Iamgold Reports Third Quarter 2018 Results - Confirms Corporate Guidance - and Updates Growth Projects Showing Higher Expected Returns
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD REPORTS THIRD QUARTER 2018 RESULTS -
CONFIRMS CORPORATE GUIDANCE -
AND UPDATES GROWTH PROJECTS SHOWING HIGHER EXPECTED RETURNS
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 nine months ended September 30, 2018.
Toronto, Ontario, November 6, 2018 - IAMGOLD Corporation (“IAMGOLD” or the “Company”) reported
its consolidated financial and operating results for the quarter ended September 3 0, 2018.
Commented Steve Letwin, President and CEO of IAMGOLD, “We maintain our full-year 2018 guidance for
production of 850,000 to 900,000 attributable ounces and guidance for cost of sales of $765 to $815 per
ounce, total cash costs of $750 to $800 per ounce produced, and all-in sustaining costs of $990 to $1,070
per ounce sold. As anticipated, the third quarter was weaker than the first half of the year with the gold
margin under pressure and production at Rosebel on the lighter side. Our balance shee t remains strong,
reserves continue to grow and our development projects are looking more robust than ever. The
declaration of reserves at Saramacca, with the grade nearly double that of Rosebel's, drove Rosebel's
reserves up 51% adding five years to the life of the mine. At Essakane, we are evaluating an opportunity to
add incremental ounces by optimizing mill performance. Shifting Heap Leach construction until closer to
the end of Essakane's life would free up capital for other high-value growth projects. Recent feasibility
study results for the Côté Gold and Boto Gold projects showed increased reserves and significant
improvements in project economics compared to earlier studies. Our ability to add significant value through
exploration continues, with recent positive results from Nelligan and Diakha.”
Third Quarter 2018 Highlights
Maintains Total 2018 Production and Cost Guidance
Operating Performance
• Attributable gold production of 208,000 oz, down 9,000 oz from Q3/17.
• Attributable gold sales of 202,000 oz, down 8,000 oz from Q3/17.
• Cost of sales1 of $858/oz sold, up $63/oz from Q3/17.
• All-in sustaining costs2 of $1,086/oz sold, up $117/oz from Q3/17.
• Total cash costs2 of $830/oz produced, up $59/oz from Q3/17.
• Gold margin2 of $377/oz, down $136/oz from Q3/17.
• Capital expenditure guidance for 2018 reduced by $20 million to $305 million (±5%); updated
guidance primarily reflects the deferral of spending for the Saramacca Project, although the
completion date for the Project remains unchanged. Other factors include the evaluation of
alternative cost effective methods for expanding production at Essakane, and reduced spending on
the Sadiola Sulphide Project.
• On September 14, 2018, a new two-year Collective Labour Agreement was finalized at Rosebel,
and on September 20, 2018, union members at Westwood voted favourably on a new five -year
Collective Labour Agreement.
Financial Results
• Revenues of $244.8 million, down $24.0 million from Q3/17.
• Gross profit of $7.5 million, down $33.4 million from Q3/17.
• Net loss attributable to equity holders of $9.5 million, or $0.02 per share; compared to net earnings
of $30.8 million, or $0.07 per share in Q3/17.
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• Adjusted net loss attributable to equity holders2 of $6.9 million, or $0.01 per share2; compared to
adjusted net earnings2 of $33.7 million, or $0.07 per share2 in Q3/17.
• Net cash from operating activities of $11.4 million, down $65.6 million from Q3/17.
• Net cash from operating activities before changes in working capital 2 of $39.7 million, down $33.8
million from Q3/17.
• Cash, cash equivalents, short-term investments primarily in money market funds, and restricted
cash of $744.5 million at September 30, 2018.
• Moody's Investors Service upgraded IAMGOLD's long-term corporate credit rating to Ba3 from B1
with a stable outlook.
Strategic Developments
• On September 23, 2018, we reported a 51% increase in reserves at Rosebel, with Saramacca
accounting for nearly two-thirds of the 1.6 million-ounce increase on an attributable basis.
Compared to the previously disclosed mine plan, once Saramacca is in or close to full production
Rosebel’s average annual attributable production is expected to increase by 11% to 295,000
ounces from 2020 to 2032, with Rosebel’s mine life extended by five years to 2033.
• On September 11, 2018, we reported drilling results that continue to intersect wide zones of
mineralization at our Nelligan Gold Project. Highlights included 56.6 metres grading 1.81 g/t Au,
including 30.8 metres grading 2.66 g/t Au; 23.1 metres grading 2.59 g/t Au; and 66.3 metres
grading 1.18 g/t Au.
• IAMGOLD is in advanced discussions with a syndicate of lenders to increase the existing credit
facility from $250 million to $500 million to provide additional financial flexibility as it executes its
growth strategy. The facility is expected to close before the end of 2018.
Subsequent to Quarter-End
• On November 1, 2018, we announced positive feasibility study results for the Côté Gold Project,
which demonstrated significant economic and operational improvements compared with the
previously filed pre-feasibility study, including an attractive extended reserves scenario. On a
100% basis, total proven and probable reserves increased by 23% to 7.3 million ounces,
measured and indicated resources (including reserves) increased by 24% to app roximately 10.0
million ounces, and inferred resources increased by 97% to 2.4 million ounces. The Base Case
Mine Plan, supported by 88% of the mineral reserves, demonstrated a 16 -year mine life with
average annual production of 367,000 ounces (Years 1-12: averaging 428,000 ounces annually),
life-of-mine average total cash costs of $594 per ounce and all-in sustaining costs of $694 per
ounce. After-tax net present value increased by 13% to $795 million at a 5% discount rate, with an
after-tax internal rate of return of 15.2%. The Extended Mine Plan, supported by total mineral
reserves, demonstrated an 18-year mine life, with a 29% increase in the net present value to $905
million, at a 5% discount rate, and a 15.4% after-tax internal rate of return.
• On October 22, 2018, we announced positive feasibility study results for the Boto Gold Project,
which demonstrated significant economic and operational improvements compared with the
previously filed pre-feasibility study. Highlights included a 0.5 million-ounce increase in reserves
(100% basis) to 1.9 million ounces; a mine life of 12.8 years with average annual production of
140,000 ounces, and life-of-mine average total cash costs of $714 per ounce and all-in sustaining
costs of $753 per ounce. Net present value, at a 6% discount rate, increased by 151% to $261
million, with an after-tax internal rate of return of 23% and a 3.4 year payback period.
• On October 18, 2018, we reported further high-grade intersections from infill and expansion drilling
at our Siribaya Project’s Diakha deposit. Highlights included 13.0 metres grading 6.05 g/t Au; 22.0
metres grading 2.96 g/t Au; 13.0 metres grading 11.6 g/t Au; and, 52.0 metres grading 1.61 g/t Au.
Upcoming Growth Catalysts
• Oxygen plant at Essakane, which is designed to improve recoveries, is expected to be
commissioned in Q4/18.
• Initial resource estimate for the Gossey satellite prospect at Essakane is expected in Q4/18.
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• Expect to receive a $95 million final cash payment from Sumitomo Metal Mining Co., Ltd. by end of
2018 pursuant to the sale of a 30% interest in the Côté Gold Project in June 2017.
• Application for the mining concession for the Boto Gold Project is expected to be approved by the
Government of Senegal in H1/19. An investment decision would follow as part of our overall
growth and capital strategy.
• Due to encouraging drill results, the feasibility study for the Heap Leach Project at Essakane was
refocused on optimizing the performance of the carbon-in-leach ("CIL") mill. The construction of
the heap leach facility has been deferred to the end of the CIL operations. This is a lower capital
cost strategy and is expected to provide superior economic returns.
• Construction decision for the Côté Gold Project is expected in H1/19 with production expected to
begin in mid-2021.
• Production at Saramacca is expected to begin in H2/19.
• Westwood ramp-up to full production is expected in 2020.
• Advancing exploration along the Saramacca-Brokolonko trend to confirm the presence of
mineralization and evaluate the resource potential.
SUMMARY OF FINANCIAL AND OPERATING RESULTS
Three months ended
September 30,
Nine months ended
September 30,
Financial Results ($ millions, except where noted) 2018 2017 2018 2017
Revenues $ 244.8 $ 268.8 $ 836.7 $ 803.8
Cost of sales $ 237.3 $ 227.9 $ 723.8 $ 692.0
Gross profit $ 7.5 $ 40.9 $ 112.9 $ 111.8
Net earnings (loss) attributable to equity holders of IAMGOLD $ (9.5 ) $ 30.8 $ 6.6 $ 519.3
Net earnings (loss) attributable to equity holders ($/share) $ (0.02 ) $ 0.07 $ 0.01 $ 1.12
Adjusted net earnings (loss) attributable to equity holders of
IAMGOLD1 $ (6.9 ) $ 33.7
$ 45.9
$ 43.1
Adjusted net earnings (loss) attributable to equity holders
($/share)1 $ (0.01 ) $ 0.07
$ 0.10
$ 0.09
Net cash from operating activities $ 11.4 $ 77.0 $ 168.0 $ 230.1
Net cash from operating activities before changes in working
capital1 $ 39.7
$ 73.5
$ 232.7
$ 225.8
Key Operating Statistics
Gold sales – attributable (000s oz) 202 210 652 641
Gold production – attributable (000s oz) 208 217 651 654
Average realized gold price1 ($/oz) $ 1,207 $ 1,284 $ 1,282 $ 1,255
Cost of sales2 ($/oz) $ 858 $ 795 $ 805 $ 777
Total cash costs1 ($/oz) $ 830 $ 771 $ 791 $ 757
All-in sustaining costs1 ($/oz) $ 1,086 $ 969 $ 1,035 $ 978
Gold margin1 ($/oz) $ 377 $ 513 $ 491 $ 498
1 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A.
2 Cost of sales, excluding depreciation, as disclosed in note 31 of the Company's consolidated interim financial statements is on an attributable ounce
sold basis (excluding the non-controlling interests of 10% at Essakane and 5% at Rosebel) and does not include Joint Ventures which are accounted
for on an equity basis.
THIRD QUARTER 2018 SUMMARY
Financial Performance
• Revenues for the third quarter 2018 were $244.8 million, down $24.0 million from the same prior year
period. The decrease was primarily due to a lower realized gold price ($15.6 million), and lower sales
volume at Rosebel ($14.6 million) and Westwood ($1.6 million), partially offset by higher sales volume
at Essakane ($7.6 million).
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• Cost of sales for the third quarter 2018 was $237.3 million, up $9.4 million from the same prior year
period. The increase was due to higher operating costs ($8.0 million) and higher depreciation expense
($2.3 million), partially offset by lower royalties ($0.9 million). Operating costs were higher primarily
due to increased maintenance and contractor costs resulting from higher mine production at
Essakane, increased preventative maintenance at Rosebel, lump sum payments at Rosebel and
Westwood pursuant to new Collective Labour Agreements, and higher energy costs, partially offset by
higher capitalized stripping at Essakane, and a stronger U.S. dollar relative to the euro and the
Canadian dollar.
• Depreciation expense for the third quarter 2018 was $64.6 million, up $2.3 million from the same prior
year period. The increase was primarily due to higher depreciation of capital spares, and higher
depreciation of capitalized stripping as Essakane and Rosebel reached ore zones in previously
capitalized phases, partially offset by an increase in reserves at Essakane and Rosebel.
• Income tax expense for the third quarter 2018 was $0.5 million, down $4.6 million from the same prior
year period. Income tax expense for the third quarter 2018 comprised current income tax expense of
$24.7 million (Q3/17 - $11.1 million) and deferred income tax recovery of $24.2 million (Q3/17 - $6.0
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 third quarter 2018 was $9.5 million, or $0.02 per share
compared to net earnings of $30.8 million, or $0.07 per share in the same prior year period. The
decrease was primarily due to lower gross profit ($33.4 million), lower interest income, derivatives and
other investment gains (losses) ($8.1 million), higher general and administrative expenses ($1.9
million) and exploration expenses ($1.8 million), partially offset by lower income taxes ($4.6 million).
• Adjusted net loss attributable to equity holders2 for the third quarter 2018 was $6.9 million, or $0.01 per
share2,compared to adjusted net earnings2 of $33.7 million, or $0.07 per share2 from the same prior
year period.
• Net cash from operating activities for the third quarter 2018 was $11.4 million, down $65.6 million from
the same prior year period. The decrease was primarily due to lower earnings after non -cash
adjustments ($32.3 million) and changes in movements in non-cash working capital items and non-
current ore stockpiles ($31.8 million), partially offset by higher net settlement of derivatives ($3.5
million).
• Net cash from operating activities before changes in working capital 2 for the third quarter 2018 was
$39.7 million, down $33.8 million from the same prior year period.
Financial Position
• We ended the third quarter in a strong financial position, with cash, cash equivalents, short -term
investments primarily in money market funds, and restricted cash of $744.5 millio n at September 30,
2018. The $71.3 million decrease from December 31, 2017 was primarily due to spending on property,
plant and equipment ($172.8 million) and exploration and evaluation assets ($31.9 million), interest
paid ($14.3 million), and other investing activities ($19.3 million), partially offset by cash generated
from operating activities ($168.0 million).
Production and Costs
• Attributable gold production, inclusive of joint venture operations, was 208,000 ounces for the third
quarter 2018, down 9,000 ounces from the same prior year period. The decrease was due to lower
throughput and head grades at Rosebel (8,000 ounces) and Westwood (3,000 ounces), and lower
head grades at the Joint Ventures (1,000 ounces), partially offset by higher head grades at Essakane
(3,000 ounces).
• Attributable gold sales, inclusive of joint venture operations, were 202,000 ounces for the third quarter
2018, down 8,000 ounces from the same prior year period. The decrease was due to lower sales at
Rosebel (11,000 ounces) and Westwood (1,000 ounces), partially offset by higher sales at Essakane
(4,000 ounces).
• Cost of sales1 per ounce for the third quarter 2018 was $858, up 8% from the same prior year period.
The increase was primarily due to lower sales volume at Rosebel, increased maintenance and
contractor costs resulting from higher mine production at Essakane, increased preventative
maintenance at Rosebel, lump sum payments at Rosebel and Westwood pursuant to new Collective
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Labour Agreements, and higher energy costs, partially offset by higher capitalized stripping at
Essakane, and a stronger U.S. dollar relative to the euro and the Canadian dollar.
• Total cash costs2 per ounce produced for the third quarter 2018 were $830, up 8% from the same prior
year period. The increase was primarily due to lower production volume at Rosebel and the factors
noted above.
• All-in sustaining costs2 per ounce sold for the third quarter 2018 were $1,086, up 12% from the same
prior year period. The increase was primarily due to higher cost of sales per ounce and higher
sustaining capital expenditures.
• Total cash costs2 and all-in sustaining costs2 for the third quarter 2018 included realized derivative
gains from hedging programs of $13 per ounce produced and $13 per ounce sold, respectively ( Q3/17
- $7 and $10).
2018 Guidance
(Refer to MD&A for more detail)
• While total production guidance for 2018 is maintained at 850,000 to 900,000 attributable ounces, we
have revised the allocation. Essakane's attributable production guidance was revised to 390,000 to
405,000 ounces compared to the previously disclosed guidance of 380,000 to 395,000 ounces. The
increase reflects higher throughput benefiting from increased mill availability relative to the initial plan
for the year. Rosebel's attributable production guidance was revised to 280,000 to 295,000 ounces
compared to the previously disclosed guidance of 295,000 to 310,000 ounces. The decrease at
Rosebel reflects lower mining tonnages and head grades in the third quarter 2018. Attributable
production guidance for Sadiola was revised to 55,000 to 65,000 ounces compared to the previously
disclosed guidance of 50,000 to 60,000 ounces. We maintain 2018 guidance for cost of sales 1 per
ounce of $765 to $815, total cash costs2 per ounce produced of $750 to $800, and all-in sustaining
costs2 per ounce sold of $990 to $1,070.
• Capital expenditure guidance for 2018 has been reduced by $20 million to $305 million (±5%). This is
the result of a reduction in non-sustaining capital expenditures from $165 million in the previously
disclosed guidance to $145 million. The decrease relates to a $10 million reduction at Rosebel, a $5
million reduction at Essakane, and a $5 million reduction at Sadiola. The reduction at Rosebel
primarily relates to the deferral of spending for the Saramacca Project based on final engineering
work, lower spending on indirect costs and the removal of the 2018 cost contingency. The completion
date for the Saramacca Project remains unchanged. The reduction at Essakane reflects the evaluation
of alternative cost effective methods to expand production with a shift in timing of the Heap Leach
Project. The $5 million decrease at Sadiola reflects decreased spending on the Sadiola Sulphide
Project, as an agreement with the Government of Mali regarding terms critical to moving the Project
forward has not been reached.
Commitment to Zero Harm Continues
• The DART rate3, representing the frequency of all types of serious injuries across all sites and
functional areas for the third quarter 2018 was 0.65, above IAMGOLD's target of 0.50. Zero Harm
remains our number one priority. We are implementing a new behaviour-based safety program to
ensure a safer work environment.
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ATTRIBUTABLE GOLD PRODUCTION AND COSTS
Gold Production
(000s oz)
Cost of Sales1
($ per ounce)
Total Cash
Costs2
($ per ounce
produced)
All-in Sustaining
Costs2
($ per ounce
sold)
Three months ended September 30, 2018 2017 2018 2017 2018 2017 2018 2017
Owner-operator
Essakane (90%) 96 93 $ 809 $ 810 $ 762 $ 779 $ 993 $ 944
Rosebel (95%) 67 75 921 765 893 718 1,113 898
Westwood (100%)3 30 33 891 819 856 814 1,047 907
Owner-operator4 193 201 $ 858 $ 795 $ 822 $ 762 $ 1,099 $ 967
Joint Ventures 15 16 933 883 922 985
Total operations 208 217 $ 830 $ 771 $ 1,086 $ 969
Cost of sales1 ($/oz) $ 858 $ 795
Cash costs, excluding royalties $ 780 $ 718
Royalties 50 53
Total cash costs2 $ 830 $ 771
All-in sustaining costs2 $ 1,086 $ 969
Gold Production
(000s oz)
Cost of Sales1
($ per ounce)
Total Cash
Costs2
($ per ounce
produced)
All-in Sustaining
Costs2
($ per ounce
sold)
Nine months ended September 30, 2018 2017 2018 2017 2018 2017 2018 2017
Owner-operator
Essakane (90%) 302 287 $ 761 $ 783 $ 716 $ 746 $ 968 $ 946
Rosebel (95%) 202 223 858 751 855 722 1,017 902
Westwood (100%)3 101 96 834 819 823 792 1,003 954
Owner-operator4 605 606 $ 805 $ 777 $ 780 $ 744 $ 1,042 $ 978
Joint Ventures 46 48 933 919 939 987
Total operations 651 654 $ 791 $ 757 $ 1,035 $ 978
Cost of sales1 ($/oz) $ 805 $ 777
Cash costs, excluding royalties $ 736 $ 705
Royalties 55 52
Total cash costs2 $ 791 $ 757
All-in sustaining costs2 $ 1,035 $ 978
1 Cost of sales, excluding depreciation, as disclosed in note 31 of the Company's consolidated interim financial statements is on an attributable ounce sold basis (excluding the
non-controlling interests of 10% at Essakane and 5% at Rosebel) and does not include Joint Ventures which are accounted for on an equity basis.
2 This is a non-GAAP measure. Refer to the non-GAAP performance measures section of the MD&A. Consists of Essakane, Rosebel, Westwood and the Joint Ventures on an
attributable basis.
3 There was no normalization of costs of sales per ounce for Westwood for the three and nine months ended September 30, 2018 (three and nine months ended September 30,
2017 - $nil and $8 per ounce, respectively). Normalization of costs ended at the onset of the second quarter 2017.
4 Owner-operator all-in sustaining costs include corporate general and administrative costs. Refer to all-in sustaining costs reconciliation on page 26 of the MD&A.
OPERATIONS ANALYSIS BY MINE SITE
Essakane Mine - Burkina Faso (IAMGOLD interest - 90%)
Essakane produced 96,000 attributable ounces in the third quarter 2018, 3% higher than the same prior
year period, primarily due to higher head grades. Mine production was higher compared to the same prior
year period due to increased equipment availability. Ore mined was higher compared to the same prior
year period as the mine reached ore zones and lower grade heap leach ore was stockpiled. The mill
continued to perform significantly higher than the nameplate capacity of 10.8 million tonne s per annum,
with an annualized throughput rate of approximately 13.5 million tonnes.
Cost of sales of $809 per ounce sold for the third quarter 2018 was comparable to $810 per ounce in the
same prior year period as the impact of higher capitalized stripping, higher sales volume, and a stronger
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U.S. dollar relative to the euro, was offset by increased maintenance and contractor costs resulting from
higher mine production, and higher energy costs.
Total cash costs of $762 per ounce produced for the third quarter 2018 were 2% lower than the same prior
year period, primarily due to higher capitalized stripping due to mine sequencing, higher production
volume, and a stronger U.S dollar relative to the euro, partially offset by increased maintenance and
contractor costs resulting from higher mine production, and higher energy costs.
All-in sustaining costs of $993 per ounce sold for the third quarter 2018 were 5% higher than the same
prior year period primarily due to higher sustaining capital expenditures.
Total cash costs and all-in sustaining costs for the third quarter 2018 included the impact of realized
derivative gains from hedging programs of $19 per ounce produced and $19 per ounce sold, respectively
(Q3/17 - $10 and $12).
Sustaining capital expenditures for the third quarter 2018 of $18.6 million included capitalized stripping of
$12.0 million, mobile equipment of $1.5 million, resource development of $1.3 million, capital spares of
$1.1 million, and other sustaining capital expenditures of $2.7 million. Non-sustaining capital expenditures
of $11.7 million included tailings facility liners of $9.5 million, Heap Leach Project costs of $1.2 million,
oxygen plant costs of $0.8 million, and other non-sustaining capital expenditures of $0.2 million.
Construction of the oxygen plant is on target for commissioning in the fourth quarter 2018. The oxygen
plant is designed to increase recoveries through improved leach kinetics, and to improve the efficiency of
the circuit by reducing reagent consumption.
Due to encouraging drill results leading to higher proportions of carbon-in-leach ("CIL") ore, the feasibility
study for the Heap Leach Project was refocused on optimizing the performance of the CIL mill. The
construction of the heap leach facility has been deferred to the end of the CIL operations. This is a lower
capital cost strategy as it will permit the use of the CIL crushing circuit for the heap leaching process, and
is expected to provide superior economic returns. Heap leach grade ore will be stockpiled i n the interim.
At the Gossey satellite prospect located approximately 15 kilometres northwest of the Essakane operation,
technical studies progressed well during the quarter to support the declaration of an initial resource
estimate expected for the fourth quarter 2018.
Outlook
We increased Essakane's 2018 production guidance to 390,000 to 405,000 attributable ounces, compared
to the previously disclosed guidance of 380,000 to 395,000 ounces. The increase reflects higher
throughput benefiting from increased mill availability relative to the initial plan for the year. Capital
expenditures are expected to be approximately $135 million, comprising $90 million of sustaining capital
expenditures and $45 million of non-sustaining capital expenditures. The non-sustaining capital
expenditure guidance reflects a decrease of $5 million due to the evaluation of alternative cost effective
methods to expand production with a shift in timing of the Heap Leach Project.
Rosebel Mine - Suriname (IAMGOLD interest - 95%)
Attributable gold production of 67,000 ounces for the third quarter 2018 was 11% lower than the same prior
year period, primarily due to lower throughput and head grades. Mill throughput was lower primarily due to
higher hard rock content, while head grades were lower due to mine sequencing. Mine production was 6%
lower than the same prior year period, primarily due to lower labour productivity during the Collective
Labour Agreement negotiations, which have now been finalized. The finalized agreement includes terms
that are expected to have a favourable impact on mine production, with components of variable
compensation that are benchmarked against productivity targets.
Cost of sales of $921 per ounce sold and total cash costs of $893 per ounce produced for the t hird quarter
2018 were higher than the same prior year period by 20% and 24%, respectively. The increases were
primarily due to lower sales and production volumes, increased preventative maintenance, lower
capitalized stripping due to mine sequencing, higher energy costs, and a lump sum payment with the
finalization of a new Collective Labour Agreement. A two-year Collective Labour Agreement was finalized
on September 14, 2018, which included a lump sum payment of $1.7 million, or $24 per ounce produced
and $26 per ounce sold.
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All-in sustaining costs of $1,113 per ounce sold for the third quarter 2018 were 24% higher than the same prior
year period primarily due to higher cost of sales per ounce and higher sustaining capital expenditures.
Total cash costs and all-in sustaining costs for the third quarter 2018 included the impact of realized
derivative gains from hedging programs of $13 per ounce produced and $15 per ounce sold, respectively
(September 30, 2017 - $1 and $1).
Sustaining capital expenditures for the third quarter 2018 of $11.9 million included capital spares of $3.2
million, mobile equipment of $2.3 million, capitalized stripping of $2.2 million, tailings management of $1.2
million, pit infrastructure of $1.0 million, mill equipment of $0.8 million, and other sustaining capital
expenditures of $1.2 million. Non-sustaining capital expenditures of $3.8 million related to the Saramacca
Project.
Outlook
We reduced Rosebel's 2018 production guidance to 280,000 to 295,000 ounces compared to the
previously disclosed guidance of 295,000 to 310,000 ounces. The decrease reflects lower mining tonnages
and head grades in the third quarter 2018. Capital expenditures are expected to be approximately $80
million, comprising $45 million of sustaining capital expenditures and $35 million of non-sustaining capital
expenditures. The non-sustaining capital expenditures guidance reflects a decrease of $10 million primarily
due to the deferral of spending for the Saramacca Project based on final engineering work, lower s pending
on indirect costs, and the removal of the 2018 cost contingency. The completion date for the Saramacca
Project remains unchanged.
Saramacca
On September 23, 2018, we announced mineral reserves for the Saramacca Project, allowing for
incorporation into the Rosebel life-of-mine plan (see news release dated September 23, 2018).
Saramacca hosted estimated mineral reserves as at September 1, 2018 on a 100% project basis
comprising probable reserves of 26.5 million tonnes grading 1.8 g/t Au for 1.54 million ounces of gold. Also
on a 100% basis, indicated resources (inclusive of reserves) were estimated at 27.9 million tonnes grading
2.0 g/t Au for 1.76 million ounces of gold and inferred resources at 11.8 million tonnes grading 0.7 g/t Au
for 273,000 ounces of gold. A supporting technical report was filed on SEDAR on November 5, 2018.
Of the 1.54 million ounces of reserves from Saramacca, 66.5% is attributable to IAMGOLD. This is based
on 70% of IAMGOLD's 95% ownership of Rosebel, as per our Unincorporated Joint Venture ("UJV")
Agreement with the Government of Suriname, in which the Government of Suriname holds a 30% interest
in Saramacca.
On an attributable basis, Rosebel's reserves increased by 51%, or 1.6 million ounces, with Saramacca
accounting for 64% of the increase, or 1.0 million ounces. The softer rock expected from Saramacca as
well as overall improvements to the life-of-mine plan have allowed for the inclusion of an additional 0.4
million ounces from the Koolhoven deposit on the Rosebel concession. This followed positive results from
jointly led technical studies, which have outlined an economically viable project for Saramacca and justified
fast tracking of the project development with the commencement of mining expected in the second half of
2019.
An Environmental and Social Impact Study (“ESIA”) to support permitting was submitted during the quarter
to Surinamese environmental regulators. Planned public consultations have been completed and approval
is expected in the fourth quarter 2018. Ongoing technical studies continue and are at various levels of
advancement, ranging from pre-feasibility to detailed engineering, and construction has been initiated for
various elements of the Project. Firm orders have been placed for the acquisition of the l ong-haul fleet, and
the haul road between Saramacca and the current Rosebel concession is in the final phases of detailed
engineering. On-going optimization studies including pit slope dewatering, slope design improvements and
metallurgical testing to further optimize recoveries will continue in the fourth quarter 2018.
The additional reserves together with continued focus on cost containment, have extended Rosebel ’s mine
life by 5 years to 2033. Average annual attributable production, once Saramacca is in or close to full
production, is expected to be 295,000 ounces (337,000 ounces on a 100% basis) from 2020 to 2032. Peak
annual production is expected to be 362,000 ounces (415,000 ounces on a 100% basis).