IAMGOLD REPORTS OPERATING AND FINANCIAL RESULTS FOR THE SECOND QUARTER 2012 All amounts are expressed in U.S. dollars, unless otherwise indicated.
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD REPORTS OPERATING AND FINANCIAL RESULTS FOR THE SECOND QUARTER 2012
All amounts are expressed in U.S. dollars, unless otherwise indicated.
Toronto, Ontario, August 13, 2012 – IAMGOLD Corporation (“IAMGOLD” or the “Company”) today reported its unaudited consolidated financial and operating results for the second quarter ended June 30, 2012. Revenues increased 19% to $410.6 million compared to $345.7 million in the second quarter 2011. Adjusted net earnings1 (from continuing operations attributable to equity holders) were up 9% to $74.0 million ($0.20 per share) compared to $67.7 million ($0.18 per share) in the second quarter 2011. Adjusted net earnings exclude the impact of items not indicative of underlying business performance, such as impairment of marketable securities and foreign exchange translation. Including these items, net earnings were $52.9 million ($0.14 per share) compared to $74.5 million ($0.20 per share) in the second quarter 2011.
Operating cash flow1 (from continuing operations) before changes in working capital was $72.4 million ($0.19 per share) compared to $76.4 million ($0.20 per share) for the second quarter 2011. Operating cash flow in the second quarter 2012 included tax payments of $70.4 million ($0.19 per share) previously accrued in 2011, compared to $52.0 million ($0.14 per share) in the same period in 2011. Guidance respecting the tax payments was provided by the Company at the end of the first quarter.
“Our second quarter results were solid and in line with our expectations,” said Steve Letwin, President and Chief Executive Officer. “When you look at the income generated by our underlying business, adjusted net earnings rose 9% from the same quarter last year. This is consistent with our focus on sustaining profitability through a commitment to projects with attractive rates of return. This discipline drove our decision to acquire the Côté Gold project in northern Ontario, which increases our resource base by close to 30% and geographically balances our future production profile. The objective of the drilling program now underway is to convert a significant portion of Côté Gold’s inferred mineral resources to the indicated category.”
“As we stated in our outlook for the second quarter, the higher costs were expected and we maintain our guidance for the year. Our annual production and capital expenditure guidance remains unchanged, and we continue to have a strong balance sheet.”
SECOND QUARTER 2012 HIGHLIGHTS
Financial Performance and Position
- Revenues were $410.6 million, up $64.9 million or 19% from the same prior year period. The increase in revenues was mainly due to higher gold sales and gold prices.
- Adjusting for items not indicative of future operating performance, adjusted net earnings were $74.0 million ($0.20 per share) compared to $67.7 million ($0.18 per share) in the same prior year period.
- Net earnings from continuing operations attributable to equity holders were $52.9 million ($0.14 per share) compared to $74.5 million ($0.20 per share) in the same prior year period.
- The effective tax rate for the second quarter 2012 was 45% (35% for the first six months of 2012) compared to the same prior year period of 37% (29% for the first six months of 2011). The increase in the effective tax rate is primarily attributable to the non-recognition of tax benefits and items that are not indicative of the Company’s future operating performance.
- Operating cash flow was $52.7 million ($0.14 per share), up 332% from the same prior year period. Adjusting for the changes in non-cash working capital items, such as accounts receivables, inventories and long-term stockpiles, operating cash flow before changes in working capital was $72.4 million ($0.19 per share).
- The Company’s cash, cash equivalents and gold bullion (at market value) position was $614.9 million at June 30, 2012, compared to $1.3 billion at the end of the first quarter 2012. The variance reflects the $480.4 million payment for the acquisition of Trelawney.
Production, Cash Costs and Margin
Gold Operations
- Attributable gold production of 204,000 ounces increased by 9% from 188,000 ounces in the second quarter 2011. The increase was primarily the result of having effectively addressed the technical issues that limited production in 2011.
- The gold margin3 increased by 5% to $856 per ounce from $818 per ounce in the second quarter 2011 as the increase in the average realized gold price offset the increase in mining costs.
- Total cash costs3 were $737 per ounce, up from $697 per ounce in the second quarter 2011. The increase was mainly due to higher costs at the Sadiola and Yatela joint ventures due to high strip ratios and lower grades. Cash costs at IAMGOLD-operated sites were $641 per ounce, down from $666 per ounce in the second quarter 2011.
Niobec Mine
- Niobium production was 1.2 million kilograms for the second quarter 2012 compared to 1.1 million kilograms produced in the same prior year period.
- The operating margin3 of $15 per kilogram increased from $14 per kilogram in the second quarter 2011.
Operating Highlights
- On June 21, 2012, IAMGOLD completed the acquisition of Trelawney Mining and Exploration Inc. The main asset acquired in this transaction is the Côté Gold project, formerly known as Côté Lake, located adjacent to the Swayze Greenstone Belt in Northern Ontario, Canada. Since the acquisition, approximately 3,600 metres of drilling has been completed, and a NI 43-101 technical report will be filed in October 2012. A pre-feasibility study is expected to begin in the fourth quarter 2012.
- On June 20, 2012, the Company entered into a definitive arrangement to sell the Quimsacocha project in Ecuador to INV Metals Inc. (“INV”) for 150 million shares (40% - 45% interest) of INV. The acquisition is subject to INV raising C$20 million in financing which brings the total value of the deal to approximately C$30 million. The closing of the transaction is subject to certain conditions, including INV shareholder approval, government consent and financing by INV.
- In April 2012, the Company filed the resource study for the Westwood project. The start-up date for production remains on track for early 2013.
- At the Essakane mine in Burkina Faso, the development study to double the hard rock processing was completed at the end of 2011. The outcome of negotiations with the Government of Burkina Faso on fiscal terms related to mine expansions has been favourable. This includes import duties applicable to expansion-related equipment and significant improvements on the timely reimbursement of VAT (Value Added Taxes).The construction of the expanded plant commenced in early July 2012, with completion expected by the end of 2013.
At the Rosebel mine in Suriname, the completed installation of a temporary pre-crusher, a larger pebble crusher, and an expanded gravity recovery circuit this year are expected to have a positive impact in the second half 2012. A third ball mill is under construction and will be completed early in the first quarter 2013. In addition, a feasibility study expected to be completed by the first quarter 2013 will provide greater design detail around various aspects of the expansion project and is intended to further increase the capacity to treat harder ore at the mill.
- In December 2011, IAMGOLD announced an initial agreement with the Surinamese government on the terms and conditions related to further expansion at Rosebel. The Company is making good progress towards reaching a definitive agreement, which will be followed by a concept study to further define the expansion potential of bringing in the satellite resources.
- Production at IAMGOLD’s joint venture operations with AngloGold Ashanti in Mali remain largely unaffected by the unrest in that country, although the Sadiola sulphide project has progressed cautiously as a result, with the expectation that the project will be back on track in the coming months. A number of steps have been taken to improve performance following some technical and mechanical issues experienced in the first half of the year. These steps include the installation of an additional crusher to increase throughput of harder ore, the installation of equipment to increase the usage of the gravity circuit to improve recovery and accelerated access to higher grade ore in the satellite pits.
- The Company continues to move forward in unlocking the value of Niobec, including progress on the feasibility study based on block-caving and the establishment of the financing framework for the expansion. The completion of the feasibility study is expected by the third quarter 2013 and the permitting process should be finalized by 2014. Additional funding is not required until the commencement of construction.
- IAMGOLD continues to evaluate options for exploiting the large Rare Earth Elements (“REE”)
resource near its Niobec mine operation. An expanded drilling program is underway to infill and upgrade the resource and to further delineate the deposit to a depth of 700 metres. The completion of a scoping study is anticipated by the end of September 2012.
- The exploration budget for 2012 is $157.3 million, which is higher than the initial budget as it now includes $19.4 million for ongoing exploration at the recently acquired Côté Gold project in Ontario.
Commitment to Zero Harm
- The Company received approval from the Quebec provincial authorities to use the inactive Doyon open pit to store tailings generated from the Westwood mine.
The frequency of all types of serious injuries (measured as DART rate4) across IAMGOLD was 1.04 for the current year to date compared to 1.12 for full year 2011, representing a 7% improvement.
- The Total Recordable Injury rate (TRIR), which measures all injuries across IAMGOLD, is improving, with a 27% reduction from the end of 2011.
SECOND QUARTER FINANCIAL REVIEW
- Revenues from continuing operations in the second quarter 2012 were $410.6 million, a 19% increase from $345.7 million in the second quarter 2011. The increase was driven mainly by higher gold sales ($49.5 million) and higher realized gold prices ($17.7 million). For IAMGOLD’s continuing operations, including joint ventures, the number of ounces sold in the second quarter 2012 increased by 33,000 ounces from the same prior year period. Gold sales in the second quarter 2012 included inventory build-up of 13,000 ounces in the first quarter 2012 which was sold in April 2012.
- Mining costs for the second quarter 2012 were $250.1 million, up $50.1 million or 25% from the same prior year period. The increase primarily related to higher operating costs ($11.1 million), inventory movements mostly from sales exceeding production ($21.0 million), and higher depreciation, depletion and amortization ($12.9 million).
- The gold margin increased from $818 per ounce during the second quarter 2011 to $856 per ounce in the same current year period as the increase in the average realized gold price offset the increase in costs.
- Net earnings attributable to equity holders were $52.9 million ($0.14 per share) during the second quarter 2012, compared to $74.5 million ($0.20 per share) in the same prior year period.
- Adjusted net earnings from continuing operations attributable to equity holders of $74.0 million ($0.20 per share) in the second quarter 2012 increased by 9% from $67.7 million ($0.18 per share) in the same prior year period.
- Operating cash flow from continuing operations in the second quarter 2012 was $52.7 million compared to $12.2 million in the same prior year period. Operating cash flow from continuing operations before changes in working capital in the second quarter 2012 was $72.4 million ($0.19 per share), compared to $76.4 million ($0.20 per share) in the same prior year period.
Financial Position
- The Company’s cash, cash equivalents and gold bullion (at market value) position was $614.9 million at June 30, 2012, compared to $1.3 billion at the end of the first quarter 2012. The variance reflects the $480.4 million payment for the acquisition of Trelawney.
- Working capital2 as at June 30, 2012 was $549.0 million, a decrease of $641.8 million compared to December 31, 2011 mostly due to the drawdown of cash and cash equivalents of $652.1 million. The drawdown took place mainly for the acquisition of the Côté Gold project ($480.4 million), capital expenditures related to mining assets and exploration and evaluation assets ($304.5 million), the payment of dividends ($50.9 million) and acquisition of investments ($46.3 million), offset partially by net cash generated from operating activities ($223.0 million) and other cash movements ($7.0 million). Offsetting increases in non-cash working capital of $10.3 million were mainly the result of lower income and mining taxes payable.
At June 30, 2012, no funds had been drawn against the unsecured revolving credit facilities of IAMGOLD ($500 million) or Niobec ($250 million). At June 30, 2012, the Company had letters of credit in the amount of $66.1 million to guarantee certain asset retirement obligations compared to $17.9 million at December 31, 2011. The increase in collateral support to guarantee asset retirement obligrations was the result of Quebec, Canada regulators accepting a revised asset retirement plan. The Company also has cash legally restricted of $2.8 million included in other non-current assets for the purposes of settling asset retirement obligations.
SUMMARIZED FINANCIAL RESULTS
| June 30, 2012 | Change | ||
|---|---|---|---|
| $ | 614.9 | (51% | ) |
| $ | 496.4 | (57% | ) |
| $ | 4,492.3 | 3% | |
| $ | 3,665.5 | 4% |
Financial Position ($ millions, except where noted) December 31, 2011
Cash, cash equivalents, and gold bullion
- at market value $ 1,262.5
- at cost $ 1,148.4
Total assets $ 4,349.7
Equity $ 3,528.9
Summary of Financial and
Three months ended June 30, Six months ended June 30,
Operating Results
| ($ millions, except where noted) | 2012 | Change | 2011 | 201 | 2 | Change | 2011 | |||||
| Financial Data Revenues Mining costs including depreciation, depletion and amortization | $ 345.7 $ 200.0 | $ 759.7 $ 409.5 | ||||||||||
| $ | 410.6 | 19% | $ | 814.8 | 7% | |||||||
| $ | 250.1 | 25% | $ | 465.7 | 14% | |||||||
| Gross earnings from mining operations | $ | 160.5 | 10% | $ 145.7 | $ | 349.1 | - | $ 350.2 | ||||
| Net earnings attributable to equity holders of IAMGOLD1 Basic net earnings per share ($/share)1 | $ 74.5 $ 0.20 | $ 207.7 $ 0.56 | ||||||||||
| $ | 52.9 | (29% | ) | $ | 172.1 | (17% | ) | |||||
| $ | 0.14 | (30% | ) | $ | 0.46 | (18% | ) | |||||
| Adjusted net earnings attributable to equity holders of IAMGOLD1, 2 Basic adjusted net earnings per share ($/share)1,2 | $ 67.7 $ 0.18 | $ 185.5 $ 0.50 | ||||||||||
| $ | 74.0 | 9% | $ | 166.4 | (10% | ) | ||||||
| $ | 0.20 | 11% | $ | 0.44 | (12% | ) | ||||||
| Operating cash flow1 Operating cash flow ($/share)1 Operating cash flow before changes in working capital1, 2 Operating cash flow before changes in working capital ($/share)1, 2 | $ | 52.7 | 332% | $ 12.2 $ 0.03 $ 76.4 $ 0.20 | $ | 223.0 | 6% | $ 211.2 $ 0.56 $ 290.9 $ 0.78 | ||||
| $ | 0.14 | 367% | $ | 0.59 | 5% | |||||||
| $ | 72.4 | (5% | ) | $ | 258.1 | (11% | ) | |||||
| $ | 0.19 | (5% | ) | $ | 0.69 | (12% | ) |
1 Amounts represent results from continuing operations and do not include discontinued operations.
2 The Company has included the following non-GAAP measures: adjusted net earnings attributable to equity holders of IAMGOLD, adjusted net earnings per share, operating cash flow before changes in working capital per share, total cash cost per ounce, gold margin per ounce, and operating margin per kilogram of niobium sold at the Niobec mine. Refer to the Supplemental Information attached to the MD&A for reconciliation to GAAP measures.
KEY OPERATING STATISTICS
Three months ended June 30, Six months ended June 30,
| 2012 | Change | 2011 | 2012 | Change | |||
| 193 182 188 | |||||||
| 226 | 17% | 434 | (5% | ) | |||
| 212 | 16% | 407 | (6% | ) | |||
| 204 | 9% | 411 | (2% | ) | |||
| $ | 1,593 | 5% | $ 1,515 $ 697 $ 818 | $ | 1,645 | 14% | |
| $ | 737 | 6% | $ | 708 | 15% | ||
| $ | 856 | 5% | $ | 937 | 12% | ||
| 1.1 1.3 $ 14 | |||||||
| 1.2 | 9% | 2.3 | 5% | ||||
| 1.2 | (8%) | 2.4 | 4% | ||||
| $ | 15 | 7% | $ | 15 | - |
2011
Key Operating Statistics–Gold Mines
Gold sales – 100% (000s oz)1 459 Gold sales – Attributable (000s oz)1 431 Gold production – Attributable (000s oz)2 421 Average realized gold price ($/oz)1 $ 1,447 Total Cash cost ($/oz)1, 3 $ 613 Gold margin ($/oz)1, 3 $ 834
Key Operating Statistics – Niobec mine
Niobium production (millions of kg Nb) 2.2
Niobium sales (millions of kg Nb) 2.3 Operating margin ($/kg Nb)3 $ 15
1 Amounts represent results from continuing operations and do not include discontinued operations.
2 Excludes attributable ounces from discontinued operations of nil for the three and six months ended June 30, 2012 (three months ended June 30, 2011: 10,000 ounces, six months ended June 30, 2011: 67,000 ounces). Discontinued operations include Mupane, Tarkwa and Damang, which were sold in 2011.
3 The Company has included the following non-GAAP measures: adjusted net earnings attributable to equity holders of IAMGOLD, adjusted net earnings per share, operating cash flow before changes in working capital per share, total cash cost per ounce, gold margin per ounce, and operating margin per kilogram of niobium sold at the Niobec mine. Refer to the Supplemental Information attached to the MD&A for reconciliation to GAAP measures.
ATTRIBUTABLE GOLD PRODUCTION AND CASH COSTS
The table below presents the gold production attributable to the Company along with the weighted average cash cost per ounce of production.
Gold Production (000s oz) Total Cash Cost1 ($/oz)
Three months ended Six months ended Three months ended Six months ended June 30, June 30, June 30, June 30,
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||
| IAMGOLD Operator Rosebel (95%) Essakane (90%) Doyon division2 (100%) | 87 62 - | 187 157 - | $ 704 $ 613 $ - | $ 618 $ 501 $ - | ||||||
| 94 | 187 | $ | 696 | $ | 666 | |||||
| 81 | 161 | $ | 587 | $ | 574 | |||||
| 2 | 4 | $ | 143 | $ | 137 | |||||
| 177 | 149 | 352 | 344 | $ | 641 | $ 666 | $ | 619 | $ 565 | |
| Joint Ventures Sadiola (41%) Yatela (40%) | 33 6 | 63 14 | $ 705 $ 1,401 | $ 714 $ 1,352 | ||||||
| 22 | 47 | $ | 1,213 | $ | 1,104 | |||||
| 5 | 12 | $ | 1,864 | $ | 1,730 | |||||
| 27 | 39 | 59 | 77 | $ | 1,349 | $ 817 | $ | 1,234 | $ 829 | |
| Continuing operations | 204 | 188 | 411 | 421 | $ | 737 | $ 697 | $ | 708 | $ 613 |
| Discontinued operations3 | 10 | 67 | $ 1,271 | $ 792 | ||||||
| - | - | $ | - | $ | - | |||||
| Total | 204 | 198 | 411 | 488 | $ | 737 | $ 729 | $ | 708 | $ 637 |
| Continuing operations Cash cost excluding royalties Royalties Total cash cost1 | $ 610 87 | $ 533 80 | ||||||||
| $ | 650 | $ | 619 | |||||||
| 87 | 89 | |||||||||
| $ | 737 | $ 697 | $ | 708 | $ 613 |
1 Total cash cost is a non-GAAP measure. Refer to the Cash Costs section above for reconciliation to GAAP measures.
2 As a cost savings initiative, the ore mined from Mouska was stockpiled in 2011. In 2012, the mine will not be producing other than marginal gold derived from the mill clean-up process.
3 Discontinued operations include Mupane, Tarkwa and Damang which were sold in 2011.
OPERATIONS
ROSEBEL MINE, SURINAME
Operating Performance
Attributable gold production of 94,000 ounces for the second quarter 2012 was 8% higher than the same prior year period, primarily as a result of higher throughput and higher recoveries. Recoveries have shown an improving trend with the partial installation of the gravity circuit. Mine tonnage for the current quarter was adversely impacted by the heavy rainfall and was lower than the same prior year period due to longer hauls.
Total cash costs were lower than the same period in the prior year mainly due to higher gold production partially offset by higher royalties as a result of higher realized gold prices.
CAPEX
Of the $145 million 2012 capital plan, $70.2 million has been expended year-to-date. During the second quarter, capital expenditures were $48.1 million and consisted of new mining equipment ($21.9 million), the third ball mill project ($8.5 million), resource delineation and near-mine exploration ($4.5 million), precrusher unit ($3.5 million), new gravity circuit project ($2.4 million), capital spares ($1.7 million), infrastructure development for Rosebel pit ($1.4 million), tailings dam ($1.1 million), and various smaller projects ($3.1 million).
Exploration
Approximately 36,000 metres of diamond drilling was completed during the quarter, mainly at the Mayo, Koolhoven and Pay Caro deposits, to increase the confidence in the existing resource inventory and target resource expansions.
ESSAKANE MINE, BURKINA FASO
Operating Performance
Attributable gold production of 81,000 ounces for the second quarter 2012 was 30% higher than the second quarter 2011. The increase was primarily the result of having effectively addressed the technical issues that limited production in 2011, partially offset by lower grades in 2012.
Total cash costs in the second quarter 2012 were lower compared to the second quarter 2011 mainly due to higher production.
CAPEX
Of the $320 million 2012 capital plan, $88.4 million has been expended to date, including $22.8 million of capitalized stripping costs. During the second quarter 2012, capital expenditures were $47.3 million and consisted of capitalized stripping costs on the push-back of the pit ($12.5 million), mill expansion including advances towards long lead equipment ($23.2 million), liner installation at the bulk water storage facility ($3.9 million), resource development ($4.2 million), capital spares ($1.2 million) and other sustaining capital ($2.3 million).
Exploration
More than 41,600 metres of drilling was completed, including approximately 15,600 metres targeting the Essakane Main Zone on the northern extensions of the current life of mine pit as well as within or immediately below the expansion feasibility study pit design. Systematic drilling is also testing for southeast extensions of the Falagountou deposit and evaluating the resource potential of selected targets along the 10 kilometre long Gossey - Korizena trend.
DOYON DIVISION, CANADA
During the quarter, the Mouska mine recovered 2,000 ounces as a result of the mill clean-up activities. The site continues to stockpile ore which will be processed in the refurbished mill upon the start-up of Westwood in 2013.
SADIOLA MINE, MALI
Operating Performance
Attributable gold production of 22,000 ounces for the second quarter 2012 was 33% lower than the prior year period. This was due to lower throughput resulting from low mill availability, lower grades mined, and lower recoveries due to graphitic ore. Lower production had an adverse impact on total cash costs which rose significantly from the same quarter in 2011.
CAPEX
Of the $40 million 2012 capital plan (attributable portion), $23.6 million has been expended to date, including $9.5 million of capitalized stripping costs. During the second quarter 2012, attributable capital expenditures were $9.7 million and consisted of spending on the Sulphide project ($5.6 million), capitalized stripping ($2.7 million), and various smaller projects ($1.4 million).
Sadiola did not distribute any dividends in the second quarter 2012 or 2011.
YATELA MINE, MALI
Operating Performance
Attributable gold production of 5,000 ounces for the second quarter 2012 was lower than the prior year period as a result of comparably lower ore tonnage being fed to the heap leach pads.
Total cash costs in the second quarter 2012 were higher than the same quarter in 2011 due to a 25% increase in tonnage mined attributed to a focus on mining the main pit while the North Pit had a short-term waste stripping campaign. By the third quarter 2012, the short-term waste stripping campaign will be complete as ore in the pit will be accessible.
There were no significant capital expenditures year-to-date for both 2012 and 2011. Yatela did not distribute any dividend during the second quarter 2012 or 2011.
NIOBEC NIOBIUM MINE, CANADA
Operating Performance
Niobium production of 1.2 million kilograms in the second quarter 2012 was 9% higher than the same period in 2011. This was due to the higher conversion of niobium pentoxide and higher recoveries, offset to some extent by lower grades mined.
Niobium revenues increased to $48.4 million in the second quarter 2012 from $48.1 million in the same period in 2011 due to a higher realized niobium price offset by lower sales volume. Operating margin during the second quarter 2012 was higher than the second quarter 2011 as a result of the higher realized Niobium price partially offset by higher labour and consumables costs.
CAPEX
Of the $90 million 2012 capital plan, $34.5 million has been expended to date. During the second quarter, capital expenditures were $19.6 million and included mining equipment ($4.8 million), underground development ($4.6 million) and the expansion feasibility study ($0.8 million).
ATTRIBUTABLE GOLD SALES VOLUME AND REALIZED GOLD PRICE
Gold sales (000s oz) Realized gold price ($/oz)
Three months ended Six months ended Three months ended Six months ended June 30, June 30, June 30, June 30,
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | ||
| 198 | 156 37 | 376 | 385 74 | $ | 1,591 | $ 1,518 $ 1,500 | $ | 1,645 |
| 28 | 58 | $ | 1,607 | $ | 1,649 | |||
| 193 | 459 | $ 1,515 | ||||||
| 226 | 434 | $ | 1,593 | $ | 1,645 |
2011
Operator Joint ventures1
Total sales from continuing operations 2,3
1 Attributable sales of joint ventures: Sadiola (41%) and Yatela (40%).
2 Attributable sales volume for the second quarters 2012 and 2011 were 212,000 ounces and 182,000 ounces, respectively, and for the first six months 2012 and 2011 were 407,000 ounces and 431,000 ounces after taking into account 95% of the Rosebel sales and 90% of the Essakane sales.
3 Continuing operations exclude Mupane, Tarkwa and Damang which were sold in 2011 and are discontinued operations.
NIOBEC PRODUCTION, SALES AND OPERATING MARGIN
Three months ended June 30, Six months ended June 30,
| 2012 | Change | 2011 | 2012 | Change | 2011 | |||||
| Total operating material mined (000s t) Ore milled (000s t) Grade (% Nb O ) 2 5 Niobium production (millions of kg Nb) Niobium sales (millions of kg Nb) Operating margin ($/kg Nb)1 | 483 | (12%) | 546 529 0.60 1.1 1.3 $ 14 | 1,053 | (2%) | 1,075 1,050 0.59 2.2 2.3 $ 15 | ||||
| 522 | (1%) | 1,077 | 3% | |||||||
| 0.53 | (12% | ) | 0.54 | (8% | ) | |||||
| 1.2 | 9% | 2.3 | 5% | |||||||
| 1.2 | (8%) | 2.4 | 4% | |||||||
| $ | 15 | 7% | $ | 15 | - |
1 Operating margin per kilogram of niobium at the Niobec mine is a non-GAAP measure. Refer to the Supplemental Information section attached to the MD&A for reconciliation to GAAP measures.
EXPLORATION
IAMGOLD’s exploration efforts remain focused in West Africa, select countries in South America, and the provinces of Ontario and Quebec in Canada. With a strategic mandate for organic growth, the Company has numerous projects already underway and continues to pursue additional advanced exploration joint venture or acquisition opportunities that will provide the foundation for future growth.
These advanced opportunities include an on-going resource expansion and delineation drilling program of more than 95,000 metres at Rosebel in Suriname, an underground exploration and resource delineation drilling program of more than 89,000 metres at the Westwood development project in Quebec and a resource delineation program of approximately 49,000 metres at Essakane in Burkina Faso.
In the second quarter 2012, IAMGOLD incurred $36.6 million on exploration projects compared to $27.5 million in the same prior year period. The second quarter 2012 expenditures included:
- near-mine exploration and evaluation expenditures of $13.4 million, and
greenfield exploration expenditures of $23.2 million conducted at 20 projects, including two advanced exploration sites, in eight countries in Africa and the Americas as part of IAMGOLD’s long-term commitment to reserves replenishment and organic growth.
2012 OUTLOOK
IAMGOLD guidance for production, cash costs and capital expenditures has been maintained for 2012 and is as follows:
| IAMGOLD full year 2012 guidance | 2012 Plan |
| Attributable gold production (000s oz) Rosebel Essakane Total mines owned and operated by IAMGOLD Total joint venture mines (Sadiola and Yatela) | |
| 370 – 395 | |
| 320 – 345 | |
| 690 – 740 | |
| 150 – 170 | |
| Total attributable production | 840 – 910 |
| Cash cost ($/oz) from continuing operations1 | $670 – $695 |
| Average gold price ($/oz) Average crude oil price ($/barrel) Average foreign exchange rate (C$/US$) Average foreign exchange rate (US$/€) | $1,700 |
| $90 | |
| $1.00 | |
| $1.40 | |
| Niobec production (millions of kg Nb) Niobec operating margin ($/kg Nb)1 | 4.6 – 5.1 |
| $15 – $17 | |
| Capital expenditures ($ millions) | $800 – $840 |
1 Cash cost per ounce and operating margin per kilogram of niobium sold at the Niobec mine are non-GAAP measures. Refer to the Supplemental Information attached to the MD&A for reconciliation to GAAP measures.