IAMGOLD REPORTS STRONG OPERATING CASH FLOW, UP $276 MILLION (721%) IN 2016 A Year of Achievements Sets the Stage for Growth
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD REPORTS STRONG OPERATING CASH FLOW, UP $276 MILLION (721%) IN 2016
A Year of Achievements Sets the Stage for Growth
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Refer to the annual Management Discussion and Analysis (MD&A) and Audited Consolidated
Financial Statements as at December 31, 2016 for more information.
Toronto, Ontario, February 22, 2017 - IAMGOLD Corporation (“IAMGOLD” or the “Company”) reported
its consolidated financial and operating results for the quarter and year ended December 31, 2016.
“We had an excellent year,” said Steve Letwin, President and CEO of IAMGOLD. “Operating results were
strong, with all of our mines exceeding production guidance and costs benefiting from significant
performance improvement initiatives. Operating cash flow increased by 721%, gold margins rose by 56%
and we ended the year with $763 million in cash. Throughout the year, we achieved objectives that set the
stage for our growth opportunities today and in the future. We signed an agreement to acquire the rights to
the Saramacca property in Suriname, and recently reported drilling results indicating significant
mineralization. At Sadiola, we made a decision to proceed with the expansion as soon as our agreements
with the government are finalized. At Essakane, we expect to delineate a resource for the eastern portion
of the Falagountou deposit. And at Westwood, the team has done outstanding work to achieve aggressive
ramp-up targets. These accomplishments form the backbone of a plan to extend the life of our mines,
lower our cost structure, and grow production by 25% over the next four years.
"Further out, we have solid growth options in our own backyard. Following positive government decisions
on environmental assessments for Côté Gold and a positive preliminary economic assessment, we expect
to complete a pre-feasibility study by the end of the second quarter. Additionally, we have exploration
projects with declared resources and others fast approaching that stage."
2016 Highlights
• Attributable gold production of 813,000 oz exceeded top end of guidance; up 7,000 oz from 2015.
• Production at all sites exceeded top end of guidance ranges.
• Cost of sales1 of $794/oz sold, a new measure added in 2016, $111/oz lower than 2015.
• All-in sustaining costs2 of $1,057/oz sold, at low end of guidance and $61/oz lower than 2015.
• Total cash costs2 of $739/oz produced, below guidance and $96/oz lower than 2015.
• Gross profit of $102.2 million, up $156.8 million from 2015.
• Gold margin2 of $505/oz, up $182/oz from 2015.
• Net earnings of $52.6 million ($0.13 per share), up $849.7 million ($2.17 per share) from 2015.
• Adjusted net earnings from continuing operations2 of $3.9 million ($0.01 per share2), up $173.9
million ($0.45 per share) from 2015.
• Net cash from operating activities of $314.4 million, up $276.1 million from 2015.
• Cash, cash equivalents and restricted cash of $762.7 million as at December 31, 2016.
• Established a $250 million revolving credit facility; with commitments of $170 million.
• Subsequent to year end, amended the credit facility adding $80 million of additional commitments
resulting in total commitments of $250 million, with similar terms and conditions.
• Completed $230 million (gross proceeds) equity financing to strengthen balance sheet, reduce debt
and fund organic growth, including the expansion of Sadiola.
• Purchased $145.9 million (face value) of outstanding senior unsecured notes.
• Sold gold bullion for proceeds of $170.3 million; realizing a $72.9 million gain after transaction
costs.
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• Issued flow-through shares for total proceeds of $43.6 million.
• Finalized agreement with Government of Suriname to acquire the rights to the Saramacca property,
and expect to complete an initial mineral resource estimate by Q3 2017.
• Subsequent to year end, announced assay results for the 2016 drilling program at Saramacca.
Highlights included: 4.31 g/t Au over 101.0 metres; 3.98 g/t Au over 78.0 metres, 5.22 g/t Au over
46.5 metres and 4.78 g/t Au over 24.0 metres.
• Announced intention to move ahead with Sadiola Sulphide Project contingent upon Government of
Mali's renewal of operating and construction permits, power agreement and fiscal terms.
• Achieved ramp-up targets at Westwood, including 25 km of underground development.
• Signed definitive agreement with Merrex Gold to acquire, in an all-share transaction, all issued and
outstanding shares not already owned by IAMGOLD; transaction expected to close Q1 2017.
• Subsequent to year end, announced results of a Preliminary Economic Assessment setting out a
potential alternative development scenario for the Côté Gold project, and a positive decision on the
provincial environmental assessment, which followed a positive decision on the federal
environmental assessment in April 2016.
• On February 16, 2017, INV Metals Inc. ("INV Metals") announced a C$27.6 million bought deal
financing, including a C$3.6 million over-allotment option, for advancing the development of the
Loma Larga project in Ecuador and for general corporate purposes. Our intent is to maintain our
existing equity ownership interest of 35.6% in INV Metals.
SUMMARY OF FINANCIAL AND OPERATING RESULTS
Three months ended
December 31,
Years ended
December 31,
Financial Results ($ millions, except where noted) 2016 2015 2016 2015
Continuing Operations
Revenues $ 252.5 $ 238.2 $ 987.1 $ 917.0
Cost of sales $ 233.4 $ 283.5 $ 884.9 $ 971.6
Gross profit $ 19.1 $ (45.3) $ 102.2 $ (54.6)
Net earnings (loss) from continuing operations attributable to
equity holders of IAMGOLD $ (5.3) $ (675.9) $ 52.6 $ (797.1)
Net earnings (loss) from continuing operations attributable to
equity holders of IAMGOLD per share ($/share) $ (0.01) $ (1.73) $ 0.13 $ (2.04)
Adjusted net earnings (loss) from continuing operations
attributable to equity holders of IAMGOLD1 $ 3.3 $ (62.8) $ 3.9 $ (170.0)
Adjusted net earnings (loss) from continuing operations
attributable to equity holders per share ($/share)1 $ 0.01 $ (0.16) $ 0.01 $ (0.44)
Net cash from (used in) operating activities $ 65.2 $ (37.3) $ 314.4 $ 38.3
Net cash from (used in) operating activities before changes in
working capital1 $ 63.3 $ (59.9) $ 290.1 $ 79.5
Net earnings from discontinued operations attributable to equity
holders of IAMGOLD $ — $ — $ — $ 41.8
Net earnings from discontinued operations attributable to equity
holders of IAMGOLD ($/share) $ — $ — $ — $ 0.11
Key Operating Statistics
Gold sales – attributable (000s oz) 218 219 808 808
Gold production – attributable (000s oz) 215 199 813 806
Average realized gold price1 ($/oz) $ 1,190 $ 1,101 $ 1,244 $ 1,158
Cost of sales2 ($/oz) $ 784 $ 1,019 $ 794 $ 905
Total cash costs1 ($/oz) $ 740 $ 825 $ 739 $ 835
All-in sustaining costs1 ($/oz) $ 995 $ 1,202 $ 1,057 $ 1,118
Gold margin1 ($/oz) $ 450 $ 276 $ 505 $ 323
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 35 of the Company's annual consolidated financial statements on an attributable ounce sold
basis (excluding the non-controlling interests of 10% at Essakane and 5% at Rosebel) does not include Joint Ventures which are accounted for on an
equity basis.
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FULL YEAR AND FOURTH QUARTER 2016 HIGHLIGHTS
Financial Performance
• Revenues from continuing operations for 2016 were $987.1 million, up $70.1 million or 8% from the
prior year primarily due to a higher realized gold price ($67.8 million) and higher sales volume at
Westwood ($4.5 million), partially offset by lower sales volume at Rosebel ($3.6 million). Revenues
from continuing operations for the fourth quarter 2016 were $252.5 million, up $14.3 million or 6% from
the same prior year period due to higher sales volume at Rosebel and Westwood ($20.4 million) and a
higher realized gold price ($18.9 million), partially offset by lower sales volume at Essakane ($25.5
million).
• Cost of sales from continuing operations for 2016 was $884.9 million, down $86.7 million or 9% from
the prior year. The decrease was primarily the result of lower operating costs ($91.8 million), partially
offset by higher royalty expense due to a higher realized gold price ($4.7 million). Operating costs
were lower primarily due to higher capitalized stripping at Essakane, lower realized fuel prices, lower
inventory write-downs, the devaluation of the Surinamese dollar relative to the U.S. dollar, lower labour
costs at Rosebel following workforce reductions in 2015, lower realized derivative losses and the
stronger U.S. dollar relative to the Canadian dollar and the Euro, partially offset by higher fuel
consumption at Essakane.
• Cost of sales from continuing operations for the fourth quarter 2016 was $233.4 million, down $50.1
million or 18% from the same prior year period. The decrease was primarily the result of lower
operating costs ($55.0 million), partially offset by higher depreciation expense ($4.3 million). Operating
costs were lower primarily due to lower inventory write-downs, higher capitalized stripping and lower
realized fuel prices at Essakane, the devaluation of the Surinamese dollar relative to the U.S. dollar
and lower realized derivative losses, partially offset by the timing of mill maintenance at Rosebel,
higher fuel consumption at Essakane and Rosebel, and higher realized fuel prices at Rosebel.
• Depreciation expense for 2016 was $261.3 million, which was comparable to $260.9 million in the prior
year primarily due to higher production and lower reserves at Rosebel and the timing of capital
additions, partially offset by lower amortization of capitalized stripping at Essakane. Depreciation
expense for the fourth quarter 2016 was $68.2 million, up $4.3 million from the same prior year period
primarily due to the timing of capital additions and higher production at Rosebel, partially offset by
lower amortization of capitalized stripping at Essakane.
• Income tax expense from continuing operations for 2016 was $33.4 million, up $21.9 million from the
prior year. The income tax expense for 2016 comprised current income tax expense of $21.7 million
(2015 - $30.4 million) and deferred tax expense of $11.7 million (2015 - deferred tax recovery of $18.9
million). The increase in income tax expense in 2016 was primarily due to differences in the level of
taxable income in our operating jurisdictions from one period to the next and to changes to deferred
tax assets and liabilities as a result of fluctuations in foreign exchange.
• Net earnings from continuing operations attributable to equity holders for 2016 was $52.6 million or
$0.13 per share, up $849.7 million or $2.17 per share from 2015. The increase was mainly due to
impairment charges in the fourth quarter 2015 ($621.3 million), lower cost of sales ($86.7 million), gain
on sale of gold bullion ($72.9 million), higher revenues ($70.1 million), lower realized derivative losses
($43.7 million) and revisions to asset retirement obligation estimates at closed sites ($13.4 million),
partially offset by higher income tax expense ($21.9 million) and a gain on the sale of the Diavik royalty
asset in 2015 ($43.5 million). The net loss from continuing operations attributable to equity holders for
the fourth quarter 2016 was $5.3 million, down $670.6 million or 99% from the same prior year period.
The decrease was mainly due to impairment charges in the fourth quarter 2015 ($621.3 million), lower
cost of sales ($50.1 million), higher revenues ($14.3 million) and revisions to asset retirement
obligation estimates at closed sites ($12.2 million), partially offset by higher income tax expense ($24.0
million).
• Adjusted net earnings from continuing operations attributable to equity holders2 for 2016 was $3.9
million ($0.01 per share2), up from an adjusted net loss of $170.0 million ($0.44 per share2) for the
prior year. Adjusted net earnings from continuing operations attributable to equity holders2 for the
fourth quarter 2016 was $3.3 million ($0.01 per share2), up from an adjusted net loss of $62.8 million
($0.16 per share2) for the same prior year period.
• Net cash from operating activities for 2016 was $314.4 million, up $276.1 million from 2015. The
increase was mainly due to lower net settlement of derivatives ($118.8 million), higher earnings after
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non-cash adjustments ($103.7 million) and a change in the movement of non-cash working capital
($65.5 million). Net cash from operating activities for the fourth quarter 2016 was $65.2 million, up
$102.5 million from the same prior year period, primarily due to the reasons noted above.
• Net cash from operating activities before changes in working capital2 for 2016 was $290.1 million, up
$210.6 million from 2015. Net cash from operating activities before changes in working capital2 for the
fourth quarter 2016 was $63.3 million, up $123.2 million from the same prior year period.
Financial Position
• Cash, cash equivalents and restricted cash were $762.7 million as at December 31, 2016, up $205.6
million from December 31, 2015. The increase was due to cash generated from operating activities
($314.4 million), net proceeds from an equity financing ($220.1 million), proceeds from the sale of gold
bullion ($170.3 million), and proceeds from the issuance of flow-through shares ($43.6 million),
partially offset by spending on Property, plant and equipment and Exploration and evaluation assets
($273.6 million), repurchase of senior unsecured notes ($141.5 million), repayment of the credit facility
($70.0 million), interest paid ($41.9 million) and income taxes paid ($16.3 million).
Production and Costs
• Attributable gold production, inclusive of joint venture operations, for 2016 was 813,000 ounces, up
7,000 ounces from 2015. The increase was due to higher grades and throughput at Rosebel (9,000
ounces), higher grades at Westwood (5,000 ounces) and higher grades at Sadiola (1,000 ounces),
partially offset by lower grades and recoveries at Essakane (6,000 ounces) and the closure of Yatela
(2,000 ounces). Attributable gold production, inclusive of joint venture operations, for the fourth quarter
2016 was 215,000 ounces, up 16,000 ounces from the same prior year period. The increase was due
to higher grades and throughput at Rosebel (13,000 ounces) and higher grades and recoveries at
Westwood (5,000 ounces), partially offset by lower recoveries at Essakane (2,000 ounces).
• Attributable gold sales, inclusive of joint venture operations, for 2016 were 808,000 ounces, which was
consistent with the prior year primarily as a result of higher sales at Westwood (3,000 ounces), offset
by lower sales at Rosebel (3,000 ounces).
• Cost of sales per ounce sold for the full year and fourth quarter 2016 was $794 and $784, respectively,
down 12% and 23% from the same prior year periods due to the factors noted in the cost of sales
discussion under the Financial Performance section above.
• Total cash costs per ounce produced were $739 in 2016, 11% lower than 2015. The decrease was
mainly due to higher capitalized stripping at Essakane, lower realized fuel prices, the devaluation of
the Surinamese dollar relative to the U.S. dollar, lower labour costs at Rosebel following workforce
reductions in 2015, lower realized derivative losses and higher production at Rosebel. Total cash costs
for the fourth quarter 2016 were $740 per ounce, down 10% from the same prior year period. The
decrease was due to higher capitalized stripping at Essakane, lower realized fuel prices and lower
costs at Rosebel due to the devaluation of the Surinamese dollar relative to the U.S. dollar and lower
realized derivative losses, partially offset by higher operating costs at the Joint Ventures. Included in
total cash costs were:
Reductions of $32 per ounce for 2016 ($35/oz for 2015) and $44/oz for the fourth quarter 2016
($39/oz for Q4 2015) for the normalization of costs and revised ramp-up at Westwood.
Realized derivative losses of $1 per ounce for 2016 ($55/oz for 2015) and nil for the fourth
quarter 2016 ($58/oz for Q4 2015).
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• All-in sustaining costs per ounce sold were $1,057 in 2016, 5% lower than 2015 as a result of lower
cost of sales, partially offset by higher sustaining capital expenditures. Fourth quarter 2016 all-in
sustaining costs were $995 per ounce, 17% lower than the fourth quarter 2015, primarily due to lower
cost of sales and lower sustaining capital expenditures. Included in all-in sustaining costs were:
Reductions of $33 per ounce for 2016 ($35/oz for 2015) and $43 per ounce for the fourth quarter
2016 ($36/oz for Q4/15) for the normalization of costs and revised ramp-up at Westwood.
Realized derivative losses of $1 per ounce sold for 2016 ($63/oz for 2015) and $nil for the fourth
quarter 2016 ($59/oz for Q4/15).
All-in sustaining costs for 2015 also included the impact from the purchase of assets held under
finance leases at Rosebel, which increased all-in sustaining costs for the full year 2015 by $33
per ounce sold and for the fourth quarter by $123 per ounce.
Commitment to Zero Harm Continues
• In 2016, we achieved record health and safety performance as measured by the frequency of all types
of serious injuries (DART rate3 ). The rate of 0.30 for 2016 was better than our target of 0.62 and an
improvement from 0.67 in 2015. Unfortunately, our health and safety performance was affected by a
fatality in the third quarter 2016, the result of an accident involving personnel transport buses in
Burkina Faso.
2017 GUIDANCE
Refer to the January 16, 2017 news release and annual MD&A for more detail.
Attributable Gold Production 845,000 to 885,000 oz
Westwood will continue to focus on underground development, with expected production of 115,000 to
125,000 ounces, nearly double that of 2016. The higher production at Westwood reflects commercial
levels of production from three mining blocks, including the zone where remedial work was completed in
2016. At Rosebel, higher grades and improving productivity are expected to drive production higher,
despite the lower throughput anticipated with the proportion of hard rock approaching 70%. At Essakane,
throughput and recoveries are expected to increase while grades are expected to be lower. The joint
ventures are expected to produce between 65,000 and 75,000 ounces.
Costs
Cost of Sales/oz $765 - $815
Total Cash Costs/oz $740 - $780
All-in Sustaining Costs/oz $1,000 - $1,080
The cost of sales measure, which is used to monitor the performance of the Company, was added in the
fourth quarter 2016 to provide additional operational guidance. Our cost guidance for 2017 reflects our
assumptions related to oil prices and foreign exchange and our expectation that we will sustain
performance optimization initiatives across the sites, while recognizing that an increasing proportion of
harder rock at Rosebel and Essakane is expected to exert greater demand on crushing and grinding
capacity, thereby increasing the consumption of energy and reagents.
Capital Expenditures $250 million ±5%
Of the $250 million, $175 million is sustaining capital and $75 million development capital. Sustaining
capital includes capitalized stripping for Essakane ($39 million) and Rosebel ($28 million) and $51 million
for capital spares and equipment at these operations. Of the development/expansion capital, $45 million is
for underground development work at Westwood and $10 million is to advance the Sadiola Sulphide
Project, including completing an optimization study to refine project economics. Capital expenditures for
new construction are not included in our guidance for Sadiola at this time. We plan to move forward once
the Government of Mali renews construction and operating permits, the power agreement and fiscal terms
related to the project. Once the timing of project commencement is known, guidance for Sadiola will be
adjusted accordingly.
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Exploration Projects $47 million
The $47 million includes exploration work at the Saramacca project near Rosebel, the drilling of saddle
zones between the pits at Rosebel and highly prospective targets at Essakane. As we advance projects
this year, we will be targeting initial resource estimates for Saramacca, the Monster Lake project in Quebec
and the Eastern Borosi project in Nicaragua. Of the $47 million in exploration expenditures, $20 million will
be capitalized and is included in the $250 million in anticipated capital expenditures for the year.
Depreciation $260 million to $270 million
The expected depreciation expense for 2017 is consistent with 2016.
Income Taxes $35 million to $45 million
We expect to pay cash taxes of between $35 million and $45 million in 2017. In addition, adjustments to
deferred tax assets and/or liabilities may be recorded during the year.
ATTRIBUTABLE GOLD PRODUCTION AND COSTS
Gold Production
(000s oz)
Cost of Sales1
($ per ounce sold)
Total Cash Costs3
($ per ounce
produced)
All-in Sustaining
Costs3
($ per ounce sold)
Three months ended
December 31, 2016 2015 2016 2015 2016 2015 2016 2015
Owner-operator
Essakane (90%) 96 98 $ 725 $ 983 $ 686 $ 802 $ 948 $ 1,024
Rosebel (95%) 83 70 710 943 667 812 799 1,420
Westwood (100%)2 18 13 1,452 1,963 880 995 1,281 1,265
197 181 $ 784 $ 1,019 695 820 966 1,218
Joint Ventures 18 18 1,231 877 1,265 1,043
Total operations 215 199 $ 740 $ 825 $ 995 $ 1,202
Cost of sales1 ($/oz) $ 784 $ 1,019
Cash costs, excluding
royalties $ 686 $ 771
Royalties 54 54
Total cash costs3 $ 740 $ 825
All-in sustaining costs3 $ 995 $ 1,202
1 Cost of sales, excluding depreciation, as disclosed in note 35 of the Company's annual consolidated financial statements on an attributable ounce sold
basis (excluding the non-controlling interests of 10% at Essakane and 5% at Rosebel) does not include Joint Ventures which are accounted for on an
equity basis.
2 Cost of sales per ounce sold for Westwood does not consider the impact of normalization of costs and revised ramp-up for the fourth quarter 2016 of
$518 per ounce (fourth quarter 2015 - $826).
3 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A. Consists of Essakane, Rosebel, Westwood and the
Joint Ventures on an attributable basis.
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Gold Production
(000s oz)
Cost of Sales1
($ per ounce sold)
Total Cash Costs3
($ per ounce
produced)
All-in Sustaining
Costs3
($ per ounce sold)
Years ended
December 31, 2016 2015 2016 2015 2016 2015 2016 2015
Owner-operator
Essakane (90%) 377 383 $ 716 $ 836 $ 668 $ 808 $ 977 $ 1,010
Rosebel (95%) 296 287 768 860 729 849 988 1,165
Westwood (100%)2 65 60 1,324 1,467 894 1,001 1,182 1,292
738 730 $ 794 $ 905 712 840 1,056 1,145
Joint Ventures 75 76 996 787 1,067 862
Total operations 813 806 $ 739 $ 835 $ 1,057 $ 1,118
Cost of sales1 ($/oz) $ 794 $ 905
Cash costs, excluding
royalties $ 683 $ 784
Royalties 56 51
Total cash costs3 $ 739 $ 835
All-in sustaining costs3 $ 1,057 $ 1,118
1 Cost of sales, excluding depreciation, as disclosed in note 35 of the Company's annual consolidated financial statements on an attributable ounce sold
basis (excluding the non-controlling interests of 10% at Essakane and 5% at Rosebel) does not include Joint Ventures which are accounted for on an
equity basis.
2 Cost of sales per ounce sold for Westwood does not consider the impact of normalization of costs and revised ramp-up for the year ended 2016 of $385
per ounce (year ended 2015 - $436).
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 annual MD&A for further details.)
Essakane Mine - Burkina Faso (IAMGOLD interest - 90%)
Attributable gold production for the fourth quarter and full year 2016 was 96,000 and 377,000 ounces,
respectively, compared to 98,000 and 383,000 ounces in the same prior year periods. Production was
lower than the prior year primarily due to lower recoveries resulting from higher graphite content in the ore,
and lower grades, partially offset by higher throughput. Mill throughput in the fourth quarter was 7% higher
than the same prior year period despite an increase in the proportion of hard rock to 65% from 60% in the
same prior year period.
Cost of sales per ounce sold for the fourth quarter and full year 2016 was $725 and $716, respectively,
compared to $983 and $836 in same prior year periods. The decreases of 26% and 14% were primarily
due to lower inventory write-downs, higher capitalized stripping, lower realized derivative losses, lower
realized fuel prices, lower mine consumables driven by lower tonnes mined, the stronger U.S. dollar
relative to the Euro, lower royalties driven by lower sales impacting the fourth quarter 2016, partially offset
by higher fuel consumption from mining at Falagountou, and an increase in fleet maintenance costs from
mining harder rock.
All-in sustaining costs per ounce sold for the fourth quarter and full year 2016 were $948 and $977,
respectively, compared to $1,024 and $1,010 in the same prior year periods. The decreases of 7% and 3%
from the same prior year periods were primarily due to lower cost of sales, partially offset by higher
sustaining capital expenditures, including an increase in capitalized stripping. Included in all-in sustaining
costs for the fourth quarter and full year 2015 was the impact of realized derivative losses of $55 and $75
per ounce sold, respectively.
2017 Outlook
During 2016, Essakane completed several initiatives to improve operating performance. The
commissioning of an intensive leach reactor in Q2 2016 will further improve recoveries and a
geometallurgical study to improve gold recoveries when processing ore with high graphite content is
expected to be completed in Q2 2017. To increase the amount of salable gold, a carbon fines treatment
plant was commissioned in Q2 2016 to allow for the processing of carbon fines material at the site.
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Essakane will continue optimizing production, lowering unit costs and increasing mining and milling
efficiencies at higher proportions of hard rock in the mill feed. Initiatives include optimization of the grinding
circuit and the addition of an oxygen plant to improve recoveries.
In 2017, attributable production is expected to range between 370,000 and 380,000 ounces.
Rosebel Mine - Suriname (IAMGOLD interest - 95%)
Attributable gold production for the fourth quarter and full year 2016 was 83,000 ounces and 296,000
ounces, respectively, compared to 70,000 ounces and 287,000 ounces in the same prior year periods.
Production was higher in 2016 primarily due to higher grades and throughput, partially offset by lower
recoveries. Mill throughput and production during the fourth quarter 2015 were impacted by an 11 day work
stoppage in December.
Cost of sales per ounce sold for the fourth quarter 2016 was $710 compared to $943 in the same prior
year period. The decrease of 25% was primarily due to lower inventory write-downs and the devaluation of
the Surinamese dollar relative to the U.S. dollar, partially offset by the timing of mill maintenance, higher
realized fuel prices, higher fuel consumption, and higher contractor costs.
Cost of sales per ounce sold for 2016 was $768 compared to $860 in the prior year. The decrease of 11%
was primarily due to the devaluation of the Surinamese dollar relative to the U.S. dollar, lower inventory
write-downs, lower realized fuel prices and lower labour costs following the 2015 workforce reductions,
partially offset by higher contractor costs.
All-in sustaining costs per ounce sold for the fourth quarter and full year 2016 were $799 and $988,
respectively, compared to $1,420 and $1,165 in the same prior year periods. The decreases of 44% and
15% compared to the same prior year periods were primarily due to lower sustaining capital expenditures
and lower cost of sales. Included in all-in sustaining costs for the fourth quarter and full year 2015 was the
impact of the purchase of assets held under finance leases of $382 and $94 per ounce sold, respectively,
and the impact of realized derivative losses of $58 and $46 per ounce.
During the fourth quarter 2016, we finalized an agreement with the Government of Suriname to acquire the
rights to Saramacca, a property with high potential for soft rock mineralization located approximately 25
kilometres from the Rosebel mill. An initial diamond drilling program commenced at the end of the third
quarter 2016 to validate historical mineral resources. Final assay results from the 2016 drilling program
were reported subsequent to the year end. Highlights include 4.31 g/t Au over 101.0 metres, 3.98 g/t Au
over 78.0 metres, 5.22 g/t Au over 46.5 metres and 4.78 g/t Au over 24.0 metres (see news release dated
February 13, 2017). Delineation drilling is expected to continue throughout 2017 with the objective to
complete an initial mineral resource estimate by Q3 2017.
2017 Outlook
Mill throughput in 2017 is expected to decrease relative to 2016 as the proportion of hard rock milled
continues to increase. To manage the increasing proportions of hard rock in the mill feed, Rosebel made
three major mill improvements in 2016: commissioning of a secondary crusher to increase the grinding
capacity of hard rock, installation of a power flex drive to increase torque capacity in the SAG mill, and a
new liner design in the grinding circuit. As well, the metallurgical improvements to elution, carbon
management and gravity optimization are on-going and will continue to help reduce gold inventory in
circuit. Rosebel will continue to optimize mining capacity by improving blast fragmentation, and to improve
loading and hauling efficiency while reducing costs through improved fuel and tire management. Despite
levels of hard rock expected to approach 70% this year from 26% in the fourth quarter 2016, we expect
that grade improvements and the impact of these initiatives will enable Rosebel to deliver on its 2017
production and cost targets. Rosebel expects attributable production in 2017 to be in the range of 295,000
to 305,000 ounces.