All amounts are expressed in U.S. dollars, unless otherwise
indicated.
TSX: IMG NYSE: IAG
TORONTO,
May 11, 2012 /PRNewswire/ -
IAMGOLD Corporation ("IAMGOLD" or the "Company") today
reported its unaudited consolidated financial and operating results
for the first quarter ended March 31,
2012. Revenues from continuing operations were $404.2 million compared to $414.0 million in the first quarter of 2011. Net
earnings from continuing operations attributable to equity
shareholders were $119.2 million
($0.32 per share) compared to
$133.2 million ($0.36 per share) in 2011. The operating cash flow
from continuing operations before changes in working
capital1 was $185.7 million ($0.49 per share) compared to $214.5 million ($0.57 per share) during the first quarter of
2011.
"We had a good start to 2012 and are on track to
meet our annual guidance for production and cash costs," said
Steve Letwin, President and CEO of
IAMGOLD. "We finished the first quarter strongly at our two
flagship operations, with attributable production in March of over
32,000 ounces at Rosebel and over 30,000 ounces at
Essakane. Both mines are running well and meeting the
objectives per their mine plans, and the Westwood project is on track to begin
production in the first quarter of 2013."
Mr. Letwin further commented, "We have been clear about the
strategic direction for our company, and look forward to expanding
our gold production pipeline through the proposed acquisition of
Trelawney. This transaction offers a very attractive return on
capital. Trelawney's location in northern Ontario will give us a much more
geographically balanced production profile. Its large defined
resource will increase our global resource base by close to 30% and
has expansion potential. Trelawney is an excellent strategic
fit and dovetails perfectly into our project development
timeline. At the same time, the ground work is being laid for
the Niobec expansion and we're developing a plan to bring our rare
earth elements to market."
FIRST QUARTER 2012 HIGHLIGHTS
Financial Performance and Position
- Revenues from continuing operations were $404.2 million, down 2% from $414.0 million in the first quarter of 2011,
the result of lower gold sales partly due to the timing of
shipments, partially offset by higher gold prices and niobium
sales.
- Net earnings from continuing operations attributable to equity
shareholders were $119.2 million
($0.32 per share) compared to
$133.2 million ($0.36 per share) in the same period in 2011.
- Adjusting for items not indicative of future operating
performance, adjusted net earnings from continuing operations
attributable to equity shareholders1 were $92.4 million ($0.25 per share1) compared to
$117.8 million ($0.32 per share) in the first quarter of
2011.
- The operating cash flow from continuing operations before
changes in working capital1 of $185.7 million ($0.49 per share1),decreased by 13%
compared to $214.5 million
($0.57 per share) in the first
quarter of 2011.
- Cash, cash equivalents and gold bullion (at market) were
$1.3 billion at March 31, 2012. Operating cash flow during the
current quarter effectively funded investments in operating,
exploration and development sites.
Production, Cash Costs and Margin
Gold Operations
- The attributable gold production of 207,000 ounces declined by
11% from 233,000 ounces in the first quarter of 2011.
- The gold margin2 increased by 20% from $854 per ounce during the first quarter of 2011
to $1,023 per ounce during the first
quarter of 2012 as 22% price increases more than offset the
increases in costs.
- Weighted average cash costs2 were $679 per ounce, compared to $544 per ounce in the first quarter of 2011. Cash
costs at IAMGOLD-operated sites were $596 per ounce compared to $487 per ounce in the first quarter of 2011.
Throughout 2011 the Company faced cost pressures
from higher labour costs, higher energy costs, and higher costs of
consumables. Despite the recent decline from high prices, the
worldwide price for crude oil continues to be higher than during
the prior year. This increase in energy prices led to higher
haulage and power generation costs. The Company has entered into
various hedges to partially mitigate the impact. Royalties
increased by $17 per ounce compared
to the first quarter of 2011 due to higher gold prices. In
addition, lower grades and hard rock contributed to increasing
costs per ounce.
Niobec Mine
- The niobium production of 1,109 thousand kilograms during the
first quarter of 2012, was consistent with the 1,087 thousand
kilograms of niobium produced in the first quarter of 2011.
- The operating margin of $16 per
kilogram was consistent with that of the first quarter of
2011.
Operating Highlights
- In April 2012, the Company
re-affirmed the resource study for the Westwood project. The commercial start-up date
for production remains on track for early 2013.
- At the Essakane mine in Burkina
Faso, the development study to double hard rock processing
was completed at the end of 2011. Pending final agreement on fiscal
terms with the Government of Burkina
Faso, a construction start is planned for the second
half of 2012 followed by commissioning of the expanded plant in
2014.
- At the Rosebel mine in Suriname, the installation of a third
ball mill this year, along with a temporary pre-crusher, a larger
pebble crusher, and an expanded gravity recovery circuit, is
expected to have a positive impact on throughput by the second half
of 2012. In addition, a feasibility study expected to be completed
by the end of 2012, will provide greater design detail around
various aspects of the expansion project and is intended to further
increase the capacity to treat harder ores at the mill.
- In December 2011, IAMGOLD
announced an initial agreement with the Surinamese government on
the terms and conditions related to further expansion at Rosebel.
The Company is making good progress towards reaching a definitive
agreement, which will be followed by a concept study to further
define the expansion potential of bringing in the satellite
resources.
- The military unrest in Mali
has not had a significant impact on production at the Company's
joint venture operations with AngloGold Ashanti. The Company
continues to monitor the situation.
- The Sadiola sulphide project in Mali has progressed cautiously given recent
political events. The Company and its joint venture partner are
monitoring the transition of the government. IAMGOLD expects the
project will be back on track in the coming months.
- The Company continues to move forward in unlocking the value of
Niobec, including progress on the feasibility study based on
block-caving and establishing the financing framework for the
expansion. The framework is premised on obtaining funding without
reliance on cash flow from the gold business.
- IAMGOLD continues to evaluate options for exploiting the large
Rare Earth Elements ("REE") resource near its Niobec mine
operation.
- In line with a higher exploration budget in 2012, exploration
expenditures totaled $28.4 million during the first quarter of
2012, compared to $20.7 million
during the first quarter of 2011. Exploration spending included
near-mine exploration and resource development at Rosebel, Essakane
and Westwood, and greenfield
exploration on 18 projects.
Trelawney Acquisition
- On April 27, 2012, IAMGOLD
announced that it has entered into a definitive agreement to
acquire, through a plan of arrangement, all of the issued and
outstanding common shares of Trelawney Mining and Exploration Inc.
("Trelawney"), a Canadian junior mining and exploration company,
focused on the development of a significant mineral deposit in
northern Ontario. The fully
diluted in the money value of the transaction is approximately
C$608 million with an enterprise
value of C$505 million net of cash.
Shareholders will receive C$3.30 in
cash for each Trelawney share held.
-
- The cash transaction is made possible by the Company's strong
liquidly position which was bolstered by the inflow of over
$700 million in cash from divesting
of non-core assets in 2011.
- The proposed transaction will increase the Company's resources
by approximately 30% or 7 million ounces of contained gold with
potential for significant exploration and expansion.
- This proposed transaction is expected to provide an accretive
return on invested capital. The acquisition is consistent with the
Company's strategy to invest in development projects that it owns
and operates so maximum benefit can be derived from leveraging
existing operational and development expertise.
- The proposed Trelawney acquisition significantly strengthens
the Company's future gold production profile and provides a more
geographically balanced asset mix.
Commitment to Zero Harm
Zero Harm is an underlying core value for all that we do at
IAMGOLD. The Company operates to benefit all stakeholders
through a commitment to leadership at all levels, daily engagement
of its employees in responsible operating, and by fostering a
culture of finding and eliminating potential impacts.
- IAMGOLD was added to the Jantzi Social Index (JSI), a socially
screened, market capitalization-weighted common stock index,
modeled on the S&P/TSX 60. IAMGOLD is one of only eight mining
companies on the index.
- IAMGOLD participates in Towards Sustainable Mining (TSM), a
program developed by the Mining Association of Canada (MAC) and a national Community of
Interest panel. In the first quarter, IAMGOLD completed a third
party external verification of its 2011 TSM self-assessment and
reported on the new health and safety performance indicators
provided by MAC. Overall, and on average, IAMGOLD achieved an
"A" rating. Most noteworthy, was the achievement of a AAA
rating by the Rosebel mine under the External Outreach
protocol. In achieving this rating, Rosebel has become
the first international site as a MAC member to achieve a AAA
rating in External Outreach.
- Requested and received approval from the Quebec provincial authorities to use the
inactive Doyon open pit to store tailings generated from the
Westwood mine. This
process will begin in 2013, commensurate with the scheduled
start-up of Westwood.
- The frequency of all types of serious injuries (measured as
DART rate3) across IAMGOLD was 1.03 for the first
quarter of 2012 compared to 1.12 for full year 2011.
- The Total Recordable Injury rate (TRIR) is also trending
downward, showing a reduction of 18% over 2011. The TRIR is a
measure of all injuries occurring across IAMGOLD.
FIRST QUARTER FINANCIAL REVIEW
- Revenues from continuing operations in the first quarter of
2012 were $404.2 million, a 2%
decrease from $414.0 million in
the first quarter of 2011. The variance was due to lower gold sales
partly offset by higher realized gold prices and higher revenue
from the sale of niobium. For IAMGOLD's continuing operations
including joint ventures, the number of ounces of gold sold
decreased by 58,000 ounces while the average realized gold price
rose by 22% compared to the first quarter of 2011. Gold sales
declined for three reasons:
-
- Build-up of inventory in process in the first quarter 2012
which was sold in April (13,000 ounces);
- Late timing of production at the end of 2010 which was carried
forward and sold in the first quarter of 2011 (17,000 ounces);
and
- Lower gold production in the first quarter of 2012 (28,000
ounces), mainly the result of harder ore and lower grades.
- Net earnings attributable to equity shareholders were
$119.2 million ($0.32 per share) during the first quarter of
2012, compared to $153.4 million
($0.41 per share) in the first
quarter of 2011. The gold margin per ounce2
increased from $854 during the first
quarter of 2011 to $1,023 in the
current quarter as price increases more than offset the increases
in costs. Net earnings for the comparative quarter included the
positive impact of earnings from discontinued operations of
$20.2 million.
- Adjusted net earnings from continuing operations attributable
to equity shareholders1 of $92.4 million ($0.25 per share1) in the first quarter
of 2012 decreased by 22% compared to $117.8 million ($0.32 per share) in the first quarter of
2011.
- The operating cash flow from continuing operations in the first
quarter of 2012 was $170.3 million
compared to $199.0 million in
the first quarter of 2011. Operating cash flow from
continuing operations before changes in working capital1
in the first quarter of 2012 was $185.7 million ($0.49 per share1), a decrease of 13%
compared to $214.5 million
($0.57 per share) in the first
quarter of 2011. The decrease is mainly due to the impact of
lower production partially offset by higher per ounce gold
margin.
Financial Position
- The Company's cash, cash equivalents and gold bullion (at
market value) position was $1.3
billion at March 31, 2012,
consistent with the end of 2011.
- As at March 31, 2012, no funds
were drawn against the Company's $750.0 million total unsecured revolving
credit facilities.
SUMMARIZED FINANCIAL RESULTS
|
|
|
|
|
|
(in $millions) |
March 31,
2012 |
Change |
December 31,
2011 |
Financial Position |
|
|
$ |
|
$ |
Cash, cash equivalents and gold
bullion |
|
|
|
|
● at market value |
|
|
1,257.1 |
- |
1,262.5 |
|
● at cost |
|
|
1,130.1 |
(2%) |
1,148.4 |
Total assets |
|
|
4,456.6 |
2% |
4,349.7 |
Equity |
|
|
3,660.9 |
4% |
3,528.9 |
(in $millions, except where
noted) |
|
|
First quarter
ended March
31, 2012 |
Change |
First quarter
ended March
31, 2011 |
Results of Continuing
Operations |
|
|
|
|
Revenues |
|
|
404.2 |
(2%) |
414.0 |
Mining costs including depreciation,
depletion and
amortisation |
215.6 |
3% |
209.5 |
Gross earnings from mining
operations |
188.6 |
(8%) |
204.5 |
Net earnings from continuing
operations attributable to
equity shareholders |
119.2 |
(11%) |
133.2 |
Basic earnings from continuing
operations attributable to
equity shareholders per share ($/share) |
0.32 |
(11%) |
0.36 |
Net earnings attributable to equity
shareholders |
119.2 |
(22%) |
153.4 |
Basic net earnings attributable to
equity shareholders
per share ($/share) |
0.32 |
(22%) |
0.41 |
Adjusted net earnings from continuing
operations
attributable to equity shareholders(a) |
92.4 |
(22%) |
117.8 |
Basic adjusted net earnings from
continuing operations
attributable to equity shareholders per share
($/share)(a) |
0.25 |
(22%) |
0.32 |
Cash Flows |
|
|
|
|
|
Operating cash flow from continuing
operations |
170.3 |
(14%) |
199.0 |
Operating cash flow from continuing
operations before
changes in working capital(a) |
185.7 |
(13%) |
214.5 |
Operating cash flow from continuing
operations before
changes in working capital per share ($/share)(a) |
0.49 |
(14%) |
0.57 |
(a) |
Adjusted net earnings from continuing operations attributable
to equity shareholders of the
Company, adjusted net earnings from continuing operations
attributable to equity shareholders
per share and operating cash flow from continuing operations before
changes in working capital
per share are non-GAAP measures. Refer to the Supplemental
Information for reconciliation to
GAAP measures at the end of this news release. |
KEY OPERATING STATISTICS
|
|
|
|
|
First
quarter
ended
March 31,
2012 |
Change |
First
quarter
ended
March 31,
2011 |
Gold mines
(Continuing operations) |
|
|
|
Gold sales - 100% (000oz) |
208 |
(22%) |
266 |
Gold sales - Attributable (000oz) |
195 |
(22%) |
249 |
Average realized gold price ($/oz) |
1,702 |
22% |
1,398 |
Attributable gold production (000 oz) |
|
|
|
Continuing operations |
207 |
(11%) |
233 |
Discontinued
operations(a) |
- |
(100%) |
57 |
Total |
207 |
(29%) |
290 |
Cash cost from continuing
operations ($/oz)(b) |
679 |
25% |
544 |
Gold margin from continuing operations
($/oz)(b) |
1,023 |
20% |
854 |
Niobec mine - Operating results |
|
|
|
Niobium production (thousands of kg
Nb) |
1,109 |
2% |
1,087 |
Niobium sales (thousands of kg Nb) |
1,183 |
16% |
1,018 |
Operating margin ($/kg
Nb)(b) |
16 |
- |
16 |
(a) |
Discontinued operations include Mupane, Tarkwa and Damang which
were sold in 2011. |
(b) |
Cash cost per ounce, gold margin per ounce, and operating
margin per kilogram of
niobium at the Niobec mine are non-GAAP measures. Refer to
the Supplemental
Information attached to the MD&A for reconciliation to GAAP
measures. |
ATTRIBUTABLE GOLD PRODUCTION, CASH COST
AND GOLD MARGIN PER OUNCE
The table below presents the gold production
attributable to the Company along with the weighted average cash
cost per ounce of production and the gold margin.
|
|
|
|
|
|
|
Gold
Production |
Total Cash
Cost(a) |
First quarter ended March 31 |
2012 |
2011 |
2012 |
2011 |
IAMGOLD Operator |
(000 oz) |
(000 oz) |
$/oz |
$/oz |
Rosebel (95%) |
93 |
100 |
637 |
544 |
Essakane (90%) |
80 |
95 |
562 |
428 |
Doyon division(b)
(100%)1 |
2 |
- |
134 |
- |
|
175 |
195 |
596 |
487 |
Joint Ventures |
|
|
|
|
Sadiola (41%) |
25 |
30 |
1,010 |
724 |
Yatela (40%) |
7 |
8 |
1,613 |
1,312 |
|
32 |
38 |
1,135 |
840 |
Continuing operations |
207 |
233 |
679 |
544 |
Discontinued
operations(c) |
- |
57 |
- |
701 |
Total |
207 |
290 |
679 |
575 |
Continuing operations |
|
|
Cash cost excluding royalties |
588 |
470 |
Royalties |
91 |
74 |
Total cash cost(a) |
679 |
544 |
|
Gold margin |
First quarter ended March
31 |
|
2012 |
2011 |
Gold margin from continuing
operations |
$/oz |
$/oz |
Realized gold prices |
1,702 |
1,398 |
Total cash cost |
679 |
544 |
Gold margin(a) |
1,023 |
854 |
(a) |
Total cash cost per ounce and gold margin per ounce are a
non-GAAP
measures. Refer to the Supplemental Information attached to
the MD&A
for reconciliation to GAAP measures. |
(b) |
As a cost savings initiative, the ore mined from Mouska was
stockpiled
in 2012 and in 2012 the mine will not be producing other than
marginal
gold derived from mill clean-up process. |
(c) |
Discontinued operations include Mupane, Tarkwa and Damang
which
were sold in 2011. |
OPERATIONS
ROSEBEL MINE, SURINAME
Gold production during the first quarter of 2012 was 7% lower than
the same quarter in the prior year, primarily as a result of lower
grades and recoveries partially offset by higher throughput.
During the quarter, Rosebel initiated waste
stripping at the second phase of the East Pay Caro pit and
capitalized 0.8 million tonnes of waste mined from the area.
Total cash costs per ounce were higher compared to
same quarter of the last year mainly due to higher labour and
energy costs. Royalties were higher as a result of higher realized
gold prices.
Rosebel's attributable production in 2012 is
expected to be between 370,000 and 395,000 ounces. Capital
expenditures of $160 million for 2012
includes mill expansion project ($68
million), mine expansion ($15
million), resource delineation and near mine exploration
($16 million), replacement of mining
equipment ($51 million), and
other sustaining capital expenditures ($10
million). The 95,000-metre near-mine drill program is
designed to upgrade additional resources to reserves and pursue
targets in close proximity to existing resources.
ESSAKANE MINE, BURKINA
FASO
The attributable production during the first quarter of 2012 was
80,000 ounces, compared to 95,000 ounces during the first quarter
of 2011. The decrease in production was anticipated and is
the result of harder ore and lower grades encountered.
Total cash costs in the first quarter of 2012 were higher
compared to the first quarter of 2011 mainly due to lower
production. Other factors such as higher energy prices,
upward pressure on consumable prices and higher royalties due to
higher gold prices contributed towards the remaining increase in
total cash costs.
Essakane's attributable production in 2012 is expected to be
between 320,000 and 345,000 ounces. Capital expenditures for 2012
of $330 million are planned at
Essakane and include expansion ($208 million), capitalized stripping
($50 million), additional water
storage ($15 million), additional
power generation for hard ore ($12
million), resource delineation and near-mine exploration
program ($8 million) and other
sustaining capital ($37 million).
DOYON DIVISION, CANADA
During the quarter, the Mouska mine produced 2,000 ounces as a
result of the mill clean-up activities. Mine production continues
to proceed well and the site is continuing to stockpile ore which
will be processed in 2013.
In 2012, Mouska will continue stockpiling ore which will be
processed in 2013 at the mill currently being refurbished for the
start-up of Westwood. Except
for gold produced during mill clean-up, there is no gold production
planned at Mouska in 2012.
SADIOLA MINE, MALI
The attributable gold production for the first quarter of 2012 was
lower compared to the prior year period due to lower throughput
from lower mill availability and lower recoveries due to graphitic
ore.
Total cash costs rose during the first quarter of 2012 compared
to the first quarter in the prior year primarily as a result of
lower production coupled with higher energy costs, consumables
costs, and increased royalties from higher realized gold
prices.
The military unrest in Mali,
which commenced in late March 2012,
has not had a significant impact on production at the Company's
joint venture operations with AngloGold Ashanti. The Company
continues to monitor the situation.
Sadiola did not distribute any dividends during the first
quarters of 2012 and 2011.
YATELA MINE, MALI
The attributable gold production was lower in the first quarter of
2012 compared to the same quarter in 2011 as a result of lower gold
stacked in prior periods.
Total cash costs during the first quarter of 2012 were higher
than the same quarter in the prior year. This was primarily
due to lower gold production, higher energy costs and higher
royalties due to higher realized gold prices.
Yatela did not distribute a dividend during the first quarter of
2012.
NIOBEC NIOBIUM MINE, CANADA
Niobium production during the first quarter of 2012 was slightly
higher than the same period in 2011 as higher throughput partially
offset lower grades. Productivity improvement initiatives
continued to show results and the mine achieved a record for
material mined during the quarter.
Niobium revenues increased to $48.4 million in the first quarter of 2012
compared to $39.6 million in the
same period in 2011 due to a higher realized niobium price and
sales volume. Notwithstanding the higher average sales price
realized, the operating margin was in line with operating margin
for the same period in 2011 due to higher prices of consumables and
higher labour costs.
The Niobec mine's production for 2012 is expected to be between
4.6 million and 5.1 million kilograms of niobium with an operating
margin between $15 and $17 per
kilogram. In 2012, capital expenditures at Niobec of
$90 million are planned for
advancing the feasibility study ($30
million), underground development ($16 million), flotation optimization project
($9 million), service hoist
($8 million), mining equipment
($6 million), pumping station
($4 million) and sustaining capital
($17 million).
ATTRIBUTABLE GOLD SALES VOLUME AND
REALIZED GOLD PRICE
|
|
|
|
|
|
Gold sales |
Realized gold
price |
First quarter ended March 31 |
2012 |
2011 |
2012 |
2011 |
|
(000 oz) |
(000 oz) |
$/oz |
$/oz |
Operator |
178 |
229 |
1,704 |
1,400 |
Joint ventures(a) |
30 |
37 |
1,690 |
1,387 |
Total sales from continuing
operations(b)(c) |
208 |
266 |
1,702 |
1,398 |
(a) |
Attributable sales of joint ventures: Sadiola (41%) and Yatela
(40%). |
(b) |
Attributable sales volume for the first quarters of 2012 and
2011 were 195,000
ounces and 249,000 ounces, respectively, after taking into account
95% of the
Rosebel sales and 90% of the Essakane sales. |
(c) |
Continuing operations exclude Mupane, Tarkwa and Damang which
were sold in
2011. |
NIOBEC PRODUCTION, SALES AND
OPERATING MARGIN
|
|
|
|
First quarter ended March 31 |
2012 |
Change |
2011 |
Operating results -
Niobec mine |
|
|
|
Niobium production (thousands of kg Nb) |
1,109 |
2% |
1,087 |
Niobium sales (thousands of kg Nb) |
1,183 |
16% |
1,018 |
Operating margin ($/kg
Nb)(a) |
16 |
- |
16 |
(a) |
Operating margin per kilogram of niobium at the Niobec Mine
is
a non-GAAP measure. Refer to the Supplemental Information
attached to the MD&A for reconciliation to GAAP measures. |
EXPLORATION
IAMGOLD's exploration efforts remain focused in West Africa, select countries in South America, and the provinces of
Ontario and Quebec in Canada. With a strategic mandate for
organic growth, the Company has numerous projects already underway
and continues to pursue additional advanced exploration joint
venture or acquisition opportunities that will provide the
foundation for future growth.
These advanced opportunities include an on-going resource
expansion and delineation drilling program of more than
95,000 metres at Rosebel in Suriname, an underground
exploration and resource delineation drilling program of more than
89,000 metres at the Westwood
development project in Quebec and
a resource delineation program of approximately 49,000 metres at
Essakane in Burkina Faso.
In the first quarter of 2012, IAMGOLD incurred $28.4 million on exploration projects
compared to $20.7 million in the
first quarter of 2011. The first quarter of 2012 expenditures
included:
- near-mine exploration and resource development expenditures of
$10.3 million, and
- greenfield exploration expenditures of $18.1 million conducted at 18 projects,
including two advanced exploration sites, in 8 countries in
Africa and the Americas as part of
IAMGOLD's long-term commitment to reserves replenishment and
organic growth.
2012 Outlook
IAMGOLD guidance for production and cash costs
has been maintained for 2012 and is as follows:
|
|
|
|
|
|
2012
Plan |
Attributable gold production (000 oz) |
|
|
|
Mines owned and operated by IAMGOLD |
|
|
|
Rosebel |
|
370 - 395 |
|
Essakane |
|
320 - 345 |
|
|
690 - 740 |
|
Sadiola and Yatela mines |
|
150 -
170 |
Total attributable
production |
|
840 - 910 |
Cash cost ($/oz of
gold) from continuing
operations(a) |
|
$670 - $695 |
Average gold price ($/oz) |
|
1,700 |
Average crude oil price
($/barrel) |
|
90 |
Average foreign exchange rate
(C$/US$) |
|
1.00 |
Average foreign exchange rate
(US$/€) |
|
1.40 |
Niobium production |
|
|
Niobec (millions of kilograms) |
|
4.6 - 5.1 |
|
Operating margin ($/kg Nb)(a) |
|
$15 - $17 |
(a) |
Cash cost per ounce and operating margin per kilogram of
niobium at
the Niobec mine are non-GAAP measures. Refer to the
Supplemental
Information attached to the MD&A for reconciliation to GAAP
measures. |
The company maintains its annual gold production
guidance of 840,000 to 910,000 ounces for 2012, with the potential
for some seasonal variation, particularly in the second quarter.
Based on historical patterns, the typical rainy season in Suriname
could result in a softer second quarter at Rosebel. However, with
planned pit sequencing in the second half of 2012, production is
expected to be on track to meet guidance for the year. Cash costs
are expected to be trending higher in the second quarter due to
seasonal variation and mine sequencing at both Rosebel and
Essakane. In the second half of the year, cash costs are
expected to be on track and within the annual guidance.
At Niobec, production numbers indicate that the
Company is on track for meeting its annual guidance of 4.6
million to 5.1 million kilograms of niobium. A scheduled
maintenance shutdown on the service hoist could result in a lighter
second quarter.
The Company is reducing its annual capital
expenditures guidance for 2012 from $880 million to a range of between
$810 and $840 million. The first
quarter expenditures were lower than expected given initial project
ramp assumptions that have not materialized. At Essakane, the
Company continues working with the government of Burkina Faso on the resolution of fiscal
terms, and, based on recent discussions, is optimistic the project
will be up to speed in the near term. In addition, advance delivery
of key equipment did not arrive at certain sites. At Sadiola, the
deep sulphide project initiative has progressed cautiously given
the ongoing political events. The Company is monitoring the
situation and is ready to move forward when appropriate.
The effective tax rate for 2012 is expected to be
in the range of 32% to 34%. Cash income and mining tax
payments of $15.5 million were made
during the first quarter of 2012. Cash income and mining tax
payments, for the final payments of the 2011 income and mining tax
liabilities and installments for the estimated income and mining
tax liabilities for 2012, will be in the range of $90 to $110 million for the second quarter of
2012.
Non-GAAP4
Performance Measures
Adjusted net earnings from continuing
operations attributable to equity shareholders
Adjusted net earnings from continuing operations attributable to
equity shareholders and adjusted net earnings from continuing
operations attributable to equity shareholders per share are
non-GAAP financial measures. Management believes that these
measures better reflect the Company's performance for the current
period and are a better indication of its expected performance in
future periods. Adjusted net earnings from continuing
operations attributable to equity shareholders and adjusted net
earnings from continuing operations attributable to equity
shareholders per share are intended to provide additional
information, but do not have any standardized meaning prescribed by
IFRS, are unlikely to be comparable to similar measures presented
by other issuers, and should not be considered in isolation or a
substitute for measures of performance prepared in accordance with
IFRS. Adjusted net earnings from continuing operations
attributable to equity shareholders represent net earnings from
continuing operations attributable to equity shareholders excluding
certain impacts, net of tax, such as changes in asset retirement
obligations at closed sites, unrealized derivative gain or loss,
gain/loss on sale of marketable securities and assets, impairment
of marketable securities, foreign exchange gain or loss, executive
severance costs, as well as the impact of significant change in tax
laws for mining taxes, and unrealized gain/loss on foreign exchange
translation of deferred income and mining tax liabilities.
These measures are not necessarily indicative of net earnings or
cash flows as determined under IFRS. The following table
provides a reconciliation of net earnings from continuing
operations attributable to equity shareholders as per the unaudited
condensed consolidated interim statement of earnings, to adjusted
net earnings from continuing operations attributable to equity
shareholders.
|
|
|
|
(in $ millions, except for number of
shares and per share amounts) |
First quarter
ended
March 31 |
|
2012 |
2011 |
|
$ |
$ |
Earnings from continuing operations
before income and mining taxes
and non-controlling interests |
180.2 |
185.5 |
Foreign exchange loss (gain) |
(10.3) |
5.3 |
Unrealized gain on derivative
instruments |
(9.6) |
(2.9) |
Gain on sales of marketable
securities |
(5.6) |
(0.3) |
Impairment of marketable
securities |
4.6 |
- |
Gain on sales of assets |
(2.3) |
(10.7) |
Changes in estimates of asset
retirement obligations at closed sites |
(3.1) |
- |
|
(26.3) |
(8.6) |
Adjusted earnings from
continuing operations before income
and |
153.9 |
176.9 |
|
mining taxes and non-controlling interests |
|
|
Income and mining tax expenses |
(51.2) |
(43.4) |
Tax impact on adjusted items |
(0.5) |
(6.8) |
Non-controlling interests |
(9.8) |
(8.9) |
Adjusted net earnings from continuing operations
attributable to |
92.4 |
117.8 |
|
equity shareholders |
|
|
Basic weighted average number of common
shares outstanding |
376.0 |
373.6 |
|
(in millions) |
|
|
Basic adjusted net earnings from continuing
operations |
0.25 |
0.32 |
|
attributable to equity shareholders of the Company
per share |
|
|
|
($/share) |
|
|
|
Operating cash flow from continuing operations
before changes in working capital
The Company makes reference to a non-GAAP measure for operating
cash flow from continuing operations before changes in working
capital and operating cash flow from continuing operations before
changes in working capital per share. This measure is defined
as cash generated from continuing operations excluding changes in
working capital. Working capital can be volatile due to numerous
factors including build-up of inventories. Management
believes that, by excluding these items from continuing operations,
this non-GAAP measure provides investors with the ability to better
evaluate the cash flow performance of the Company.
The following table provides a reconciliation of operating cash
flow from continuing operations before changes in working
capital:
|
(in $ millions, except where noted)
|
First
quarter ended
March 31 |
|
2012 |
2011 |
|
$ |
$ |
Cash flow generated from continuing
operating activities per the unaudited
consolidated interim financial statements |
170.3 |
199.0 |
Adjusting items from
non-cash working capital items and long-term ore
stockpiles: |
|
|
|
Accounts receivable and other assets |
(20.6) |
0.3 |
|
Inventories and long-term stockpiles |
22.4 |
16.8 |
|
Accounts payable and accrued liabilities |
13.6 |
(1.6) |
Operating cash flow from
continuing operations before changes
in
working capital |
185.7 |
214.5 |
Basic weighted average
number of common shares
outstanding (in millions) |
376.0 |
373.6 |
Basic operating cash flow
from continuing operations
before changes
in working capital per share ($/share) |
0.49 |
0.57 |
|
|
|
END NOTES
(1) |
Adjusted net earnings attributable to
equity shareholders of the Company, adjusted net earnings
attributable to equity shareholders per share, operating cash flow
from continuing operations before changes in working capital and
operating cash flow from continuing operations before changes in
working capital per share are non-GAAP financial measures.
Please refer to the reconciliation to GAAP measures above in this
news release. |
(2) |
Cash cost per ounce, gold margin per
ounce, operating margin per kilogram of niobium at the Niobec mine
are non-GAAP measures. Please refer to the Supplemental
Information section attached to the MD&A for reconciliation to
GAAP measures. |
(3) |
The DART rate refers to the number of
days away, restricted duty or job transfer incidents that occur per
100 employees. |
(4) |
GAAP - Generally Accepted Accounting
Principles |
CONFERENCE CALL
A conference call will be held on May 14,
2012 at 9:00 a.m. (Eastern Daylight
Time) for a discussion with management regarding the
Company's 2012 first quarter operating performance and financial
results. A webcast of the conference call will be available
through the Company's website - www.iamgold.com.
Conference Call Information: North America Toll-Free:
1-866-206-0240 or 1-646-216-7111, passcode: 50578492#
A replay of this conference call will be available from
5:00 p.m. May
14th to June
14th, 2012. Access this replay by dialling:
North America toll-free:
1-866-206-0173 or 1-646-216-7204, passcode: 271582#
Forward Looking Statement
This news release contains forward-looking statements. All
statements, other than of historical fact, that address activities,
events or developments that the Company believes, expects or
anticipates will or may occur in the future (including, without
limitation, statements regarding expected, estimated or planned
gold and niobium production, cash costs, margin expansion, capital
expenditures and exploration expenditures and statements regarding
the estimation of mineral resources, exploration results, potential
mineralization, potential mineral resources and mineral reserves)
are forward-looking statements. Forward-looking statements are
generally identifiable by use of the words "may", "will", "should",
"continue", "expect", "anticipate", "estimate", "believe",
"intend", "plan" or "project" or the negative of these words or
other variations on these words or comparable terminology.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which are beyond the Company's ability to
control or predict, that may cause the actual results of the
Company to differ materially from those discussed in the
forward-looking statements. Factors that could cause actual
results or events to differ materially from current expectations
include, among other things, without limitation, failure to meet
expected, estimated or planned gold and niobium production, cash
costs, margin expansion, capital expenditures and exploration
expenditures and failure to establish estimated mineral resources,
the possibility that future exploration results will not be
consistent with the Company's expectations, changes in world gold
markets and other risks disclosed in IAMGOLD's most recent Form
40-F/Annual Information Form on file with the United States
Securities and Exchange Commission and Canadian provincial
securities regulatory authorities. Any forward-looking statement
speaks only as of the date on which it is made and, except as may
be required by applicable securities laws, the Company disclaims
any intent or obligation to update any forward-looking
statement.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission limits
disclosure for U.S. reporting purposes to mineral deposits that a
company can economically and legally extract or produce.
IAMGOLD uses certain terms in this presentation, such as
"measured," "indicated," or "inferred," which may not be consistent
with the reserve definitions established by the SEC. U.S.
investors are urged to consider closely the disclosure in the
IAMGOLD Annual Reports on Forms 40-F. You can review and
obtain copies of these filings from the SEC's website at
http://www.sec.gov/edgar.shtml or by contacting the
Investor Relations department.
About IAMGOLD
IAMGOLD (www.iamgold.com) is a leading mid-tier
gold mining company producing approximately one million ounces
annually from five gold mines (including current joint ventures) on
three continents. In the Canadian province of Québec, the Company
also operates Niobec Inc., which produces more than 4.5 million
kilograms of niobium annually, and owns a rare earth element
resource close to its niobium mine. IAMGOLD is uniquely positioned
with a strong financial position and extensive management and
operational expertise. To grow from this strong base, IAMGOLD
has a pipeline of development and exploration projects and
continues to assess accretive acquisition opportunities.
IAMGOLD's growth plans are strategically focused in certain regions
in Canada, select countries in
South America and Africa.
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,
veuillez consulter le
http://www.iamgold.com/French/Home/default.aspx.
SOURCE IAMGOLD Corporation