Iamgold Achieves Target Production and Strong GOLD Margins IN the First Quarter 2020
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD ACHIEVES TARGET PRODUCTION AND STRONG GOLD MARGINS IN THE
FIRST QUARTER 2020
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
For more information, refer to the Management Discussion and Analysis (MD&A) and Unaudited Consolidated
Interim Financial Statements for the three months ended March 31, 2020.
Toronto, Ontario, May 4, 2020 - IAMGOLD Corporation (“IAMGOLD” or the “Company”) reported its
consolidated financial and operating results for the quarter ended March 31, 2020.
"IAMGOLD benefited from strong revenues on higher gold prices in the quarter, generating $44 million in
operating cash flow, notwithstanding the rapid onset of the COVID -19 crisis toward the end of the quarter,"
commented Gordon Stothart, newly appointed P resident & Chief Executive Officer of IAMGOLD. "Our gold
margins improved 45% from one year ago, with production on plan, but lower sales volumes. We made good
progress on waste stripping at Essakane, and are on track to achieve our 2020 run rate at Saramacca in the
second half of the year, while Westwood has been steadily achieving production and cost targets. In
response to the global COVID -19 crisis, the IAMGOLD team has proved both agile and resilient, drawing
upon our deep bench strength to manage efforts at each of our locations, and taking a collaborative approach
to government and community relations.”
Mr. Stothart stated, "I am also very pleased to announce that we have promoted Bruno Lemelin to the role
of Senior Vice President, Operations & Projects, with oversight of all operational and project development
activities across the organization, and Oumar Toguyeni to the role of Senior Vice President, International
Affairs & Sustainability, with the primary objective of managing IAMGOLD ’s relationships with our overseas
host governments and other stakeholders in West Africa and South America. Both have extensive
experience across IAMGOLD's operations and they bring additional leadership, technical and stakeholder
engagement skills to our executive leadership team.”
“IAMGOLD has an exciting future, with a great foundation of existing operations, a superior balance sheet
and one of the best growth portfolios of development assets and exploration projects in the industry."
continued Mr. Stothart. “All of this is underpinned by a savvy, experienced team of technical, operational,
and financial professionals."
First Quarter 2020 Highlights
• Attributable gold production from continuing operations of 170,000 ounces at cost of sales1 per ounce
of $1,054, total cash costs 2 per ounce produced of $993 and all -in sustaining costs 2 per ounce sold
of $1,230. Target production was achieved, with production at the end of the quarter impacted by
activities related to COVID -19, including the self -confinement of E ssakane and Rosebel, and the
placement of Westwood on care and maintenance following provincial directives.
• Attributable gold sales from continuing operations were 159,000 ounces at an average realized gold
price per ounce of $1,603. Gold sales were lower at Essakane, reflecting the postponement of sales
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at the quarter-end due to the global COVID-19 crisis, while Westwood was impacted by being placed
on care and maintenance in response to provincial directives.
• Revenues of $274.5 million, reflecting the average realized gold price of $1,603 per ounce sold.
• Net loss from continuing operations attributable to equity holders of $34.4 million, or $0.07 per share,
primarily due to losses on the embedded derivatives related to the Rosebel power purchase
agreement and the Senior Notes.
• Adjusted net loss from continuing operations attributable to equity holders 2 of $4.9 million or $0.01
per share2.
• Net cash from operating activities of $44.0 million.
• Net cash from operating activities before changes in working capital2 of $72.8 million.
• The Company continues to manage its balance sheet prudently, with cash, cash equivalents, short -
term investments and restricted cash totaling $829.8 million at March 31, 2020.
Strategic Developments
Global COVID-19 Crisis
• In response to the global COVID-19 crisis, IAMGOLD immediately activated appropriate committees at
its various offices and operations world -wide to ensure a coordinated response encompassing
operations, projects, exploration, and corporate offices. This en abled the timely assessment and
implementation of protocols to mitigate risk to employees, contractors and local communities, including
protocols aimed at complying with government -imposed restrictions and reducing the impact of supply
chain disruptions.
• The impact of the crisis on our business was not significant in the first quarter of 2020. Although
precautionary self -confinement measures were taken at Essakane and Rosebel in late March,
production continued uninterrupted. Six days of care and maintenan ce at Westwood in the quarter had
a limited impact on production.
• The continuing global COVID -19 crisis is expected to continue to affect our operations, including
incremental costs and productivity impacts due to measures in place and new protocols imple mented.
While the precise impact continues to evolve, the impact could be significant in future periods, affecting
our guidance for future years.
• For 2020, primarily due to the crisis, we have lowered our total attributable gold production and capital
expenditure guidance and revised upwards our cost of sales per ounce sold, total cash costs1 per ounce
produced, and all-in sustaining costs1 per ounce sold guidance.
• IAMGOLD has taken extensive steps to protect the health and safety of employees, contractors and
local communities in response to the global COVID -19 crisis. This included training on new procedures
and sanitary measures, adjusted work schedules and transp ort, and physical distancing and protective
equipment. In addition, the number of sleeping quarters and handwashing stations at the mine sites was
increased, temperature checks are performed and equipment is cleaned frequently.
• IAMGOLD is working closely with both host communities and local governments to safeguard vulnerable
communities against COVID -19 through food security, medical equipment donations and contributions
to COVID -19 rel ief programs. We are reviewing various Federal and Provincial COVID -19 related
support programs to determine eligibility and impact.
Organizational Changes
• P .Gordon Stothart was appointed President and Chief Executive Officer and joined the Board of
Directors, effective March 1, 2020.
• IAMGOLD strengthened its leadership, tec hnical and stakeholder engagement talent with the following
appointments to our Executive Leadership Team:
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◦ Bruno Lemelin was appointed to the role of Senior Vice President, Operations & Projects, with
oversight of all operational and project development activities across the Company.
◦ Oumar Toguyeni was appointed to the role of Senior Vice President, International Affairs &
Sustainability, with the primary objective of managing the Company's relationships with
governments and other stakeholders in West Africa and South America.
Financial
• We lowered our total attributable gold production guidance to the range of 685,000 to 740,000 ounces,
lowered capital expenditure guidance to $345 million (±5%), revised upwards cost of sales per ounce
sold guidance to the r ange of $955 to $995, revised upwards total cash costs 1 per ounce produced
guidance to the range of $920 to $960, and revised upwards all -in sustaining costs 1 per ounce sold
guidance to the range of $1,195 to $1,245, primarily due to the impact of the glob al COVID-19 crisis.
• On February 26, 2020, IAMGOLD further amended its $500 million credit facility with a maturity date of
January 31, 2023. These amendments included, among other things, extending $447 million of credit
available under the credit facility agreement to a maturity date of January 31, 2024.
• The Company acted on its financ ial risk mitigation strategies by executing currency hedges and fuel
hedges due to favourable market conditions relative to internal planning rates.
Reserves and Resources
• On February 18, 2020, we announced updated total attributable proven and probable re serves of 16.7
million ounces at the end of 2019. In addition, total attributable measured and indicated resources
(inclusive of reserves) were reported at 27.2 million ounces of gold, while total attributable inferred
resources were reported at 12.0 million ounces of gold.
Exploration
• IAMGOLD announced an updated mineral resource estimate for the Pitangui Project in Brazil,
comprising 3.33 million tonnes of indicated resources grading 4.39 g/t Au for 470,000 ounces and 3.56
million tonnes of inferred resources grading 3.78 g/t Au for 433,000 ounces.
Development and Operations
• Mining activities continued at Saramacca with the construction of mine site facilities, water management
infrastructure, site roads and the preparation of waste dumps. The delivery a nd commissioning of the
hauling fleet and mining equipment also continued during the quarter. Construction of the haul road
progressed with the road connection completed in the first quarter 2020 and ore from Saramacca was
delivered to the Rosebel mill using the substantially completed haul road.
• We continued to de -risk the Côté Gold Project, approaching 60% completion of the detailed project
engineering as at March 31, 2020.
• IAMGOLD announced that the Government of the Republic of Senegal approved the mini ng permit
application for the Boto Gold Project for an initial 20 -year period. The receipt of the mining permit
positions the Project for a development decision and eventual production.
• Our Westwood Gold Mine in Canada was placed on care and maintenance on March 25, 2020, along
with other mining companies province -wide, as directed by the Government of Quebec in response to
the global COVID-19 crisis as mining was considered a non -essential business. Subsequently, on April
15, 2020, Westwood commenced the restart of operations from care and maintenance following the April
13, 2020 confirmation from the Government of Quebec that mining is an essential business.
• IAMGOLD's Rosebel mine in Suriname and the Essakane mine in Burkina Faso were moved into self -
confinement on March 22, 2020 and March 24, 2020, respectively, to better protect employees and
communities, and to support the continuity of these operations. The Government of Burkina Faso
subsequently imposed a curfew and limited movement in the country by placing a number of locations,
including Ouagadougou and Essakane under administrative quarantine. Although the Essakane mine
was placed under administrative quarantine on April 8, 2020, production has continued uninterrupted.
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Subsequent to the Quarter
• On April 22, 2020, Rosebel Gold Mines N.V. ("Rosebel") signed an Unincorporated Joint Venture (“UJV”)
agreement with Staatsolie Maatschappij Suriname N.V. (“Staatsolie”) relating to the concession areas
within the UJV Area of Interest, which includes Saramac ca. The UJV excludes the existing gross
Rosebel mining concession, which is 95% owned by Rosebel and 5% owned by the Republic of
Suriname. Rosebel holds a 70% participating interest and Staatsolie holds a 30% participating interest
in the UJV on behalf of the Republic of Suriname. Staatsolie has paid Rosebel an initial amount of $34.0
million toward an aggregate owing of $54.9 million for all operating and capital expenses related to the
Saramacca Project. The remaining amount will be paid out of Staatsolie’s gold entitlement.
Upcoming Growth Catalysts
• We continue the strategic review of our growth projects, Côté Gold and Boto Gold. The Company is well
positioned for growth, with a strong reserve and resource base, robust balance sheet and skilled
workforce.
• IAMGOLD expects to complete an updated life of mine plan for Westwood, and accompanying National
Instrument 43-101 technical report, by mid-year 2020. The report is expected to outline the details of a
safe, profitable and long life mine plan.
• We continue to advance various ongoing and planned delineation and resource evaluation drilling
programs at selected projects including the Nelligan Gold, Monster Lake and the Rouyn Gold Projects
in Quebec, the Gosselin discovery on the Côté Gold property in Ontario, and the Karita Gold discovery
in Guinea.
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SUMMARY OF FINANCIAL AND OPERATING RESULTS
Three months ended March 31,
Financial Results ($ millions, except where noted) 2020 2019
Continuing Operations
Revenues $ 274.5 $ 251.0
Cost of sales $ 242.6 $ 251.9
Gross profit (loss) $ 31.9 $ (0.9 )
Net loss from continuing operations attributable to equity holders of
IAMGOLD $ (34.4 ) $ (40.7 )
Net loss from continuing operations attributable to equity holders of
IAMGOLD ($/share) $ (0.07 ) $ (0.09 )
Adjusted net loss from continuing operations attributable to equity
holders of IAMGOLD1 $ (4.9 ) $ (6.9 )
Adjusted net loss from continuing operations attributable to equity
holders of IAMGOLD ($/share)1 $ (0.01 ) $ (0.01 )
Net cash from operating activities $ 44.0 $ 8.8
Net cash from operating activities before changes in working capital1 $ 72.8 $ 33.8
Key Operating Statistics
Gold sales – attributable (000s oz) 159 178
Gold production – attributable (000s oz) 170 173
Average realized gold price1 ($/oz) $ 1,603 $ 1,308
Cost of sales2 ($/oz) $ 1,054 $ 962
Total cash costs1 ($/oz) $ 993 $ 884
All-in sustaining costs1 ($/oz) $ 1,230 $ 1,103
Gold margin1 ($/oz) $ 610 $ 420
1 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A.
2 Cost of sales, excluding depreciation, as disclosed in note 30 of the Company's consolidated interim financial statements is on an attributable ounce
sold basis (excluding the non-controlling interests of 10% at Essakane and 5% at Rosebel).
FIRST QUARTER 2020 SUMMARY
Financial Performance
• Revenues from continuing operations for the first quarter 2020 were $274.5 million up $23.5 million or
9% from the same prior year period. The increase was primarily due to a higher realized gold price
($50.3 million) and higher sales volume at Westwood ($4.5 million), partially offset by lower sales volume
at Essakane ($25.8 million) and Rosebel ($6.2 million).
• Cost of sales from continuing operations for the first quarter 2020 was $242.6 million, down $9.3 million
or 4% from the same prior year period. The decrease was primarily due to lower operating costs and
depreciation expense partially offset by higher royalty expense as a result of an increase in the gold
price. Operating costs were lower primarily due to higher capitalized stripping due to pushbacks at
Essakane and Rosebel, a build of finished goods at Essakane reflecting the postponement of gold sales
at the quarter-end due to the global COVID -19 crisis, partially offset by a drawdown of lower grade ore
stockpiles to supplement ore feed at Rosebel.
• Depreciation expense from continuing operations for the first quarter 2020 was $63.4 million, down $5.2
million or 8% from the same prior year period. The decrease was primarily due to lower depreciation at
Westwood resulting from the impairment charge recorded in the fourth quarter 2019.
• Income tax expense for the first quarter 2020 was $3.6 million, up $2.2 million from the same prior year
period. Income tax expense for the first quarter 2020 comprised current income tax expense of $8.9
million (March 31, 2019 - $9.7 million) and deferred income tax recovery of $5.3 million (March 31, 2019
- recovery of $8.3 million). The increase in income tax expense was due to a lower deferred tax recovery
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primarily due to changes to deferred income tax assets and liabilities, differences in the impact of
fluctuations in foreign exchange, and differences in the level of taxable income in the Company ’s
operating jurisdictions from one period to the next.
• Net loss from continuing operations attributable to equity holders for the first quarter 2020 was $34.4
million, or $0.07 per share, compared to net loss of $40.7 mill ion, or $0.09 per share in the same prior
year period. The decrease in net loss was primarily due to higher gross profit ($32.8 million) and lower
other expenses ($19.1 million), partially offset by lower interest income, derivatives and other investment
gains (losses) ($35.6 million) primarily due to losses on the embedded derivatives related to the Rosebel
power purchase agreement and the Senior Notes.
• Adjusted net loss attributable to equity holders 1 was $4.9 million, or $0.01 per share 1, compared to
adjusted net loss1 of $6.9 million, or $0.01 per share1 in the same prior year period.
• Net cash from operating activities for the first quarter 2020 was $44.0 million, up $35.2 million from the
same prior year period. The increase was primarily due to higher earnings after non-cash adjustments
($35.3 million).
• Net cash from operating activities before changes in working capital1 for the first quarter 2020 was $72.8
million, up $39.0 million from the same prior year period.
Financial Position
• Our cash, cash e quivalents, short-term investments and restricted cash balance was $829.8 million at
March 31, 2020, down $35.0 million from December 31, 2019. The decrease was due to spending on
property, plant and equipment ($67.5 million), partially offset by cash generated from operating activities
($44.0 million).
Production and Costs
• Attributable gold production from continuing operations was 170,000 ounces for the first quarter 2020,
down 3,000 ounces from the same prior year period. The decrease was primarily due to lower grades
at Essakane as a result of mine sequencing (6,000 ounces), lower throughput at Rosebel as ore feed
was supplemented from lower grade ore stockpiles and higher grade mil l pebbles as mining activity
focused on achieving strategic pushbacks (4,000 ounces), partially offset by increased throughput at
Westwood due to the ramp up of mining activity compared to the reduced activity resulting from
increased seismicity in the fourth quarter 2018 (7,000 ounces).
• Attributable gold sales from continuing operations were 159,000 ounces for the first quarter 2020, down
19,000 ounces from the same prior year period. The decrease was due to lower sales at Essakane
(18,000 ounces) and Rose bel (4,000 ounces) partially offset by higher sales at Westwood (3,000
ounces).
• Cost of sales3 per ounce from continuing operations for the first quarter 2020 was $1,054, up 10% from
the same prior year period primarily due to lower sales volume and higher royalties as a result of an
increase in the gold price.
• Total cash costs1 per ounce produced from continuing operations for the first quarter 2020 were $993,
up 12% from the same prior year period primarily due to lower production volume and higher royalties
as a result of an increase in the gold price.
• All-in sustaining costs1 per ounce sold from continuing operations for the first quarter 2020 were $1,230,
up 12% f rom the same prior year period. The increase was primarily due to higher cost of sales per
ounce, partially offset by lower sustaining capital expenditures.
• While there was no impact on total cash costs 1 and all-in sustaining costs 1 from continuing operations
for the first quarter 2020, the first quarter 2019 included a reduction of $61 per ounce produced and $60
per ounce sold, respectively, for the normalization of costs due to abnormally low production at
Westwood.
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• Included in total cash costs 1 and all-in sustaining costs 1 from continuing operations for the first quarter
2020 were realized derivative losses from hedging programs of $9 per ounce produced and $12 per
ounce sold, respectively (2019 - $2 gain and $2 gain).
Commitment to Zero Harm Continues
• The DART rate2, representing the frequency of all types of serious injuries across all sites and
functional areas for the first quarter 2020 was 0.65, above IAMGOLD's target of 0.57. We continue the
implementation of several initiatives, including a behaviour-based safety program, to ensure a safer
work environment.
• In response to the global COVID -19 crisis, IAMGOLD has taken extensive steps to protect the health
and safety of employees and contractors.
ATTRIBUTABLE GOLD PRODUCTION AND COSTS
Gold Production
(000s oz)
Cost of Sales1
($ per ounce)
Total Cash
Costs2
($ per ounce
produced)
All-in Sustaining
Costs2,3
($ per ounce
sold)
Three months ended March 31, 2020 2019 2020 2019 2020 2019 2020 2019
Continuing operations
Essakane (90%) 84 90 $ 970 $ 896 $ 909 $ 883 $ 1,054 $ 1,010
Rosebel (95%) 64 68 1,114 889 1,042 901 1,248 1,064
Westwood (100%)4,5 22 15 1,162 1,549 1,176 858 1,242 1,192
170 173 $ 1,054 $ 962 $ 993 $ 888 $ 1,230 $ 1,103
Cost of sales1 ($/oz) $ 1,054 $ 962
Cash costs, excluding royalties $ 920 $ 826
Royalties 73 62
Total cash costs2 $ 993 $ 888
All-in sustaining costs2,3 $ 1,230 $ 1,103
1 Cost of sales, excluding depreciation, as disclosed in note 30 of the Company's con solidated interim financial statements is on an attributable ounce
sold basis (excluding the non-controlling interests of 10% at Essakane and 5% at Rosebel).
2 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A.
3 All-in sustaining costs include corporate general and administrative costs. Refer to all -in sustaining costs reconciliation on page 29 of the MD&A.
4 Cost of sales per ounce sold for Westwood does not include the impact of normalization of costs for the first quarter 2020 of $nil per ounce (2019 - $60
per ounce).
5 Total cash costs per ounce produced and all -in sustaining costs per ounce sold for Westwood include the impact of normalization of costs for the first
quarter 2020 of $nil per ounce (2019 - $61 per ounce produced and $60 per ounce sold, respectively).
UPDATED 2020 GUIDANCE
IAMGOLD Full Year Attributable Guidance Revised1 Previous2
Essakane (000s oz) 350 – 370 365 – 385
Rosebel (000s oz) 250 – 270 245 – 265
Westwood (000s oz) 85 – 100 90 – 110
Total attributable production (000s oz) 685 - 740 700 - 760
Cost of sales3 ($/oz) $955 - $995 $900 - $950
Total cash costs4,5 ($/oz) $920 - $960 $840 - $890
All-in sustaining costs4,5 ($/oz) $1,195 - $1,245 $1,100 - $1,150
1. The revised outlook is based on 2020 full year assumptions with an average realized gold price of $1,500 per ounce, U.S.$ / Canadian $ exchange rate
of 1.40, € / U.S.$ exchange rate of 1.12 and average crude oil price of $35 per barrel.
2. The previous outlook was based on 2020 full year assumptions with an average realized gold price of $1,350 per ounce, U.S.$ / Canadian $ exchan ge
rate of 1.30, € / U.S.$ exchange rate of 1.15 and average crude oil price of $62 per barrel.
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3. Cost of sales, excluding depreciat ion, is on an attributable ounce sold basis (excluding the non -controlling interest of 10% at Essakane and 5% at
Rosebel).
4. This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A.
5. Consists of Essakane, Rosebel, and Westwood on an attributable basis.
GOLD PRODUCTION, COST OF SALES, TOTAL CASH COSTS AND ALL-IN SUSTAINING COSTS
We lowered our 2020 total attributable gold production guidance to the range of 685,000 to 740,000 ounces
from 700,000 to 760,000 ounces primarily due to the impact of the global COVID-19 crisis at Essakane and
Westwood.
We expect to incur incremental cost s including charter flights for gold shipments, increased number of
sleeping quarters, adjusted work schedules and transport, expediting key supplies, additional security and
screening measures, and personal protective equipment to protect the Company's workforce. Higher royalty
expenses are expected due to the higher gold price expected in the year.
IAMGOLD revised upwards our 2020 cost of sales per ounce sold guidance to the range of $955 to $995
from $900 to $950 primarily due to the global COVID-19 crisis resulting in lower sales volume relative to the
initial guidance.
We revised upwards our 2020 total cash costs 1 per ounce produced guidance to the range of $920 to $960
from $840 to $890 primarily due to the global COVID -19 crisis resulting in lower production volume relative
to the initial guidance.
We also revised upwards our 2020 all -in sustaining costs 1 per ounce sold guidance to the range of $1,195
to $1,245 from $1,100 to $1,150 primarily due to the global COVID-19 crisis resulting in a decrease in sales
volume.
DEPRECIATION EXPENSE
Depreciation expense in 2020 is expected to be in the range of $250 million to $260 million, down $10 million
from the previous guidance.
INCOME TAXES
IAMGOLD expects to pay cash taxes in the range of $30 million to $45 million in 2020. The Company is
subject to income tax in several jurisdictions, at various tax rates. However, the consolidated effective tax
rate for IAMGOLD is subject to significant fluctuations period over period due to: expenditures and revenues
recognized only for financial accounting purposes or only for income tax purposes; income tax unrelated to
the income or loss before taxes for the current period, such as withholding taxes; and adjustments for
deferred tax purposes that are not directly related to the income or loss before taxes for the current period,
such as foreign exchange rate changes. In addition, adjustments to deferred income tax assets and/or
liabilities may be recorded during the year.
CAPITAL EXPENDITURES OUTLOOK
Revised Previous
($ millions)
Sustaining1
Non-sustaining
(Development/
Expansion)2
Total Sustaining1
Non-sustaining
(Development/
Expansion)2
Total
Essakane
$ 40 $ 80 $ 120 40 100 140
Rosebel 60 55 115 55 60 115
Westwood 25 15 40 25 25 50
125 150 275 120 185 305
Côté Gold (70%) — 45 45 — 35 35
Boto Gold — 25 25 — 30 30
Total3,4,5 (±5%) $ 125 $ 220 $ 345 120 250 370
1 Sustaining capital includes capitalized stripping of $15 million for Rosebel.
2 Non-sustaining capital includes capitalized stripping of $65 million for Essakane (previously $80 million) and $30 million for Ro sebel (previously $35
million).
3 Includes $16 million of capitalized exploration and evaluation expenditures (previously $11 million). Refer to the Exploratio n section of the MD&A.
4 Capitalized borrowing costs are not included.
5 In addition to the above capital expenditures, $20 million in total principal lease payments are expected.