Announces Transaction with Sumitomo
TSX:
IMG
NYSE:
IAG
NEWS RELEASE
IAMGOLD
ANNOUNCES
TRANSACTION
WITH SUMITOMO
METAL MINING
TO PROVIDE
UP TO $340
MILLION IN
ADDITIONAL
FUNDING FOR THE CONSTRUCTION OF
THE
CÔTÉ
GOLD
PROJECT
All monetary amounts are
expressed in U.S. dollars, unless otherwise indicated.
Toronto,
Ontario,
December
19,
2022
–
IAMGOLD
Corporation
(TSX:IMG,
NYSE:IAG)
(“IAMGOLD”
or
the
“Company”)
is pleased to announce that it has
reached an agreement
(“Agreement”)
to amend the
Côté Gold
Joint
Venture
Agreement
(“
JV
A”)
with Sumitomo Metal Mining Co., Ltd.
and SMM Gold Cote Inc.
(“Sumitomo” or “SMM”)
.
Under
the
Agreement,
commencing
in
January
2023,
Sumitomo
will
contribute
certain
of
IAMGOLD’s
funding
amounts
to the
Côté Gold Project (“Côté” or “the project”)
that in aggregate
are
expected to total approximately $340
million over the course of 2023.
As a result of
Sumitomo funding such amounts,
IAMGOLD will
transfer, in aggregate,
an approximate 10% interest in
Côté
to SMM (the “Transferred Interests”)
as funding is
made
by SMM, subject to
the
right
for
IAMGOLD
to
repurchase
the
Transferred
Interests
pursuant
to
the
terms
of
the
Agreement
(the
“
Repurchase Option
”). IAMGOLD will
pay a
repurchase option
fee
to SMM
on the terms set forth
in
the
Agreement,
and IAMGOLD shall have the right to exercise the Repurchase Option on seven dates between November 30, 2023
and
November 30, 2026,
to
return to
its
full
70% interest
in the
Côté
Gold Project. IAMGOLD may exercise
its
option
through
the
payment
of
the
aggregate
amounts
advanced
by
Sumitomo
in
respect
of
the
Transferred
Interests,
subject to certain adjustments as set out in the Agreement relating to the period between initial gold production and
commercial production.
Such terms are discussed further below and set out in detail in the Agreement.
IAMGOLD will remain the operator of the
Côté
Gold Project.
“The financial support
of
Sumitomo demonstrates
to all of our stakeholders
the strong validation of the
Côté
Gold
Project
from
our
partner
and
our
alignment
to
complete
construction
and
commence
production,”
said
Maryse
Bélanger, Chair and interim President and CEO of IAMGOLD. “On behalf of the Board and IAMGOLD, I want to
thank Sumitomo for their continued support and dedication as
together
we continue
to build
what will be
Canada’s
third largest gold mine
by production.
”
“
The
Côté Gold project remains on track for gold production in early 2024, in line with the updated schedule and
cost to complete as
outlined on our most recent project update at the end of last quarter.
The
successful construction
and
commissioning
of
the
Côté
Gold
Project,
together
with
our
commitment
to
mine
safely
across
all
of
our
operations, is the most important
strategic
priority of IAMGOLD,
”
continued Ms.
Bélanger.
“
It is
Sumitomo’s
and IAMGOLD’s
intent for IAMGOLD to return to a 70%
interest in the project, and the flexibility
of
the terms of the
Agreement reflects that alignment. Notwithstanding the financing initiatives
we have announced to
date, we continue to
advance
further financing
alternatives
available to the company
to strengthen its business,
improve its liquidity
and
reduce
amounts drawn under
its
credit facility,
and
in order to place the company in a strong
position to return to a 70% interest in the
Côté
Gold Project at the appropriate time,
” concluded Ms.
Bélanger.
Mr. Akira Nozaki, President and Representative Director of Sumitomo Metal Mining,
added,
“The Côté Gold
Project
has the potential to become a world-class, low-cost, long-life gold mine, and is one of the major pillars of
Sumitomo
Metal Mining’s growth strategy outlined in our “2021 3
-
Year Business Plan”. We believe that this
transaction will
further strengthen the friendly relationship between IAMGOLD and Sumitomo Metal Mining, while
ensuring that the
construction of this project will proceed without delay and secure the early start-
up of operations.”
Page | 2 of 4
Key Terms of the Agreement
In addition to its proportionate monthly cash calls under the JVA, commencing with the January 2023 cash call,
Sumitomo will contribute 100% of IAMGOLD’s proportionate cash calls, up to a maximum of $250 million in
aggregate of IAMGOLD ’s cash calls (the “Interim Participant Advances”). Based on the currently forecasted
capital spending profile at the Côté Gold Project, it is expected that Sumitomo will provide this funding between
January 2023 and April 2023. IAMGOLD has the right to re-start funding its own cash calls on ten days’ advance
notice to Sumitomo prior to the $250 million maximum being funded.
Each IAMGOLD monthly cash call that is funded by Sumitomo up to the $250 million maximum of Interim
Participant Advances will result in IAMGOLD transferring an interest in the Côté Gold Project to Sumitomo ,
based on the dilution calculations under the JVA.
In aggregate, it is estimated that IAMGOLD will transfer an approximate 10% interest in the Côté Gold Project
to Sumitomo based on the $250 million maximum of funding through the Interim Participant Advances, resulting
in IAMGOLD holding an approximate 60% interest in the Côté Gold Project.
After the $250 million funding limit with respect to Interim Participant Advances has been reached, going forward
each of IAMGOLD and Sumitomo will fund joint venture expenditures in proportion to their revised joint venture
interests. Based on the currently forecasted capital spending profile at the Côté Gold Project and revised joint
venture interests , it is expected that this will result in Sumitomo contributing an additional $ 90 million of
construction cost funding to the project in 2023 (the “Incremental Contributions by SMM”).
Upon commencement of production, each of IAMGOLD and Sumitomo will fund joint venture expenditures and
receive gold in proportion to their revised joint venture interests.
In connection with the Repurchase Option, IAMGOLD will pay Sumitomo a repurchase option fee (“Repurchase
Option Fee”) equal to 3 Month SOFR plus 4.00% on the amounts advanced during construction and up to
achieving commercial production. This Repurchase Option Fee will be payable in cash quarterly from January
1, 2024. The amount of the fee accrued until January 1, 202 4 will be payable upon the earlier of IAMGOLD’s
repurchase of the Transferred Interests, or November 30, 2026.
The Repurchase Option provides the ability for IAMGOLD to return to its full 70% joint venture interest by
repaying the $250 million of IAMGOLD’s cash calls funded by S umitomo Interim Participant Advances, in
addition to the following in respect of the Transferred Interests:
o Incremental Contributions by SMM, with respect to the Transferred Interests relating to capital
expenditures advanced during construction, are estimated to be approximately $90 million during 2023,
plus
o Incremental joint venture expenditure s incurred after completion of construction and up to achieving
commercial production, plus
o The Repurchase Option Fee accrued and not paid in 2023 and any accrued and unpaid Repurchase
Option Fees at the time of repurchasing the Transferred Interests, less
o The value of the incremental gold production received by Sumitomo up to commercial production.
IAMGOLD can exercise the Repurchase Option to repurchase the Transferred Interests on any one of the
following: November 30, 2023, May 31, 2024, November 30, 2024, May 31, 2025, November 30, 2025, May 31,
2026 and November 30, 2026, on 60 day’s prior notice to Sumitomo.
The Agreement includes certain amendments to the JVA, including, among other things, increasing the approval
threshold of the Oversight Committee (as defined in the JVA) for annual budgets and unbudgeted expenditures
above specified amounts. IAMGOLD’s rights on the Oversight Committee are maintained.
The Agreement is subject to the consent of IAMGOLD’s senior lending syndicate.
Page | 3 of 4
Goodmans LLP is acting as legal advisor for IAMGOLD. McCarthy Tétrault LLP is acting as legal advisor and RCI
Capital Group is the sole financial advisor to Sumitomo in this transaction.
About IAMGOLD
IAMGOLD is a mid -tier gold mining company operating in North America, South America and West Africa. The
Company has three operating mines: Essakane (Burkina Faso), Rosebel (Suriname) and Westwood (Canada), and
is building the large -scale, long life Côté Gold project (Canada) , in partnership with Sumitomo Metals & Mining of
Japan, which is expected to commence production in early 2024. In addition, the Company has a robust development
and exploration portfolio within high potential mining districts in the Americas and West Africa.
IAMGOLD employs approximately 5,000 people and is committed to maintaining its culture of accountable mining
through high standard s of Environmental, Social and Governance ("ESG") practices, including its commitment to
Zero Harm®, in every aspect of its business. IAMGOLD is listed on the New York Stock Exchange (NYSE:IAG) and
the Toronto Stock Exchange (TSX:IMG) and is one of the com panies on the Jantzi Social Index (“JSI”), a socially
screened market capitalization-weighted consisting of companies which pass a set of broadly based environmental,
social and governance rating criteria.
IAMGOLD Contact Information
Graeme Jennings, Vice President, Investor Relations
Tel: 416 360 4743 | Mobile: 416 388 6883
Toll-free: 1 888 464 9999
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Statements included in this news release, including any with respect to the Company’s future financial or operating performance
and other statements that express management’s expectations or estimates of future performance, including statements in respect
of the sale of its interest in Rosebel, prospects and/or development of the Company’s projects, other than statements of historical
fact, constitute forward -looking information or forward -looking statements within the meaning of applicable securities laws
(collectively referred to herein as “forward-looking statements”) and such forward-looking statements are based on expectations,
estimates and projections as of the date of this news release. Forward -looking statements in this news release include, but are
not limited to, statements with respect to: receipt of regulatory approvals, construction costs and site expenditures; including
remaining costs to complete and schedule for Côté Gold; the Company’s strategic review of certain of its assets; the impact o f
COVID-19 and the war in Ukraine on the Company, including its operations, the project schedule for Côté Gold, key inputs, staffing
and contractors; the Company’s guidance for production and recovery from its operating mine sites; cost of sales and revision s
to cost guidance; cash costs; AISC; s ecuring of alternative sources of consumables; costs of production; depreciation expense;
effective tax rate; expected capital expenditures; operations outlook; expected benefits from the operational improvements an d
de-risking strategies enacted by the Co mpany; development and expansion projects; exploration; impairment assessments and
estimates; the expected receipt of permits; permitting timelines; sale transactions; the future price of gold and other commodities;
foreign exchange rates and currency fluc tuations; requirements for additional capital; the Company's capital allocation; the
estimation of mineral reserves and mineral resources; the realization of mineral reserve and mineral resource estimates; security
concerns in the jurisdictions in which th e Company operates; expected collective bargaining discussions; and government
regulation of mining operations. Forward -looking statements are provided for the purpose of providing information about
management’s current expectations and plans relating to the future. Forward-looking statements are generally identifiable by the
use of words such as “may”, “will”, “should”, “continue”, “expect”, "budget", "forecast", “anticipate”, “estimate”, “believe”, “intend”,
“plan”, "schedule", “guidance”, “outlook”, “potential”, “seek”, “targets”, "suspended", “strategy”, or “project” or the negative of these
words or other variations on these words or comparable terminology.
The Company cautions the reader that forward -looking statements are necessarily based upon a numb er of estimates and
assumptions that, while considered reasonable by management, are inherently subject to significant business, financial,
operational and other risks, uncertainties, contingencies and other factors, including those described below, which could cause
actual results, performance or achievements of the Company to be materially different from results, performance or achievements
expressed or implied by such forward -looking statements and, as such, undue reliance must not be placed on them. For ward-
looking statements are also based on numerous material factors and assumptions, including as described in this news release,
including with respect to: the Company's present and future business strategies; operations performance within expected ranges;
anticipated future production and cash flows; local and global economic conditions and the economic environment in which the
Page | 4 of 4
Company will operate in the future; legal and political developments in the jurisdictions in which the Company operates; the price
of gold and other key commodities; projected mineral grades; international exchanges rates; anticipated capital and operating
costs; the availability and timing of required governmental and other approvals for the construction of the Company's projects and
the sale of Rosebel.
Risks, uncertainties, contingencies and other factors that could cause actual results, performance or achievements of the
Company to be materially different from results, performance or achievements expressed or implied by such forw ard-looking
statements include, without limitation: the Company's business strategies and its ability to execute thereon, including the ongoing
strategic review of certain of the Company’s assets; political and legal risks; risks associate with the estimation of mineral reserves
and mineral resources; the ongoing impacts of COVID-19 (and its variants) and the Ukraine war on the Company and its workforce,
the availability of labour and contractors, key inputs for the Company and global supply chains; the vol atility of the Company's
securities; potential engagements with activist shareholders; litigation; contests over title to properties, particularly tit le to
undeveloped properties; mine closure and rehabilitation risks; management of certain of the Company' s assets by other
companies or joint venture partners; the lack of availability of insurance covering all of the risks associated with a mining
company's operations; business risks, including pandemics, adverse environmental conditions and hazards; unexpec ted
geological conditions; potential shareholder dilution; increasing competition in the mining sector; the profitability of the Company
being highly dependent on the condition and results of the mining industry as a whole, and the gold mining industry in particular;
changes in the global prices for gold and certain other commodities (such as diesel and electricity); consolidation in the go ld
mining industry; legal, litigation, legislative, political or economic risks and new developments in the jurisdictio ns in which the
Company carries on business; government actions taken in response to COVID -19 and other public health emergencies and
pandemics, including new variants of COVID-19, and any worsening thereof; changes in taxes, including mining tax regimes; the
failure to obtain in a timely manner from authorities key permits, authorizations or approvals necessary for exploration,
development or operation, operating or technical difficulties in connection with mining or development activities, including
geotechnical difficulties and major equipment failure; seismic activity; the inability to participate in any gold price increase a bove
the cap in any collar transaction entered into in conjunction with certain gold sale prepayment arrangements; the availabilit y of
capital; the level of liquidity and capital resources; access to capital markets and financing; the Company's level of indebtedness;
the Company's ability to satisfy covenants under its outstanding debt instruments; changes in interest rates; adverse changes in
the Company’s credit rating; the Company's choices in capital allocation; effectiveness of the Company's ongoing cost
containment efforts; the ability to execute on the Company's de-risking activities and measures to improve operations; risks related
to third-party contractors, including reduced control over aspects of the Company's operations and/or the failure of contractors to
perform; risks arising from holding derivative instruments; changes in U.S. dollar and other currency exchange rates, interest rates
or gold lease rates; capital and currency controls in foreign jurisdictions; assessment of carrying values for the Company’s assets,
including the ongoing potential for material impairment and/or write -downs of such assets; the speculative na ture of exploration
and development, including the risks of diminishing quantities or grades of reserves; the fact that reserves and resources,
expected metallurgical recoveries, capital and operating costs are estimates which may require revision; the pre sence of
unfavourable content in ore deposits, including clay and coarse gold; inaccuracies in life of mine plans; failure to meet operational
targets; equipment malfunctions; security risks, including civil unrest, war or terrorism; information systems se curity threats and
cybersecurity; laws and regulations governing the protection of the environment; employee relations and labour disputes, and the
ability of the Company to successfully negotiation collective labour agreements; the maintenance of tailings storage facilities and
the potential for a major spill or failure of the tailings facilities due to uncontrollable events, such as extreme weather o r seismic
events; lack of reliable infrastructure, including access to roads, bridges, power sources and wa ter supplies; physical and
regulatory risks related to climate change; the potential direct or indirect operational impacts resulting from external fact ors,
including infectious diseases, public health emergencies or pandemics, such as COVID -19, unpredictable weather patterns and
challenging weather conditions; attraction and retention of key employees and other qualified personnel; availability and increasing
costs associated with mining inputs and labour; the availability of qualified contractors and the ability of contractors to timely
complete projects on acceptable terms; the relationship with the communities surrounding the Company's operations and projects;
indigenous rights or claims; illegal mining; and the inherent risks involved in the exploration , development and mining industry
generally. Please see the Company’s AIF or Form 40 -F available on www.sedar.com or www.sec.gov/edgar.shtml for a
comprehensive discussion of the risks faced by the Company and which may cause actual results, performance or achievements
of the Company to be materially different from results, performance or achievements expressed or implied by forward -looking
statements.
Although the Company has attempted to identify important factors that could cause actual results to differ materially from those
contained in forward -looking statements, there may be other factors that cause results not to be as anticipated, estimated or
intended. The Company disclaims any intention or obligation to update or revise any forward -looking statements whether as a
result of new information, future events or otherwise except as required by applicable law.
All material information on IAMGOLD can be found at www.sedar.com or at www.sec.gov.
Si vous désirez obtenir la version française de ce communiqué, veuillez consulter le www.iamgold.com/French/accueil/default.aspx.