IAMGOLD Reports Third Quarter 2023 Results
NEWS RELEASE
TSX: IMG NYSE: IAG
IAMGOLD REPORTS THIRD QUARTER 2023 RESULTS
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Toronto, Ontario, November 9, 2023 – IAMGOLD Corporation (NYSE:IAG, TSX:IMG) (“IAMGOLD” or the “Company”) today reported its financial and operating results for the third quarter ended September 30, 2023.
HIGHLIGHTS:
Operations
- Attributable gold production from continuing operations was 109,000 ounces. Attributable gold production guidance for 2023 is unchanged and is expected to be in the range of 410,000 to 470,000 ounces.
- Revenues from continuing operations were $224.5 million from sales of 116,000 ounces (106,000 ounces on an attributable basis) at an average realized gold price1 of $1,937 per ounce.
- Cost of sales per ounce sold from continuing operations was $1,436, cash cost1 per ounce sold from continuing operations was $1,400 and all-in-sustaining-cost1 (“AISC”) per ounce sold from continuing operations was $1,975.
- The Company now expects cash costs1 to be between $1,250 and $1,325 per ounce sold and AISC1 to be between $1,750 and $1,825 per ounce sold for the year, an increase from prior guidance due to the impact of the security situation in Burkina Faso on the supply chain combined with continued elevated costs from the recent inflationary cycle in the industry.
- In health and safety, for the nine months ended September 30, 2023, the Company reported a DARTFR (days away, restricted, transferred duty frequency rate) of 0.36 and a TRIFR (total recordable injuries frequency rate) of 0.66, both with a decreasing trend since the last quarter.
Financial
- Net earnings (loss) attributable to equity holders1 of $(0.8) million or $(0.00) per share and adjusted net loss attributable to equity holders1 of $(4.0) million or $(0.01) per share.
- Net cash from operating activities was $37.5 million. Net cash from operating activities, before movements in noncash working capital and non-current ore stockpiles1 was $29.3 million.
- Earnings before interest, income taxes, depreciation and amortization ("EBITDA")1from continuing operations was $61.8 million and adjusted EBITDA1 was $57.8 million.
- The Company has available liquidity1 of $1,001.8 million comprised of cash and cash equivalents of $548.9 million and the available balance of the secured revolving credit facility ("Credit Facility") of $452.9 million as at September 30, 2023.
Côté Gold
- As of September 30, 2023, the Côté Gold Project was estimated to be 90.6% complete, with construction progress approximately 92% complete.
- On a 100% basis at the UJV level, the Côté Gold Project incurred project expenditures1 of $317.3 million ($222.0 million at 70%) in the third quarter 2023.
- Since commencement of construction, $2.54 billion ($1.78 billion at 70%) of the planned $2.965 billion ($2.08 billion at 70%) of project expenditures has been incurred. The total expected project expenditures are expected to be in line with the planned $2.965 billion (± 1.5%) and the estimated remaining cost to complete the Côté Gold Project on a 100% basis is $425 million ($298 million at 70%) on an incurred basis assuming a USDCAD rate of 1.35 during the remainder of construction. A portion of the expenditures is expected to be incurred in 2024 during commissioning and ramp up.
- IAMGOLD is expected to fund $325 million during the remainder of construction based on its 60.3% ownership in the Côté Gold unincorporated joint venture.
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 October 26, 2023, the Company received $32.0 million in deferred consideration from the closing of the sale of Senegal Assets.
- 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 received 6.3 million common shares from Jaguar for an aggregate value of $9.0 million. The Company will also retain a net smelter royalty on both projects.
- On September 21, 2023, the Company announced the retirement of Maryse Bélanger from the Board of Directors (the “Board”) for personal reasons and other commitments. Immediately following Ms. Bélanger's retirement, the Board appointed David Smith as Chair of the Board.
- On September 27, 2023, Bruno Lemelin was appointed to the role of Chief Operating Officer, having served as SVP, Operations & Projects since March 2020.
- On November 9, 2023, the Company entered into a one year extension of its Credit Facility extending its maturity to January 31, 2026. As part of the extension, the Credit Facility was reduced to $425 million based on the Company’s requirements for a senior revolving facility for its overall business.
- On November 9, 2023, the Company announced the retirement of Ian Ashby from the Board, and the appointment of Anne Marie Toutant as an independent director.
“IAMGOLD finished the quarter with year-to-date production from continuing operations of 329,000 ounces, putting the company well on track to meet its annual production guidance of 410,000 to 470,000 ounces,” said Renaud Adams, President and Chief Executive Officer of IAMGOLD. “This performance has been driven by the continued resiliency of our Essakane operating teams as they manage the operation within a geopolitically challenging environment, as well as the continued dedication of the Westwood team as they rebuild and reopen mining areas underground. Despite these achievements, operating costs, particularly in Burkina Faso, remain high as price increases from the prior inflationary period are slow to decline and the higher cost of operating and moving goods within the country remain. At IAMGOLD, we always place the health and safety of our employees first, and we work continuously with a focus on our goal of Zero Harm® – for the people and the places in which we operate.”
“At Côté Gold we are nearing the finish line of construction. Pre-commissioning teams are starting to receive hand-off of project elements from construction teams, as activities at site start the shift from major construction to finalization and commissioning. Construction at the end of September was 92% complete, putting the project on track for gold production in the first quarter of next year. It is an exciting time for IAMGOLD as this is a project that is critical for the repositioning of this company, as once online, IAMGOLD will have a significantly higher production base and lower cost profile, providing a strong foundation of cashflow and growth opportunities in Canada.”
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QUARTERLY SUMMARY
The following table summarizes certain operating and financial results for the three months ended September 30, 2023 (Q3 2023), September 30, 2022 (Q3 2022) and the nine months ended September 30 (or YTD) 2023 and 2022 and certain measures of the Company's financial position as at September 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.
| Q3 2022 | YTD 2022 | |||
|---|---|---|---|---|
| Q3 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 ($/oz sold) – attributable Average realized gold price2 ($/oz) - Continued operations - Discontinued operations Total average realized gold price2 ($/oz) | 115 19 | 334 49 | ||
| 84 | 264 | |||
| 25 | 65 | |||
| 109 | 134 50 | 329 | 383 145 | |
| — | 25 | |||
| 109 | 184 120 18 | 354 | 528 343 48 | |
| 84 | 265 | |||
| 22 | 61 | |||
| 106 | 138 49 | 326 | 391 147 | |
| — | 24 | |||
| 106 | 187 | 350 | 538 | |
| $ 1,417 | $ 954 | $ 1,249 | $ 860 | |
| 1,506 | 1,817 | 1,674 | 2,043 | |
| $ 1,436 | $ 1,067 | $ 1,329 | $ 1,007 | |
| — | 1,346 | 949 | 1,355 | |
| $ 1,436 | $ 1,140 | $ 1,303 | $ 1,102 | |
| $ 1,372 | $ 952 | $ 1,201 | $ 858 2,015 | |
| 1,506 | 1,803 | 1,667 | ||
| $ 1,400 | $ 1,063 | $ 1,288 | $ 1,001 1,316 | |
| — | 1,305 | 949 | ||
| $ 1,400 | $ 1,126 | $ 1,265 | $ 1,087 $ 1,171 2,541 | |
| $ 1,798 | $ 1,248 | $ 1,510 | ||
| 2,138 | 2,208 | 2,486 | ||
| $ 1,975 | $ 1,448 | $ 1,803 | $ 1,439 1,845 | |
| — | 1,873 | 1,358 | ||
| $ 1,975 | $ 1,559 | $ 1,773 | $ 1,550 $ 1,745 1,824 | |
| $ 1,937 | $ 1,677 | $ 1,934 | ||
| — | 1,726 | 1,905 | ||
| $ 1,937 | $ 1,690 | $ 1,933 | $ 1,766 |
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.
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| YTD 2022 | ||||
|---|---|---|---|---|
| Q3 2023 | Q3 2022 | YTD 2023 | ||
| Financial Results ($ millions from continuing operations) Revenues Gross profit EBITDA1 | $ 751.6 $ 127.9 | |||
| $ 224.5 | $ 254.5 | $ 689.5 | ||
| $ 4.6 | $ 22.8 | $ 74.3 | ||
| $ 61.8 | $ (41.3) | $ 310.8 | $ 195.0 | |
| - Continuing operations | $ 61.8 | $ 52.5 | $ 296.4 | $ 234.4 |
| - Discontinued operations | $ — | $ (93.8) | $ 14.4 | $ (39.4) |
| Adjusted EBITDA1 | $ 57.8 | $ 103.1 | $ 227.9 | $ 350.6 |
| - Continuing operations | $ 57.8 | $ 82.1 | $ 204.5 | $ 274.6 |
| - Discontinued operations | $ — | $ 21.0 | $ 23.4 | $ 76.0 |
| Net earnings (loss) attributable to equity holders | $ (0.8) | $ (108.3) | $ 103.7 | $ (94.1) |
| - Continuing operations | $ (0.8) | $ (45.5) | $ 98.1 | $ (51.7) |
| - Discontinued operations | $ — | $ (62.8) | $ 5.6 | $ (42.4) |
| Adjusted net earnings (loss) attributable to equity | $ (4.0) | $ (13.7) | $ 32.6 | $ 6.1 |
| holders1 | ||||
| - Continuing operations | $ (4.0) | $ (22.7) | $ 18.0 | $ (20.9) |
| - Discontinued operations | $ — | $ 9.0 | $ 14.6 | $ 27.0 |
| 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 | ||||
| $ (0.00) | $ (0.10) | $ 0.21 | $ (0.11) | |
| $ (0.01) | $ (0.05) | $ 0.04 | $ (0.04) | |
| $ 29.3 | $ 85.4 | $ 106.8 | $ 261.1 | |
| $ 37.5 | $ 117.7 | $ 89.5 | $ 341.9 | |
| - Continuing operations | $ 37.5 | $ 94.5 | $ 74.1 | $ 244.4 |
| - Discontinued operations | $ — | $ 23.2 | $ 15.4 | $ 97.5 |
| Mine-site free cash flow1 | $ 2.1 | $ 58.6 | $ 25.3 | $ 187.3 |
| - Continuing operations | $ 2.1 | $ 64.9 | $ 19.4 | $ 188.2 |
| - Discontinued operations | $ — | $ (6.3) | $ 5.9 | $ (0.9) |
| Capital expenditures1,2 – sustaining Capital expenditures1,2 – expansion | $ 50.4 | $ 44.3 | $ 131.7 | $ 139.8 |
| $ 207.3 | $ 154.0 | $ 539.9 | $ 404.8 | |
| September 30 | December 31 | September 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 | |||
| $ 548.9 | $ 407.8 | $ 548.9 | ||
| $ 836.0 | $ 918.7 | $ 836.0 | ||
| Net cash (debt)1 | $ (478.1) | $ (605.6) | $ (478.1) | |
| Available credit facility | $ 452.9 | $ 26.6 | $ 452.9 |
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.
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OUTLOOK
Operating Performance Outlook
| Updated Full Year Previous Full Year Guidance 20231 Guidance 20232 | |||
|---|---|---|---|
| Actual YTD 2023 | |||
| Essakane (000s oz) Westwood (000s oz) | 264 | 340 – 380 340 – 380 70 – 90 70 – 90 | |
| 65 | |||
| Total attributable production (000s oz)3 | 329 | 410 – 470 410 – 470 | |
| Cost of sales3 ($/oz sold) Cash costs3,4 ($/oz sold) AISC3,4 ($/oz sold) Depreciation expense ($ millions) Income taxes5 paid ($ millions) | $1,329 | $1,250 – $1,325 $1,125 – $1,175 $1,250 – $1,325 $1,125 – $1,175 $1,750 – $1,825 $1,625 – $1,700 $205 – $215 $245 – $255 $70 – $80 $70 – $80 | |
| $1,288 | |||
| $1,803 | |||
| $144.9 | |||
| $67.0 | |||
| 1. 2. 3. 4. 5. | The updated full year guidance is based on the following 2023 full year assumptions, before the impact of hedging: average realized gold price of $1,912 per ounce, | ||
| USDCAD exchange rate of 1.34, EURUSD exchange rate of 1.09 and average crude oil price of $80 per barrel. | |||
| The previous 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. Westwood production is expected to be at the top end of the guidance range and Essakane production is expected to be within the guidance range.
Costs Outlook
Cash costs1 guidance for 2023 has been revised to $1,250 and $1,325 per ounce sold and AISC1 guidance is revised with costs expected to be between $1,750 and $1,825 per ounce sold, mainly due to cost pressures at Essakane resulting from the security situation, combined with continued elevated prices from recent inflation and increased underground rehabilitation performed at Westwood. At Essakane, the landed cost of fuel and other consumables has increased due to the measures taken to reduce the impact of the security situation on the supply chain as well as the increased cost of producing energy used in the mill arising from the periodic substitution of more expensive light fuel in periods when heavy fuel used for power generation is unavailable. At Westwood, the level of ground support required for the development and rehabilitation work increased relative to the annual plan combined with the advancing of a portion of the 2024 scope of work into the current year to de-risk future years.
Capital Expenditures
Sustaining capital expenditures¹ for 2023 have been revised downwards to approximately $190 million (± 5%). The reduction primarily relates to lower volumes of capitalized stripping year-to-date at Essakane due to periodic interruptions to mining activity due to supply shortages of light fuel. At Westwood, sustaining capital expenditure guidance has been refined following an increase in guidance last quarter as a result of increased visibility into end of year underground development and rehabilitation rates (See quarterly update on "Essakane, Burkina Faso" and "Westwood, Canada").
Expansion capital1 for 2023, excluding Côté Gold, is expected to be approximately $5 million, on an incurred basis. Project expenditures1 to complete the Côté Gold Project, from January 1, 2023 onwards, are expected to be $875 million (± 5%), on a 70% basis (see also “Côté Gold Project"). Project expenditures1 at Côté Gold consist of capital expenditures, right-ofuse assets purchased through leasing, supplies inventory and the cost to build the ore stockpile. Some of the Côté Gold project expenditures will be incurred in early 2024 during commissioning and ramp up.
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| ($ millions) | Actual YTD 20231 | Updated Full Year Guidance 20232 | Previous Full Year Guidance 2023 Sustaining3 Expansion Total | ||||
|---|---|---|---|---|---|---|---|
| Sustaining3 | Expansion | Total | Sustaining3 | Expansion | Total | ||
| Essakane Westwood | $ 83.2 | $ 1.4 | $ 84.6 | $ 125 | $ 5 | $ 130 | $ 150 $ 5 $ 155 80 — 80 |
| 48.2 | 0.2 | 48.4 | 65 | — | 65 | ||
| Côté Gold4,5 Corporate | $ 131.4 | $ 1.6 | $ 133.0 | $ 190 | $ 5 | $ 195 | |
| — | 581.8 | 581.8 | — | ||||
| 0.3 | — | 0.3 | — | — | — | ||
| Total6,7,8 | $ 131.7 | $ 583.4 | $ 715.1 | $ 190 | $ 880 | $ 1,070 | $ 230 $ 830 – 880 $ 1,060 – 1,110 |
1. 100% basis, unless otherwise stated.
2. Capital expenditures guidance (±5%) at Essakane and Westwood and Côté Gold.
3. Sustaining capital includes capitalized stripping of (i) $20.8 million for Essakane and $0.3 million for Westwood in the third quarter 2023, (ii) $41.5 million for Essakane and $4.2 million for Westwood YTD 2023, and (iii) $65 million for Essakane and $5.0 million for Westwood for the full year revised guidance. See "Outlook" sections below.
4. 70% basis. Some of the Côté Gold project expenditures will be incurred in 2024 during commissioning and ramp up.
5. Represents Côté Gold project expenditures of $581.8 million (see Côté Gold Project) that consists of capital expenditures of $538.3 million, right-of-use assets of $39.8 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 | $ — | $ 9.3 | $ 9.3 | $ — $ 13 $ 13 3 2 5 |
| 3.1 | 1.5 | 4.6 | ||
| $ 3.1 | $ 10.8 | $ 13.9 | $ 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 issued its 16th annual Sustainability Report on October 16, 2023, highlighting progress and achievements in 2022 across a range of strategies and indicators. As part of its accountability and reporting framework, the Company has also committed to reporting in accordance with the Task Force on Climate-Related Financial Disclosures (“TCFD”) guidelines and is releasing its initial TCFD report in the fourth quarter 2023. The Company implemented the Mining Association of Canada's Towards Sustainable Mining (“TSM”) framework at all its operations and recently finalized its external assurance of compliance relating to the implementation of the World Gold Council’s (“WGC”) Responsible Gold Mining Principles.
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 (days away, restricted, transferred duty frequency rate) was 0.36 for the nine months ended September 30, 2023, with a slight decrease since the last quarter (compared to 0.27 for the same period ended September 30, 2022). The TRIFR (total recordable injuries frequency rate) was 0.66 for the nine months ended September 30, 2023, (compared to 0.74 for the same period ended September 30, 2022). At Côté Gold, total project hours worked reached 13.2 million hours with a LTIFR (lost time injury frequency rate) of 0.06.
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Specific safety initiatives are being implemented to manage the incident trend, in addition to the Company’s existing preventive Health and Safety program including fatigue management prevention program, critical risks training program and cascading leadership.
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 Essakane, progress continued on Falagountou’s Closure Plan, including collaborative work with INERA (Institute of Environment and Agricultural Research) on the best practice phytoremediation of the closed mine site. On Tailings management, an Independent Tailings Review Board ("ITRB") annual review was conducted in September, with an expert report still pending.
At Westwood, the ITRB yearly review was also conducted in September, with a final expert report still pending. The 2021 Closure Plan update was reviewed by the Quebec Ministry of Natural Resources and Forestry (“MRNF”) and IAMGOLD submitted an amended Closure Plan on September 8, 2023, following this review process. Water recycling projects have been initiated to reduce water withdrawal from the Bousquet River.
At Côté Gold, biodiversity monitoring studies were completed for birds and bats. At Mattagami Lake, a fish population study was also conducted as part of the Project’s Fisheries Offsetting Plan. The first cycle of environmental effects monitoring was completed per the Metal and Diamond Mining Effluent Regulations. A Notice of Non-Compliance was received from the Impact Assessment Agency of Canada (“IAAC”) on September 22, 2023, regarding a total suspended solids exceedance in April 2023. IAMGOLD provided a response to IAAC and is awaiting further communication from the Agency on the status of the alleged non-compliances.
Social and Economic Development
The Company is continuously exploring opportunities for investing in 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 third quarter 2023 is estimated at $1.8 million and $5.7 million for the nine months ended September 30, 2023. The Company also invested in several agricultural projects during the quarter in the communes of Falagountou and Gorom-Gorom. Several donations were made during the period, including the distribution of sheep to communities for Aîd El Kebir celebration and food distribution to people displaced by the security crisis, financial support for students and for promotion of road safety awareness.
At Côté Gold, various meetings were held in support of Impact Benefit Agreement (“IBA”) implementation with First Nation Partners ("FNP") Mattagami and Flying Post and the Métis Nation of Ontario, Region 3. The FNP and Gogama Socioeconomic Management and Monitoring Committees also met during the quarter. Notable engagement events during the quarter included Côté Gold and IAMGOLD leadership participation in Flying Post First Nation’s Fall Feast in honour of the National Day for Truth and Reconciliation; participation in Mattagami’s quarterly community open house; and a visit to Mattagami community during the field work being conducted as part of the Mattagami Lake Fisheries Plan development in support of the Côté’s Fisheries Offsetting Plan. Côté Gold provided support to several events and initiatives during the quarter through community investment, donation and sponsorships.
At Westwood, the team is seeking to continue discussions with the Abitibiwinni First Nation community of Pikogan on finalizing the negotiated Impact Benefit Agreement. The third meeting of the Fayolle monitoring committee was held in September, which included a site visit. A dust abatement program is being implemented in coordination with the City of Rouyn-Noranda in relation to concerns raised by local residents near the Fayolle Project.
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Equity, Diversity and Inclusion
The Company unequivocally condemns inequity, discrimination and hatred in all its forms. One of the Company’s values is to conduct itself with respect and to embrace diversity. The Company has established an Equity, Diversity and Inclusion (“EDI”) Steering Committee to further enhance the Company’s strong commitment to these important values through data collection, education, awareness and action planning at the enterprise level. The Company completed a diagnostic evaluation of its EDI status, and the findings and recommendations (global and site specific) were rolled out across the Company to develop action plans. The Company is a sponsor of the Artemis Project, which aims to promote female business owners and entrepreneurs in the mining sector. The Company is also an active contributor to the Mining Association of Canada’s TSM protocol on EDI and is working closely with Mining HR Canada on various initiatives, including with the representation of a member of management as Chair of the “Safe Workplaces for All” council.
In addition, IAMGOLD was recognized as a GTA Top 100 Employer for its efforts on various inclusion, engagement and culture work.
Governance
The Board of Directors of IAMGOLD (the “Board”) adopted new diversity and renewal guidelines in 2021, reflecting governance best practices. Currently, women represent 50% of the directors and 57% of the independent directors. The average tenure of directors on the Board is less than two years.
On September 21, 2023, the Company announced the retirement of Maryse Bélanger from the Board of Directors for personal reasons and other commitments. Immediately following Ms. Bélanger's retirement, the Board appointed David Smith as Chair of the Board.
On September 27, 2023, Bruno Lemelin was appointed to the role of Chief Operating Officer, having served as SVP, Operations & Projects since March 2020.
On November 9, 2023, the Company announced the retirement of Ian Ashby from the Board, and the appointment of Anne Marie Toutant as an independent director.
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OPERATIONS – CONTINUING
Essakane Mine (IAMGOLD interest – 90%)1 | Burkina Faso
| Q3 2022 | YTD 2022 | |||
|---|---|---|---|---|
| Q3 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) | 3,259 1.29 9,357 12,616 2.9 2,978 1.50 90 129 115 133 $ 1,739 | 10,894 1.12 28,305 39,199 2.6 8,844 1.47 89 372 334 381 $ 1,833 | ||
| 2,015 | 6,369 | |||
| 1.16 | 1.32 | |||
| 8,624 | 24,070 | |||
| 10,639 | 30,439 | |||
| 4.3 | 3.8 | |||
| 2,908 | 8,167 | |||
| 1.10 | 1.24 | |||
| 90 | 90 | |||
| 93 | 293 | |||
| 84 | 264 | |||
| 94 | 295 | |||
| $ 1,940 | $ 1,936 | |||
| 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 | $ 232.2 127.4 | $ 699.2 327.8 | ||
| $ 181.0 | $ 571.3 | |||
| 132.1 | 368.1 | |||
| 121.0 | 113.8 2.2 11.4 | 346.4 | 287.7 5.8 34.3 | |
| 2.1 | (7.1) | |||
| 9.0 | 28.8 | |||
| 127.8 | 127.1 37.6 1.0 38.6 38.4 | 353.9 | 326.8 116.4 2.5 118.9 190.5 | |
| 36.6 | 83.2 | |||
| 0.4 | 1.4 | |||
| 37.0 | 84.6 | |||
| 3.7 | 77.7 | |||
| Performance Measures6 Cost of sales excluding depreciation ($/oz sold) Cash costs3 ($/oz sold) AISC3 ($/oz sold) | $ 954 $ 952 $ 1,248 | $ 860 $ 858 $ 1,171 | ||
| $ 1,417 | $ 1,249 | |||
| $ 1,372 | $ 1,201 | |||
| $ 1,798 | $ 1,510 |
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 third quarter 2023 of $20.8 million (third quarter 2022 - $18.6 million) and $41.5 million for YTD 2023 (YTD 2022 - $65.7 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 third quarter 2023 of 84,000 ounces was lower by 31,000 ounces or 27% compared to the same prior year period, primarily as a result of lower grades from the upper benches of Phase 5 of the pit which were lower than reserve block model grades.
Mining activity of 10.6 million tonnes in the third quarter 2023 was lower by 2.0 million tonnes or 16% compared to the same prior year period as the mining fleet did not operate at full capacity during August due to disruptions in fuel supply, resulting from regional geopolitical issues and the security situation further described below. The situation improved during September and the mining fleet was operating at capacity during September and October. Mining activity in the third quarter 2023 continued to transition into Phase 5, resulting in a higher strip ratio, in line with expectations as the operation moves to new mining phases. At quarter end, there was sufficient fuel on hand to maintain normal levels of operating activity for October.
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Mill throughput in the third quarter 2023 was 2.9 million tonnes at an average head grade of 1.10 g/t, 2% and 27% lower than the same prior year period, respectively. The decrease in head grade during the quarter is partially due to the blending of lower grade material from stockpiles and the upper benches of Phase 5.
The mill achieved recoveries of 90% in the third quarter 2023 in line with the same prior year period.
The security situation in Burkina Faso continues to be a focus for the Company. Terrorist related incidents are still occurring in the country, the immediate region of the Essakane mine and, more broadly, the West African region. The security situation in Burkina Faso and its neighboring countries continues to apply pressures to supply chains and continued security incidents or related 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. The Company continues to invest in the security and supply chain infrastructure in the region and at the mine site. It is also incurring additional costs to bring employees, contractors, supplies and inventory to the mine.
On October 27, 2023, the President of Burkina Faso signed a decree resulting in an increase to royalty rates on gold sales occurring at per ounce prices above $1,500. The decree increases the royalty from the previous rate of 5% on all gold sold over $1,500 per ounce, to the new rate applied at 6% on gold sales between $1,500 and $1,700 per ounce, 6.5% on sales between $1,700 and $2,000 per ounce, and has been capped at 7% for gold sales occurring at prices exceeding $2,000 per ounce.
Financial Performance
Production costs of $121.0 million were higher by $7.2 million or 6% primarily due to higher volumes of operating waste resulting from increased strip ratios as the mine enters new phases, the impacts of the security situation resulting in higher landed fuel prices, transportation and camp costs, as well as higher labour costs due to appreciation in the local currency. In addition to the fuel pricing pressures, power generation costs increased as heavy fuel used normally was periodically substituted with more expensive light fuel to maintain operations when supply was limited.
Production costs and depreciation included abnormal costs of $4.0 million and $0.3 million (third quarter 2022 - $nil and $nil), respectively, resulting from the reduced operating capacity in August. The abnormal costs have been excluded from cash costs and AISC, reducing both metrics by $43 per ounce sold.
Cost of sales, excluding depreciation, of $132.1 million was higher by $4.7 million or 4% primarily due to higher production costs, partially offset by lower royalties due to lower sales. Cost of sales per ounce sold, excluding depreciation, of $1,417 was higher by $463 or 49% primarily due to lower production and sales as well as higher production costs.
Cash costs of $127.8 million were in line with the prior year. Cash costs per ounce sold of $1,372 were higher by $420 or 44% primarily due to lower production and sales.
AISC per ounce sold of $1,798 was higher by $550 or 44% primarily due to lower production and sales.
Total capitalized stripping of $20.8 million was higher by $2.2 million or 12% primarily due to higher mining costs resulting from the increased landed cost of fuel.
Sustaining capital expenditures, excluding capitalized stripping, of $15.8 million included mobile and mill equipment of $4.6 million, tailings management of $2.7 million, capital spares of $2.1 million, generator overhaul of $1.8 million, resource development of $1.0 million and other sustaining projects of $3.6 million. Expansion capital expenditures of $0.4 million were incurred in support of fulfilling the community village resettlement commitment.
Outlook
Attributable gold production at Essakane in 2023 is expected to be within the range of 340,000 to 380,000 ounces. Mining activity is expected to return to normal operating levels during the fourth quarter, including increased levels of waste stripping. The mill feed will consist of a combination of direct feed and stockpiles as the mine fleet continues to sequence through the targeted phases of waste stripping. The Company is expanding its fuel storage facilities to mitigate the impact of potential limited fuel supplies in the future.
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Capital expenditures are expected to be approximately $130 million, with increased volumes of capitalized waste in the fourth quarter 2023 to provide access to mining areas in support of the 2024 and 2025 production plan. The capital spending plan assumes no significant disruptions in the supply chain resulting from the security situation described above.
The Company plans to file an updated NI 43-101 technical report by the end of 2023 detailing the life of mine plan for Essakane and an updated mineral reserve and mineral resource estimation. The technical report will incorporate the decision to forego a capital-intensive heap leach project in favour of processing through the existing CIL circuit the 9.9 million tonnes of the previously stockpiled material over the life of mine.
Westwood Mine (IAMGOLD interest – 100%) | Quebec, Canada
| Q3 2022 | YTD 2022 | |||
|---|---|---|---|---|
| Q3 2023 | YTD 2023 | |||
| Key Operating Statistics Underground lateral development (metres) Ore mined (000s t) – underground Ore mined (000s t) – other sources Ore mined (000s t) – total Grade mined (g/t) – underground Grade mined (g/t) – other sources Grade mined (g/t) – total Ore milled (000s t) Head grade (g/t) – underground Head grade (g/t) – other sources Head grade (g/t) – total Recovery (%) Gold production (000s oz) Gold sales (000s oz) Average realized gold price1 ($/oz) | 951 61 | 3,006 177 | ||
| 1,133 | 4,008 | |||
| 79 | 203 | |||
| 231 | 243 | 580 | 620 | |
| 310 | 304 | 783 | 797 | |
| 6.81 | 6.70 | 6.86 | 5.73 | |
| 1.86 | 1.01 | 1.54 | 0.99 | |
| 3.12 | 2.15 | 2.92 | 2.04 | |
| 283 | 284 | 789 | 818 | |
| 6.66 | 6.82 | 6.80 | 5.68 | |
| 1.57 | 0.94 | 1.37 | 0.98 | |
| 2.94 | 2.23 | 2.76 | 2.00 | |
| 92 | 94 | 93 | 93 | |
| 25 | 19 | 65 | 49 | |
| 22 | 18 | 61 | 48 | |
| $ 1,928 | $ 1,730 | $ 1,925 | $ 1,814 | |
| 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 | ||||
| $ 43.5 | $ 31.4 | $ 118.0 | $ 89.3 | |
| 33.9 | 32.7 | 102.2 | 99.1 | |
| 36.7 | 35.5 (2.8) | 109.2 | 104.2 | |
| (2.8) | (7.0) | (5.1) | ||
| 34.0 | 32.4 | 101.8 | 97.7 | |
| 13.8 | 6.4 1.5 7.9 (3.2) | 48.2 | 22.5 2.7 25.2 (22.3) | |
| — | 0.2 | |||
| 13.8 | 48.4 | |||
| 2.1 | (7.3) | |||
| Performance Measures3 Cost of sales excluding depreciation4 ($/oz sold) Cash costs1 ($/oz sold) AISC1 ($/oz sold) | $ 2,043 $ 2,015 $ 2,541 | |||
| $ 1,506 | $ 1,817 $ 1,803 $ 2,208 | $ 1,674 | ||
| $ 1,506 | $ 1,667 | |||
| $ 2,138 | $ 2,486 |
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 $nil for the third quarter 2023 (third quarter 2022 - $1.1 million) and $3.2 million for YTD 2023 (YTD 2022 - $6.1 million), which had an impact on cost of sales, excluding depreciation, per ounce sold of $nil for the third quarter 2023 (third quarter 2022 - $61) and $53 for YTD 2023 (YTD 2022 - $126).
5. Includes sustaining capitalized stripping for the third quarter 2023 of $0.3 million (third quarter 2022 - $nil) and $4.2 million for YTD 2023 (YTD 2022 - $nil).
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Operations
Gold production in the third quarter 2023 was 25,000 ounces, higher by 6,000 ounces or 32% compared to the same prior year period, primarily due to higher grades. The higher grades result from an increased proportion of underground ore processed as underground activities continue to improve, in addition to increased grades with the introduction of higher grade ore from the Fayolle deposit and positive grade reconciliation at the Grand Duc open pit.
Mining activity in the third quarter 2023 was 310,000 tonnes of ore, a 2% increase from the same prior year period. The underground ore tonnes mined exceeded the same prior year period due to the continued progress in rehabilitation and development of underground activities, which has resulted in an increase in production stopes available.
Underground development in the third quarter 2023 continued to improve over prior periods, with 1,133 metres of lateral development completed, higher by 182 metres or 19% than the prior year period. 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 ramp up plan. The rehabilitation work program consists of repairing and upgrading the existing underground infrastructure in line with the revised rock mechanic standard, which has 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 third quarter 2023 was 283,000 tonnes at an average head grade of 2.94 g/t, in line with and 32% higher than the same prior year period, respectively. The higher head grades during the quarter are primarily due to an increased proportion of higher grade ore feed from the underground as production activities were able to target rehabilitated underground zones, in addition to increasing grades from other sources with the introduction of higher grade material from Fayolle deposit.
The mill achieved recoveries of 92% in the third quarter 2023, 2% lower than the same prior year period. During the quarter, there was a build-up of in-circuit gold inventory in the elution circuit that has been resolved subsequent to the quarter end.
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. Incidental volumes of ore were processed during the third 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 of $36.7 million was higher by $1.2 million or 3% than the same prior year period and include approximately $2.9 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 $33.9 million was higher by $1.2 million or 4% due to higher production costs. Cost of sales per ounce sold, excluding depreciation, of $1,506, was lower by $311 or 17% primarily due to higher production and sales.
Cash costs of $34.0 million were higher by $1.6 million or 5% due to higher production costs. Cash costs per ounce sold of $1,506 were lower by $297 or 16%, primarily due to higher production and sales. Included in cash costs per ounce sold is an approximate impact of $127 per ounce sold resulting from the development cost incurred at the Fayolle deposit.
AISC per ounce sold of $2,138 was lower by $70 or 3% primarily due to lower cash costs per ounce sold, partially offset by increased sustaining capital expenditures, including non-recurring rehabilitation work performed. AISC in September was close to break even.
Sustaining capital expenditures, excluding capitalized stripping, of $13.5 million included underground development and rehabilitation of $9.0 million and other sustaining capital projects of $4.5 million.
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