All monetary amounts are expressed in U.S.
dollars, unless otherwise indicated.
Refer to the Management Discussion and
Analysis (MD&A) and Unaudited Consolidated
Interim Financial Statements for the three and
nine months ended September 30, 2017
for more information.
TORONTO, Nov. 7, 2017 /CNW/ - IAMGOLD Corporation
("IAMGOLD" or the "Company") reported its consolidated financial
and operating results for the third quarter ended September 30, 2017.
Commenting on the third quarter, IAMGOLD's President and CEO,
Steve Letwin, said, "We delivered
solid results with gross profit increasing for the third
consecutive quarter. The lowering of the top end of our 2017 all-in
sustaining cost guidance by $40 an
ounce narrowed the range to $1,000 to
$1,040 an ounce, reflecting continued progress in reducing
costs. Based on operating performance for the first nine months and
our expectations for the final quarter, we are on track to meet our
production and cost guidance for the year.
"At the same time, our strategic transformation continues. The
larger than expected resource estimate for Saramacca, together with
its higher grades and significant expansion potential, added to the
substantial resource increase at Rosebel. We continue to work at
consolidating other concessions within an emerging gold district
anchored by Rosebel. Westwood
continues to ramp up. Heap leaching and satellite prospects could
add years to Essakane's mine life, and Côté Gold is expected to be
a long-life, low-cost mine heading towards development."
Third Quarter 2017 Highlights
Operating Performance
- Attributable gold production of 217,000 oz, up 3% from
Q3/16.
- Cost of sales1 of $795/oz sold, up 4% from Q3/16.
- All-in sustaining costs2 of $969/oz sold, down 7% from Q3/16.
- Total cash costs2 of $771/oz produced, up 8% from Q3/16.
- Gold margin2 of $513/oz, down 16% from Q3/16.
- Maintaining 2017 production guidance of 845,000 to 885,000
ounces.
- Lowered top end of 2017 all-in sustaining cost guidance by
$40 an ounce, narrowing the range to
$1,000 - $1,040/oz.
- Lowered 2017 capital spending guidance by $25 million to $225 million ±5%.
Financials
- Gross profit of $40.9 million,
down $11.3 million from Q3/16, up 14%
from Q2/17.
- Net earnings attributable to equity holders of $30.8 million ($0.07 per share), up from $17.0 million ($0.04 per share) in Q3/16.
- Adjusted net earnings2 attributable to equity
holders of $33.7 million
($0.07 per share2), up
from $21.8 million ($0.05 per share) in Q3/16 and up from
$4.3 million ($0.01 per share) in Q2/17.
- Net cash from operating activities of $77.0 million, down from $125.8 million in Q3/16.
- Net cash from operating activities before changes in working
capital2 of $73.5 million,
down from $111.3 million in
Q3/16.
- Cash, cash equivalents, short-term investments in money market
instruments, and restricted cash were $835.7
million as at September 30,
2017, up $72.6 million from
December 31, 2016.
Developments
- On September 5, 2017, filed the
NI 43-101 Technical Report for the previously reported reserve and
resource update for the Rosebel mine (see news release
July 26, 2017), which included an
80% increase in attributable reserves to 3.5 million ounces from
the end of 2016.
- On September 5, 2017, reported an
initial resource estimate for the Saramacca deposit near the
Rosebel mine, comprising 14.4 million tonnes of indicated resources
averaging 2.2 g/t Au for 1.0 million ounces and 13.6 million tonnes
of inferred resources averaging 1.18 g/t Au for 0.5 million ounces.
Approximately 60% of the resources are contained in softer rock,
with the deposit remaining open along strike in both directions and
at depth. Filed the supporting NI-43-101 Technical Report on
October 17, 2017.
- On August 14, 2017, acquired a
19.98% interest in TomaGold Corporation for C$2.5 million. IAMGOLD and TomaGold have a 50:50
joint venture interest in the Monster Lake exploration project in
Quebec.
SUMMARY OF
FINANCIAL AND OPERATING RESULTS
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
Financial Results
($ millions, except where noted)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
$
|
268.8
|
|
$
|
282.4
|
|
$
|
803.8
|
|
$
|
734.6
|
Cost of
sales
|
$
|
227.9
|
|
$
|
230.2
|
|
$
|
692.0
|
|
$
|
651.5
|
Gross
profit
|
$
|
40.9
|
|
$
|
52.2
|
|
$
|
111.8
|
|
$
|
83.1
|
Net earnings
attributable to equity holders of IAMGOLD
|
$
|
30.8
|
|
$
|
17.0
|
|
$
|
519.3
|
|
$
|
57.9
|
Net earnings
attributable to equity holders ($/share)
|
$
|
0.07
|
|
$
|
0.04
|
|
$
|
1.12
|
|
$
|
0.14
|
Adjusted net earnings
(loss) attributable to equity holders of
IAMGOLD1
|
$
|
33.7
|
|
$
|
21.8
|
|
$
|
43.1
|
|
$
|
(1.3)
|
Adjusted net earnings
(loss) attributable to equity holders
($/share)1
|
$
|
0.07
|
|
$
|
0.05
|
|
$
|
0.09
|
|
$
|
—
|
Net cash from
operating activities
|
$
|
77.0
|
|
$
|
125.8
|
|
$
|
230.1
|
|
$
|
247.3
|
Net cash from
operating activities before changes in working
capital1
|
$
|
73.5
|
|
$
|
111.3
|
|
$
|
225.8
|
|
$
|
224.9
|
Key Operating
Statistics
|
|
|
|
|
|
|
|
Gold sales –
attributable (000s oz)
|
210
|
|
212
|
|
641
|
|
590
|
Gold production –
attributable (000s oz)
|
217
|
|
210
|
|
654
|
|
598
|
Average realized gold
price1 ($/oz)
|
$
|
1,284
|
|
$
|
1,326
|
|
$
|
1,255
|
|
$
|
1,263
|
Cost of
sales2 ($/oz)
|
$
|
795
|
|
$
|
764
|
|
$
|
777
|
|
$
|
797
|
Total cash
costs1 ($/oz)
|
$
|
771
|
|
$
|
714
|
|
$
|
757
|
|
$
|
738
|
All-in sustaining
costs1 ($/oz)
|
$
|
969
|
|
$
|
1,046
|
|
$
|
978
|
|
$
|
1,080
|
Gold
margin1 ($/oz)
|
$
|
513
|
|
$
|
612
|
|
$
|
498
|
|
$
|
525
|
|
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 30 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 doesn't include Joint Ventures which are
accounted for on an
equity basis.
|
THIRD QUARTER 2017 HIGHLIGHTS
Financial Performance
- Revenues for the third quarter 2017 were $268.8 million, down $13.6
million from the same prior year period, primarily due to
lower sales at Essakane ($32.9
million) as the prior year period benefited from the sale of
12,000 ounces from carbon fines built up in inventory, and a lower
realized gold price at all sites ($8.8
million), partially offset by higher sales at Westwood ($20.4
million) and Rosebel ($7.6
million).
- Cost of sales for the third quarter 2017 was $227.9 million, down $2.3
million from the same prior year period. The decrease was
primarily due to lower depreciation ($7.0
million) and lower royalty expense ($2.4 million), partially offset by higher
operating costs ($7.1 million).
Operating costs were higher primarily as a result of lower
capitalized stripping at Essakane and Rosebel, combined with higher
realized fuel prices and increased production at Westwood.
- Depreciation expense for the third quarter 2017 was
$62.3 million, down $7.0 million from the same prior year period,
primarily due to the increase in reserves at Rosebel and lower
production at Essakane, partially offset by higher amortization of
capitalized stripping at Essakane.
- Income tax expense for the third quarter 2017 was $5.1 million, down $9.3
million from the same prior year period. Income tax expense
for the third quarter 2017 comprised current income tax expense of
$11.1 million (2016 - expense of
$7.6 million) and deferred income tax
recovery of $6.0 million (2016 -
expense of $6.8 million). The
decrease in income tax expense was primarily due to changes to
deferred income tax assets and liabilities, fluctuations in foreign
exchange, and differences in the level of taxable income in
IAMGOLD's operating jurisdictions from one period to the next.
- Net earnings attributable to equity holders for the third
quarter 2017 were $30.8 million
($0.07 per share), up $13.8 million ($0.03 per share) from the same prior year period.
The increase was mainly due to lower finance costs ($4.2 million), gain on derivatives and warrants
($2.9 million), higher interest
income ($1.7 million), gain on
foreign exchange ($2.0 million),
lower write-down of accounts receivable ($1.5 million), higher share of net earnings from
investments in associates ($1.1
million), and lower income tax expense ($9.3 million), partially offset by lower earnings
from operations ($6.9 million).
- Adjusted net earnings attributable to equity
holders2 for the third quarter 2017 were $33.7 million ($0.07 per share2), up $11.9 million ($0.02 per share2) from $21.8 million ($0.05 per share2) in the same prior
year period.
- Net cash from operating activities for the third quarter 2017
was $77.0 million, down $48.8 million from the same prior year period.
The decrease was mainly due to lower earnings after non-cash
adjustments ($18.7 million), a change
in the movement of non-cash working capital items ($11.0 million), lower dividends from joint
ventures ($9.2 million), and an
increase in income taxes paid ($9.1
million).
- Net cash from operating activities before changes in working
capital2 for the third quarter 2017 was $73.5 million, down $37.8
million from the same prior year period.
Financial Position
- The Company's financial position has strengthened with cash,
cash equivalents, short-term investments in money market
instruments, and restricted cash of $835.3
million at September 30, 2017,
up $72.6 million from December 31, 2016. The increase was primarily due
to net proceeds from the issuance of the 7.00% senior secured notes
on March 16, 2017 ($393.6 million), which extended the term of our
debt by five years to 2025. Further, the Company received net
proceeds from the sale of a 30% interest in the Côté Gold Project,
to form a joint venture with Sumitomo Metal Mining Co., Ltd.
($96.5 million). The Company had cash
generated from operating activities ($259.0
million) due to a continued focus on improvements in cost
management. The Company also benefited from proceeds from the
issuance of flow-through shares ($15.1
million). The increase was partially offset by the early
redemption of the 6.75% senior unsecured notes ($505.6 million), spending on Property, plant and
equipment and Exploration and evaluation assets ($138.5 million), income taxes paid ($28.9 million) and interest paid ($16.5 million).
Production and Costs
- Attributable gold production, inclusive of joint venture
operations, was 217,000 ounces for the third quarter 2017, up 7,000
ounces from the same prior year period. The increase was due to the
continued ramp-up at Westwood
(17,000 ounces) and higher grades and throughput at Rosebel (3,000
ounces), partially offset by lower grades at both Essakane (11,000
ounces) and Sadiola (2,000 ounces).
- Attributable gold sales, inclusive of joint venture operations,
were 210,000 ounces for the third quarter 2017, down 2,000 ounces
from the same prior year period, primarily due to lower sales at
Essakane (21,000 ounces) as the prior year benefited from the sale
of 12,000 ounces from carbon fines built up in inventory, and lower
sales at the Joint Ventures (2,000 ounces), partially offset by
higher sales at Westwood (15,000
ounces) and Rosebel (6,000 ounces).
- Cost of sales1 per ounce for the third quarter 2017
was $795, up 4% from the same prior
year period due to lower capitalized stripping at Essakane and
Rosebel combined with higher realized fuel prices.
- Total cash costs2 per ounce produced for the third
quarter 2017 were $771, up 8% from
the same prior year period primarily due to lower capitalized
stripping at Essakane and Rosebel. The normalization of
Westwood's costs was discontinued
in the second quarter 2017 (Q3/16 - $30 per ounce produced) and realized derivative
gains from hedging programs were $7
per ounce produced (Q3/16 - gain of $1 per ounce).
- All-in sustaining costs2 per ounce sold were
$969 for the third quarter 2017, down
7% from the same prior year period as a result of lower sustaining
capital expenditures. The normalization of Westwood's costs was discontinued in the
second quarter 2017 (Q3/16 - $30 per
ounce sold) and realized derivative gains from hedging programs
were $10 per ounce sold (Q3/16 - gain
of $1 per ounce).
Commitment to Zero Harm Continues
- The DART rate3, representing the frequency of all
types of serious injuries across IAMGOLD for the third quarter 2017
was 0.48, below our target of 0.56.
ATTRIBUTABLE GOLD
PRODUCTION AND COSTS
|
|
|
|
|
|
|
Gold
Production
(000s oz)
|
Cost of
Sales1 ($ per ounce)
|
Total Cash
Costs3 ($ per ounce
produced)
|
All-in
Sustaining
Costs3
($ per ounce sold)
|
Three months ended
September 30,
|
2017
|
|
2016
|
2017
|
|
2016
|
2017
|
|
2016
|
2017
|
|
2016
|
Owner-operator
|
|
|
|
|
|
|
|
|
|
|
|
|
Essakane
(90%)
|
93
|
|
104
|
$
|
810
|
|
$
|
669
|
$
|
779
|
|
$
|
624
|
$
|
944
|
|
$
|
815
|
Rosebel
(95%)
|
75
|
|
72
|
765
|
|
769
|
718
|
|
728
|
898
|
|
1,183
|
Westwood
(100%)2
|
33
|
|
16
|
819
|
|
1,322
|
814
|
|
888
|
907
|
|
1,391
|
Owner-operator4
|
201
|
|
192
|
$
|
795
|
|
$
|
764
|
762
|
|
685
|
967
|
|
1,035
|
Joint
Ventures
|
16
|
|
18
|
|
|
|
883
|
|
1,015
|
985
|
|
1,180
|
Total
operations
|
217
|
|
210
|
|
|
|
$
|
771
|
|
$
|
714
|
$
|
969
|
|
$
|
1,046
|
Cost of
sales1 ($/oz)
|
|
|
|
$
|
795
|
|
$
|
764
|
|
|
|
|
|
|
Cash costs, excluding
royalties
|
|
|
|
|
|
|
$
|
718
|
|
$
|
649
|
|
|
|
Royalties
|
|
|
|
|
|
|
53
|
|
65
|
|
|
|
Total cash
costs3
|
|
|
|
|
|
|
$
|
771
|
|
$
|
714
|
|
|
|
All-in sustaining
costs3
|
|
|
|
|
|
|
|
|
$
|
969
|
|
$
|
1,046
|
|
|
|
|
|
|
|
|
|
|
|
Gold
Production
(000s oz)
|
Cost of
Sales1 ($ per ounce)
|
Total Cash
Costs3 ($ per ounce
produced)
|
All-in
Sustaining
Costs3 ($ per ounce sold)
|
Nine months ended
September 30,
|
2017
|
|
2016
|
2017
|
|
2016
|
2017
|
|
2016
|
2017
|
|
2016
|
Owner-operator
|
|
|
|
|
|
|
|
|
|
|
|
|
Essakane
(90%)
|
287
|
|
281
|
$
|
783
|
|
$
|
712
|
$
|
746
|
|
$
|
662
|
$
|
946
|
|
$
|
987
|
Rosebel
(95%)
|
223
|
|
213
|
751
|
|
791
|
722
|
|
753
|
902
|
|
1,062
|
Westwood
(100%)2
|
96
|
|
47
|
819
|
|
1,322
|
792
|
|
900
|
954
|
|
1,146
|
Owner-operator4
|
606
|
|
541
|
$
|
777
|
|
$
|
797
|
744
|
|
719
|
978
|
|
1,089
|
Joint
Ventures
|
48
|
|
57
|
|
|
|
|
919
|
|
921
|
987
|
|
988
|
Total
operations
|
654
|
|
598
|
|
|
|
$
|
757
|
|
$
|
738
|
$
|
978
|
|
$
|
1,080
|
Cost of
sales1 ($/oz)
|
|
|
|
$
|
777
|
|
$
|
797
|
|
|
|
|
|
|
Cash costs, excluding
royalties
|
|
|
|
|
|
|
$
|
705
|
|
$
|
681
|
|
|
|
Royalties
|
|
|
|
|
|
|
52
|
|
57
|
|
|
|
Total cash
costs3
|
|
|
|
|
|
|
$
|
757
|
|
$
|
738
|
|
|
|
All-in sustaining
costs3
|
|
|
|
|
|
|
|
|
|
$
|
978
|
|
$
|
1,080
|
1 Cost of sales,
excluding depreciation, as disclosed in note 30 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 Cost of sales per ounce
for Westwood does not include the impact of normalization of costs
for the three and nine months ended September 30, 2017 of $nil and
$8 per ounce
(three and nine months ended September 30, 2016 - $385 and $338),
respectively.
|
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.
|
4 Owner-operator cost of
sales and all-in sustaining costs includes corporate general and
administrative costs. Refer to all-in sustaining costs
reconciliation on page 28.
|
OPERATIONS ANALYSIS BY MINE SITE
(Refer to the Q3 2017
MD&A for further details.)
Essakane Mine - Burkina Faso
(IAMGOLD interest - 90%)
Attributable gold production was 93,000 ounces for the third
quarter 2017, 11% lower than the same prior year period. This was
due to lower grades, partially offset by higher recoveries and mill
throughput. Throughput increased 8% despite 90% hard rock content
(Q3/16 - 77%) as a result of the new SAG mill liner design, which
increased mill capacity, speed, and circuit availability. With
annualized throughput of approximately 14 million tonnes, the mill
is performing significantly above nameplate capacity of 10.8
million tonnes per annum, providing upside to the current life of
mine plan. To further increase reserves and resources and extend
the life of the mine, a heap leach pre-feasibility study is
underway and expected to be completed by the second quarter 2018. A
heap leach plant could provide a low-cost method for processing
marginal and low grade mineralization as well as some existing
stockpiles, which, together with the carbon-in-leach plant, would
increase total annual production.
Due to mine sequencing, grades were lower in the third quarter
2017 compared to the prior year period. Mining activity continued
to increase as a result of initiatives that are improving equipment
availability and productivity, including the addition of two
production drills and a new loader in the previous quarter. Mill
recoveries are improving as mining continues in non-graphitic
zones. Optimization of the grinding circuit and analysis of the ore
characterization continues as part of the geometallurgical study.
The purpose of the study, which is on track to be completed by the
end of 2017, is to better identify the pockets of graphitic
material in the ore zones. In addition, engineering work on the
oxygen plant commenced during the third quarter 2017. The oxygen
plant is expected to increase recoveries through improved leach
kinetics and to improve the efficiency of the circuit by reducing
the consumption of reagents once commissioned at the end of 2018.
The construction of the solar plant, which commenced in the second
quarter 2017, is now expected to be completed by the first quarter
of 2018.
Cost of sales of $810 per ounce
and total cash costs of $779 per
ounce produced for the third quarter 2017 were 21% and 25% higher
than the same prior year period, respectively. The increases were
primarily the result of lower capitalized stripping costs due to
mine sequencing, higher realized fuel prices, higher processing
costs with the increased throughput of a higher proportion of hard
rock, and the lower volume of sales and production, respectively.
The decline in sales volume was partly due to the previous year
benefiting from the sale of 12,000 ounces from carbon fines built
up in inventory. The carbon fines treatment plant allowing for the
on-site processing of gold contained in carbon fines was
commissioned in the third quarter 2016.
All-in sustaining costs per ounce sold for the third quarter
2017 of $944 were 16% higher than the
same prior year period, primarily due to higher cost of sales and
lower sales volume, partially offset by lower sustaining capital
expenditures.
The positive impact on cash costs per ounce produced and all-in
sustaining costs per ounce sold from realized derivative gains from
hedging programs was $10 per ounce
and $12 per ounce, respectively, in
the third quarter 2017 (Q3/16 - $3
per ounce produced and $2 per ounce
sold).
Rosebel Mine - Suriname (IAMGOLD interest - 95%)
Attributable gold production for the third quarter 2017 was
75,000 ounces, up 4% from the same prior year period. Although the
percentage of hard rock in the mill feed increased to 44% from 37%
in the prior year, mill throughput increased by 5% due to major
mill improvements completed in the latter half of 2016, including
the installation of a secondary crusher and power flex drive
combined with a new liner design.
Cost of sales of $765 per ounce
and total cash costs of $647 per
ounce produced for the third quarter 2017 were both 1% lower than
the same prior year period. The improvement was primarily due to
the inclusion of supplemental labour costs in the third quarter
2016 relating to the modified Labour Agreement ($43 per ounce sold and $40 per ounce produced), partially offset by
lower capitalized stripping and higher fuel prices.
All-in sustaining costs of $898
per ounce sold for the third quarter 2017 were 24% lower than the
same prior year period primarily due to lower sustaining capital
expenditures.
Initial Resource Estimate for Saramacca
On September 5, 2017, an initial
resource estimate was announced for the Saramacca deposit located
25 kilometres from the Rosebel mill (see news release dated
September 5, 2017). The
supporting NI 43-101 Technical Report was filed on October 17, 2017. The resource estimate comprises
14.4 million tonnes of indicated resources averaging 2.2 g/t Au for
1.0 million ounces and 13.6 million tonnes of inferred resources
averaging 1.18 g/t Au for 518,000 ounces. The average grade of
Saramacca's estimated indicated resource is 120% higher than the
average grade of Rosebel's reserves and resources. Approximately
60% of the resources are contained in shallow, softer laterite and
saprolite mineralization.
By the first half of 2018, we expect to have a preliminary
reserve estimate and to have completed permitting work. An
Environmental and Social Impact Study and preliminary engineering
work on mine design and infrastructure are underway. Metallurgical
testing will refine the recovery assumptions, test the crushing and
grinding characteristics of the mineralization, and investigate the
metallurgical variability across the deposit. Using the new block
model as a basis, new mine designs and integrated scheduling with
the main Rosebel resources will commence soon. Rosebel is working
to advance the deposit towards production in 2019. Given the higher
grade and abundance of soft saprolitic ore, we expect Saramacca to
have a significant positive impact on Rosebel's cost profile once
integrated into the mine plan.
With the deposit remaining open along strike in both directions
and at depth, there is significant potential to expand the deposit.
A follow-up drill program commenced in the third quarter for the
purpose of increasing the confidence in the current resources and
converting inferred resources to indicated, targeting expansions of
the existing resource along known mineralized trends and at depth,
and evaluating exploration targets for the presence of additional
mineralized zones. Approximately 20,000 metres of diamond and
reverse circulation drilling is expected to be completed by the end
of this year.
Rosebel Reserve and Resource Update
On July 26, 2017, an updated
reserve and resource estimate was reported for Rosebel (see news
release dated July 26, 2017).
From December 31, 2016 to
June 30, 2017, Rosebel's estimated
attributable proven and probable gold reserves increased by 80% to
3.5 million ounces, attributable measured and indicated gold
resources (inclusive of reserves) increased by 55% to 8.9 million
ounces and attributable inferred resources increased by 322% to 2.5
million ounces. There were no changes in the gold price
assumptions of $1,200 per ounce for
reserves and $1,500 per ounce for
resources. The increases were mainly due to mine design
optimization, cost reductions, and near-pit exploration. The
supporting NI 43-101 Technical Report was filed on September 5, 2017.
Westwood Mine - Canada
(IAMGOLD interest - 100%)
Production of 33,000 ounces of gold in the third quarter 2017
was 106% higher than the same prior year period, primarily due to
the continued ramp-up resulting in increased tonnes mined and
higher throughput. Although head grade for the quarter of 6.68 g/t
Au was higher than the prior year period, it was lower than the
grade mined during the quarter. This was due to processing marginal
ore stockpiles to exploit available mill capacity as the mine
continues to ramp up. Head grade excluding marginal ore was 7.40
g/t Au for the third quarter 2017 compared with 7.16 g/t Au for the
third quarter 2016.
During the quarter, underground development continued to open up
access to new mining areas with lateral and vertical development of
approximately 3,400 and 500 metres, respectively, averaging 42
metres per day. Westwood is
expected to achieve 18 kilometres of development during 2017,
including lateral and vertical development of 15.7 and 2.3
kilometres, respectively, with a focus on ramp breakthroughs and
infrastructure development in future development blocks at lower
levels.
Cost of sales of $819 per ounce
and total cash costs of $814 per
ounce produced for the third quarter 2017 were 38% and 8% lower,
respectively, than the same prior year period. The improvement was
primarily due to the higher volume of sales and production,
respectively, with the continued ramp-up.
All-in sustaining costs of $907
per ounce sold for the third quarter 2017 were 35% lower than the
same prior year period, primarily due to higher sales volume and
lower sustaining capital expenditures.
Westwood had been normalizing
costs attributed to inventory in accordance with International
Financial Reporting Standards since the seismic event in
May 2015. Normalization of these
costs ended at the onset of the second quarter 2017 when
Westwood reached normal production
levels (September 30, 2016 -
$6.3 million). In the same prior year
period, total cash costs and all-in sustaining costs were reduced
by $383 per ounce produced and
$385 per ounce sold,
respectively.
Sadiola Mine - Mali (IAMGOLD
interest - 41%)
Attributable gold production of 15,000 ounces for the third
quarter 2017 was 12% lower than the same prior year period due to
lower grades, partially offset by increased throughput.
Total cash costs of $876 per ounce
produced and all-in sustaining costs of $970 per ounce sold decreased by 12% and 8%,
respectively, as a result of greater draw downs of marginal ore
stockpiles compared to the prior year period.
Discussions with the Government of Mali continue regarding the Sadiola Sulphide
Project. Despite the benefits the Project would generate locally
and to the Government of Mali,
there has been no resolution around the terms critical to moving
the Project forward. Although we remain committed to the Project,
we continue to advance a number of other growth opportunities
across the Company.
DEVELOPMENT PROJECT
(Refer to the
Q3 2017 MD&A for further details.)
Côté Gold Joint Venture Project, Canada
The Côté Gold Project in northern Ontario is a 70:30 joint venture between the
operator IAMGOLD and Sumitomo Metal Mining Co. Ltd. The project
hosts estimated mineral reserves as at May
26, 2017 on a 100% project basis comprising probable
reserves totaling 196.1 million tonnes grading 0.94 g/t Au for 5.9
million ounces. Also on a 100% project basis, indicated resources
(inclusive of reserves) are estimated at 281.2 million tonnes
grading 0.89 g/t Au for 8.0 million ounces and inferred resources
of 76.5 million tonnes grading 0.50 g/t Au for 1.2 million ounces
(see news release dated June 5,
2017).
Based on the recommendations from a pre-feasibility study
completed in the second quarter (see news release dated
June 5, 2017), the joint venture
partners working with Wood Group (formerly Amec Foster Wheeler)
have initiated a feasibility study which is now expected to be
completed in the first half of 2019. During the quarter, a
delineation drilling program commenced with the objective to
upgrade near surface inferred resources to an indicated category as
well as to evaluate grade variation in the starter pit.
Approximately 2,000 metres of diamond drilling were completed
during the quarter.
Subject to an acceptable feasibility study, a favourable
development environment and a positive construction decision by the
Côté Gold Joint Venture, commercial production is expected to begin
in the first half of 2021.
Regional exploration activities continue within the
516-square-kilometre property surrounding the Côté Gold deposit to
develop and assess exploration targets that could further maximize
our flexibility with respect to any future development
decisions.
EXPLORATION
(Refer to the Q3 2017
MD&A for further details.)
In the third quarter 2017, we spent $14.6
million on exploration and project studies, of which
$6.6 million was expensed and
$8.0 million capitalized. This
compared to $10.6 million in the same
prior year period. The following summarizes the status of our most
advanced projects:
Wholly-Owned Projects
Boto - Senegal
Effective December 31, 2016, the
Boto Gold project hosts an indicated resource of 27.7 million
tonnes averaging 1.8 g/t Au for 1.56 million ounces of gold and an
inferred resource of 2.9 million tonnes averaging 1.3 g/t Au for
125,000 ounces (see news release dated February 22, 2017).
During the third quarter 2017, approximately 1,150 metres of
diamond drilling were completed to evaluate potential near-pit
extensions of the Malikoundi deposit, explore for additional
mineral resources along known mineralized trends associated with
the Boto 5 and 6 zones, and provide additional geo-technical
information in the area of the Malikoundi pit to support ongoing
technical studies.
In addition, an 1,800-kilogram sample prepared from core
composites was sent to SGS Laboratories in Canada for further metallurgical test work.
Various technical studies to advance the economic evaluation of the
Project continued during the quarter.
Pitangui - Brazil
Effective December 31, 2016,
reported mineral resources at the São Sebastião deposit comprise an
inferred resource of 4.3 million tonnes grading 5.0 g/t Au for
679,000 ounces of gold (see news release dated February 22, 2017).
In late 2016, we received the permits necessary to complete
drilling of the interpreted up-plunge extension of the São
Sebastião deposit within a densely vegetated area. As such, the
focus of the 2017 exploration drilling program is to evaluate the
up-plunge extension area for additional resources. Just over 3,100
metres of diamond drilling were completed during the third quarter
2017. Drilling is ongoing and the results will be used to update
the mineral resources in 2017. Various technical and environmental
studies are ongoing to advance the economic evaluation of the
Project.
Siribaya - Mali
Effective December 31, 2016, total
resources estimated for the Siribaya Project include indicated
resources of 2.1 million tonnes grading 1.9 g/t Au for 129,000
ounces of gold, and inferred resources of 19.8 million tonnes
grading 1.7 g/t Au for 1.1 million ounces (see news release
dated February 22, 2017).
During the third quarter 2017, core logging and sampling
activities were completed for remaining drill holes completed in
the second quarter ahead of the seasonal rains. Approximately
19,500 metres of diamond and reverse circulation drilling has been
completed year to date. The drilling program is designed to confirm
the geometry of the known mineralized zones at the Diakha deposit,
and to extend the gold mineralization north and south along strike
where previous exploration has returned encouraging results. The
drilling results will be incorporated into the deposit model and
used to update the mineral resources.
Joint Venture Projects
Following are the highlights for our joint venture exploration
projects. The agreements are typically structured in a way that
gives us the option of increasing our ownership interest over time,
with the decision dependent upon the exploration results as time
progresses.
Monster Lake - Canada
(Option Agreement with TomaGold Corporation)
During the third quarter, final assay results from the 25-drill
hole, 10,700-metre winter drilling campaign were received.
Highlights include: 67.42 g/t Au over 3.5 metres, 80.28 g/t Au over
5.0 metres and 39.48 g/t Au over 1.6 metres (see news release
dated July 6, 2017). As follow
up, just over 1,800 metres of diamond drilling were completed
during the third quarter, largely targeting the Lower zone which is
a developing mineralized zone parallel to the Megane zone. Assay
results from this program were received and reported (see news
release dated November 1, 2017).
The results will be used to guide future drilling and will be
incorporated into a deposit model to support the completion of an
initial mineral resource estimate in 2017, if results merit.
On August 14, 2017, IAMGOLD
subscribed for 27.7 million common shares of TomaGold from treasury
representing 19.98% of the outstanding common shares of TomaGold.
The common shares were purchased at a price of C$0.09 per common share, for an aggregate
purchase price of C$2.5 million.
Prior to the acquisition, IAMGOLD did not hold any common shares of
TomaGold.
Nelligan - Canada (Option
Agreement with Vanstar Mining Resources Inc.)
During the third quarter 2017, final assay results were received
from the remaining drill holes of an approximately 7,700-metre
diamond drill program completed in the first half of the year. The
program was designed to follow up on encouraging results from the
2016 program, further explore a newly discovered mineralized zone
north of the Liam zone, and test other IP (Induced Polarization)
geophysical anomalies on the property. Highlights include:
11.3 metres grading 2.78 g/t Au; 34.3 metres grading 2.01 g/t Au,
including 4.4 metres grading 7.66 g/t Au; and 11.6 metres grading
2.38 g/t Au (see Vanstar news release dated
September 5, 2017).
Eastern Borosi - Nicaragua
(Option Agreement with Calibre Mining Corporation)
The continuation of diamond drilling in the third quarter 2017
brought the total number of holes drilled year-to-date to 22 for
approximately 7,300 metres. Results from the final eight holes were
reported in the third quarter, with highlights including: 4.1
metres grading 0.38 g/t Au and 328.3 g/t Ag, 6.0 metres grading
2.74 g/t Au and 42.5 g/t Ag from the East Dome target (see
Calibre news release dated August 17,
2017).
The program's objective is to evaluate the resource potential of
the Guapinol, Riscos de Oro and
East Dome veins. An updated NI 43-101 resource estimate is planned
which will incorporate an additional 26,000 metres of drilling
completed over the last four years.
Other
Loma Larga (formerly Quimsacocha) - Ecuador
IAMGOLD, through its 35.6% equity ownership of INV Metals, has
an indirect interest in the Loma Larga gold, silver and copper
project in southern Ecuador. INV
Metals has completed a preliminary feasibility study supporting the
proposed development of an underground mine with an anticipated
production rate of 3,000 tonnes per day, average annual gold
production of 150,000 ounces, and a mine life of approximately 12
years (see INV Metals news release dated July 14, 2016).
During the third quarter 2017, in addition to technical studies
to support an ongoing feasibility study, INV Metals announced that
it had completed a thirteen-hole, 4,500-metre exploration drilling
program targeting a potential west extension of the Loma Larga
deposit. Encouraging assay results were received, including:
51.3 metres grading 3.22 g/t Au and 48.7 g/t Ag, and 53.0 metres
grading 1.59 g/t Au and 25.5 g/t Ag (see INV Metals news release
dated September 18, 2017). The
results will be assessed and used to guide future drilling
programs.
End Notes (excluding tables)
1
|
Cost of sales,
excluding depreciation, as disclosed in note 30 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 reconciliation in the non-GAAP
performance measures section of the MD&A.
|
3
|
The DART refers
to the number of days away, restricted duty or job transfer
incidents that occur per 100 employees.
|
CONFERENCE CALL
A conference call will be held on Wednesday, November 8, 2017 at 8:30 a.m. (Eastern Standard Time) for a
discussion with management regarding IAMGOLD`s third quarter 2017
operating performance and financial results. A webcast of the
conference call will be available through IAMGOLD`s website -
www.iamgold.com.
Conference Call Information: North America Toll-Free:
1-800-319-4610 or 1-604-638-5340.
A replay of this conference call will be accessible for one
month following the call by dialling: North America toll-free: 1-800-319-6413 or
1-604-638-9010, passcode: 1536#.
CAUTIONARY STATEMENT ON
FORWARD-LOOKING
INFORMATION
All information included in this news release, including any
information as to the Company's future financial or operating
performance, and other statements that express management's
expectations or estimates of future performance, other than
statements of historical fact, constitute forward looking
information or forward-looking statements and are based on
expectations, estimates and projections as of the date of this news
release. For example, forward-looking statements contained in this
news release are found under, but are not limited to being
included under, the heading "Third Quarter 2017 Highlights", and
include, without limitation, statements with respect to: the
Company's guidance for production, cost of sales, total cash costs,
all-in sustaining costs, depreciation expense, effective tax rate,
capital expenditures, operations outlook, cost management
initiatives, development and expansion projects, exploration, the
future price of gold, the estimation of mineral reserves and
mineral resources, the realization of mineral reserve and mineral
resource estimates, the timing and amount of estimated future
production, costs of production, permitting timelines, currency
fluctuations, requirements for additional capital, government
regulation of mining operations, environmental risks, unanticipated
reclamation expenses, title disputes or claims and limitations on
insurance coverage. 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, but are not limited to
the use of the words "may", "will", "should", "continue", "expect",
"estimate", "plan", "guidance", "outlook", "potential",
"transformation", "targets", "strategy" or "project" or the
negative of these words or other variations on these words or
comparable terminology. Forward-looking statements are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by management, are inherently subject to
significant business, economic and competitive uncertainties, and
contingencies. The Company cautions the reader that reliance on
such forward-looking statements involve risks, uncertainties and
other factors that may cause the actual financial results,
performance or achievements of IAMGOLD to be materially different
from the Company's estimated future results, performance or
achievements expressed or implied by those forward-looking
statements, and the forward-looking statements are not guarantees
of future performance. These risks, uncertainties and other factors
include, but are not limited to, changes in the global prices for
gold, copper, silver or certain other commodities (such as diesel,
and electricity); changes in U.S. dollar and other currency
exchange rates, interest rates or gold lease rates; risks arising
from holding derivative instruments; the level of liquidity and
capital resources; access to capital markets, and financing; mining
tax regimes; ability to successfully integrate acquired assets;
legislative, political or economic developments in the
jurisdictions in which the Company carries on business; operating
or technical difficulties in connection with mining or development
activities; laws and regulations governing the protection of the
environment; employee relations; availability and increasing costs
associated with mining inputs and labour; the speculative nature of
exploration and development, including the risks of diminishing
quantities or grades of reserves; adverse changes in the Company's
credit rating; contests over title to properties, particularly
title to undeveloped properties; and the risks involved in the
exploration, development and mining business. With respect to
development projects, IAMGOLD's ability to sustain or increase its
present levels of gold production is dependent in part on the
success of its projects. Risks and unknowns inherent in all
projects include the inaccuracy of estimated reserves and
resources, metallurgical recoveries, capital and operating costs of
such projects, and the future prices for the relevant minerals.
Development projects have no operating history upon which to base
estimates of future cash flows. The capital expenditures and time
required to develop new mines or other projects are considerable,
and changes in the price of gold, costs or construction schedules
can affect project economics. Actual costs and economic returns may
differ materially from IAMGOLD's estimates or IAMGOLD could fail to
obtain the governmental approvals necessary for the operation of a
project; in either case, the project may not proceed, either on its
original timing or at all.
For a more comprehensive discussion of the risks faced by the
Company, and which may cause the actual financial results,
performance or achievements of IAMGOLD to be materially different
from the company's estimated future results, performance or
achievements expressed or implied by forward-looking information or
forward-looking statements, please refer to the Company's latest
Annual Information Form, filed with Canadian securities regulatory
authorities at www.sedar.com, and filed under Form 40-F with the
United States Securities Exchange Commission at
www.sec.gov/edgar.shtml. The risks described in the Annual
Information Form (filed and viewable on www.sedar.com and
www.sec.gov/edgar.shtml, and available upon request from the
Company) are hereby incorporated by reference into this news
release.
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.
Qualified Person Information
The technical information relating to exploration activities
disclosed in this news release was prepared under the supervision
of, and reviewed and verified by, Craig
MacDougall, P.Geo., Senior Vice President, Exploration,
IAMGOLD. Mr. MacDougall is a Qualified Person as defined by
National Instrument 43-101.
About IAMGOLD
IAMGOLD (www.iamgold.com) is a mid-tier mining company with four
operating gold mines on three continents. A solid base of strategic
assets in North and South America
and West Africa is complemented by
development and exploration projects and continued assessment of
accretive acquisition opportunities. IAMGOLD is in a strong
financial position with extensive management and operational
expertise.
Please note:
This entire news release may be accessed via fax, e-mail,
IAMGOLD's website at www.iamgold.com and through CNW Group's
website at www.newswire.ca. 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 de
presse, veuillez consulter le
http://www.iamgold.com/French/accueil/default.aspx.
SOURCE IAMGOLD Corporation