Iamgold Reports Second Quarter 2019 Results; Expecting Stronger Second Half of the Year at Essakane and Westwood
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD REPORTS SECOND QUARTER 2019 RESULTS; EXPECTING
STRONGER SECOND HALF OF THE YEAR AT ESSAKANE AND WESTWOOD
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 June 30, 2019.
Toronto, Ontario, August 7, 2019 - IAMGOLD Corporation (“IAMGOLD” or the “Company”) reported its
consolidated financial and operating results for the quarter ended June 30, 2019.
"While our second quarter demonstrated improved performance over the first q uarter, our outlook at
Essakane and Westwood is stronger for the balance of the year," commented Steve Letwin, President and
CEO of IAMGOLD, “As margins improve on higher gold prices and our continued focus on costs, we
anticipate higher grades and production at Essakane and increasing production at Westwood, with Sadiola
contributing to year-end. Production for the year will be impacted by a temporary suspension of mining
activities at Rosebel as we work alongside our local stakeholders to resolve the secu rity issues related to
unauthorized mining. As a result of this, combined with lower grades at Rosebel, we have adjusted our
production and cost guidance for the year. Additionally, we have reduced capital expenditures for 2019,
including deferrals. Our balance sheet remains strong, with $660 million in cash and short-term
investments as we continue to build out our self-funding operating model across our sites. Saramacca
development remains on track, with initial ounces to the Rosebel mill targeted later t his year. And, we
continue to see exploration potential across our sites, as highlighted by the drill results from Nelligan,
Rouyn, Monster Lake and Gosselin.”
Second Quarter 2019 Highlights
• Attributable gold production of 198,000 ounces at cost of sales 1 per ounce of $941, total cash
costs2 per ounce produced of $896 and all-in sustaining costs2 per ounce sold of $1,132.
• Attributable gold sales of 187,000 ounces, lower than production primarily due to inventory in circuit
at Rosebel, at an average realized gold price per ounce of $1,314.
• Revenues of $246.5 million.
• Net loss attributable to equity holders of $14.4 million, or $0.03 per share.
• Adjusted net loss attributable to equity holders2 of $15.5 million or $0.03 per share2.
• Net cash from operating activities of $40.6 million.
• Net cash from operating activities before changes in working capital 2 of $42.8 million.
• Cash, cash equivalents, short-term investments, and restricted cash totaled $688.5 million at June
30, 2019. Cash and cash equivalents were $609.7 million, short term investments, primarily in
money market funds, were $50.7 million and restricted cash was $28.1 million. Additionally, there
was $499.6 million available under our almost undrawn revolving credit facility.
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Strategic Developments
Financial
• On June 27, 2019, we executed a €20.5 million ($23.3 million) loan agreement with Caterpillar
Financial Services Corporation ("Equipment Loan") with an interest rate of 5.23% per annum. The
Equipment Loan, secured by certain mobile equipment at Essakane, matures on June 27, 2024 and is
repayable in quarterly installments starting September 27, 2019.
• We have lowered our full-year 2019 total attributable gold production guidance to 765,000 to 810,000
ounces primarily due to lower production expected at Rosebel resulting from the temporary
suspension of mining activities subsequent to the second quarter 2019 and lower grades realized in
the first half of the year. Additionally, we have revised upwards our guidance for cost of sales per
ounce sold and total cash cost2 per ounce produced to the range of $910 to $960 and $860 to $910
per ounce, respectively, due to higher waste volumes being classified as operational waste as
opposed to capitalized stripping and lower owner-operator sales volumes relative to the initial
guidance. All-in sustaining costs2 per ounce sold guidance has been revised upwards to the range of
$1,090 to $1,130.
• Capital expenditures guidance for 2019 has been reduced by $80 million to $275 million (±5%)
primarily due to timing of spend on the haul road construction and deferral of non-critical infrastructure
at Saramacca, and lower capitalized stripping at Rosebel as a result of mine sequencing.
Reserves and Resources
• On May 30, 2019, we reported initial drilling results from its 2019 delineation diamond drilling program
at the Nelligan Project in Quebec. Drilling highlights included: 37.43 metres grading 1.32 g/t Au and
73.0 metres grading 1.09 g/t Au; 16.7 metres grading 4.04 g/t Au and 28.42 metres grading 2.11 g/t Au.
Exploration
• During the quarter, we reported initial drilling results from our delineation program completed on the
Lac Gamble Zone at the Rouyn Gold Project in Quebec. Drilling highlights included: 7.75 metres
grading 11.02 g/t Au; 10.6 metres grading 8.21 g/t Au; 29.7 metres grading 8.96 g/t Au, including 11.1
metres grading 17.49 g/t Au (See news releases dated May 23 and June 12, 2019)
Operations and Development
• Development work on Saramacca continued with the haul road construction progressing, and the
commencement of pit clearing, pre-stripping activities and the construction of essential infrastructure
during the quarter.
• The carbon-in-column plant at Rosebel, which became fully operational in the first quarter 2019,
produced an additional 2,100 ounces in the second quarter 2019, for total year-to-date recoveries of
4,300 ounces.
• We continued to advance its application for a mining concession, optimize the design elements of the
Boto Gold Project development, maintained stakeholder engagement and completed a condemnatio n
and delineation drilling program to improve the resource model.
• The oxygen plant at Essakane, designed to improve recoveries by 0.5%, became fully operational,
with ongoing optimization.
Subsequent to the Quarter
• On July 23, 2019, we reported drilling results from its 2019 drilling program completed at the Monster
Lake Joint Venture Project in Quebec. Drilling highlights included: 0.8 metres grading 357.0 g/t Au; 0.5
metres grading 133.0 g/t Au.
• On July 30, 2019, we reported drilling results from the 2019 drilling program completed at the Gosselin
Discovery at the Côté Gold Project in Ontario. Drilling highlights included: 342.5 metres grading 0.98
g/t Au; 412.0 metres grading 1.28 g/t Au.
• On July 31, 2019, we reported additional drilling results from our delineation program completed on the
Lac Gamble Zone at the Rouyn Gold Project in Quebec. Drilling highlights included: 9.7 metres
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grading 6.64 g/t Au; 23.4 metres grading 6.08 g/t Au including 8.1 metres grading 13.25 g/t Au; 10.05
metres grading 6.59 g/t Au.
• On August 1, 2019, we reported that an incident involving local police and unauthorized artisanal
miners within the Rosebel concession had resulted in the death of an unauthorized miner. The
incident also resulted in damage to equipment. To ensure the safety and security of the workforce,
mining activities have been temporarily suspended while the mill continues to operate.
• On August 7, 2019, we reported initial drilling results testing the underground mining potential of our
Saramacca deposit. Drilling highlights included 21.0 metres grading 6.05 g/t Au including 10.5 metres
grading 9.72 g/t Au, 22.7 metres grading 8.54 g/t Au including 9.0 metres grading 15.23 g/t Au, and
24.0 metres grading 9.67 g/t Au including 6.0 metres grading 26.41 g/t Au.
Upcoming Growth Catalysts
• Development of Saramacca continues, with mining and stockpiling expected to begin in the third
quarter 2019 and targeting nominal production from Saramacca in the fourth quarter 2019.
• At Rosebel, a scoping study is underway to evaluate the underground mining potential of Saramacca,
which could result in higher grades and significantly lower waste volumes, thereby reducing costs.
• We continue to advance exploration activities along the Saramacca-Brokolonko trend in Suriname to
confirm the presence of additional zones of mineralization and evaluate the resource potential.
• The Carbon-In-Leach ("CIL") and Heap Leach feasibility study at Essakane is progressing well and is
expected to be completed in the third quarter 2019: the feasibility study is expected to support an
investment in a mill de-bottlenecking project, which could increase CIL plant throughput by 6% to 11.7
million tonnes per annum at 100% hard rock, compared to our 2018 hard rock run rate of 11.0 million
tonnes per annum.
• Discussions with the Government of Senegal on obtaining a mining concession for the Boto Gold
Project are well advanced, with approval expected in the second half of 2019.
• Completed the planned diamond drilling program for the Nelligan Project in Quebec, and an initial
resource estimate is expected in the second half of 2019.
• Studying various design approaches to Westwood with a preliminary life of mine plan update expected
in the fourth quarter 2019, followed by a NI 43-101 compliant plan in the first half of 2020.
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SUMMARY OF FINANCIAL AND OPERATING RESULTS
Three months
ended June 30,
Six months ended
June 30,
Financial Results ($ millions, except where noted) 2019 2018 2019 2018
Revenues $ 246.5 $ 277.4 $ 497.5 $ 591.9
Cost of sales $ 239.9 $ 247.8 $ 491.8 $ 486.5
Gross profit $ 6.6 $ 29.6 $ 5.7 $ 105.4
Net earnings (loss) attributable to equity holders of IAMGOLD $ (14.4 ) $ (26.2 ) $ (55.7 ) $ 16.1
Net earnings (loss) attributable to equity holders ($/share) $ (0.03 ) $ (0.06 ) $ (0.12 ) $ 0.03
Adjusted net earnings (loss) attributable to equity holders of IAMGOLD1 $ (15.5 ) $ 13.1 $ (17.7 ) $ 52.8
Adjusted net earnings (loss) attributable to equity holders ($/share)1 $ (0.03 ) $ 0.03 $ (0.04 ) $ 0.11
Net cash from operating activities $ 40.6 $ 50.6 $ 48.7 $ 156.6
Net cash from operating activities before changes in working capital1 $ 42.8 $ 73.4 $ 75.9 $ 193.0
Key Operating Statistics
Gold sales – attributable (000s oz) 187 215 377 450
Gold production – attributable (000s oz) 198 214 383 443
Average realized gold price1 ($/oz) $ 1,314 $ 1,299 $ 1,311 $ 1,316
Cost of sales2 ($/oz) $ 941 $ 826 $ 952 $ 781
Total cash costs1 ($/oz) $ 896 $ 812 $ 890 $ 773
All-in sustaining costs1 ($/oz) $ 1,132 $ 1,077 $ 1,109 $ 1,012
Gold margin1 ($/oz) $ 419 $ 487 $ 421 $ 543
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 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.
SECOND QUARTER 2019 SUMMARY
Financial Performance
• Revenues for the second quarter 2019 were $246.5 million, down $30.9 million or 11% from the same
prior year period. The decrease was primarily due to lower sales volume at Essakane ($15.5 million),
Rosebel ($11.5 million), and Westwood ($6.8 million), partially offset by a higher realized gold price
($3.1 million).
• Cost of sales for the second quarter 2019 was $239.9 million, down $7.9 million or 3% from the same
prior year period. The decrease was primarily due to lower depreciation expense ($8.6 million),
partially offset by higher operating costs ($0.9 million). Operating costs were higher primarily due to
lower capitalized stripping at Essakane and Rosebel, partially offset by labour reductions at Westwood
and a stronger U.S. dollar relative to the euro and the Canadian dollar.
• Depreciation expense for the second quarter 2019 was $63.7 million, down $8.6 million or 12% from
the same prior year period. The decrease was primarily due to lower production and an increase in
reserves at Essakane and Rosebel.
• Income tax expense for the second quarter 2019 was $3.9 million, down $3.5 million from the same
prior year period. Income tax expense for the second quarter 2019 comprised current income tax
expense of $0.2 million (June 30, 2018 - $11.4 million) and deferred income tax expense of $3.7
million (June 30, 2018 - recovery of $4.0 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 2019 was $14.4 million, or $0.03 per
share, compared to net loss of $26.2 million, or $0.06 per share in the same prior year period. The
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decrease in net loss was primarily due to higher interest income, derivatives and o ther investment
gains (losses) ($16.8 million), lower foreign exchange gain (loss) ($12.1 million) and lower income tax
expense ($3.5 million), partially offset by lower gross profit ($23.0 million).
• Adjusted net loss attributable to equity holders2 was $15.5 million, or $0.03 per share2, compared to
adjusted net earnings2 of $13.1 million, or $0.03 per share2 in the same prior year period.
• Net cash from operating activities for the second quarter 2019 was $40.6 million, down $10.0 million
from the same prior year period. The decrease was due to lower earnings after non-cash adjustments
($29.8 million), partially offset by lower movements in non-cash working capital items and non-current
ore stockpiles ($20.3 million).
• Net cash from operating activities before changes in working capital2 for the second quarter 2019 was
$42.8 million, down $30.6 million from the same prior year period. The decrease was primarily due to
lower earnings after non-cash adjustments.
Financial Position
We ended the quarter in a strong financial position, with cash, cash equivalents, short-term investments
primarily in money market funds and restricted cash were $688.5 million at June 30, 2019, down $69.5
million from December 31, 2018. The decrease was primarily due to spending on property, plant and
equipment ($133.6 million), interest paid ($14.7 million) and an increase in restricted cash ($3.5 million),
partially offset by cash generated from operating activities ($48.7 million), net proceeds received from the
Equipment Loan ($23.0 million), interest received ($6.9 million) and other investing activities ($5.8 million).
Production and Costs
• Attributable gold production, inclusive of joint venture operations, was 198,000 ounces for the second
quarter 2019, down 16,000 ounces from the same prior year period. The decrease was primarily due
to lower head grades at Essakane (9,000 ounces) and Westwood (7,000 ounces) and lower
throughput and recoveries at Sadiola (2,000 ounces), partially offset by higher recoveries at Rosebel
(2,000 ounces).
• Attributable gold sales, inclusive of joint venture operations, were 187,000 ounces for the second
quarter 2019, down 28,000 ounces from the same prior year period. The decrease was due to lower
sales at Essakane (11,000 ounces), Rosebel (8,000 ounces), Westwood (6,000 ounces) and Sadiola
(3,000 ounces).
• Cost of sales1 per ounce for the second quarter 2019 was $941, up 14% from the same prior year
period primarily due to lower sales volumes in addition to the factors noted above.
• Total cash costs2 per ounce produced for the second quarter 2019 were $896, up 10% from the same
prior year period primarily due to lower production volumes at Essakane and Westwood in addition to
the factors noted above.
• All-in sustaining costs2 per ounce sold for the second quarter 2019 were $1,132, up 5% from the same
prior year period. The increase was primarily due to higher cost of sales per ounce, partially offset by
lower sustaining capital expenditures.
• Included in total cash costs2 and all-in sustaining costs2 for the second quarter 2019 were realized
derivative gains from hedging programs of $5 per ounce produced and sold, respectively (2018 - $14
and $15).
Commitment to Zero Harm Continues
The DART rate3, representing the frequency of all types of serious injuries across all sites and functional
areas for the second quarter 2019 was 0.59, below IAMGOLD's target of 0.63. We continue the
implementation of several initiatives, including a behaviour-based safety program, to ensure a safer work
environment.
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2019 Guidance
IAMGOLD Full Year Attributable Guidance1,2 Revised Previous
Essakane (000s oz) 380 - 390 375 - 390
Rosebel (000s oz) 240 - 260 315 - 330
Westwood (000s oz) 95 - 105 100 - 120
Total owner-operated production (000s oz) 715 - 755 790 - 840
Sadiola Joint Venture (000s oz) 50 - 55 20 - 30
Total attributable production (000s oz) 765 - 810 810 - 870
Cost of sales3 ($/oz) $910 - $960 $790 - $840
Total cash costs4 - owner-operator ($/oz) $860 - $910 $765 - $815
Total cash costs4,5 ($/oz) $860 - $910 $765 - $815
All-in sustaining costs4- owner-operator ($/oz) $1,100 - $1,140 $1,030 - $1,080
All-in sustaining costs4,5 ($/oz) $1,090 - $1,130 $1,030 - $1,080
1 The revised outlook is based on 2019 full year assumptions with an average realized gold price of $1,300 per ounce, U.S.$ / Canadian $ exchange rate
of 1.33, € / U.S.$ exchange rate of 1.13 and average crude oil price of $63 per barrel.
2 The previous outlook was based on 2019 full year assumptions with an average realized gold price of $1,225 per ounce, U.S.$ / Canadian $ exchan ge
rate of 1.30, € / U.S.$ exchange rate of 1.15 and average crude oil price of $62 per barrel.
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) and does not include the Sadiola Joint Venture which is accounted for on an equity basis.
4 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A.
5 Consists of Essakane, Rosebel, Westwood and the Sadiola Joint Venture on an attributable basis.
GOLD PRODUCTION, COST OF SALES, TOTAL CASH COSTS AND ALL-IN SUSTAINING COSTS
We have lowered the range of our 2019 total attributable gold production guidance to 765,000 to 810,000
ounces from 810,000 to 870,000 ounces primarily due to lower production expected at Rosebel resulting
from the temporary suspension of mining activities subsequent to the second quarter 2019 and lower
grades realized in the first half of the year.
Gold production at Westwood is expected to continue improving progressively throughout the second half
of 2019 compared to the first half, and is expected to be strongest in the fourth quarter.
Cost of sales per ounce sold guidance has been revised upwards to the range of $910 to $960 from $790
to $840 primarily due to higher waste volumes being classified as operational waste as opposed to
capitalized stripping, and due to lower production volumes relative to the initial guidance.
Total cash cost2 per ounce produced guidance has been revised upwards to the range of $860 to $910
from $765 to $815 primarily due to a higher waste volumes being classified as operational waste as
opposed to capitalized stripping.
All-in sustaining costs2 per ounce sold guidance has been revised upwards to the range of $1,090 to
$1,130 from $1,030 to $1,080.
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CAPITAL EXPENDITURES OUTLOOK
Revised Previous
($ millions)
Sustaining1
Non-
sustaining
(Development/
Expansion)1
Total Sustaining1
Non-sustaining
(Development/
Expansion)1
Total
Owner-operator
Essakane
$ 40 $ 70 $ 110 55 70 125
Rosebel 40 50 90 70 75 145
Westwood 15 20 35 15 30 45
95 140 235 140 175 315
Corporate and
development projects2 —
40
40
—
40
40
Total3,4 (±5%) $ 95 $ 180 $ 275 140 215 355
1 Sustaining capital includes capitalized stripping o f $5 million for Essakane and $2 million for Rosebel. In accordance with the World Gold Council
guidance on all-in sustaining costs, capitalized stripping of $35 million is included in non -sustaining capital for Essakane.
2 Includes estimated attributable capital expenditures for the Côté Gold Project (70%) for the first nine months of 2019.
3 Includes $14 million of capitalized exploration and evaluation expenditures. Refer to the Exploration section of the MD&A.
4 Excludes capitalized borrowing costs and $10 million of principal lease payme nts.
We have reduced our 2019 capital expenditure guidance by $80 million to $275 million (±5%). Sustaining
and non-sustaining capital expenditures decreased by $45 million and $35 million, respectively. The $80
million decrease is due to timing of spend on the Saramacca Project ($25 million), reduction in sustaining
capital expenditures at Rosebel primarily due to lower capitalized stripping ($30 million), timing of spend at
Essakane ($15 million), and a decrease in non-sustaining capital at Westwood ($10 million).
ATTRIBUTABLE GOLD PRODUCTION AND COSTS
Gold Production
(000s oz)
Cost of Sales1
($ per ounce)
Total Cash Costs2
($ per ounce
produced)
All-in Sustaining
Costs2
($ per ounce sold)
Three months ended June 30, 2019 2018 2019 2018 2019 2018 2019 2018
Owner-operator
Essakane (90%) 88 97 $ 960 $ 771 $ 887 $ 728 $ 1,077 $ 1,003
Rosebel (95%) 72 70 944 862 915 842 1,116 1,035
Westwood (100%)4 24 31 869 924 849 929 990 1,129
Owner-operator3 184 198 $ 941 $ 826 $ 893 $ 799 $ 1,146 $ 1,086
Joint ventures 14 16 934 962 937 968
Total operations 198 214 $ 896 $ 812 $ 1,132 $ 1,077
Cost of sales1 ($/oz) $ 941 $ 826
Cash costs, excluding royalties $ 837 $ 756
Royalties 59 56
Total cash costs2 $ 896 $ 812
All-in sustaining costs2 $ 1,132 $ 1,077
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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, 2019 2018 2019 2018 2019 2018 2019 2018
Owner-operator
Essakane (90%) 178 206 $ 927 $ 739 $ 885 $ 695 $ 1,043 $ 956
Rosebel (95%) 140 135 916 831 908 836 1,089 976
Westwood (100%)4 39 71 1,165 808 853 809 1,078 984
Owner-operator3 357 412 $ 952 $ 781 $ 891 $ 761 $ 1,124 $ 1,017
Joint Ventures 26 31 882 933 889 947
Total operations 383 443 $ 890 $ 773 $ 1,109 $ 1,012
Cost of sales1 ($/oz) $ 952 $ 781
Cash costs, excluding royalties $ 830 $ 715
Royalties 60 58
Total cash costs2 $ 890 $ 773
All-in sustaining costs2 $ 1,109 $ 1,012
1 Cost of sales, excluding depreciation, as disclosed in note 22 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.
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 Owner-operator all-in sustaining costs include corporate general and administrative costs. Refer to all -in sustaining costs reconciliation on page 28 of
the MD&A.
4 Cost of sales per ounce sold for Westwood does not include the impact of normalization of costs for the three and six months ended June 30, 2019 of
$nil and $30 per ounce (three and six months ended June 30, 2018 - $nil and $nil), respectively.
OPERATIONS ANALYSIS BY MINE SITE
Essakane Mine - Burkina Faso (IAMGOLD interest - 90%)
Attributable gold production for the second quarter 2019 was lower by 9% compared to the same prior year
period primarily due to lower head grades. Ore feed for the second quarter 2019 was primarily sourced
from lower grade zones relative to the higher grades realized in the same pr ior year period. Mill throughput
was favourably impacted in the second quarter 2019 by higher mill availability due to the timing of mill
maintenance. Optimization of oxygen distribution is ongoing at the oxygen plant, which was commissioned
during the first quarter 2019. Once optimized, the oxygen plant is expected to increase recoveries by 0.5%
through improved leach kinetics and to improve the efficiency of the circuit by reducing reagent
consumption.
Material mined for the second quarter 2019 was higher compared to the same prior year period primarily
due to an increase in the fleet size and improved equipment availability. Essakane commissioned an
additional haul truck, loader and two excavators in the second quarter 2019. The new equipment received
and commissioned has allowed for increased hauling capacity, improved equipment availability and
reduced reliance on the contracted mining fleet. Ore mined for the second quarter 2019 was higher
compared to the same prior year period primarily due to the mining and stockpiling of lower grade ore to
support the construction of a proposed heap leach facility at the end of carbon-in-leach (“CIL”) operations,
in addition to the items noted above.
The CIL and Heap Leach feasibility study at Essakane is progressing well and is expected to be completed
in the third quarter 2019. The feasibility study is expected to support an investment in a mill de -
bottlenecking project, which could increase CIL plant throughput by 6% to 11.7 million tonnes per annum at
100% hard rock, compared to the 2018 hard rock run rate of 11.0 million tonnes per annum. The CIL
crushing circuit would be used for the heap leach process at the end of CIL operations.