All amounts are expressed in U.S. dollars, unless otherwise
indicated.
TSX: IMG NYSE: IAG
TORONTO, Aug. 13, 2012 /PRNewswire/ - IAMGOLD
Corporation ("IAMGOLD" or the "Company") today reported its
unaudited consolidated financial and operating results for the
second quarter ended June 30, 2012.
Revenues increased 19% to $410.6 million compared to $345.7 million in the second quarter 2011.
Adjusted net earnings1 (from continuing operations
attributable to equity holders) were up 9% to $74.0 million ($0.20 per share) compared to $67.7 million ($0.18 per share) in the second quarter 2011.
Adjusted net earnings exclude the impact of items not indicative of
underlying business performance, such as impairment of marketable
securities and foreign exchange translation. Including these items,
net earnings were $52.9 million
($0.14 per share) compared to
$74.5 million ($0.20 per share) in the second quarter 2011.
Operating cash flow1 (from continuing operations)
before changes in working capital was $72.4 million ($0.19 per share) compared to $76.4 million ($0.20 per share) for the second quarter 2011.
Operating cash flow in the second quarter 2012 included tax
payments of $70.4 million
($0.19 per share) previously accrued
in 2011, compared to $52.0 million
($0.14 per share) in the same period
in 2011. Guidance respecting the tax payments was provided by the
Company at the end of the first quarter.
"Our second quarter results were solid and in line with our
expectations," said Steve Letwin,
President and Chief Executive Officer. "When you look at the income
generated by our underlying business, adjusted net earnings rose 9%
from the same quarter last year. This is consistent with our focus
on sustaining profitability through a commitment to projects with
attractive rates of return. This discipline drove our decision to
acquire the Côté Gold project in northern Ontario, which increases our resource base by
close to 30% and geographically balances our future production
profile. The objective of the drilling program now underway is to
convert a significant portion of Côté Gold's inferred mineral
resources to the indicated category."
"As we stated in our outlook for the second quarter, the higher
costs were expected and we maintain our guidance for the year. Our
annual production and capital expenditure guidance remains
unchanged, and we continue to have a strong balance sheet."
SECOND QUARTER 2012 HIGHLIGHTS
Financial Performance and Position
- Revenues were $410.6 million, up
$64.9 million or 19% from the same
prior year period. The increase in revenues was mainly due to
higher gold sales and gold prices.
- Adjusting for items not indicative of future operating
performance, adjusted net earnings were $74.0 million ($0.20 per share) compared to $67.7 million ($0.18 per share) in the same prior year
period.
- Net earnings from continuing operations attributable to equity
holders were $52.9 million
($0.14 per share) compared to
$74.5 million ($0.20 per share) in the same prior year
period.
- The effective tax rate for the second quarter 2012 was 45% (35%
for the first six months of 2012) compared to the same prior year
period of 37% (29% for the first six months of 2011). The increase
in the effective tax rate is primarily attributable to the
non-recognition of tax benefits and items that are not indicative
of the Company's future operating performance.
- Operating cash flow was $52.7
million ($0.14 per share), up
332% from the same prior year period. Adjusting for the changes in
non-cash working capital items, such as accounts receivables,
inventories and long-term stockpiles, operating cash flow before
changes in working capital was $72.4
million ($0.19 per share).
- The Company's cash, cash equivalents and gold bullion (at
market value) position was $614.9
million at June 30, 2012,
compared to $1.3 billion at the end
of the first quarter 2012. The variance reflects the $480.4 million payment for the acquisition of
Trelawney.
Production, Cash Costs and Margin
Gold Operations
- Attributable gold production of 204,000 ounces increased by 9%
from 188,000 ounces in the second quarter 2011. The increase was
primarily the result of having effectively addressed the technical
issues that limited production in 2011.
- The gold margin3 increased by 5% to $856 per ounce from $818 per ounce in the second quarter 2011 as the
increase in the average realized gold price offset the increase in
mining costs.
- Total cash costs3 were $737 per ounce, up from $697 per ounce in the second quarter 2011. The
increase was mainly due to higher costs at the Sadiola and Yatela
joint ventures due to high strip ratios and lower grades. Cash
costs at IAMGOLD-operated sites were $641 per ounce, down from $666 per ounce in the second quarter 2011.
Niobec Mine
- Niobium production was 1.2 million kilograms for the second
quarter 2012 compared to 1.1 million kilograms produced in the same
prior year period.
- The operating margin3 of $15 per kilogram increased from $14 per kilogram in the second quarter 2011.
Operating Highlights
- On June 21, 2012, IAMGOLD
completed the acquisition of Trelawney Mining and Exploration Inc.
The main asset acquired in this transaction is the Côté Gold
project, formerly known as Côté Lake, located adjacent to the
Swayze Greenstone Belt in Northern Ontario, Canada. Since the acquisition,
approximately 3,600 metres of drilling has been completed, and a NI
43-101 technical report will be filed in October 2012. A pre-feasibility study is expected
to begin in the fourth quarter 2012.
- On June 20, 2012, the Company
entered into a definitive arrangement to sell the Quimsacocha
project in Ecuador to INV Metals
Inc. ("INV") for 150 million shares (40% - 45% interest) of INV.
The acquisition is subject to INV raising C$20 million in financing which brings the total
value of the deal to approximately C$30
million. The closing of the transaction is subject to
certain conditions, including INV shareholder approval, government
consent and financing by INV.
- In April 2012, the Company filed
the resource study for the Westwood project. The start-up date for
production remains on track for early 2013.
- At the Essakane mine in Burkina
Faso, the development study to double the hard rock
processing was completed at the end of 2011. The outcome of
negotiations with the Government of Burkina Faso on fiscal terms related to mine
expansions has been favourable. This includes import duties
applicable to expansion-related equipment and significant
improvements on the timely reimbursement of VAT (Value Added
Taxes).The construction of the expanded plant commenced in early
July 2012, with completion expected
by the end of 2013.
- At the Rosebel mine in Suriname, the completed installation of
a temporary pre-crusher, a larger pebble crusher, and an expanded
gravity recovery circuit this year are expected to have a positive
impact in the second half 2012. A third ball mill is under
construction and will be completed early in the first quarter 2013.
In addition, a feasibility study expected to be completed by the
first quarter 2013 will provide greater design detail around
various aspects of the expansion project and is intended to further
increase the capacity to treat harder ore 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.
- Production at IAMGOLD's joint venture operations with AngloGold
Ashanti in Mali remain largely
unaffected by the unrest in that country, although the Sadiola
sulphide project has progressed cautiously as a result, with the
expectation that the project will be back on track in the coming
months. A number of steps have been taken to improve performance
following some technical and mechanical issues experienced in the
first half of the year. These steps include the installation of an
additional crusher to increase throughput of harder ore, the
installation of equipment to increase the usage of the gravity
circuit to improve recovery and accelerated access to higher grade
ore in the satellite pits.
- The Company continues to move forward in unlocking the value of
Niobec, including progress on the feasibility study based on
block-caving and the establishment of the financing framework for
the expansion. The completion of the feasibility study is expected
by the third quarter 2013 and the permitting process should be
finalized by 2014. Additional funding is not required until the
commencement of construction.
- IAMGOLD continues to evaluate options for exploiting the large
Rare Earth Elements ("REE") resource near its Niobec mine
operation. An expanded drilling program is underway to infill and
upgrade the resource and to further delineate the deposit to a
depth of 700 metres. The completion of a scoping study is
anticipated by the end of September
2012.
- The exploration budget for 2012 is $157.3 million, which is higher than the initial
budget as it now includes $19.4
million for ongoing exploration at the recently acquired
Côté Gold project in Ontario.
Commitment to Zero Harm
- The Company received approval from the Quebec provincial authorities to use the
inactive Doyon open pit to store tailings generated from the
Westwood mine.
- The frequency of all types of serious injuries (measured as
DART rate4) across IAMGOLD was 1.04 for the current year
to date compared to 1.12 for full year 2011, representing a 7%
improvement.
- The Total Recordable Injury rate (TRIR), which measures all
injuries across IAMGOLD, is improving, with a 27% reduction from
the end of 2011.
SECOND QUARTER FINANCIAL REVIEW
- Revenues from continuing operations in the second quarter 2012
were $410.6 million, a 19%
increase from $345.7 million in
the second quarter 2011. The increase was driven mainly by higher
gold sales ($49.5 million) and higher
realized gold prices ($17.7 million).
For IAMGOLD's continuing operations, including joint ventures, the
number of ounces sold in the second quarter 2012 increased by
33,000 ounces from the same prior year period. Gold sales in the
second quarter 2012 included inventory build-up of 13,000 ounces in
the first quarter 2012 which was sold in April 2012.
- Mining costs for the second quarter 2012 were $250.1 million, up $50.1
million or 25% from the same prior year period. The increase
primarily related to higher operating costs ($11.1 million), inventory movements mostly from
sales exceeding production ($21.0
million), and higher depreciation, depletion and
amortization ($12.9 million).
- The gold margin increased from $818 per ounce during the second quarter 2011 to
$856 per ounce in the same current
year period as the increase in the average realized gold price
offset the increase in costs.
- Net earnings attributable to equity holders were $52.9 million ($0.14 per share) during the second quarter 2012,
compared to $74.5 million
($0.20 per share) in the same prior
year period.
- Adjusted net earnings from continuing operations attributable
to equity holders of $74.0 million ($0.20 per share) in the second quarter 2012
increased by 9% from $67.7 million ($0.18 per share) in the same prior year
period.
- Operating cash flow from continuing operations in the second
quarter 2012 was $52.7 million
compared to $12.2 million in the
same prior year period. Operating cash flow from continuing
operations before changes in working capital in the second quarter
2012 was $72.4 million
($0.19 per share), compared to
$76.4 million ($0.20 per share) in the same prior year
period.
Financial Position
- The Company's cash, cash equivalents and gold bullion (at
market value) position was $614.9
million at June 30, 2012,
compared to $1.3 billion at the end
of the first quarter 2012. The variance reflects the $480.4 million payment for the acquisition of
Trelawney.
- Working capital2 as at June
30, 2012 was $549.0 million, a decrease of $641.8 million compared to December 31, 2011 mostly due to the drawdown of
cash and cash equivalents of $652.1
million. The drawdown took place mainly for the acquisition
of the Côté Gold project ($480.4
million), capital expenditures related to mining assets and
exploration and evaluation assets ($304.5
million), the payment of dividends ($50.9 million) and acquisition of investments
($46.3 million), offset partially by
net cash generated from operating activities ($223.0 million) and other cash movements
($7.0 million). Offsetting increases
in non-cash working capital of $10.3
million were mainly the result of lower income and mining
taxes payable.
- At June 30, 2012, no funds had
been drawn against the unsecured revolving credit facilities of
IAMGOLD ($500 million) or Niobec
($250 million). At June 30, 2012, the Company had letters of credit
in the amount of $66.1 million
to guarantee certain asset retirement obligations compared to
$17.9 million at December 31, 2011. The increase in
collateral support to guarantee asset retirement obligations was
the result of Quebec, Canada
regulators accepting a revised asset retirement plan. The
Company also has cash legally restricted of $2.8 million included in other non-current assets
for the purposes of settling asset retirement obligations.
SUMMARIZED FINANCIAL RESULTS
|
|
|
|
|
|
|
Financial Position
($ millions, except where noted) |
|
June 30, 2012 |
Change |
December 31, 2011 |
Cash, cash equivalents, and gold
bullion |
|
|
|
|
|
|
|
● at market value |
|
$ |
614.9 |
(51%) |
$ |
1,262.5 |
|
● at cost |
|
$ |
496.4 |
(57%) |
$ |
1,148.4 |
Total assets |
|
$ |
4,492.3 |
3% |
$ |
4,349.7 |
Equity |
|
$ |
3,665.5 |
4% |
$ |
3,528.9 |
|
|
|
|
Summary of Financial and
Operating Results |
Three months ended June 30, |
Six
months ended June 30, |
($ millions, except where
noted) |
2012 |
Change |
2011 |
2012 |
Change |
2011 |
Financial Data |
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
410.6 |
19% |
$ |
345.7 |
$ |
814.8 |
7% |
$ |
759.7 |
Mining costs including
depreciation, depletion and amortization |
$ |
250.1 |
25% |
$ |
200.0 |
$ |
465.7 |
14% |
$ |
409.5 |
Gross earnings from mining
operations |
$ |
160.5 |
10% |
$ |
145.7 |
$ |
349.1 |
- |
$ |
350.2 |
Net earnings attributable to
equity holders of IAMGOLD1 |
$ |
52.9 |
(29%) |
$ |
74.5 |
$ |
172.1 |
(17%) |
$ |
207.7 |
Basic net earnings per share
($/share)1 |
$ |
0.14 |
(30%) |
$ |
0.20 |
$ |
0.46 |
(18%) |
$ |
0.56 |
Adjusted net earnings attributable
to equity holders of IAMGOLD1, 2 |
$ |
74.0 |
9% |
$ |
67.7 |
$ |
166.4 |
(10%) |
$ |
185.5 |
Basic adjusted net earnings per
share ($/share)1,2 |
$ |
0.20 |
11% |
$ |
0.18 |
$ |
0.44 |
(12%) |
$ |
0.50 |
Operating cash
flow1 |
$ |
52.7 |
332% |
$ |
12.2 |
$ |
223.0 |
6% |
$ |
211.2 |
Operating cash flow
($/share)1 |
$ |
0.14 |
367% |
$ |
0.03 |
$ |
0.59 |
-5% |
$ |
0.56 |
Operating cash flow before changes
in working capital1, 2 |
$ |
72.4 |
(5%) |
$ |
76.4 |
$ |
258.1 |
(11%) |
$ |
290.9 |
Operating cash flow before changes
in working capital ($/share)1, 2 |
$ |
0.19 |
(5%) |
$ |
0.20 |
$ |
0.69 |
(12%) |
$ |
0.78 |
1 |
Amounts represent results from continuing operations and do not
include discontinued operations. |
2 |
The Company has included the following non-GAAP measures:
adjusted net earnings attributable to equity holders of IAMGOLD,
adjusted net earnings per share, operating cash flow before changes
in working capital per share, total cash cost per ounce, gold
margin per ounce, and operating margin per kilogram of niobium sold
at the Niobec mine. Refer to the Supplemental Information
attached to the MD&A for reconciliation to GAAP measures. |
KEY OPERATING STATISTICS
|
|
|
|
|
Three months ended June 30, |
Six
months ended June 30, |
|
2012 |
Change |
2011 |
2012 |
Change |
2011 |
Key Operating Statistics-Gold Mines |
|
|
|
|
|
|
|
|
|
|
Gold sales - 100% (000s oz)1 |
|
226 |
17% |
|
193 |
|
434 |
(5%) |
|
459 |
Gold sales - Attributable (000s
oz)1 |
|
212 |
16% |
|
182 |
|
407 |
(6%) |
|
431 |
Gold production - Attributable (000s oz)2 |
|
204 |
9% |
|
188 |
|
411 |
(2%) |
|
421 |
Average realized gold price
($/oz)1 |
$ |
1,593 |
5% |
$ |
1,515 |
$ |
1,645 |
14% |
$ |
1,447 |
Total Cash cost ($/oz)1,3 |
$ |
737 |
6% |
$ |
697 |
$ |
708 |
15% |
$ |
613 |
Gold margin ($/oz)1, 3 |
$ |
856 |
5% |
$ |
818 |
$ |
937 |
12% |
$ |
834 |
Key Operating Statistics - Niobec mine |
|
|
|
|
|
|
|
|
|
|
Niobium production (millions of kg Nb) |
|
1.2 |
9% |
|
1.1 |
|
2.3 |
5% |
|
2.2 |
Niobium sales (millions of kg Nb) |
|
1.2 |
(8%) |
|
1.3 |
|
2.4 |
4% |
|
2.3 |
Operating margin ($/kg Nb)3 |
$ |
15 |
7% |
$ |
14 |
$ |
15 |
- |
$ |
15 |
1 |
Amounts represent results from continuing operations and do not
include discontinued operations. |
2 |
Excludes attributable ounces from discontinued operations of
nil for the three and six months ended June 30, 2012 (three months
ended June 30, 2011: 10,000 ounces, six months ended June 30, 2011:
67,000 ounces). Discontinued operations include Mupane, Tarkwa and
Damang, which were sold in 2011 |
3 |
The Company has included the following non-GAAP measures:
adjusted net earnings attributable to equity holders of IAMGOLD,
adjusted net earnings per share, operating cash flow before changes
in working capital per share, total cash cost per ounce, gold
margin per ounce, and operating margin per kilogram of niobium sold
at the Niobec mine. Refer to the Supplemental Information
attached to the MD&A for reconciliation to GAAP measures. |
ATTRIBUTABLE GOLD PRODUCTION AND CASH
COSTS
The table below presents the gold production
attributable to the Company along with the weighted average cash
cost per ounce of production.
|
|
|
Gold Production
(000s oz) |
Total Cash
Cost1 ($/oz) |
|
Three months ended
June 30, |
Six months ended
June 30, |
Three months ended
June 30, |
Six months ended
June 30, |
|
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
IAMGOLD Operator |
|
|
|
|
|
|
|
|
|
|
|
|
Rosebel (95%) |
94 |
87 |
187 |
187 |
$ |
696 |
$ |
704 |
$ |
666 |
$ |
618 |
Essakane (90%) |
81 |
62 |
161 |
157 |
$ |
587 |
$ |
613 |
$ |
574 |
$ |
501 |
Doyon division2 (100%) |
2 |
- |
4 |
- |
$ |
143 |
$ |
- |
$ |
137 |
$ |
- |
|
177 |
149 |
352 |
344 |
$ |
641 |
$ |
666 |
$ |
619 |
$ |
565 |
Joint Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
Sadiola (41%) |
22 |
33 |
47 |
63 |
$ |
1,213 |
$ |
705 |
$ |
1,104 |
$ |
714 |
Yatela (40%) |
5 |
6 |
12 |
14 |
$ |
1,864 |
$ |
1,401 |
$ |
1,730 |
$ |
1,352 |
|
27 |
39 |
59 |
77 |
$ |
1,349 |
$ |
817 |
$ |
1,234 |
$ |
829 |
Continuing operations |
204 |
188 |
411 |
421 |
$ |
737 |
$ |
697 |
$ |
708 |
$ |
613 |
Discontinued operations3 |
- |
10 |
- |
67 |
$ |
- |
$ |
1,271 |
$ |
- |
$ |
792 |
Total |
204 |
198 |
411 |
488 |
$ |
737 |
$ |
729 |
$ |
708 |
$ |
637 |
Continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost excluding royalties |
|
|
|
|
$ |
650 |
$ |
610 |
$ |
619 |
$ |
533 |
Royalties |
|
|
|
|
|
87 |
|
87 |
|
89 |
|
80 |
Total cash cost1 |
|
|
|
|
$ |
737 |
$ |
697 |
$ |
708 |
$ |
613 |
1 |
Total cash cost is a non-GAAP measure. Refer to the Cash
Costs section above for reconciliation to GAAP measures. |
2 |
As a cost savings initiative, the ore mined from Mouska was
stockpiled in 2011. In 2012, the mine will not be producing other
than marginal gold derived from the mill clean-up process. |
3 |
Discontinued operations include Mupane, Tarkwa and Damang which
were sold in 2011. |
OPERATIONS
ROSEBEL MINE, SURINAME
Operating Performance
Attributable gold production of 94,000 ounces for the second
quarter 2012 was 8% higher than the same prior year period,
primarily as a result of higher throughput and higher recoveries.
Recoveries have shown an improving trend with the partial
installation of the gravity circuit. Mine tonnage for the current
quarter was adversely impacted by the heavy rainfall and was lower
than the same prior year period due to longer hauls.
Total cash costs were lower than the same period in the prior
year mainly due to higher gold production partially offset by
higher royalties as a result of higher realized gold prices.
CAPEX
Of the $145 million 2012 capital
plan, $70.2 million has been expended
year-to-date. During the second quarter, capital expenditures were
$48.1 million and consisted of
new mining equipment ($21.9 million), the third ball mill project
($8.5 million), resource delineation
and near-mine exploration ($4.5 million), pre-crusher unit
($3.5 million), new gravity circuit
project ($2.4 million), capital
spares ($1.7 million), infrastructure
development for Rosebel pit ($1.4
million), tailings dam ($1.1 million), and various smaller projects
($3.1 million).
Exploration
Approximately 36,000 metres of diamond drilling was completed
during the quarter, mainly at the Mayo, Koolhoven and Pay Caro
deposits, to increase the confidence in the existing resource
inventory and target resource expansions.
ESSAKANE MINE, BURKINA
FASO
Operating Performance
Attributable gold production of 81,000 ounces for the second
quarter 2012 was 30% higher than the second quarter 2011. The
increase was primarily the result of having effectively addressed
the technical issues that limited production in 2011, partially
offset by lower grades in 2012.
Total cash costs in the second quarter 2012 were lower compared
to the second quarter 2011 mainly due to higher production.
CAPEX
Of the $320 million 2012 capital
plan, $88.4 million has been expended
to date, including $22.8 million of
capitalized stripping costs. During the second quarter 2012,
capital expenditures were $47.3 million and consisted of capitalized
stripping costs on the push-back of the pit ($12.5 million), mill expansion including advances
towards long lead equipment ($23.2
million), liner installation at the bulk water storage
facility ($3.9 million), resource
development ($4.2 million),
capital spares ($1.2 million) and
other sustaining capital ($2.3 million).
Exploration
More than 41,600 metres of drilling was completed, including
approximately 15,600 metres targeting the Essakane Main Zone on the
northern extensions of the current life of mine pit as well as
within or immediately below the expansion feasibility study pit
design. Systematic drilling is also testing for southeast
extensions of the Falagountou deposit and evaluating the resource
potential of selected targets along the 10 kilometre long Gossey -
Korizena trend.
DOYON DIVISION, CANADA
During the quarter, the Mouska mine recovered 2,000 ounces as a
result of the mill clean-up activities. The site continues to
stockpile ore which will be processed in the refurbished mill upon
the start-up of Westwood in
2013.
SADIOLA MINE, MALI
Operating Performance
Attributable gold production of 22,000 ounces for the second
quarter 2012 was 33% lower than the prior year period. This was due
to lower throughput resulting from low mill availability, lower
grades mined, and lower recoveries due to graphitic ore. Lower
production had an adverse impact on total cash costs which rose
significantly from the same quarter in 2011.
CAPEX
Of the $40 million 2012 capital plan
(attributable portion), $23.6 million
has been expended to date, including $9.5
million of capitalized stripping costs. During the second
quarter 2012, attributable capital expenditures were $9.7 million and consisted of spending on
the Sulphide project ($5.6 million),
capitalized stripping ($2.7 million),
and various smaller projects ($1.4
million).
Sadiola did not distribute any dividends in the second quarter
2012 or 2011.
YATELA MINE, MALI
Operating Performance
Attributable gold production of 5,000 ounces for the second quarter
2012 was lower than the prior year period as a result of comparably
lower ore tonnage being fed to the heap leach pads.
Total cash costs in the second quarter 2012 were higher than the
same quarter in 2011 due to a 25% increase in tonnage mined
attributed to a focus on mining the main pit while the North Pit
had a short-term waste stripping campaign. By the third
quarter 2012, the short-term waste stripping campaign will be
complete as ore in the pit will be accessible.
There were no significant capital expenditures year-to-date for
both 2012 and 2011. Yatela did not distribute any dividend
during the second quarter 2012 or 2011.
NIOBEC NIOBIUM MINE, CANADA
Operating Performance
Niobium production of 1.2 million kilograms in the second quarter
2012 was 9% higher than the same period in 2011. This was due to
the higher conversion of niobium pentoxide and higher recoveries,
offset to some extent by lower grades mined.
Niobium revenues increased to $48.4 million in the second quarter 2012
from $48.1 million in the same
period in 2011 due to a higher realized niobium price offset by
lower sales volume. Operating margin during the second quarter 2012
was higher than the second quarter 2011 as a result of the higher
realized Niobium price partially offset by higher labour and
consumables costs.
CAPEX
Of the $90 million 2012 capital plan,
$34.5 million has been expended to
date. During the second quarter, capital expenditures were
$19.6 million and included
mining equipment ($4.8 million),
underground development ($4.6 million) and the expansion feasibility
study ($0.8 million).
ATTRIBUTABLE GOLD SALES VOLUME AND REALIZED
GOLD PRICE
|
|
|
Gold sales (000s
oz) |
Realized gold
price ($/oz) |
|
Three months ended
June 30, |
Six
months ended
June 30, |
Three months ended
June 30, |
Six
months ended
June 30, |
|
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
Operator |
198 |
156 |
376 |
385 |
$ |
1,591 |
$ |
1,518 |
$ |
1,645 |
$ |
1,448 |
Joint ventures1 |
28 |
37 |
58 |
74 |
$ |
1,607 |
$ |
1,500 |
$ |
1,649 |
$ |
1,444 |
Total sales from continuing
operations 2,3 |
226 |
193 |
434 |
459 |
$ |
1,593 |
$ |
1,515 |
$ |
1,645 |
$ |
1,447 |
1 |
Attributable sales of joint ventures: Sadiola (41%) and Yatela
(40%). |
2 |
Attributable sales volume for the second quarters 2012 and 2011
were 212,000 ounces and 182,000 ounces, respectively, and for the
first six months 2012 and 2011 were 407,000 ounces and 431,000
ounces after taking into account 95% of the Rosebel sales and 90%
of the Essakane sales. |
3 |
Continuing operations exclude Mupane, Tarkwa and Damang which
were sold in 2011 and are discontinued operations. |
NIOBEC PRODUCTION, SALES AND OPERATING
MARGIN
|
|
|
|
|
|
Three months ended June 30, |
Six
months ended June 30, |
|
2012 |
Change |
2011 |
2012 |
Change |
2011 |
Total operating material mined (000s t) |
483 |
(12%) |
546 |
1,053 |
(2%) |
1,075 |
Ore milled (000s t) |
522 |
(1%) |
529 |
1,077 |
3% |
1,050 |
Grade (%
Nb2O5) |
0.53 |
(12%) |
0.60 |
0.54 |
(8%) |
0.59 |
Niobium production (millions of kg Nb) |
1.2 |
9% |
1.1 |
2.3 |
5% |
2.2 |
Niobium sales (millions of kg Nb) |
1.2 |
(8%) |
1.3 |
2.4 |
4% |
2.3 |
Operating margin ($/kg Nb)1 |
$ |
15 |
7% |
$ |
14 |
$ |
15 |
- |
$ |
15 |
1 |
Operating margin per kilogram of niobium at the Niobec mine is
a non-GAAP measure. Refer to the Supplemental Information
section 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 second quarter 2012, IAMGOLD incurred $36.6 million on exploration projects
compared to $27.5 million in the
same prior year period. The second quarter 2012 expenditures
included:
- near-mine exploration and evaluation expenditures of
$13.4 million, and
- greenfield exploration expenditures of $23.2 million conducted at 20 projects,
including two advanced exploration sites, in eight countries in
Africa and the Americas as part of
IAMGOLD's long-term commitment to reserves replenishment and
organic growth.
2012 OUTLOOK
IAMGOLD guidance for production, cash costs and capital
expenditures has been maintained for 2012 and is as follows:
|
|
IAMGOLD full year 2012
guidance |
2012 Plan |
Attributable gold production (000s
oz) |
|
|
Rosebel |
370 - 395 |
|
Essakane |
320 - 345 |
Total mines owned and operated by
IAMGOLD |
690 - 740 |
Total joint venture mines (Sadiola and
Yatela) |
150 - 170 |
Total attributable production |
840 - 910 |
Cash cost ($/oz) from continuing
operations1 |
$670 - $695 |
Average gold price ($/oz) |
$1,700 |
Average crude oil price
($/barrel) |
$90 |
Average foreign exchange rate
(C$/US$) |
$1.00 |
Average foreign exchange rate
(US$/€) |
$1.40 |
Niobec production (millions of kg
Nb) |
4.6 - 5.1 |
Niobec operating margin ($/kg
Nb)1 |
$15 - $17 |
Capital expenditures ($ millions) |
$800 - $840 |
1 |
Cash cost per ounce and operating margin per kilogram of
niobium sold at the Niobec mine are non-GAAP measures. Refer
to the Supplemental Information attached to the MD&A for
reconciliation to GAAP measures. |
Effective Tax Rate
The effective tax rate for the second quarter 2012 was 45% (35%
for the first six months 2012) compared to the same prior year
period of 37% (29% for the first six months 2011). The higher rate
this year is due mainly to the non-recognition of tax benefits
related to increased exploration activity and the valuation of
marketable securities. Accounting principles generally prohibit the
recognition of tax benefits on these losses.
In light of the Company's non-recognition of tax benefits on its
record exploration spend anticipated for this year, we now expect
our adjusted annual effective tax rate to be in the range of 33% to
35% and an effective tax rate of between 35% and 37% on our
reported earnings.
Tax Payments
Tax payments include the final payment of the prior year's
liability, which was accrued in the prior year, and installments to
be applied to the current year liability. While the timing of
the final payments varies depending on the jurisdiction, the
majority of the payments are made in the second quarter. The
large catch up payment is expected when earnings are growing
year-over-year, as tax installments are generally based on prior
year earnings.
Tax Payments for 2012
|
|
|
|
|
|
$millions |
|
Q1 |
|
Q2 |
|
Final Payment for 2011 |
$ |
5.1 |
$ |
70.4 |
|
2012 Installments |
$ |
10.4 |
$ |
32.5 |
|
Tax Payments for 2012 |
$ |
15.5 |
$ |
102.9 |
|
NON-GAAP5 PERFORMANCE
MEASURES
Adjusted net earnings from continuing
operations attributable to equity holders of IAMGOLD
Adjusted net earnings from continuing operations
attributable to equity holders of IAMGOLD and adjusted net earnings
from continuing operations attributable to equity holders of
IAMGOLD 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 holders
of IAMGOLD and adjusted net earnings from continuing operations
attributable to equity holders 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 holders represent net
earnings from continuing operations attributable to equity holders
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.
|
|
|
|
|
|
|
|
|
|
($millions, except for number of
shares and per share amounts) |
Three months ended
June 30, |
Six months ended
June 30, |
2012 |
2011 |
2012 |
2011 |
Earnings from
continuing operations before income and
mining taxes and non-controlling interests |
$ |
110.0 |
$ |
127.5 |
$ |
290.2 |
$ |
313.0 |
|
● Foreign exchange loss /
(gain) |
|
(0.7) |
|
(5.1) |
|
(11.0) |
|
0.2 |
|
● Unrealized loss / (gain) on
derivative instruments |
|
5.8 |
|
(1.4) |
|
(3.8) |
|
(4.3) |
|
● Gain on sales of marketable
securities |
|
(3.7) |
|
(0.6) |
|
(9.3) |
|
(0.9) |
|
● Impairment of marketable
securities |
|
14.9 |
|
- |
|
19.5 |
|
- |
|
● Loss/(gain) on sales of
assets |
|
0.1 |
|
(1.1) |
|
(2.2) |
|
(11.8) |
|
● Changes in estimates of
asset retirement obligations at closed sites |
|
3.6 |
|
- |
|
0.5 |
|
- |
|
|
20.0 |
|
(8.2) |
|
(6.3) |
|
(16.8) |
Adjusted earnings
from continuing operations before
income and mining taxes and non-controlling interests |
$ |
130.0 |
$ |
119.3 |
$ |
283.9 |
$ |
296.2 |
|
● Income and mining tax
expenses |
|
(49.1) |
|
(47.4) |
|
(100.3) |
|
(90.8) |
|
● Tax impact of adjusted
items |
|
1.1 |
|
1.4 |
|
0.6 |
|
(5.4) |
|
● Non-controlling
interests |
|
(8.0) |
|
(5.6) |
|
(17.8) |
|
(14.5) |
Adjusted net
earnings from continuing operations
attributable to equity holders of IAMGOLD |
$ |
74.0 |
$ |
67.7 |
$ |
166.4 |
$ |
185.5 |
Basic weighted
average number of common shares
outstanding (in millions) |
|
376.1 |
|
374.9 |
|
376.0 |
|
374.2 |
Basic adjusted net
earnings from continuing operations
attributable to equity holders of IAMGOLD per share
($/share) |
$ |
0.20 |
$ |
0.18 |
$ |
0.44 |
$ |
0.50 |
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:
|
|
|
|
|
|
|
|
|
|
($millions, except where
noted) |
Three months ended
June 30, |
Six months ended
June 30, |
2012 |
2011 |
2012 |
2011 |
Cash flow generated
from continuing operating activities
per the unaudited consolidated interim financial statements |
$ |
52.7 |
$ |
12.2 |
$ |
223.0 |
$ |
211.2 |
Adjusting items from non-cash working capital items and
long-term ore stockpiles |
|
|
|
|
|
|
|
|
|
● Accounts receivable and
other assets |
|
12.7 |
|
9.6 |
|
(7.9) |
|
9.9 |
|
● Inventories and long-term
stockpiles |
|
15.3 |
|
46.3 |
|
37.7 |
|
63.1 |
|
● Accounts payable and
accrued liabilities |
|
(8.3) |
|
8.3 |
|
5.3 |
|
6.7 |
Operating cash flow
from continuing operations
before changes in working capital |
$ |
72.4 |
$ |
76.4 |
$ |
258.1 |
$ |
290.9 |
Basic weighted average
number of common shares
outstanding (in millions) |
|
376.1 |
|
374.9 |
|
376.0 |
|
374.2 |
Basic operating cash
flow from continuing operations
before changes in working capital per share ($/share) |
$ |
0.19 |
$ |
0.20 |
$ |
0.69 |
$ |
0.78 |
END NOTES (excluding tables)
(1) |
Adjusted net earnings attributable to
equity holders of IAMGOLD, adjusted net earnings attributable to
equity holders of IAMGOLD 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) |
Working capital is defined as current
assets less current liabilities and excludes long-term
stockpiles. |
|
|
(3) |
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. |
|
|
(4) |
The DART rate refers to the number of
days away, restricted duty or job transfer incidents that occur per
100 employees. |
|
|
(5) |
GAAP - Generally Accepted Accounting
Principles. |
CONFERENCE CALL
A conference call will be held on August 14,
2012 at 8:30 a.m. (Eastern Daylight
Time) for a discussion with management regarding the
Company's 2012 second 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: 62156682#
A replay of this conference call will be available from
5:00 p.m. August 14th to September 14th, 2012. Access this
replay by dialling: North America
toll-free: 1-866-206-0173 or 1-646-216-7204, passcode: 273287#
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", "outlook", "guidance",
"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:
changes in the global prices for gold, niobium, copper, silver or
certain other commodities (such as diesel, aluminum 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, financing and interest rates;
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 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.
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