the continued progress in rehabilitation and development of underground activities.
Underground development in the second quarter 2023 continued to improve over prior periods, with 1,381 metres of lateral development completed, higher by 174 metres or 14% than the prior year period, despite the temporary cessation of mine shifts due to the wildfires. The progressive ramp up in development and rehabilitation work continues to secure safe access to multiple ore faces at different levels in the mine, increasing operational flexibility to allow simultaneous exploitation of multiple stope sequences in line with the 2023 production plan. The rehabilitation work program consists of repairing and upgrading the existing underground infrastructure in line with the revised rock mechanic standard, which have been developed to ensure that safe work conditions are maintained in seismic portions of the mine. This activity enables production to safely recommence once rehabilitation work on a specific level has been completed. The rehabilitation work program, which was expected to be completed over the course of 2023 and 2024, is currently experiencing better than planned productivity rates moving more of the work and costs in 2023 while reducing the work required in 2024.
Mill throughput in the second quarter 2023 was 251,000 tonnes at an average head grade of 2.53 g/t. Head grades increased 56% compared to the same prior year period as underground activities were able to target rehabilitated underground zones.
In March 2023, all required environmental and regulatory permits were received to commence mining of the Fayolle satellite deposit, located approximately 30 kilometres northwest of the Westwood complex. Primary activities in the quarter include improving the access to the mine pit, preparing the waste stockpile pads and improving the haul road network to facilitate transport of ore volumes to the Westwood mill in the second half of 2023. Incidental volumes of ore were processed during the second quarter 2023 with the remaining ore mined stockpiled at the Fayolle site for future transport. The comparatively higher-grade material from the Fayolle deposit is expected to increase the average head grade of ore milled from surface sources as the year progresses.
Financial Performance
Production costs in the second quarter of $36.7 million were in line with the same prior year period and include approximately $2.4 million of development cost incurred at the Fayolle deposit, which has been expensed due to the short life of the Fayolle project.
Cost of sales, excluding depreciation, of $33.8 million was lower by $1.6 million or 5% due to timing of sales. Cost of sales per ounce sold, excluding depreciation, of $1,909, was lower by $554 or 22% primarily due to higher gold production and sales, while aggregate costs remained in line with the prior year period.
Cash costs of $33.5 million were lower by $1.3 million or 4% due to timing of sales at the period end. Cash costs per ounce sold of $1,896 were lower by $531 or 22%, primarily due to higher gold production and sales. Included in cash costs per ounce sold is an approximate impact of $136 per ounce sold resulting from the development cost incurred at the Fayolle deposit.
AISC per ounce sold of $2,903 was lower by $244 or 8% primarily due to lower cash costs per ounce sold, partially offset by increased sustaining capital expenditures, including non-recurring rehabilitation work performed.
Sustaining capital expenditures, excluding capitalized stripping, in the second quarter 2023 of $15.4 million included underground development and rehabilitation of $10.9 million and other sustaining capital projects of $4.5 million.
Page | 11 of 32
Westwood gold production is expected to be in the range of 70,000 to 90,000 ounces in 2023. Production levels and unit costs are expected to continue to improve into the second half of the year, benefiting from the continued advancement of underground development providing access to more and higher-grade stope sequences. Mill feed will continue to be supplemented from available satellite surface deposits, including increased proportions of ore feed from the Fayolle property in the second half of the year.
Capital expenditures are expected to be approximately $80.0 million of sustaining capital in support of underground development and rehabilitation work, the renewal of the mobile fleet and fixed equipment, repairs to the Westwood mill, and other capital projects.
During the fourth quarter of the year, the Company plans to file an updated NI 43-101 compliant technical report detailing the results of certain mine optimization efforts and strategic assessments of the Westwood complex.
PROJECTS
Côté Gold Project | Ontario, Canada
As of June 30, 2023, overall, the project was estimated to be 85.7% complete. The following provides an update on project activities:
| Project Activity | Update |
| Health and safety | |
| Total project hours worked of 11.5 million hours with a project-to-date DARTFR of 0.05 and | |
| a TRIFR of 0.68. During the month of June, wildfires created regional adverse air quality. | |
| Air monitoring stations on site recorded values for particulate matter that exceeded site | |
| recommended limits with notification provided to Ministry of the Environment, Conservation | |
| and Parks. | |
| and Parks. | |
| Labour and workforce | |
| In June, the project workforce exceeded 1,900 workers on site, achieving peak camp | |
| capacity. Labour availability and turnover continues to be a primary focus for Côté | |
| management. | |
| management. | |
| Earthworks activities | |
| Earthworks activities advanced with a focus on the tailings management facility (“TMF”). | |
| East Starter Dam Phase 1 was completed in June. Water accumulation in the TMF has | |
| started in order to have sufficient water for the plant startup. Phase 2 dam raising has been | |
| initiated which will give a year of storage once complete. | |
| initiated which will give a year of storage once complete. | |
| TMF earthworks has now achieved over 92% progress with stripping of overburden | |
| materials from the open pit substantially complete. | |
| materials from the open pit substantially complete. | |
| Mining activities are continuing to ramp up to debottleneck mine production and prepare for | |
| final hand-off of all pit related activities to the operations team later in the third quarter. | |
| final hand-off of all pit related activities to the operations team later in the third quarter. | |
| Processing plant | |
| Considerable progress was made in the process area during the second quarter as the | |
| project begins the evolution from bulk construction to the completion phase with a focus on | |
| finishing activities. | |
| finishing activities. | |
| Primary crusher steel assembly restarted in June with installation of the overhead crane | |
| and continuing the overall primary crusher structure. Work continued with the gyratory | |
| crusher installation including all ancillary equipment being placed. | |
| crusher installation including all ancillary equipment being placed. | |
| The HPGR crusher rolls and reducing gear drives were installed. Preparation for the cone | |
| crusher also commenced. Construction of the Triodetic coarse ore dome structure made | |
| significant progress and will be completed in the beginning of the third quarter. Feed | |
| conveyor belting in the fine ore bin area is complete, and welding of the final two screen | |
| box girders in the screening building is nearing completion. | |
| box girders in the screening building is nearing completion. |
Page | 12 of 32