Iamgold Reports Second Quarter 2022 Results
NEWS RELEASE
TSX: IMG NYSE: IAG
IAMGOLD REPORTS SECOND QUARTER 2022 RESULTS
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Toronto, Ontario, August 3, 2022 – IAMGOLD Corporation (NYSE:IAG, TSX:IMG) (“IAMGOLD” or the “Company”) today
reported its financial and operating results for the second quarter ended June 30, 2022.
Q2 2022 HIGHLIGHTS:
• Attributable gold production of 170,000 ounces in the second quarter, and 344,000 ounces year to date (“YTD”), on
continued strong performance from Essakane and improvements at Rosebel; annual production is expected to be
in the upper end of the guidance range of 570,000 to 640,000 ounces.
• Cost of sales per ounce sold of $1,130 ($1,081 YTD), cash costs1 per ounce sold of $1,119 ($1,066 YTD) and all-
in sustaining costs 1 ("AISC") per ounce sold of $1,604 ($1,545 YTD); cost guidance for 2022 is unchanged with
cash costs¹ expected to be between $1,100 and $1,150 per ounce sold and AISC¹ expected to be between $1,650
and $1,690 per ounce sold.
• Mine-site free cash flow1 of $42.8 million ($130.3 million YTD).
• Net earnings and adjusted net earnings1 per share attributable to equity holders of ($0.02) and ($0.01), respectively;
YTD net earnings 1 and adjusted net earnings 1 per share attributable to equity holders of $0.03 and $0.04 ,
respectively.
• Earnings before interest, income taxes, depreciation and amortization ("EBITDA")1 of $101.4 million ($236.3 million
YTD) and adjusted EBITDA1 of $110.0 million ($247.5 million YTD).
• Cash, cash equivalents and short -term investments and liqu idity1 at the end of the quarter of $452.9 million and
$801.6 million, respectively.
• Announced the remaining costs to complete, project economics and updated life-of-mine (“LOM”) plan for Côté Gold
to be included in a new NI 43-101 technical report (see news release dated August 3, 2022). The Company's share
of remaining spend to complete construction and bring Côté Gold into production is estimated to be between
approximately $1.2 and $1.3 billion from July 1, 2022, net of leases and working capital.
• Advanced the strategic review process to evaluate options for Rosebel and initiated review of development and
exploration assets in South America and West Africa.
• Published its 2021 Sustainability Report and named as one of the Corporate Knights' Canada's Best 50 Corporate
Citizens of 2022, ranking as one of the top 50 companies in Canada for corporate citizenship.
“We are pleased to report that our operations continued their strong production performance in the second quarter, driven
by the continued outperformance at Essakane and operational improvements at Rosebel,” said Maryse Bélanger, Chair and
Interim President and CEO of IAMGOLD. “In the current inflationary environment, it is essential to mitigate the impact of
rising costs through diligent focus on ope rations and productivity initiatives. Every gold ounce produced has to be done
safely, and we applaud our teams for their continued commitment to Zero Harm ® and the Côté construction team for
achieving the milestone of 5.7 million hours with no lost time injuries to date.
“Alongside our quarterly results today, we also announced the completion of the Côté Gold project review, risk analysis and
updated mine plan. This is the culmination of months of in -depth analysis of the project, by the Company’s manageme nt
and project teams, EPCM contractor and technical experts. Côté Gold is transformational for IAMGOLD, offering robust
cash flow generation once in production with significant potential for future growth. We truly believe that Côté Gold is not
just a proj ect, but the start of a district, with the addition of Gosselin and minimal historical exploration targeting
Côté/Gosselin style intrusion-hosted deposits within our 595 km2 land package.
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“The construction of Côté is happening in an environment with signif icant headwinds, including COVID -19, inflation and
other global events. The project today is over 57% complete and the updated project costs and schedule give us greatly
improved visibility towards completion. Given the strategic importance of Côté Gold to achieve our goal of becoming a
leading high-margin gold producer, we are actively pursu ing various alternatives to increase liquidity to deliver Côté on its
updated schedule. The strategic review process of Rosebel is active and ongoing and we will provid e updates when
appropriate. Further, we have initiated a separate review of development and exploration assets in South America and West
Africa. I am confident we will address the near-term challenges in order to advance Côté and better position IAMGOLD as
a more resilient, agile company for the current environment.”
For more information, refer to the Management Discussion and Analysis ( “MD&A”) and unaudited consolidated interim
Financial Statements as at and for the three and six months ended June 30, 2022 , that are available on the Company's
website at www.iamgold.com and on SEDAR at www.sedar.com. The Company uses certain non -GAAP financial
performance measures throughout this new s release. Please refer to the "Non -GAAP Financial Performance Measures"
section of this news release and the MD&A for more information.
QUARTERLY REVIEW
The following table summarizes certain operating and financial results for the three months ended June 30, 2022 (Q2 2022),
March 31, 2022 (Q1 2022), June 30, 2021 (Q2 2021) and six months ended June 30, 2022 (YTD 2022):
Q2 2022 Q1 2022 Q2 2021 YTD 2022 YTD 2021
Key Operating Statistics
Gold production – attributable (000s oz) 170 174 139 344 295
Gold sales – attributable (000s oz) 170 181 135 351 288
Average realized gold price1 ($/oz) $ 1,799 $ 1,813 $ 1,800 $ 1,806 $ 1,788
Cost of sales2 ($/oz sold) – attributable $ 1,130 $ 1,035 $ 1,150 $ 1,081 $ 1,110
Cash costs1 ($/oz sold) – attributable $ 1,119 $ 1,017 $ 1,149 $ 1,066 $ 1,108
AISC1 ($/oz sold) – attributable $ 1,604 $ 1,490 $ 1,422 $ 1,545 $ 1,324
Financial Results ($ millions, except where noted)
Revenues $ 334.0 $ 356.6 $ 265.6 $ 690.6 $ 563.0
Gross profit $ 49.4 $ 81.0 $ 27.9 $ 130.4 $ 72.1
EBITDA1 $ 101.4 $ 134.9 $ 87.0 $ 236.3 $ 200.8
Adjusted EBITDA1 $ 110.0 $ 137.5 $ 84.8 $ 247.5 $ 184.9
Net earnings (loss) attr. to equity holders $ (9.6) $ 23.8 $ (4.5) $ 14.2 $ 15.0
Adjusted net earnings (loss) attr. to equity holders1 $ (6.3) $ 26.1 $ (3.6) $ 19.8 $ 2.6
Net earnings (loss) per share attr. to equity holders $ (0.02) $ 0.05 $ (0.01) $ 0.03 $ 0.03
Adjusted EPS3 attr. to equity holders1 $ (0.01) $ 0.05 $ (0.01) $ 0.04 $ 0.01
Net CFO4 before changes in working capital1 $ 93.9 $ 133.9 $ 54.9 $ 227.8 $ 137.4
Net cash from operating activities $ 81.9 $ 142.3 $ 37.3 $ 224.2 $ 139.0
Mine-site free cash flow1 $ 42.8 $ 87.5 $ 1.9 $ 130.3 $ 91.4
Capital expenditures1,5 – sustaining $ 67.1 $ 76.6 $ 23.9 $ 143.7 $ 37.6
Capital expenditures1,5 – expansion $ 189.0 $ 92.1 $ 128.4 $ 281.1 $ 217.2
June 30 March 31 December 31 June 30 December 31
2022 2022 2021 2022 2021
Financial Position ($ millions)
Cash, cash equivalents and short-term investments $ 452.9 $ 524.4 $ 552.5 $ 452.9 $ 552.5
Long-term debt $ 612.0 $ 463.5 $ 464.4 $ 612.0 $ 464.4
Net cash (debt)1 $ (225.1) $ (6.5) $ 16.3 $ (225.1) $ 16.3
Available credit facility $ 348.7 $ 498.2 $ 498.3 $ 348.7 $ 498.3
1. This is a non-GAAP measure. See "Non-GAAP Financial Measures".
2. Throughout this news release, cost of sales, excluding depreciation, is disclosed in the cost of sales note in the annual con solidated financial statements.
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3. EPS: “net earnings (loss) per share “
4. CFO: “cash from operating activities”
5. Starting in 2022, a higher portion of stripping costs are categorized as sustaining capital versus expansion capital, due to the particular areas that are scheduled
to be mined and the stage of the life of mine aligning with World Gold Council guidelines. See "Non -GAAP Financial Measures section".
Operating Results
Attributable gold production for the second quarter was 170,000 ounces, down 4,000 ounces or 2% from the prior quarter.
Attributable gold sales of 170,000 ounces were in-line with production, with the avera ge realized gold price of $1,799 per
ounce reflecting the delivery of 37,500 ounces at $1,500 per ounce under the 2019 prepay arrangement.
Cost of sales (excluding depreciation) per ounce sold was $ 1,130 for the second quarter, up $95 per ounce or 9% from
$1,035 per ounce sold in the prior quarter . Excluding depreciation, cost of sales per ounce sold increased from the prior
quarter due to higher production costs and lower production volume.
Cash costs1 per ounce sold in the second quarter were $1,119, up $102 per ounce or 10% from the prior quarter on higher
production costs and lower gold sales. Included was a non-cash NRV write-down of short-term ore stockpile and finished
goods inventories of $19 per ounce sold (first quarter 2022 - $9 per ounce sold). AISC per ounce sold of $1,604 was up
$114 per ounce or 8% from the prior quarter, primarily due to the increase in cash costs per ounce sold.
Health and Safety
Health and safety is core to the Company’s relentless pursuit of its Zero Harm ® vision. Through various programs, the
Company continuously promotes a safe work environment and a wellness program at all sites. The DARTFR 2 (days away,
restricted, transferred duty frequency rate) was 0.31 for the first half of 2022, tracking below the global annual target of 0.42.
The TRIFR2 (total recordable injuries frequency rate) was 0.85 for the first half of 2022, tracking above the global annual
target of 0.73. Côté Gold has surpassed over 5.7 million hours with no lost time injuries to date. The operations have been
increasing focus on situational awareness and preventative activities related to work tasks.
The global COVID-19 pandemic continues to evol ve and the management thereof remains a focus for the business . The
Company continues to closely monitor developments and is taking necessary measures to manage the impact of the
COVID-19 pandemic on its personnel, operations, construction and development projects and exploration activities. COVID-
19 detection and mitigation protocols at our sites are reviewed on an ongoing basis to adapt to the evolving situation.
Financial Results
For the second quarter ended June 30, 2022, n et earnings and adjusted net e arnings1 per share attributable to equity
holders were ($0.02) and ($0.01), respectively, EBITDA1 was $101.4 million and adjusted EBITDA1 was $110.0 million.
Second quarter 2022 mine site free cash flow was $42.8 million, down $44.7 million from the prior quarter, due to lower
operating cash flow at Essakane ($54.6 million) and Westwood ($11.1 million), mainly due to higher operating costs, lower
sales volume and a lower average realized gold price, and higher capital expenditures at Rosebel ($16.0 million ), partially
offset by higher operating cash flow from Rosebel ($21.5 million) and lower capital expenditures at Essakane ($17.1 million).
Net cash from operating activities for the second quarter 2022 was $81.9 million, a decrease of $60.4 million from the prior
quarter, primarily due to lower net cash earnings ($19.9 million), higher income taxes paid resulting from withholding taxes
on repatriation of funds ($26.9 million) and a net outflow in non -cash working capital movements ($20.4 million), partially
offset by an increase in cash inflows from the settlement of derivatives ($6.3 million).
Net cash used in investing activities for the second quarter 2022 was $269.2 million, an increase of $108.7 million from the
prior quarter, primarily due to an increa se in capital expenditures for property, plant and equipment ($87.4 million) related
to the Côté Gold construction and timing of financing costs paid and capitalized as borrowing costs ($13.1 million).
Net cash from financing activities in the second quart er 2022 was $129.9 million, an increase of $137.4 million from the
prior quarter, primarily due to proceeds from drawdowns from the Company’s secured revolving credit facility (the “Credit
Facility”) ($150.0 million), partially offset by an increase in div idends paid to non -controlling interest ($11.6 million) on the
declaration of dividends from subsidiaries.
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Liquidity and Capital Resources
As at June 30, 2022, the Company had $451.1 million in cash and cash equivalents, $1.8 million in short-term investments
and net debt1 of $225.1 million. Restricted cash in support of en vironmental closure costs obligations related to Essakane
totaled $38.9 million.
Approximately $348.7 million was available under the Credit Facility resulting in liquidity1 at June 30, 2022 of approximately
$802 million. The Côté unincorporated joint venture (the "Côté UJV") required its joint venture partners to fund three months
of future expenditures. Subsequent to quarter end, t he Côté UJV has amended this requirement to two months. The
Company has funded its portion of the Côté UJV funding through cash generated from its operations and the Credit Facility.
The Company uses dividends and intercompany loans to repatriate funds from its operations and the timing of dividends
may impact the timing and amount of required financing, including the Company’s drawdown under the Credit Facility.
The following table summarizes the Company's outstanding long-term debt:
June 30, March 31, December 31,
($ millions)1 2022 2022 2021
Credit Facility $ 150.0 $ — $ —
5.75% senior notes 447.4 447.0 445.7
Equipment loans 14.6 16.5 18.7
$ 612.0 $ 463.5 $ 464.4
1. Long-term debt does not include: 2019 and 2022 prepay arrangements and leases of $62.0 million as at June 30, 2022 (March 31, 2022 - $62.5 million; December
31, 2021 - $65.6 million),
Prepay Arrangements
During 2019, the Company entered into a gold sale prepayment arrangement (the “2019 Prepay Arrangement”) with a collar
range of $1,300 to $1,500 per ounce at a cost of 5.38% per annum. Pursuant to the 2019 Prepay Arrangement, the Company
received a cash prepayment of $169.8 million in December 2019 in exchange for delivering 150,000 gold ounces in 2022.
During the three and six months ended June 30, 2022, 37,500 ounces and 75,000 ounces, respectively, were physically
delivered into the 2019 Prepay Arrangement and the Company received $7.5 million and $15.0 million, respectively, in cash
in relation to the collar.
During 2021, the Company entered into gold sale prepayment arran gements (the "2022 Prepay Arrangements") at a
weighted average cost of 4.45% per annum in respect of 150,000 gold ounces. These arrangements have an average
forward contract price of $1,753 per ounce on 50,000 gold ounces and a collar range of $1,700 to $2 ,100 per ounce on
100,000 gold ounces. This will result in a total prepayment to the Company of $236 million over the course of 2022 and the
requirement on the part of the Company to physically deliver such ounces over the course of 2024. The 2022 Prepayme nt
Arrangements have the effect of rolling the 2019 Prepay Arrangement from 2022 to 2024 after the completion of the
construction of Côté Gold. The Company received cash prepayment s of $59 .0 million and $118.0 million, respectively,
during the three and six months ended June 30, 2022 pursuant to the 2022 Prepay Arrangements.
OUTLOOK
Liquidity Outlook
The remaining attributable spend to complete the construction of the Côté Gold project are estimated to be between $1.2
and $1.3 billion from July 1, 2022, net of leases and working capital (see “Côté Gold Project”). The Côté Gold UJV requires
its joint venture partners to fund, in advance, previously three and now two months of future expenditures. The Company uses
dividends and intercompany loans to repatriate funds from its operations and the timing of dividends may impact the timing
and amount of required financing, including the Company's drawdowns under the Credit Facility. Primarily due to the timing
of a dividend payment from Essakane, the Company drew down an additional $80 million at the end of July 2022 and issued
a $19 million letter of credit under the Credit Facility.
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Based on the recently updated cost estimate and schedule of construction of the Côté Gold project, information currently
available and prevailing market prices, which impact operating cash flows, t he Company will require additional liquidity to
complete construction of the project and continues to seek to implement a fully funded financing plan by the end of the year
and prior to the necessity to make any potential adjustments to the timing of the advancement of the project based on the
updated schedule.
As such, t he Company is actively pursuing various alternatives to increase its liquidity and capital resources including
disposition of one or more of the Company’s assets and/or an interest therein and/or joint -venture partnerships, additional
secured debt which could be provided by banks, private capital providers and/or institutional investors, additional unsecured
debt including unsecu red and/or convertible notes, sales of common shares and/or the extension of the 2022 Prepay
Arrangements.
In January 2022, the Company announced that it was commencing a strategic review process to evaluate options for its
Rosebel/Saramacca mining complex, including a potential sale of this complex. The Company advanced this process in the
second quarter 2022. In addition, the Company is evaluating strategic alternatives with respect to certain of its development
and exploration assets in South America and West Africa (excluding Essakane), that may include the disposition of all or
an interest in one or more of such assets.
However, there can be no assurance that the Company will be successful in achieving financing solutions in time and/or on
terms acceptable to the Company or that the strategic evaluations discussed above will result in a transaction. In this case
and in order to execute its plans for the foreseeable future , including financing alternatives, the Company has developed
certain potential alternatives to defer or reduce its capital spending and various other expenditures. These alternatives may
impact future operating and financial performance and/or could extend the Côté Gold project construction timeline and
significantly increase project co sts, and/or dilute the Company’s interest in the Côté Gold project . Reductions in capital
expenditures at the Côté Gold project requires majority approval from the Côté UJV oversight committee.
The Company’s financial results are highly dependent on the pr ice of gold and future changes in the price of gold will,
therefore, impact performance. The Company will be dependent on the cash flows generated from the Côté Gold project to
eventually repay its existing and any additional indebtedness that it may incur to fund the remaining construction costs of
the Côté Gold project. Readers are encouraged to read the “Caution Regarding Forward Looking Statements” and the “Risk
Factors” sections contained in the Company’s 2021 Annual Information Form, which is availabl e on SEDAR at
www.sedar.com and the “Caution Regarding Forward Looking Statements” and “Risk and Uncertainties” section of the
MD&A.
Operating Performance
Actual YTD 2022 Full Year Guidance 20221
Essakane (000s oz) 219 360 – 385
Rosebel (000s oz) 95 155 – 180
Westwood (000s oz) 30 55 – 75
Total attributable production (000s oz)2 344 570 – 640
Cost of sales2 ($/oz sold) $ 1,081 $1,100 – $1,150
Cash costs2,3 ($/oz sold) $ 1,066 $1,100 – $1,150
AISC2,3 ($/oz sold) $ 1,545 $1,650 – $1,690
Depreciation expense ($ millions) $ 153.8 $280 – $290
Income taxes paid $ 45.3 $69 – $79
1 The full year guidance is based on the following 2022 full year assumptions: average realized gold price of $1,700 per ounce, USDCAD exchange rate of 1.25,
EURUSD exchange rate of 1.20 and average crude oil price of $70 per barrel.
2 Consists of Essakane, Rosebel and Westwood on an attributable basis of 90%, 95% and 100%, respectively.
3 This is a non-GAAP financial measure. See "Non-GAAP Financial Measures".
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Production Outlook
Attributable gold production guidance for 2022 is unchanged and is expected to be in the upper end of the range of 570,000
to 640,000 ounces.
Costs Outlook
Costs guidance for 2022 is unchanged with cash costs¹ expected to be between $1,100 and $1 ,150 per ounce sold and
AISC¹ expected to be between $1,650 and $1,690 per ounce sold. These estimates , issued in January 2022, included an
inflation assumption of 5% to 7% on key consumables, translating to an increase of 1% to 2% in cash costs and AISC
(reflected in the guidance figures). Additional cost pressures continue from systemic inflation, constrained global supply
chains and the sanctions on trade with Russia, increasing the average cost of key consumables such as oil, ammonium
nitrate, grinding media, lime and cyanide. The Company continues to work with its supply chain and seek alternatives to
mitigate ongoing costs pressures, including the sourcing of appropriate alternatives, as well as progressing productivity
initiatives at its operations th rough the IAMALLIN operational improvement program. Increases in oil prices have been
partially mitigated by the existing oil hedge program, please refer to the MD&A for more detail . The Company notes that
continued external cost pressures may result in an increase to costs and capital expenditures.
Income Taxes Paid
Income taxes paid guidance has been updated to be between $69 and $79 million ($55 – $65 million previously) to primarily
account for withholding taxes on the repatriation of funds from Essakane.
Capital Expenditures1
Actual YTD 2022 Full Year Guidance 2022
($ millions) Sustaining2 Expansion3 Total Sustaining2 Expansion3 Total
Essakane $ 78.8 $ 1.5 $ 80.3 $ 165 $ 5 $ 170
Rosebel4 48.2 20.7
68.9 105 35 140
Westwood 16.1
1.2 17.3
40 10 50
143.1
23.4
166.5
310 50 360
Boto Gold — 9.6 9.6 — 20 20
Corporate 0.6 — 0.6 — — —
Total5,6,7,8 (±5%) $ 143.7
$ 33.0 $ 176.7 $ 310 $ 70
$ 380
1 100% basis, unless otherwise stated.
2 Sustaining capital includes capitalized stripping of (i) $17.2 million for Essakane and $7.3 million for Rosebel in Q2 2022 (ii) $47.1 million for Essakane and $19.8
million for Rosebel YTD 2022 and (iii) $110 million for Essakane and $45 million for Rosebel for the full year guidance. See "Outlook" sections below.
3 Expansion capital includes capitalized stripping of (i) $nil million for Essakane and $11.3 million for Rosebel in Q2 2022 (i i) $nil for Essakane and $14.8 million for
Rosebel YTD 2022 and (iii) $nil for Essakane and $20 million for Rosebel for the full year 2022 guidance. See "Outlook" sections below.
4 Rosebel includes Saramacca at 70%.
5 Includes $10 million of capitalized exploration and evaluation expenditures also included in the Exploration Outloo k guidance table.
6 Capitalized borrowing costs are not included.
7 In addition to the above capital expenditures, $24 million in total principal lease payments are expected.
8 See "Costs Outlook" section above.
Exploration
Actual YTD 2022 Full Year Guidance 2022
($ millions) Capitalized Expensed Total Capitalized Expensed Total
Exploration projects – greenfield $ — $ 14.7 $ 14.7 $ — $ 21 $ 21
Exploration projects – brownfield1 3.9 2.6 6.5 10 4 14
$ 3.9 $ 17.3 $ 21.2 $ 10 $ 25 $ 35
1 Exploration projects - brownfield includes planned near -mine exploration and resource development of (i) 3.9 million YTD 2022, and (ii) $10 million for the full year
2022 guidance.
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OPERATIONS AND PROJECTS
Essakane Mine (IAMGOLD interest – 90%)1 | Burkina Faso
Q2 2022 Q1 2022 Q2 2021 YTD 2022 YTD 2021
Key Operating Statistics
Ore mined (000s t) 3,803 3,832 3,559 7,635 7,994
Waste mined (000s t) 7,602 11,346 11,730 18,948 22,167
Material mined (000s t) – total 11,405 15,178 15,289 26,583 30,161
Strip ratio2 2.0 3.0 3.3 2.5 2.8
Ore milled (000s t) 2,704 3,162 3,169 5,866 6,358
Head grade (g/t) 1.52 1.39 1.44 1.45 1.40
Recovery (%) 90 88 81 89 81
Gold production (000s oz) – 100% 119 124 118 243 231
Gold production (000s oz) – attributable 90% 107 112 106 219 208
Gold sales (000s oz) – 100% 117 131 115 248 229
Average realized gold price3 ($/oz) $ 1,882 $ 1,885 $ 1,801 $ 1,883 $ 1,795
Financial Results ($ millions)1
Revenues4 $ 218.8 $ 248.2 $ 208.2 $ 467.0 $ 412.3
Operating costs (86.4) (90.4) (98.8) (176.8) (202.2)
Royalties (10.6) (12.3) (10.5) (22.9) (20.6)
Cash costs3 $ (97.0) $ (102.7) $ (109.3) $ (199.7) $ (222.8)
Other mine costs5 (0.3) (0.4) (0.1) (0.7) (0.4)
Cost of sales4 $ (97.3) $ (103.1) $ (109.4) $ (200.4) $ (223.2)
Sustaining capital expenditures3,6 (31.1) (47.7) (11.3) (78.8) (16.7)
Other costs and adjustments7 (2.0) 1.7 (1.7) (0.3) (3.4)
AISC3 $ (130.4) $ (149.1) $ (122.4) $ (279.5) $ (243.3)
Expansion capital expenditures3,8 $ (0.5) $ (1.0) $ (18.6) $ (1.5) $ (33.1)
Performance Measures9
Cost of sales excluding depreciation ($/oz sold) $ 838 $ 784 $ 947 $ 810 $ 973
Cash costs3 ($/oz sold) $ 836 $ 781 $ 946 $ 807 $ 971
AISC3 ($/oz sold) $ 1,124 $ 1,134 $ 1,060 $ 1,129 $ 1,061
1 100% basis, unless otherwise stated.
2 Strip ratio is calculated as waste mined divided by ore mined.
3 This is a non-GAAP financial measure. See "Non-GAAP Financial Measures".
4 As per note 27 of the consolidated interim financial statements for revenues and cost of sales. Cost of sales is net of depre ciation expense.
5 Other mine costs exclude by-product credits.
6 Includes sustaining capitalized stripping for the second quarter 2022 of $17.2 million (first quarter 2022 - $29.9 million; second quarter 2021 - $nil) and YTD 2022 of
$47.1 million (YTD 2021 - $nil).
7 Other costs and adjustments include sustaining lease principal payments, environ mental rehabilitation accretion and depletion and prior period operating costs,
partially offset by by-product credits.
8 Includes expansion capitalized stripping for the second quarter 2022 of $nil (first quarter 2022 - $nil; second quarter 2021 - $12.9 million) and YTD 2022 of $nil (YTD
2021 - $22.1 million).
9 Cost of sales, cash costs and AISC per ounce sold may not be calculated based on amounts presented in this table due to round ing.
Essakane continued to deliver strong results and achieved attributable gold production of 107,000 ounces in the second
quarter, lower by 5,000 ounces compared to the prior quarter. Lower production compared with the prior quarter is attributed
to planned maintenance and supply chain challenges (described below), partially off set by higher grades than the reserve
block model and continued improvements in recoveries.
Mining activity of 11.4 million tonnes in the second quarter was lower than the prior quarter, primarily due to lower waste
stripping activities due to constraints in consumables from supply chain challenges in country and abroad, and the
prioritization of ore mining. The reduction in stripping activities is not expected to materially impact production in 2022 a nd
2023.
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Mill throughput of 2.7 million tonnes at an average head grade of 1.52 g/t Au and plant availability of 86% was lower by 14%
compared to the prior quarter . While the head grades were higher than the prior quarter, the feed rate and mill availability
were lower due to the mill feed consisting of highe r hard rock volumes, annual planned maintenance and supply chain
challenges. Mill recovery of 90% in the second quarter was 2% higher than the prior quarter due to lower graphitic and
sulfur content, combined with increased recovery from the gravity circuit that was optimized in 2021.
The security situation in Burkina Faso has further deteriorated during the second quarter and impacted the in -land supply
chain resulting in delays in the delivery of consumables. The Company continues to take proactive measures to ensure the
safety and security of in -country personnel and managed to limit the impact on production in the second quarter. The
Company continues to adjust its protocols and the activity levels at the site according to the security environment. The
Company is furthering certain additional investments in security infrastructure in the region and at the mine site, with the
support of the government.
The IAMALLIN improvement project has continued with the execution phase in the second quarter, with the f ocus on mine
equipment availabilities, mill feed optimization and supplies inventory management.
Outlook
Attributable gold production at Essakane in 2022 is expected to approximate the top-end of the guidance range of 360,000
to 385,000 ounces. The Company is investigating whether the updated block model may be underestimating grade as the
complexity of mineralization has increased in the lower portions of the pit with higher amounts of coarse gold. The operation
continues to execute on targeted operational improvements including improving mill throughput through optimizing blast
fragmentation and further optimizing the gravity circuit through the planned addition of a double deck screen.
Cash costs continue to be under pressure due to systemic inflation and constrained global supply chains. The Company
continues to actively work with authorities and suppliers to mitigate potential impacts and manage continuity of supply due
to the security situation noted above while also investing in additional security inf rastructure. Certain input costs at
Essakane, including labour, are expected to be lower due to a weakened EURUSD exchange rate.
Bambouk District
The Bambouk District includes the Boto Gold project and the Karita Gold project and the Diakha -Siribaya Gold p roject
located within 15 kilometres of the Boto Gold project in adjacent countries. The Company is undertaking an evaluation of
strategic alternatives with respect to these development and exploration assets in West Africa that may include the
disposition of all or an interest in one or more of such assets.
The Boto Gold project is a shovel ready development project located in southeastern Senegal along the border with Mali .
During the second quarter 2022, geotechnical drilling was completed to further de -risk the Malikoundi pit design. At the
Karita discovery in Guinea, the Company is undertaking a delineation drilling program to support an initial resource estimate.
Subsequent to quarter-end, the Company reported initial assay results with highlights inclu ding: 34.0 metres grading 5.81
g/t Au, 25.0 metres grading 5.32 g/t Au and 12.0 metres grading 9.49 g/t Au (see news release dated July 6, 2022). At the
Diakha deposit in Mali, work is continuing towards the completion of an updated mineral resource estimate aiming to convert
mineral resources to a higher confidence level.