IAMGOLD REPORTS ANOTHER SOLID QUARTER Q2/17 gross profit up 47%, operating cash flow up 25%, production up 13%, all-in sustaining costs/oz down 12%
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD REPORTS ANOTHER SOLID QUARTER
Q2/17 gross profit up 47%, operating cash flow up 25%,
production up 13%, all-in sustaining costs/oz down 12%
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Refer to the Management Discussion and Analysis (MD&A) and Unaudited Consolidated
Interim Financial Statements for the six months ended June 30, 2017 for more information.
Toronto, Ontario, August 9, 2017 - IAMGOLD Corporation (“IAMGOLD” or the “Company”) reported its
consolidated financial and operating results for the quarter ended June 30, 2017.
"We had another outstanding quarter," said Steve Letwin, President and CEO of IAMGOLD. "Rosebel and
Essakane are benefitting from major operational improvements and the Westwood ramp-up remains on
track. Net operating cash flow increased 25% from the same quarter last year and 30% from the previous
quarter, and our year-to-date gross profit was 129% higher than the previous year. Our balance sheet
remains strong with $800 million in cash, cash equivalents and restricted cash.
“The pace of transformation at IAMGOLD is accelerating," continued Mr. Letwin. "A number of catalysts
have moved into gear as we execute both short-cycle and long-cycle growth strategies. The Rosebel
concession increased its reserves by 80% and next month we expect an initial resource estimate for
Saramacca. We entered into a joint venture for our Côté Gold Project and completed a pre-feasibility
study, which saw a significant conversion of resources to reserves and demonstrated low operating costs
and an attractive rate of return."
Second Quarter 2017 Highlights
Operating Performance
• Attributable gold production of 223,000 oz, up 13% from Q2/16.
• Cost of sales1 of $767/oz, down 5% from Q2/16.
• All-in sustaining costs2 of $975/oz sold, down 12% from Q2/16.
• Total cash costs2 of $735/oz produced, down 3% from Q2/16.
• Gold margin2 of $516/oz, up $3/oz from Q2/16.
• Maintaining 2017 production and cost guidance.
Financials
• Gross profit of $35.9 million, up $11.5 million or 47% from Q2/16.
• Net earnings of $506.5 million ($1.09 per share), up from a net loss of $12.2 million ($0.03 per
share) in Q2/16, primarily due to impairment charge reversals at the Côté Gold Project and the
Rosebel mine.
• Adjusted net earnings2 of $4.3 million ($0.01 per share2), down $1.6 million ($nil per share2) from
Q2/16.
• Net cash from operating activities of $88.7 million, up 25% from Q2/16 and 30% from Q1/17.
• Net cash from operating activities before changes in working capital2 of $70.4 million, up 7% from
Q2/16
• Cash, cash equivalents and restricted cash of $800.1 million as at June 30, 2017.
• Replaced the restricted cash held by the Government of Quebec to guarantee the asset retirement
obligation related to the Doyon mine with uncollateralized surety bonds of C$123.6 million (June 30,
2017 - $95.2 million).
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Developments
• On June 20, 2017, completed the sale of a 30% interest in the Côté Gold Project to Sumitomo
Metal Mining Co., Ltd. for $195 million. As a result, we recognized a reversal of the previously
recorded impairment charge of $400 million, and a gain on the sale of $19.2 million.
• On June 5, 2017, announced positive results from a pre-feasibility study for the Côté Gold Project,
which outlined an economically viable project and confirmed the development concept previously
set out in the Preliminary Economic Assessment. Highlights of the project economics include
attributable proven and probable reserves of 3.8 million ounces, a mine life of 17 years with
average annual attributable production of 207,000 ounces, life-of-mine cash costs of $605 an
ounce and all-in sustaining costs of $689 an ounce, an after-tax Net Asset Value of $703 million
and an after-tax Internal Rate of Return of 14%.
• On May 15 and June 16, 2017, reported final drilling results from the Saramacca drilling campaign
in preparation for an initial resource estimate in September 2017. Highlights include 43.5 metres
grading 12.26 g/t Au and 41.0 metres grading 5.56 g/t Au.
• On May 11, 2017, reported final results from the winter 2017 drilling program at the Monster Lake
Project in Quebec, indicating continuity of very high grades and new areas of mineralization.
Highlights include 4.4 metres grading 5.21 g/t Au and 3.1 metres grading 121.67 g/t Au.
Subsequent to the quarter-end, on July 6, 2017, additional results were reported, with highlights
including 5.0 metres grading 80.28 g/t Au.
• On May 31, 2017, reported additional drilling results at the Boto Gold Project in Senegal in
preparation for a resource update later this year. Highlights include 19 metres grading 3.28 g/t Au,
and 77.0 metres grading 4.35 g/t Au, including 9.0 metres grading 11.76 g/t Au.
Subsequent to Quarter-End
• On July 26, 2017, reported a reserve and resource update for the Rosebel Mining concession,
including an 80% increase in attributable reserves to 3.5 million ounces from 2.0 million ounces at
the end of 2016, which is expected to extend the life of mine to 2028, leading to the reversal of a
previously recognized impairment charge. The reserve and resource update does not include
Saramacca.
SUMMARY OF FINANCIAL AND OPERATING RESULTS
Three months ended
June 30,
Six months ended
June 30,
Financial Results ($ millions, except where noted) 2017 2016 2017 2016
Revenues $ 274.5 $ 232.5 $ 535.0 $ 452.2
Cost of sales $ 238.6 $ 208.1 $ 464.1 $ 421.3
Gross profit $ 35.9 $ 24.4 $ 70.9 $ 30.9
Net earnings (loss) attributable to equity holders of IAMGOLD $ 506.5 $ (12.2) $ 488.5 $ 40.9
Net earnings (loss) attributable to equity holders ($/share) $ 1.09 $ (0.03) $ 1.06 $ 0.10
Adjusted net earnings (loss) attributable to equity holders of
IAMGOLD1 $ 4.3 $ 5.9 $ 9.4 $ (1.4)
Adjusted net earnings (loss) attributable to equity holders ($/share)1 $ 0.01 $ 0.01 $ 0.02 $ —
Net cash from operating activities $ 88.7 $ 71.2 $ 157.0 $ 122.6
Net cash from operating activities before changes in working capital1 $ 70.4 $ 65.9 $ 156.2 $ 117.6
Key Operating Statistics
Gold sales – attributable (000s oz) 219 187 431 378
Gold production – attributable (000s oz) 223 197 437 388
Average realized gold price1 ($/oz) $ 1,251 $ 1,269 $ 1,241 $ 1,228
Cost of sales2 ($/oz) $ 767 $ 805 $ 768 $ 816
Total cash costs1 ($/oz) $ 735 $ 756 $ 751 $ 751
All-in sustaining costs1 ($/oz) $ 975 $ 1,114 $ 983 $ 1,099
Gold margin1 ($/oz) $ 516 $ 513 $ 490 $ 477
1 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A.
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2 Cost of sales, excluding depreciation, as disclosed in note 29 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 doesn't include Joint Ventures which are accounted for
on an equity basis.
SECOND QUARTER 2017 HIGHLIGHTS
Financial Performance
• Revenues for the second quarter 2017 were $274.5 million, up $42.0 million or 18% from the same
prior year period, primarily due to higher sales at Essakane ($30.0 million) and Westwood ($17.4
million), partially offset by a lower realized gold price ($4.3 million) and lower sales at Rosebel ($1.4
million).
• Cost of sales for the second quarter 2017 was $238.6 million, up $30.5 million or 15% from the same
prior year period. The increase was primarily due to higher operating costs ($19.7 million), higher
depreciation ($9.2 million) and higher royalties expense ($1.6 million). Operating costs were higher
primarily as a result of higher sales and lower capitalized stripping at Essakane and higher mining
activities at Westwood.
• Depreciation expense for the second quarter 2017 was $71.5 million, up $9.2 million from the same
prior year period primarily due to higher production and sales and higher amortization of capitalized
stripping at Essakane, partially offset by lower amortization of capitalized stripping at Rosebel.
• Income tax expense for the second quarter 2017 was $53.5 million, up $39.5 million from the same
prior year period. Income tax expense for the second quarter 2017 comprised current income tax
expense of $19.7 million (2016 - $4.6 million) and deferred income tax expense of $33.8 million (2016
- $9.4 million). The increase in income tax expense was primarily due to changes to deferred income
tax assets and liabilities as a result of the reversals of impairment charges and fluctuations in foreign
exchange, and differences in the level of taxable income in our operating jurisdictions from one period
to the next.
• Net earnings attributable to equity holders for the second quarter 2017 was $506.5 million ($1.09 per
share), up from a net loss of $12.2 million ($0.03 per share) for the same prior year period. The
increase of $518.7 million or $1.12 per share was mainly due to reversals of impairment charges
relating to the Côté Gold Project and the Rosebel mine ($524.1 million) and the resulting gain on the
sale of a 30% interest in the Côté Gold Project ($19.2 million), and higher gross profit ($11.5 million),
partially offset by higher income tax expense ($39.5 million).
• Adjusted net earnings attributable to equity holders2 for the second quarter 2017 were $4.3 million
($0.01 per share2), down $1.6 million ($nil per share) from the same prior year period.
• Net cash from operating activities for the second quarter 2017 was $88.7 million, up $17.5 million from
the same prior year period. The increase was mainly due to higher earnings after non-cash
adjustments ($13.3 million), a change in the movement of non-cash working capital items ($13.0
million), and lower net settlement of derivatives ($3.7 million), partially offset by an increase in income
taxes paid ($12.0 million).
• Net cash from operating activities before changes in working capital2 for the second quarter 2017 was
$70.4 million, up $4.5 million from the same prior year period.
Financial Position
• Cash, cash equivalents and restricted cash were $800.1 million at June 30, 2017, up $37.4 million
from December 31, 2016. The increase was primarily due to net proceeds from the issuance of the
7.00% senior secured notes on March 16, 2017 ($393.6 million), cash generated from operating
activities ($173.7 million), net proceeds from the sale of a 30% interest in the Côté Gold Project ($96.5
million), proceeds from the issuance of flow-through shares ($15.1 million), partially offset by the
redemption of the 6.75% senior unsecured notes ($505.6 million), spending on Property, plant and
equipment and Exploration and evaluation assets ($93.8 million), interest paid ($16.5 million) and
income taxes paid ($16.7 million).
Production and Costs
• Attributable gold production, inclusive of joint venture operations, was 223,000 ounces for the second
quarter 2017, up 26,000 ounces from the same prior year period. The increase was due to the
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continued ramp-up at Westwood (17,000 ounces) and higher throughput at Essakane (12,000
ounces), partially offset by lower grades at Sadiola (4,000 ounces).
• Attributable gold sales, inclusive of joint venture operations, were 219,000 ounces for the second
quarter 2017, up 32,000 ounces from the same prior year period, primarily due to higher sales at
Essakane (21,000 ounces) and Westwood (14,000 ounces).
• Cost of sales1 per ounce for the second quarter 2017 was $767, down 5% from the same prior year
period due to higher sales, partially offset by the factors noted in the Cost of sales discussion in the
Financial Performance section above.
• Total cash costs2 per ounce produced for the second quarter 2017 were $735, down 3% from the
same prior year period primarily due to higher production, partially offset by lower capitalized stripping
due to mine sequencing at Essakane. The normalization of Westwood's costs was discontinued in the
second quarter 2017 (Q2/16 - $23 per ounce produced) and realized derivative losses were $nil
(Q2/16 - gain of $2 per ounce produced).
• All-in sustaining costs2 per ounce sold were $975 for the second quarter 2017,12% lower than the
same prior year period as a result of lower sustaining capital expenditures. The normalization of
Westwood's costs was discontinued in the second quarter 2017 (Q2/16 - $24 per ounce sold) and
realized derivative losses were $nil (Q2/16 - gain of $2 per ounce sold).
Commitment to Zero Harm Continues
• The DART rate3, representing the frequency of all types of serious injuries across IAMGOLD for the
second quarter 2017 was 0.44, below our target of 0.56.
ATTRIBUTABLE GOLD PRODUCTION AND COSTS
Gold Production
(000s oz)
Cost of Sales1
($ per ounce)
Total Cash Costs3
($ per ounce
produced)
All-in Sustaining
Costs3
($ per ounce sold)
Three months ended June 30, 2017 2016 2017 2016 2017 2016 2017 2016
Owner-operator
Essakane (90%) 101 89 $ 750 $ 728 $ 698 $ 679 $ 922 $ 1,090
Rosebel (95%) 74 73 752 789 722 765 923 1,051
Westwood (100%)2 33 16 843 1,278 800 948 995 1,157
208 178 $ 767 $ 805 723 738 975 1,130
Joint Ventures 15 19 910 926 965 970
Total operations 223 197 $ 735 $ 756 $ 975 $ 1,114
Cost of sales1 ($/oz) $ 767 $ 805
Cash costs, excluding royalties $ 682 $ 703
Royalties 53 53
Total cash costs3 $ 735 $ 756
All-in sustaining costs3 $ 975 $ 1,114
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Gold Production
(000s oz)
Cost of Sales1
($ per ounce)
Total Cash Costs3
($ per ounce
produced)
All-in Sustaining
Costs3
($ per ounce sold)
Six months ended June 30, 2017 2016 2017 2016 2017 2016 2017 2016
Owner-operator
Essakane (90%) 194 177 $ 770 $ 741 $ 730 $ 685 $ 946 $ 1,103
Rosebel (95%) 148 141 745 802 724 766 904 1,004
Westwood (100%)2 63 31 818 1,256 780 906 980 1,017
405 349 $ 768 $ 816 736 737 983 1,120
Joint Ventures 32 39 937 877 988 908
Total operations 437 388 $ 751 $ 751 $ 983 $ 1,099
Cost of sales1 ($/oz) $ 768 $ 816
Cash costs, excluding royalties $ 699 $ 699
Royalties 52 52
Total cash costs3 $ 751 $ 751
All-in sustaining costs3 $ 983 $ 1,099
1 Cost of sales, excluding depreciation, as disclosed in note 29 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 Cost of sales per ounce for Westwood does not include the impact of normalization of costs for the three and six months months ended June 30, 2017
of $nil and $12 per ounce (three and six months ended June 30, 2016 - $283 and $315), respectively.
3 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.
OPERATIONS ANALYSIS BY MINE SITE
(Refer to the Q2 2017 MD&A for further details.)
Essakane Mine - Burkina Faso (IAMGOLD interest - 90%)
Attributable gold production of 101,000 ounces for the second quarter 2017 was 13% higher than the
same prior year period due to higher throughput, partially offset by lower grades. Mill throughput was 24%
higher despite 85% hard rock (Q2/16 - 70%) as a result of increased circuit availability, as well as the new
SAG mill liner design, which increased capacity and mill speed. With annualized throughput of almost 14
million tonnes per annum, the mill is performing significantly above nameplate capacity of 10.8 million
tonnes per annum, which provides upside to the current life of mine plan. To further increase reserves and
resources, and extend the life of mine, a heap leach pre-feasibility study has been initiated and is expected
to be completed by the second quarter 2018. A heap leach plant could provide a low-cost method for
processing marginal and low grade ore as well as some existing stockpiles, which together with the
carbon-in-leach plant would increase total annual production.
Due to mine sequencing, grades were lower in the second quarter 2017 compared to the prior year period.
Mining activity increased with the continuation of initiatives to improve mining efficiency, including the
commissioning of two production drills and a new loader which entered production during the quarter. Mill
recoveries have improved as mining continues in non-graphitic zones. Optimization and analysis of the ore
characterization is underway as part of the geometallurgical study which commenced last year to help
better identify where there are pockets of graphitic material in the ore zones. The scope of the
geometallurgical study has been expanded and is now expected to be completed by the end of 2017. In
addition, Essakane is in the engineering stage of adding an oxygen plant to the circuit, which is expected
to be commissioned at the end of 2018. The oxygen plant is expected to increase recoveries through
improved leach kinetics and to improve the efficiency of the circuit by reducing reagents consumption.
During the second quarter, construction of the solar plant commenced and is expected to be completed by
the end of 2017.
Cost of sales of $750 per ounce and total cash costs of $646 per ounce produced for the second quarter
2017 were both 3% higher than same prior year period. The increases were primarily the result of lower
capitalized stripping costs due to mine sequencing and higher processing costs with the increased
throughput of hard rock, partially offset by higher sales and production, respectively.
All-in sustaining costs per ounce sold for the second quarter 2017 of $922 were 15% lower compared to
the same prior year period, primarily due to lower sustaining capital expenditures and higher sales.
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The impact on cash costs per ounce produced and all-in sustaining costs per ounce sold from realized
derivative losses was $nil in the second quarter 2017 (Q2/16 - $4 per ounce produced and $3 per ounce
sold).
Rosebel Mine - Suriname (IAMGOLD interest - 95%)
Attributable gold production for the second quarter 2017 was 74,000 ounces compared with 73,000
ounces for the same prior year period. Although the percentage of hard rock in the mill feed increased to
42% from 36% in the prior year, the mill maintained throughput due to major mill improvements completed
in the latter half of 2016, including the installation of a secondary crusher and power flex drive combined
with the new liner design. The grade was up slightly due to mine sequencing, while a marginally lower
recovery rate was attributed to circuit maintenance, resulting in slightly coarser grinds and lower retention
times. Mining activities increased due to mine sequencing and less rainfall.
Cost of sales of $752 per ounce and total cash costs of $651 per ounce produced for the second quarter
2017 were 5% and 6% lower, respectively, than the same prior year period. The improvement was
primarily due to lower fuel consumption, partially offset by higher realized fuel prices.
All-in sustaining costs of $923 per ounce sold for the second quarter 2017 were 12% lower than the same
prior year period primarily due to lower cost of sales and sustaining capital expenditures.
Reserve and Resource Update Announced on July 26, 2017
As a result of continuous efforts to maximize reserves through mine design optimization, cost reductions,
and near-pit exploration, Rosebel announced a reserve and resource update for the Rosebel Mine
concession on July 26, 2017. Estimated attributable proven and probable gold reserves at Rosebel
increased by 80% to 3.5 million ounces at the end of June 2017 from 2.0 million ounces at the end of
2016. There was no change in the $1,200 per ounce gold price assumption for estimating Rosebel’s
reserves. The significant increase in reserves extends the life of the Rosebel mine to 2028. Total
attributable measured and indicated gold resources (inclusive of reserves) increased by 55% to 8.9 million
ounces and the attributable inferred resource increased by 322% to 2.5 million ounces. There was also no
change in the $1,500 per ounce gold price assumption for estimating mineral resources. (Refer to
IAMGOLD's July 26, 2017 news release)
The reserve and resource update excludes the Saramacca deposit. The current phase of the infill
drilling program at the Saramacca project has been completed with approximately 20 kilometres of drilling
completed to date during 2017. Deposit models continue to be updated with drill results to support a
resource estimate, which is expected to be completed in the third quarter 2017. Once the resource model
is completed, the Rosebel team will complete project plans and mine designs to allow incorporation of the
Saramacca feed into the overall Rosebel life of mine plan. This work should be completed sometime in the
first half of 2018. We expect our ongoing exploration program at Saramacca will further enhance the value
of Rosebel.
Additionally, Rosebel has initiated baseline environmental studies as well as detailed work on a 30-
kilometre rail corridor to efficiently transport ore from the deposit to the mill.
Westwood Mine - Canada (IAMGOLD interest - 100%)
Production of 33,000 ounces of gold in the second quarter 2017 was 106% higher than the same prior
year period, primarily due to the continued ramp-up resulting in increased tonnes mined and higher
throughput. Although head grade for the quarter of 6.37 g/t Au was higher than the prior year period, it was
lower than the grade mined during the quarter. This was due to processing marginal ore stockpiles to
exploit available mill capacity resulting from the continued ramp-up. Head grade excluding marginal ore
was 8.60 g/t for the second quarter 2017.
During the quarter, underground development continued opening up access to new mining areas with
lateral and vertical development of approximately 4,500 and 700 metres, respectively, averaging 57 metres
per day. The plan for Westwood includes 20 kilometres of development during 2017, including lateral and
vertical development of 17.8 and 2.6 kilometres, respectively, with a focus on ramp breakthroughs and
infrastructure development in future development blocks at lower levels.
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Cost of sales of $843 per ounce and total cash costs of $800 per ounce produced for the second quarter
2017 were 34% and 16% lower, respectively, than the same prior year period. The improvement was
primarily due to higher sales and production, respectively, resulting from the continued ramp-up.
All-in sustaining costs of $995 per ounce sold for the second quarter 2017 were 14% lower than the same
prior year period, primarily due to higher sales volume and lower cost of sales, partially offset by higher
sustaining capital expenditures.
Westwood had been normalizing costs attributed to inventory in accordance with International Financial
Reporting Standards since the seismic event in May 2015. Normalization of these costs ended at the onset
of the second quarter 2017 when Westwood reached normal production levels (June 30, 2016 - $4.6
million). In the same prior year period, total cash costs and all-in sustaining costs were reduced by $280
per ounce produced and $283 per ounce sold, respectively.
Sadiola Mine - Mali (IAMGOLD interest - 41%)
Attributable gold production of 14,000 ounces for the second quarter 2017 was 22% lower than the same
prior year period due to lower grades, partially offset by increased throughput.
Total cash costs of $898 per ounce produced and all-in sustaining costs of $936 per ounce sold decreased
by 5% and 4%, respectively, as a result of greater drawdowns of marginal ore stockpiles compared to the
prior year period.
At this time there has been no change in the status of the Sadiola Sulphide Project. Discussions with the
Government of Mali continue. A decision to move forward will be contingent upon the Government's
renewal of the construction and operating permits, the power agreement and fiscal terms related to the
project. In parallel, a review of the current life-of-mine plan is being undertaken.
DEVELOPMENT PROJECT
(Refer to the Q2 2017 MD&A for further details.)
Côté Gold Project
Joint Venture with Sumitomo Metal Mining Co., Ltd. ("SMM")
On June 20, 2017, we completed the sale of a 30% interest in the Côté Gold Project in Ontario to SMM for
aggregate consideration of $195 million, of which $100 million was received upon the closing of the
transaction. The remaining $95 million is due upon the earlier of: (i) 18 months following the closing date
(December 20, 2018), (ii) the date the Côté Gold Project feasibility study is made available to the public,
and (iii) should it elect to do so and only as permitted under the Joint Venture Agreement, the date SMM
sells its participating interest. Upon closing of the transaction, IAMGOLD entered into a Joint Venture
Agreement with SMM, forming an unincorporated joint venture with respect to the Project, with IAMGOLD
having 70% and SMM having 30% of the total outstanding participating interests under the Joint Venture
Agreement.
Completed Pre-feasibility Study ("PFS")
During the quarter, we announced the results of a pre-feasibility study completed jointly by IAMGOLD,
Amec Foster Wheeler, and Roscoe Postle Associates Inc., with inputs from technical studies completed by
other consultants (see news release dated June 5, 2017). The PFS represents a comprehensive study of
the technical and economic viability of the Project that has advanced to a stage where a preferred mining
method is established and an effective method of mineral processing is determined. IAMGOLD is using the
PFS to identify the preferred development option, to demonstrate economic viability of the Project, to
support mineral reserve disclosure, and to identify additional work recommended to support the completion
of a feasibility study.
The PFS outlines a potentially economically viable project that at a $1,250 per ounce gold price would
generate an estimated 14.0% after-tax internal rate of return. The Project would have a 17-year mine life,
producing on average 207,000 attributable ounces of gold a year at average cash costs of $605 per ounce
produced and all-in sustaining costs of $689 per ounce sold. A technical report summarizing the PFS has
been filed on SEDAR. A feasibility study is expected to be completed in the second half of 2018.
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Based on the results of the PFS as described above, we declared estimated mineral reserves as at May
26, 2017 on a 100% project basis comprising probable reserves totaling 196.1 million tonnes grading 0.94
g/t Au for 5.9 million ounces of gold. Also on a 100% basis, estimated indicated resources (inclusive of
reserves) are 281.2 million tonnes grading 0.89 g/t Au for 8.0 million ounces and inferred resources of
76.5 million tonnes grading 0.50 g/t Au for 1.2 million ounces (see news release dated June 5, 2017).
Regional exploration activities continue within the 516-square-kilometre property surrounding the Côté
Gold deposit to develop and assess exploration targets that could further maximize our flexibility with
respect to any future development decisions. A diamond drilling program continued during the quarter with
approximately 2,000 metres completed as part of a planned 10,500 metre drilling program in 2017 to test
selected high priority exploration targets. The results will be validated and compiled as they are received
to guide the ongoing exploration program.
EXPLORATION
(Refer to the Q2 2017 MD&A for further details.)
In the second quarter 2017, we spent $17.3 million on exploration and project studies, of which $12.1
million was expensed and $5.2 million capitalized. This compared to $9.9 million in the same prior year
period. The following summarizes the status of our most advanced projects:
Wholly-Owned Projects
Boto - Senegal
During the second quarter, approximately 3,600 metres of diamond drilling were completed to follow up
encouraging results from the 2016 drilling program at the Malikoundi deposit as well as to further explore
for additional mineral resources along known mineralized trends associated with the Boto 5 and 6 zones.
Assay results were reported during the quarter, with highlights including: 3.38 g/t Au over 19.0 metres and
4.35 g/t Au over 77.0 metres, including 11.76 g/t Au over 9.0 metres (see news release dated May 31,
2017). The results of this drilling will be incorporated into a revised geological model to support an updated
resource estimate in 2017. Technical and environmental studies are ongoing to advance the economic
evaluation of the project.
Pitangui - Brazil
In late 2016, we received the necessary permits to complete drilling of the interpreted up-plunge extension
of the São Sebastião deposit within a densely vegetated area. As such, the focus of the 2017 exploration
drilling program will be to evaluate the up-plunge extension area for additional resources. Just over 2,000
metres of diamond drilling were completed in the second quarter. Drilling continues and the results will be
used to update the mineral resources in 2017. Technical and environmental studies are ongoing to
advance the economic evaluation of the project.
Siribaya - Mali
During the second quarter, approximately 12,700 metres of diamond and reverse circulation drilling were
completed. The drilling program is designed to confirm the geometry of the known mineralized zones of the
Diakha deposit, and to extend mineralization north and south along strike from Diakha where previous
exploration results have been encouraging. The delineation drilling results at Diakha will be used to update
the mineral resources in 2017.
Joint Venture Projects
Following are the highlights for our joint venture exploration projects. The agreements are typically
structured in a way that gives us the option of increasing our ownership interest over time, with the
decision dependent upon the exploration results as time progresses.