Iamgold Continues Successful Execution of Growth Projects and Reports Solid Second Quarter 2018
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD CONTINUES SUCCESSFUL EXECUTION OF GROWTH PROJECTS
AND REPORTS SOLID SECOND QUARTER 2018
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 six months ended June 30, 2018.
Toronto, Ontario, August 8, 2018 - IAMGOLD Corporation (“IAMGOLD” or the “Company”) reported its
consolidated financial and operating results for the quarter ended June 30, 2018.
“Coming off an exceptional start to the year, we had a solid second quarter,” said Steve Letwin, President
and CEO of IAMGOLD. "Operating performance to date reaffirms our 2018 production and cost guidance
established at the beginning of the year. The second quarter saw the completion of Essakane’s pre-
feasibility study for heap leaching, which demonstrated an economically viable project, including a
significant increase in reserves. The incremental ounces more than replace this year's expected annual
depletion for the entire company, and Saramacca's reserves are yet to come. Supported by more than a
billion dollars in liquidity, the steady execution of our growth strategy continues, with our core projects on
track and at the stage where we are finding opportunities to enhance expected returns. ”
Second Quarter 2018 Highlights
Operating Performance
• Attributable gold production of 214,000 oz, down 9,000 oz from Q2/17.
• Attributable gold sales of 215,000 oz, down 4,000 oz from Q2/17.
• Cost of sales1 of $826/oz sold, up $59/oz from Q2/17.
• All-in sustaining costs2 of $1,077/oz sold, up $102/oz from Q2/17.
• Total cash costs2 of $812/oz produced, up $77/oz from Q2/17.
• Gold margin2 of $487/oz, down $29/oz from Q2/17.
• Production and cost guidance maintained for 2018.
• Capital expenditure guidance reduced by $40 million to $325 million (±5%) for 2018; updated
guidance primarily relates to the refinement of estimates for the expansion projects and deferred
timing of certain expenditures to early 2019, with no impact expected on overall project timelines.
Financial Results
• Revenues of $277.4 million, up $2.9 million from Q2/17.
• Gross profit of $29.6 million, down $6.3 million from Q2/17.
• Net loss attributable to equity holders of $26.2 million, or $0.06 per share; compared with net
earnings of $506.5 million, or $1.09 per share in Q2/17, which included impairment charge
reversals relating to the Côté Gold Project and the Rosebel mine ($524.1 million).
• Adjusted net earnings attributable to equity holders 2 of $13.1 million, or $0.03 per share2; up $8.8
million, or $0.02 per share2 from Q2/17.
• Net cash from operating activities of $50.6 million, down $35.6 million from Q2/17.
• Net cash from operating activities before changes in working capital 2 of $73.4 million, up $5.5
million from Q2/17.
• Cash, cash equivalents, short-term investments in money market instruments, and restricted cash
of $803.9 million at June 30, 2018.
2
Strategic Developments
• On June 5, 2018, we reported a 39% increase in reserves, before depletion, at Essakane based
on positive results from the Heap Leach Project pre-feasibility study and higher grade intercepts
encountered during the drilling campaign. The results of the pre-feasibility study outlined an
economically viable project that increases average annual production by 16% to 480,000 ounces
versus the previously disclosed mine plan, once heap leaching begins.
• On June 14, 2018, we announced further high-grade intersections from infill drilling at the Monster
Lake Project. Highlights included: 3.8 metres grading 23.96 g/t Au, 3.8 metres grading 39.24 g/t
Au, 2.6 metres grading 72.17 g/t Au, and 5.3 metres grading 40.94 g/t Au.
Upcoming Growth Catalysts
• Mineral reserve estimate expected for Saramacca H2/18; production start expected H2/19.
• Completion of Boto Gold Project feasibility study expected H2/18.
• Commissioning of oxygen plant to improve recoveries at Essakane expected Q4/18.
• Targeting initial resource estimate for Gossey satellite prospect at Essakane in Q4/18.
• Expect to receive a $95 million cash payment from Sumitomo Metal Mining Co., Ltd. by end of
2018 in conjunction with the sale of a 30% interest in the Côté Gold Project in June 2017.
• Completion of Essakane's Heap Leach Project feasibility study expected Q1/19; production start
expected 2020.
• Completion of feasibility study at Côté Gold expected H1/19; expected production start 2021.
• Westwood ramp-up to full production expected by 2020.
• Advancing exploration at Brokolonko to confirm the presence of mineralization and evaluate the
resource potential.
SUMMARY OF FINANCIAL AND OPERATING RESULTS
Three months ended
June 30,
Six months ended
June 30,
Financial Results ($ millions, except where noted) 2018 2017 2018 2017
Revenues $ 277.4 $ 274.5 $ 591.9 $ 535.0
Cost of sales $ 247.8 $ 238.6 $ 486.5 $ 464.1
Gross profit $ 29.6 $ 35.9 $ 105.4 $ 70.9
Net earnings (loss) attributable to equity holders of IAMGOLD $ (26.2 ) $ 506.5 $ 16.1 $ 488.5
Net earnings (loss) attributable to equity holders ($/share) $ (0.06 ) $ 1.09 $ 0.03 $ 1.06
Adjusted net earnings attributable to equity holders of
IAMGOLD1 $ 13.1
$ 4.3
$ 52.8
$ 9.4
Adjusted net earnings attributable to equity holders ($/share)1 $ 0.03 $ 0.01 $ 0.11 $ 0.02
Net cash from operating activities $ 50.6 $ 86.2 $ 156.6 $ 153.1
Net cash from operating activities before changes in working
capital1 $ 73.4
$ 67.9
$ 193.0
$ 152.3
Key Operating Statistics
Gold sales – attributable (000s oz) 215 219 450 431
Gold production – attributable (000s oz) 214 223 443 437
Average realized gold price1 ($/oz) $ 1,299 $ 1,251 $ 1,316 $ 1,241
Cost of sales2 ($/oz) $ 826 $ 767 $ 781 $ 768
Total cash costs1 ($/oz) $ 812 $ 735 $ 773 $ 751
All-in sustaining costs1 ($/oz) $ 1,077 $ 975 $ 1,012 $ 983
Gold margin1 ($/oz) $ 487 $ 516 $ 543 $ 490
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 31 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) and does not inc lude Joint Ventures which are accounted
for on an equity basis.
3
SECOND QUARTER 2018 HIGHLIGHTS
Financial Performance
• Revenues for the second quarter 2018 were $277.4 million, up $2.9 million from the same prior year
period. The increase was primarily due to a higher realized gold price ($10.5 million) and higher sales
volume at Rosebel ($2.6 million), partially offset by lower sales volume at Essakane ($8.5 million) and
Westwood ($0.8 million).
• Cost of sales for the second quarter 2018 was $247.8 million, up $9.2 million from the same prior year
period. The increase was due to higher operating costs ($8.2 million), higher depreciation expense
($0.8 million), and higher royalties ($0.2 million). Operating costs were higher primarily due to planned
maintenance at Essakane and Rosebel, a weaker U.S. dollar relative to the euro and the Canadian
dollar, higher contractor costs at Essakane given the long lead time for receiving mining equipment,
higher energy costs, and the continued ramp-up at Westwood, partially offset by higher capitalized
stripping due to mine sequencing.
• Depreciation expense for the second quarter 2018 was $72.3 million, up $0.8 million from the same
prior year period. The increase was primarily due to higher depreciation on capital spares and
capitalized stripping, partially offset by an increase in reserves combined with lower production at
Essakane and Rosebel.
• Income tax expense for the second quarter 2018 was $7.4 million, down $46.1 million from the same
prior year period. Income tax expense for the second quarter 2018 comprised current income tax
expense of $11.4 million (Q2/17 - $19.7 million) and deferred tax recovery of $4.0 million (Q2/17 -
expense of $33.8 million). The decrease in income tax expense was 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 IAMGOLD's operating jurisdictions from one period to
the next.
• Net loss attributable to equity holders for the second quarter 2018 was $26.2 million, or $0.06 per
share compared to net earnings of $506.5 million, or $1.09 per share in the same prior year period.
The decrease was primarily due to reversals of impairment charges relating to the Côté Gold Project
and the Rosebel mine in the second quarter 2017 ($524.1 million), lower interest income, derivatives
and other investment gains ($33.1 million), higher foreign exchange losses ($17.0 million), and lower
gross profit ($6.3 million), partially offset by lower income taxes ($46.1 million). Foreign exchange
losses, which were substantially unrealized, were higher primarily due to the impact of a weaker U.S.
dollar relative to the euro and the Canadian dollar on non-U.S. dollar cash balances and short-term
investments.
• Adjusted net earnings attributable to equity holders 2 for the second quarter 2018 were $13.1 million, or
$0.03 per share2, up $8.8 million, or $0.02 per share2, from the same prior year period.
• Net cash from operating activities for the second quarter 2018 was $50.6 million, down $35.6 million
from the same prior year period. The decrease was primarily due to changes in movements in non-
cash working capital items and non-current ore stockpiles ($41.1 million), and lower earnings after
non-cash adjustments ($3.3 million), partially offset by higher net settlement of derivatives ($3.4
million), lower income taxes paid ($3.2 million), and dividends received from Sadiola ($2.1 million).
• Net cash from operating activities before changes in working capital 2 for the second quarter 2018 was
$73.4 million, up $5.5 million from the same prior year period.
Financial Position
• We ended the second quarter in a strong financial position, with cash, cash equivalents, short -term
investments in money market instruments and restricted cash of $803.9 million at June 30, 2018, down
$11.9 million from December 31, 2017. The decrease was primarily due to spending on property, plant
and equipment ($118.4 million) and exploration and evaluation assets ($23.2 million), interest paid
($14.2 million), and other investing activities ($10.9 million), partially offset by cash generated from
operating activities ($156.6 million).
4
Production and Costs
• Attributable gold production, inclusive of joint venture operations, was 214,000 ounces for the second
quarter 2018, down 9,000 ounces from the same prior year period. The decrease was d ue to lower
throughput at Rosebel (4,000 ounces) and Essakane (4,000 ounces) attributed to the timing of
planned mill maintenance, and lower head grades at Westwood (2,000 ounces), partially offset by
higher throughput at the Joint Ventures (1,000 ounces).
• Attributable gold sales, inclusive of joint venture operations, were 215,000 ounces for the second
quarter 2018, down 4,000 ounces from the same prior year period. The decrease was due to lower
sales at Essakane (6,000 ounces) partially offset by higher sales at Rosebel (2,000 ounces).
• Cost of sales1 per ounce for the second quarter 2018 was $826, up 8% from the same prior year
period. The increase was primarily due to planned maintenance at Essakane and Rosebel, a weaker
U.S. dollar relative to the euro and the Canadian dollar, higher contractor costs at Essakane given the
long lead time for receiving mining equipment, and higher energy costs, partially offset by higher
capitalized stripping due to mine sequencing.
• Total cash costs2 per ounce produced for the second quarter 2018 were $812, up 10% from the same
prior year period. The increase was primarily due to the factors noted above.
• All-in sustaining costs2 per ounce sold for the second quarter 2018 were $1,077, up 10% from the
same prior year period. The increase was primarily due to higher sustaining capital and higher cost of
sales per ounce.
• Total cash costs2 and all-in sustaining costs2 for the second quarter 2018 included realized derivative
gains from hedging programs of $14 per ounce produced and $15 per ounce sold, respectively (Q2/17
- $nil and $nil).
Capital Expenditure Guidance (Refer to MD&A for more detail)
• Capital expenditure guidance for 2018 has been reduced by $40 million to $325 million (±5%). This is
the result of a $20 million increase in sustaining capital expenditures and a $60 million decrease in
non-sustaining capital expenditures. The increase in sustaining capital primarily relates to higher
capitalized stripping at Essakane, which represents a shift from operating costs that will not impact all -
in sustaining costs. The decrease in non-sustaining capital is primarily due to refined work schedules
for Saramacca and the Heap Leach Project at Essakane, with both projects having amended
procurement timelines resulting in the deferral of certain expenditures to 2019. Targeted completion
dates for both projects remain intact. The change in non-sustaining capital guidance also includes an
increase of $10 million for the Côté Gold Project reflecting the advancement of detailed engineering
and equipment design.
Commitment to Zero Harm Continues
• The DART rate3, representing the frequency of all types of serious injuries across all sites and
functional areas for the second quarter 2018 was on target at 0.50. Zero Harm remains our number
one priority, and this year we are accelerating the deployment of a new Health and Safety
Management System and new prevention initiatives across all sites.
5
ATTRIBUTABLE GOLD PRODUCTION AND COSTS
Gold Production
(000s oz)
Cost of Sales1
($ per ounce)
Total Cash Costs2
($ per ounce
produced)
All-in Sustaining
Costs2
($ per ounce sold)
Three months ended June 30, 2018 2017 2018 2017 2018 2017 2018 2017
Owner-operator
Essakane (90%) 97 101 $ 771 $ 750 $ 728 $ 698 $ 1,003 $ 922
Rosebel (95%) 70 74 862 752 842 722 1,035 923
Westwood (100%)3 31 33 924 843 929 800 1,129 995
Owner-operator4 198 208 $ 826 $ 767 $ 799 $ 723 $ 1,086 $ 975
Joint Ventures 16 15 962 910 968 965
Total operations 214 223 $ 812 $ 735 $ 1,077 $ 975
Cost of sales1 ($/oz) $ 826 $ 767
Cash costs, excluding royalties $ 756 $ 682
Royalties 56 53
Total cash costs2 $ 812 $ 735
All-in sustaining costs2 $ 1,077 $ 975
Gold Production
(000s oz)
Cost of Sales1
($ per ounce)
Total Cash Costs2
($ per ounce
produced)
All-in Sustaining
Costs2
($ per ounce sold)
Six months ended June 30, 2018 2017 2018 2017 2018 2017 2018 2017
Owner-operator
Essakane (90%) 206 194 $ 739 $ 770 $ 695 $ 730 $ 956 $ 946
Rosebel (95%) 135 148 831 745 836 724 976 904
Westwood (100%)3 71 63 808 818 809 780 984 980
Owner-operator4 412 405 $ 781 $ 768 $ 761 $ 736 $ 1,017 $ 983
Joint Ventures 31 32 933 937 947 988
Total operations 443 437 $ 773 $ 751 $ 1,012 $ 983
Cost of sales1 ($/oz) $ 781 $ 768
Cash costs, excluding royalties $ 715 $ 699
Royalties 58 52
Total cash costs2 $ 773 $ 751
All-in sustaining costs2 $ 1,012 $ 983
1 Cost of sales, excluding depreciation, as disclosed in note 31 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) and does not include Joint Ventures which are accounted for on an equity basis.
2 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A. Consists of Essakane, Rosebel, Westwood and the Joint Ventures on an
attributable basis.
3 There was no normalization of costs of sales per ounce for Westwood for the three and six months ended June 30, 2018 (three and six months ended June 30, 2017 - $nil and
$12 per ounce, respectively). Normalization of costs ended at the onset of the second quarter 2017.
4 Owner-operator cost of sales and all-in sustaining costs include corporate general and administrative costs. Refer to all-in sustaining costs reconciliation on page 26 of the
MD&A.
OPERATIONS ANALYSIS BY MINE SITE
Essakane Mine - Burkina Faso (IAMGOLD interest - 90%)
Essakane produced 97,000 attributable ounces in the second quarter 2018, 4% lower the same prior year
period. The decrease was primarily due to lower throughput resulting from planned mill maintenance on
the crushing and grinding circuit. Mining activities were lower compared to the same prior year period due
to longer hauling distances as a result of increased mining activity at Falagountou and lower equipment
availability.
Cost of sales of $771 per ounce sold and total cash costs of $728 per ounce produced for the second
quarter 2018 were higher than the same prior year period by 3% and 4%, respectively. The increases were
primarily due to lower sales and production volumes, higher contractor costs given the lo ng lead time for
receiving mining equipment, a weaker U.S. dollar relative to the euro, and planned mill maintenance,
partially offset by higher capitalized stripping.
6
All-in sustaining costs of $1,003 per ounce sold for the second quarter 2018 were 9% hig her than the
same prior year period. The increase was primarily due to higher sustaining capital expenditures and
higher cost of sales per ounce.
Total cash costs and all-in sustaining costs for the second quarter 2018 included the impact of realized
derivative gains from hedging programs of $22 per ounce produced and $24 per ounce sold, respectively
(Q2/17 - $nil and $nil).
The oxygen plant, which is expected to increase recoveries through improved leach kinetics and improve
the efficiency of the circuit by reducing reagent consumption, is on track for commissioning in the fourth
quarter 2018.
Sustaining capital expenditures for the second quarter 2018 of $24.2 million included capitalized stripping
of $15.8 million, capital spares of $2.9 million, resource development of $2.1 million, mobile equipment of
$1.9 million, and other sustaining capital expenditures of $1.5 million. Non -sustaining capital expenditures
of $9.3 million included tailings liners of $6.8 million, oxygen plant of $1.4 million, and other non-sustaining
capital expenditures of $1.1 million.
Outlook
We maintain full-year 2018 production guidance of 380,000 to 395,000 attributable ounces. Capital
expenditures are expected to be approximately $140 million, comprising $90 million of sustaining capi tal
and $50 million of non-sustaining capital. The sustaining capital expenditure guidance reflects an increase
of $15 million in capitalized stripping, which represents a shift from operating costs that will not impact all -
in sustaining costs. The non-sustaining capital expenditure guidance reflects a decrease of $25 million, of
which $20 million is related to the Heap Leach Project, which is currently undergoing a feasibility study.
Procurement activities have been deferred to 2019 until after the complet ion of the feasibility study
expected in the first quarter 2019, thus resulting in the decrease in guidance for 2018. Production timelines
for the Heap Leach Project remain intact.
Heap Leach Project
On June 5, 2018, we announced positive results from the pre-feasibility study (PFS) for the Heap Leach
Project. The PFS presented a heap leach-based extraction scenario in combination with the existing
Essakane operation. (see news release dated June 5, 2018). A National Instrument 43-101 technical
report summarizing the PFS was filed on SEDAR on July 19, 2018.
Based on the results of the PFS, and on a 100% basis, Essakane's probable reserves increased by 39%,
or 1.3 million ounces, to 4.7 million ounces, before depletion. Indicated resources (inclusive of reserves)
increased by 19%, or 0.8 million ounces, to 5.1 million ounces, and inferred resources increased by 54%,
or 0.2 million ounces, to 0.6 million ounces. The mineral reserves and resources reported in the June 5,
2018 news release were before mining depletion, whereas the evaluation presented in the technical report
included depletion from January 1, 2018 to June 5, 2018.
The infill drilling program, conducted to upgrade targeted lower-grade inferred resources in support of the
PFS, intersected higher than anticipated grades in several areas. These higher-grade intercepts accounted
for more than one-third of the 39% increase in reserves.
The PFS outlined an economically viable project that has the potential to:
• extend the life of the Essakane mine by three years to 2026 from the life -of-mine reported in the
2016 Technical Report, and
• once heap leaching begins, increase average annual production by 16% from the previously
disclosed plan to 480,000 ounces at a projected all-in sustaining cost of $946 per ounce.
The PFS recommended that a feasibility study (“FS”) be completed to further optimize the development
design of the project, secure long lead equipment and optimize project economics. The recomme nded FS
has been initiated, and, in addition to the heap leach scenario, will consider additional development
alternatives, such as a gravity circuit upgrade and an increase in grinding capacity to increase throughput
and recovery of the carbon-in-leach and gravity circuits. The FS is expected to be completed in the first
quarter 2019.
During the second quarter, approximately 23,900 metres of reverse circulation and diamond drilling were
completed on the mine lease and surrounding concessions. On the mine lease, a further phase of infill
drilling was initiated at the Essakane Main Zone in support of the ongoing FS.
7
On the surrounding concessions, a second phase of delineation drilling was completed during the second
quarter at the Gossey prospect, located approximately 15 kilometres northwest of the Essakane operation.
The results of this drilling program will support the completion of a mineral resource estimate expected
later this year.
Rosebel Mine - Suriname (IAMGOLD interest - 95%)
Attributable gold production of 70,000 ounces for the second quarter 2018 was 5% lower than the same
prior year period, primarily due to lower throughput. Mill throughput was lower mainly due to planned mill
maintenance on the crushing and grinding circuit, combined with an increase in the hard rock blend.
Cost of sales of $862 per ounce sold and total cash costs of $842 per ounce produced for the second
quarter 2018 were higher than the same prior year period by 15% and 17%, respectively. The increases
were primarily the result of planned mine and mill maintenance, higher energy costs, and lower capitalized
stripping due to mine sequencing.
All-in sustaining costs of $1,035 per ounce sold for the second quarter 2018 were 12% higher than the
same prior year period. The increase was primarily due to higher cost of sales per ounce and higher
sustaining capital expenditures.
Total cash costs and all-in sustaining costs for the second quarter 2018 included the impact of realized
derivative gains from hedging programs of $11 per ounce produced and sold (June 30, 2017 - $nil and
$nil).
Sustaining capital expenditures for the second quarter 2018 of $12.7 million included capital spares of $4.2
million, capitalized stripping of $1.9 million, mobile equipment of $1.8 million, pit infrastru cture of $1.3
million, tailings management of $0.9 million, mill equipment of $0.7 million, and other sustaining capital
expenditures of $1.9 million. Non-sustaining capital expenditures were $6.5 million related to the
Saramacca Project.
Outlook
We maintain full-year 2018 production guidance of 295,000 to 310,000 attributable ounces. Capital
expenditures are expected to be approximately $90 million, comprising $45 million of sustaining capital
and $45 million of non-sustaining capital. The non-sustaining capital expenditure guidance reflects a
decrease of $40 million for the Saramacca Project, reflecting deferred procurement activity to early 2019
as a result of more specific scheduling of construction work based on detailed engineering studies.
Production timelines for the Saramacca Project remain intact.
Saramacca and Brokolonko
The Saramacca Project development is progressing according to schedule. On July 31, 2018, the
Environmental and Social Impact Assessment (ESIA) was submitted to the National Institute for
Environment and Development in Suriname (NIMOS). Optimization of the detailed engineering for the haul
road construction has been initiated, allowing for the selection of the haul fleet and a reduction in the road
distance. A comprehensive metallurgical testing program is also in progress to refine the recovery
assumptions and to test the crushing and grinding characteristics of the mineralization.
During the second quarter 2018, we completed approximately 7,950 metres of reverse circulation and
diamond drilling on the Saramacca property. The drilling program continued to infill the deposit to upgrade
the resources and target potential resource extensions or the discovery of additional zones of
mineralization along strike of the deposit.
We continued to revise the resource model for Saramacca, incorporating infill drilling results obtained since
the maiden resource estimate disclosed in September 2017 (see news release dated September 5, 2017).
The updated resource model will be used to support the ongoing engineering studies.
We intend to generate a mineral reserve estimate for Saramacca during the second half of 2018 and to
advance toward initial production in the second half of 2019.
During the second quarter, 4,550 metres of reverse circulation and diamond drilling was completed on the
adjacent Brokolonko property where a first pass drilling program was initiated late in the quarter ahead of
the rainy season.
8
Westwood Mine - Canada (IAMGOLD interest - 100%)
Westwood produced 31,000 ounces in the second quarter 2018, 2,000 ounces lower than the same prior
year period. The decrease was due to mining lower grade stopes as part of the mine plan. The head grade
at 4.76 g/t Au was lower than the same prior year period due to the processing of a greater proportion of
marginal ore stockpiles to leverage available mill capacity as the mine conti nued to ramp-up. Excluding
marginal ore, the head grade in the second quarter 2018 was 6.26 g/t Au (Q2/17 - 8.60 g/t Au).
Underground development continued in the second quarter 2018 to open up access to new mining areas
with lateral and vertical development of approximately 2,700 and 100 metres, respectively, averaging 31
metres per day. Westwood plans to complete 11,500 metres of underground development in 2018 (10,800
metres lateral and 700 metres vertical), with a focus on ramp breakthroughs on the cent ral ramp as well as
on level 132, which is expected to provide access to high-grade domains for 2019. Infrastructure
development continues in future development blocks at lower levels, specifically including the 180 West
level from which production is also expected in 2019.
Cost of sales of $924 per ounce sold and total cash costs of $929 per ounce produced for the second
quarter 2018 were higher than the same prior year period by 10% and 16%, respectively. The increases
were primarily due to a weaker U.S. dollar relative to the Canadian dollar.
All-in sustaining costs of $1,129 per ounce sold for the second quarter 2018 were 13% higher than the
same prior year period. The increase was primarily due to higher cost of sales per ounce and higher
sustaining capital expenditures.
Total cash costs and all-in sustaining costs for the second quarter 2018, included the impact of realized
derivative gains from hedging programs of $7 per ounce produced and $9 per ounce sold, respectively
(Q2/17 - of $nil and $nil).
Sustaining capital expenditures for the second quarter 2018 of $6.0 million included deferred development
of $4.0 million and other sustaining capital expenditures of $2.0 million. Non -sustaining capital
expenditures for the second quarter 2018 of $8.9 million included deferred development of $5.4 million,
underground construction of $1.7 million, development drilling of $1.2 million, and other non -sustaining
capital expenditures of $0.6 million.
Outlook
We maintain full-year 2018 production guidance of 125,000 to 135,000 ounces. Capital expenditures are
expected to be approximately $65 million, comprising $25 million of sustaining capital and $40 million of
non-sustaining capital. The shift of $5 million in capital expenditure guidance from non -sustaining to
sustaining reflects increased development work being performed on production blocks. Expansion
development work continues to open up access to areas of future production deeper within the mine.
Sadiola Mine - Mali (IAMGOLD interest - 41%)
Attributable gold production of 16,000 ounces for the second quarter 2018 was 14% higher than the same
prior year period mainly due to higher throughput. Total cash costs of $970 per ounce produced and all-in
sustaining costs of $979 per ounce sold for the second quarter 2018 were 8% and 5% higher than the
same prior year period, respectively, as a result of higher energy costs and mill maintenance.
Sadiola is expected to produce between 50,000 and 60,000 ounces in 2018.
During the quarter, the operation entered a restricted exploitation phase as excavation activity ceased and
the demobilization of the mining contractor commenced. The site continues to process the remaining oxide
ore stockpiles and marginal stockpiles which are expected to be depleted by mid -2019.
Discussions with the Government of Mali continue regarding the Sadiola Sulphide Project. Despite the
Company's efforts and the benefits the Project would generate for all stakeholders, including the
Government of Mali, there has been no resolution around the terms c ritical to moving the Project forward.
If an agreement with the Government of Mali is not reached, the operation will enter a phase of suspended
exploitation (care and maintenance) after the stockpiles are exhausted.