TSX: IMG NYSE: IAG
All monetary amounts are expressed in U.S.
dollars, unless otherwise indicated.
Refer to the Management Discussion and Analysis (MD&A) and
Unaudited Condensed Consolidated
Interim Financial Statements as at September 30, 2014 for more
information.
TORONTO, Nov. 12, 2014 /CNW/ - IAMGOLD Corporation
("IAMGOLD" or the "Company") today reported its unaudited condensed
consolidated interim financial and operating results for the third
quarter ended September 30, 2014.
THIRD QUARTER 2014 HIGHLIGHTS
- Cash, cash equivalents and gold bullion (at market) of
$334.4 million up $37.1 million from June
30, 2014, with the cash position increasing $50.3 million or 42%.
- Net cash from operating activities of $115.3 million up 19% from Q2/14 and 78% from
Q3/13.
- Westwood completed strong
first quarter of commercial production, with 35,000 ounces at a
total cash cost of $772 an ounce
produced.
- Attributable gold production of 225,000 ounces, up 9% from
Q2/14; attributable gold sales of
233,000 ounces.
- All-in sustaining1,2 and total cash
costs1 declined for third consecutive quarter.
- All-in sustaining costs1,2 - gold
mines3 of $1,115 per ounce
sold, down $9 an ounce from
Q2/14.
- Total cash costs1 – gold mines of
$851 per ounce produced, down
$30 an ounce from Q2/14.
- On track to meet 2014 gold production and cost guidance, with
production range narrowed to
835,000 to 850,000 ounces from 835,000 to 900,000 ounces.
- Reduced 2014 capital expenditures guidance by 10% to
$360 million ± 5%.
Subsequent to quarter-end:
- Agreement to sell Niobec for $530
million, with $500 million due
upon closing.
- At the Boto Gold Project in Senegal, reported positive assay results with
wide intervals of high grade mineralization confirming continuity
of resource and expanding the limits. Highlights included drill
intersections of 64 metres grading 3.37 g/t gold and 16 metres
grading 7.73 g/t gold.
- Recognizing the challenges of a lower gold price environment
and reinforcing our culture of continuous improvement we announced
the reorganization of our top executive leadership team.
"We delivered strong results across a number of key performance
metrics in the third quarter, and are encouraged by the positive
trends in production, costs and cash generation," said Steve Letwin, President and Chief Executive
Officer. "Westwood is performing
very well and we expect its high grades and low cost structure to
enhance our overall production and cost profile. Grades at Essakane
rose 22% from the previous quarter and grades at Rosebel are
improving. Cost reduction and disciplined capital spending remain a
constant focus and are reflected in costs per ounce trending
downwards for the third consecutive quarter. At $1,115 an ounce, all-in sustaining costs are down
$69 an ounce from the first quarter
of this year, moving us closer to our near-term goal of
$1,100 an ounce. Net cash from
operating activities increased for the second consecutive quarter,
driving our cash position 42% higher in the quarter.
"We're on track to meet overall guidance as set out at the
beginning of the year," continued Mr. Letwin, "and have narrowed
the production guidance to reflect our performance expectations for
the final quarter. The closing of the transaction to sell the
Niobec mine for $530 million will put
us in a stronger financial position to continue investing in the
profitable growth of our gold business. We expect a strong
finish for 2014 and are targeting positive free cash flow at our
owner-operated mines in 2015."
Agreement to Sell Niobec Inc.
On October 3, 2014, we announced
an agreement to sell Niobec Inc. for total consideration of
$530 million, which includes
after-tax cash proceeds of $500
million upon closing and $30
million when the adjacent rare earth element deposit
commences commercial production. Based on current estimates, the
expected gain on the transaction is expected to be approximately
$50 million to $60 million. The
transaction is expected to close by the end of January, 2015,
subject to the receipt of regulatory approvals.
SUMMARY OF FINANCIAL AND OPERATING
RESULTS
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
2014
|
2013
|
2014
|
2013
|
Financial Results ($ millions, except where
noted)
|
|
|
|
|
Revenues
|
$
341.5
|
$
293.5
|
$
909.4
|
$
899.9
|
Cost of
sales
|
$
294.8
|
$
217.7
|
$
765.4
|
$
610.9
|
Earnings from mining
operations1
|
$
46.7
|
$
75.8
|
$
144.0
|
$
289.0
|
Net earnings (losses)
attributable to equity holders of IAMGOLD
|
$
(72.5)
|
$
25.3
|
$
(84.8)
|
$
7.8
|
Net earnings (losses)
per share ($/share)
|
$
(0.19)
|
$
0.07
|
$
(0.23)
|
$
0.02
|
Adjusted net earnings
attributable to equity holders of IAMGOLD1
|
$
0.2
|
$
26.2
|
$
20.1
|
$
117.6
|
Adjusted net earnings
per share1($/share)
|
$
-
|
$
0.07
|
$
0.05
|
$
0.31
|
Net cash from
operating activities
|
$
115.3
|
$
64.9
|
$
240.2
|
$
202.3
|
Net cash from
operating activities before changes in working
capital1
|
$
88.9
|
$
67.4
|
$
223.6
|
$
250.9
|
Net cash from
operating activities before changes in working capital
($/share)1
|
$
0.24
|
$
0.18
|
$
0.59
|
$
0.67
|
Key Operating Statistics
|
|
|
|
|
Gold sales -
attributable (000s oz)
|
233
|
195
|
601
|
567
|
Gold commercial
production - attributable (000s oz)
|
225
|
185
|
593
|
587
|
Gold production -
attributable2(000s oz)
|
225
|
228
|
603
|
640
|
Average realized gold
price1($/oz)
|
$
1,272
|
$
1,334
|
$
1,281
|
$
1,438
|
Total cash
costs1,3,4- gold mines5($/oz)
|
$
851
|
$
807
|
$
871
|
$
793
|
Gold
margin1($/oz)
|
$
421
|
$
527
|
$
410
|
$
645
|
All-in sustaining
costs1,4,6- gold mines ($/oz)
|
$
1,115
|
$
1,207
|
$
1,138
|
$
1,221
|
All-in sustaining
costs - total7($/oz)
|
$
1,017
|
$
1,125
|
$
1,018
|
$
1,154
|
Niobium production
(millions of kg Nb)
|
1.4
|
1.3
|
4.1
|
3.7
|
Niobium sales
(millions of kg Nb)
|
1.4
|
1.1
|
4.3
|
3.6
|
Operating
margin1($/kg Nb)
|
$
22
|
$
19
|
$
20
|
$
17
|
1
|
This is a non-GAAP
measure. Refer to the non-GAAP performance measures section of the
MD&A for the reconciliation to GAAP.
|
2
|
Attributable gold
production includes Westwood pre-commercial production for the nine
months ended September 30, 2014 of 10,000 ounces, and for the three
and nine months ended September 30, 2013 of 43,000 ounces and
53,000 ounces, respectively.
|
3
|
The total cash costs
computation does not include Westwood pre-commercial production for
the nine months ended September 30, 2014 of 10,000 ounces, and for
the three and nine months ended September 30, 2013 of 43,000 ounces
and 53,000 ounces, respectively.
|
4
|
By-product
credits are included in the calculation of this measure; refer to
the non-GAAP performance measures section of the MD&A for the
reconciliation to GAAP.
|
5
|
Gold mines, as used
with total cash costs and all-in sustaining costs, consist of
Rosebel, Essakane, Westwood (commercial production), Mouska,
Sadiola and Yatela on an attributable basis.
|
6
|
We have begun
including the income from our Diavik royalty as an offset to
operating costs in the calculation of this measure. Previous
periods have been revised for comparability.
|
7
|
Total, as used with
all-in sustaining costs, includes the impact of niobium
contribution, defined as the Niobec operating margin and sustaining
capital, on a per gold ounce sold basis. Refer to the all-in
sustaining costs table in the non-GAAP performance measures section
of the MD&A.
|
THIRD QUARTER 2014 HIGHLIGHTS
Financial Performance
- Revenues for the third quarter 2014 were $341.5 million, up $48.0
million from the same prior year period. The increase was
mainly due to higher gold sales volume of 42,000 ounces at our
owner-operator mines ($52.7 million)
driven by the mill expansion at Essakane and the achievement of
commercial production at Westwood,
and higher niobium sales volume ($6.8
million), partially offset by a lower average realized gold
price ($12.3 million).
- Cost of sales for the third quarter 2014 was $294.8 million, up $77.1
million from the same prior year period. The increase was
mainly the result of higher operating costs ($52.7 million) and higher depreciation expense
($24.3 million), of which
$14.8 million was due to Westwood. Operating costs were higher due to
Essakane ($37.9 million), which
processed more hard rock and capitalized a lower amount of mining
costs as access to the ore zone on the south side of the pit was
achieved, and Westwood with the
commencement of commercial production ($24.7
million), partially offset by lower operating costs at
Mouska due to lower sales volume ($9.3
million).
- Net losses attributable to equity holders for the third quarter
2014 were $72.5 million ($0.19 per share), compared to net earnings of
$25.3 million ($0.07 per share) in the same prior year period.
The decrease mainly related to higher cost of sales ($77.1 million), higher income taxes ($48.1 million), net derivative loss ($17.9 million), net changes in estimates of asset
retirement obligations at closed sites ($12.0 million) and higher financing costs
($4.6 million), partially offset by
higher revenues ($48.0 million), the
reversal of the allowance for receivables ($6.2 million) and lower exploration expenses
$3.5 million).
- Income tax expense for the third quarter 2014 was $70.7 million. With income prior to income taxes
in the quarter of $3.4
million, a nominal income tax expense would have been
expected. However, with the agreement to sell Niobec, we no longer
had the benefit of the projected future taxable income from Niobec
that would have offset taxable losses in other operations in
Canada. Accordingly, a non-cash
deferred tax expense of $72.0 million
was incurred in the quarter. There was no change to the economic
value of the underlying tax pools that may be used to reduce cash
income taxes in the future.
- Adjusted net earnings attributable to equity
holders1 for the third quarter 2014 were $0.2 million ($0.00
per share1), compared to $26.2
million ($0.07 per share) in
the same prior year period.
- Initiatives to optimize and monetize a portion of non-cash
working capital processes continue to produce positive
results. Over the past 12 months, receivables and other
current assets and inventory levels, in aggregate, have been
reduced by $92.3 million. We will
continue to manage working capital, effectively balancing our
liquidity position, while maintaining appropriate inventory levels
to support operations.
- Net cash from operating activities for the third quarter 2014
was $115.3 million, up $50.4 million or 78% from the same prior year
period. The increase was mainly due to collecting cash on
outstanding receivables ($10.9
million), paying less income taxes ($23.1 million) and reducing inventory levels
($14.5 million), partially offset by
lower earnings from operations.
- Net cash from operating activities before changes in working
capital1 for the third quarter 2014 was $88.9 million ($0.24 per share1), up $21.5 million ($0.06 per share) from the same prior year
period.
Financial Position
- Cash, cash equivalents and gold bullion (at market value)
was $334.4 million as at September 30, 2014, up $37.1 million from June
30, 2014. The increase was mainly due to a $50.3 million or 42% increase in cash and cash
equivalents, partially offset by a $13.2
million decline in the market value of the gold bullion. The
increase in cash and cash equivalents of $50.3 million was mainly due to an increase in
net cash from operating activities ($115.3
million) partially offset by capital expenditures
($71.7 million).
Production, Costs and Margins
Gold Operations
- Attributable gold production, inclusive of joint venture
operations, was 225,000 ounces in the third quarter 2014, up 9%
from the second quarter 2014. The increase was driven by a ramp-up
in production at Westwood and
improving grades at Rosebel, which, along with higher throughput,
drove Rosebel's production higher by 22%. At Essakane, a 22%
increase in grades partially offset the impact on production of the
lower throughput expected with the increasing proportion of hard
rock. Compared to the third quarter 2013, production was
marginally lower due to lower grades at Rosebel, lower production
at Westwood and the winding down
of mine operations at Yatela. Partially offsetting the decrease was
a 30% increase in production at Essakane as grades rose 36%.
- Attributable gold sales volume, inclusive of joint venture
operations, for the third quarter 2014 was 233,000 ounces compared
to attributable gold production of 225,000 ounces. The variance of
8,000 ounces was mainly due to gold doré inventory in the second
quarter 2014 not sold until the third quarter 2014 at Essakane
(6,000 ounces) and Mouska (6,000 ounces), partially offset by
inventory at Rosebel (3,000 ounces) sold in the fourth quarter
2014.
- Total cash costs1,4 - gold mines3 – for
the third quarter 2014 were $851 per
ounce produced, down $30 an ounce
from the previous quarter. The improvement reflects higher
production and the continued benefits of the cost reduction
initiatives across the sites, with Rosebel's total cash costs
declining by 12%, which was also due in part to the higher
production associated with the increase in grades. The
positive variance also reflects Westwood's total cash costs of $772 an ounce, which is at the lower end of the
range expected for the second half of 2014. Compared to the same
period in 2013, total cash costs increased by 5% mainly due to
lower grades at Rosebel, the processing of harder rock at Essakane
and Rosebel and inflationary cost pressures at all sites, partially
offset by the benefits from our ongoing cost reduction
initiatives.
- All-in sustaining costs1,2 - gold mines3
- for the third quarter 2014 were $1,115 per ounce sold, down $9 an ounce from the second quarter 2014 and
$69 an ounce from the first quarter
of this year. Compared to the same quarter 2013, all-in
sustaining costs in the third quarter 2014 were $92 an ounce lower mainly due to lower sustaining
capital expenditures.
- All-in sustaining costs1,2 – total5 - for
the third quarter 2014 were $1,017
per ounce sold, up marginally from the previous quarter and down
$108 an ounce from the same prior
year period. This measure includes the impact of the Niobec
operating margin1 and its sustaining capital
expenditures.
Niobium Operation
- Niobium production for the third quarter 2014 was 1.4 million
kilograms, consistent with the previous quarter and up 8% from the
same quarter in 2013.
- The operating margin1 in the third quarter 2014 was
$22 per kilogram, up 22% from the
previous quarter and 16% from the same prior year period. The
increase in operating margin reflects sustainable cost saving
initiatives implemented in 2013 and higher production related to
the optimization of mill performance.
Outlook - 2014
Gold Production and Cash Costs
- We are narrowing our 2014 attributable gold production guidance
from a range of 835,000 - 900,000 ounces to 835,000 - 850,000
ounces. This guidance reflects lower grades at Rosebel offset by
Essakane's increased production due to the successful ramp-up of
the processing of higher-grade hard rock.
- We are maintaining our 2014 cash costs guidance for gold mines
of $825 - $875 per ounce produced and
all-in sustaining costs per ounce sold at $1,150 - $1,250.
- Rosebel – The grades in the third quarter were higher than the
first half of 2014 due to implementation of measures stemming from
the grade control audit, along with the move to reverse circulation
drilling for in-pit grade control. With grades and recoveries
expected to be in line with the third quarter, we are lowering the
attributable gold production guidance from 330,000 - 350,000 ounces
to 315,000 - 320,000 ounces.
- Essakane – With the production ramp up and strong throughput,
along with higher-grade hard rock ore, we are increasing 2014
attributable gold production guidance from 315,000 - 330,000 ounces
to 30,000 - 335,000 ounces.
- Westwood - We are changing the
2014 attributable gold production guidance for the Doyon division
from 100,000 - 120,000 ounces to 95,000 - 100,000 ounces. We
maintain our 2014 total cash cost guidance for Westwood of $750 -
$850 per ounce produced.
- Joint Ventures – We expect 2014 attributable production for
Sadiola and Yatela combined to be 95,000 ounces.
Niobium Production and Operating Margin
- We maintain production guidance at 5.2 million to 5.5 million
kilograms of niobium for 2014 at an operating margin of between
$17 and $19 per kilogram.
Commitment to Zero Harm Continues
- The frequency of all types of serious injuries (measured as
DART rate6) continues to be an important health and
safety measure, and for the third quarter 2014 was 0.60 compared to
1.06 for the same period in 2013, representing a 43%
improvement.
ATTRIBUTABLE GOLD PRODUCTION AND ALL-IN SUSTAINING
AND TOTAL CASH COSTS
|
|
Gold Production
(000s oz)
|
Total Cash Costs1,2
($ per gold ounce
produced)
|
All-in Sustaining Costs1
($ per gold ounce
sold)
|
Three months ended September
30,
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
Owner-operator
|
|
|
|
|
|
|
Rosebel
(95%)
|
83
|
95
|
$
828
|
$
729
|
$
1,048
|
$
979
|
Essakane
(90%)
|
83
|
64
|
861
|
736
|
1,149
|
1,119
|
Doyon
division(100%)
|
36
|
2
|
753
|
1,048
|
859
|
900
|
|
202
|
161
|
828
|
735
|
1,109
|
1,108
|
Joint ventures
|
|
|
|
|
|
|
Sadiola
(41%)
|
21
|
19
|
971
|
1,297
|
1,077
|
1,809
|
Yatela
(40%)
|
2
|
5
|
1,738
|
1,204
|
1,984
|
2,118
|
|
23
|
24
|
1,050
|
1,280
|
1,168
|
1,857
|
Total commercial operations
|
225
|
185
|
851
|
807
|
1,115
|
1,207
|
Doyon
division(100%)
|
-
|
43
|
-
|
-
|
-
|
-
|
|
225
|
228
|
851
|
807
|
1,115
|
1,207
|
Cash costs, excluding
royalties
|
|
|
792
|
734
|
|
|
Royalties
|
|
|
59
|
73
|
|
|
Total cash
costs3
|
|
|
$
851
|
$
807
|
|
|
All-in sustaining
costs3,4- gold mines5
|
|
|
|
1,115
|
1,207
|
Niobium
contribution6
|
|
|
|
|
(98)
|
(82)
|
All-in sustaining
costs - total
|
|
|
|
|
$
1,017
|
$
1,125
|
1
|
This is a non-GAAP
measure. Refer to the non-GAAP performance measures section of the
MD&A for the reconciliation to GAAP.
|
2
|
The total cash costs
computation does not include Westwood pre-commercial production for
the three months ended September 30, 2013 of 43,000
ounces.
|
3
|
By-product credits
are included in the calculation of this measure; refer to the
non-GAAP performance measures section of the MD&A for the
reconciliation to GAAP.
|
4
|
We have begun
including the income from our Diavik royalty as an offset to
operating costs in the calculation of this measure. Previous
periods have been revised for comparability
|
5
|
Gold mines, as used
with total cash costs and all-in sustaining costs, consist of
Rosebel, Essakane, Westwood (commercial production), Mouska,
Sadiola and Yatela on an attributable basis.
|
6
|
Niobium contribution
consists of the Niobec operating margin and sustaining capital on a
per gold ounce sold basis.
|
|
|
|
|
|
Gold Production
(000s oz)
|
Total Cash Costs1,2
($ per gold ounce
produced)
|
All-in Sustaining Costs1
($ per gold ounce
sold)
|
Nine months ended September 30,
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
Owner-operator
|
|
|
|
|
|
|
Rosebel
(95%)
|
231
|
266
|
$
856
|
$
730
|
$
1,094
|
$
1,055
|
Essakane
(90%)
|
243
|
191
|
860
|
732
|
1,098
|
1,158
|
Doyon
division(100%)
|
47
|
48
|
690
|
838
|
851
|
915
|
|
521
|
505
|
843
|
741
|
1,131
|
1,153
|
Joint ventures
|
|
|
|
|
|
|
Sadiola
(41%)
|
64
|
62
|
1,004
|
1,071
|
1,091
|
1,526
|
Yatela
(40%)
|
8
|
20
|
1,607
|
1,251
|
1,920
|
1,927
|
|
72
|
82
|
1,075
|
1,115
|
1,189
|
1,624
|
Total commercial operations
|
593
|
587
|
871
|
793
|
1,138
|
1,221
|
Doyon
division(100%)
|
10
|
53
|
-
|
-
|
-
|
-
|
|
603
|
640
|
871
|
793
|
1,138
|
1,221
|
Cash costs, excluding
royalties
|
|
|
809
|
718
|
|
|
Royalties
|
|
|
62
|
75
|
|
|
Total cash
costs3
|
|
|
$
871
|
$
793
|
|
|
All-in sustaining
costs3,4- gold mines5
|
|
|
|
1,138
|
1,221
|
Niobium
contribution6
|
|
|
|
|
(120)
|
(67)
|
All-in sustaining
costs - total
|
|
|
|
|
$
1,018
|
$
1,154
|
1
|
This is a non-GAAP
measure. Refer to the non-GAAP performance measures section of the
MD&A for the reconciliation to GAAP.
|
2
|
The total cash costs
computation does not include Westwood pre-commercial production for
the nine months ended September 30, 2014 of 10,000 ounces and
September 30, 2013 of 53,000 ounces.
|
3
|
By-product credits
are included in the calculation of this measure; refer to the
non-GAAP performance measures section of the MD&A for the
reconciliation to GAAP.
|
4
|
We have begun
including the income from our Diavik royalty as an offset to
operating costs in the calculation of this measure. Previous
periods have been revised for comparability
|
5
|
Gold mines, as used
with total cash costs and all-in sustaining costs, consist of
Rosebel, Essakane, Westwood (commercial production), Mouska,
Sadiola and Yatela on an attributable basis.
|
6
|
Niobium contribution
consists of Niobec mine's operating margin and sustaining capital
on a per gold ounce sold basis.
|
THIRD QUARTER 2014 OPERATING
HIGHLIGHTS
(Refer to the MD&A for further details and analyses about
our operations.)
Westwood Mine - Canada
Westwood completed its first full
quarter of commercial production, with 35,000 ounces produced in
the third quarter. Doyon division production to date is 57,000
ounces, including 10,000 pre-commercial ounces from Westwood in the first half of the year and
12,000 ounces from Mouska. During the third quarter, the head frame
at Mouska was removed and milling was completed for the remaining
ore stockpiles. Mouska has now ceased operations and the mine is
closed. For 2014, production from the Westwood mine and the former Mouska mine is
expected to range between 95,000 and 100,000 ounces.
During the third quarter, we processed an average of over 1,400
tonnes per day, underground development has progressed well and we
are seeing positive grade reconciliation. Grades in the third
quarter averaged 7.54 grams of gold per tonne with a recovery rate
of 94%.
Total cash costs for the third quarter were $772 an ounce, which are at the lower end of the
$750 to $850 per ounce range that we
had expected for the second half of the year.
Rosebel Mine - Suriname
Rosebel produced 83,000 attributable ounces in the third quarter
2014. While lower grades were behind the 13% decline in production
from the same period in 2013, a 14% increase in grades from the
second quarter 2014 drove production higher by 22%. The
implementation of several technical measures identified in the
grade control audit conducted earlier in the year is helping to
improve grades. As well, the construction of the long-haul
road to the Rosebel pit containing higher grade ore was completed.
Also contributing to the positive quarter-over-quarter variance was
the particularly severe rainy season which impeded access to higher
grade areas of the pit in the second quarter. Production in the
third quarter also benefited from measures to stabilize the blend
of hard, soft and transition rock ahead of the primary crusher. The
result is less variation in the hardness of the rock fed to the
mill. Despite the proportion of hard and transition rock
increasing to 71% in the third quarter from 55% in the second
quarter, throughput rose 7%.
Total cash costs in the third quarter were $828 an ounce, 14% higher than the same period
2013 due to the lower grades, partially offset by the benefits of
the cost reduction initiatives begun in 2013. However, compared to
the second quarter 2014, total cash costs per ounce declined by
12%. Contributing to the favourable variance is the greater
stability in the milling circuit as a result of a more consistent
ore blend, which in turn reduces the consumption of power and
reagents and increased recoveries. As well, changes made to the
cyanide addition point are reducing the consumption of cyanide in
the circuit and improving gravity recovery. Rosebel continues to
improve its operational performance around plant equipment
availability, mine equipment productivity and dilution control.
With respect to our joint venture agreement with the Government
of Suriname to target higher-grade softer rock, we completed nearly
2,000 metres of diamond and reverse circulation drilling on the
Sarafina property in the third quarter. The objective of the
drilling program is to evaluate priority targets identified in the
first half of this year. We continue to evaluate possible
transactions for other prospective properties with the potential
for higher-grade, softer rock.
Essakane Mine - Burkina
Faso
Essakane produced 83,000 attributable ounces in the third quarter
2014, up 30% from the same period 2013, driven by a 36% increase in
grades, partially offset by lower throughput resulting from a 44%
increase in the volume of hard and transition rock. Compared to the
second quarter 2014, production was lower by 10% reflecting the
increase in the percentage of hard rock from 24% to 83%, partially
offset by a 22% increase in grades to 1.2 grams of gold per tonne.
The improvement in grades was expected as mining focused on the
heart of the deposit containing higher-grade, hard rock, which will
provide the majority of ore for at least two more years. While
throughput is benefiting from the expanded mill, the increase in
the percentage of hard rock is significant and impacts throughput,
thus it is the higher grades that are expected to drive production
higher in the fourth quarter.
Previously, we guided for 2014 production to increase 25% from
2013; however, having increased guidance from 315,000 - 320,000
ounces to 330,000 - 335,000 ounces, we expect at least a 32%
increase in 2014 production from the previous year.
Total cash costs in the third quarter 2014 of $861 an ounce were 17% higher than the same
period in 2013 and 2% higher than the second quarter 2014. The
increases are mainly due to higher energy costs associated with
processing a greater proportion of hard and transition rock, as
well as a reduction in capitalized stripping as Essakane reached
the ore body on the south side of the pit.
We continue to mitigate cost increases through initiatives to
optimize mining and milling processes and to look for lower cost
energy solutions. As well, we have taken advantage of declining oil
prices in the third quarter to enter into hedging contracts for
crude oil up to 2017 so as to mitigate exposure to future price
increases.
Sadiola Mine - Mali
Third quarter attributable gold production of 21,000 ounces was 11%
higher than the same period in 2013 and 12% lower than the previous
quarter. There are no updates to report at this time with respect
to a potential future expansion at Sadiola. Any future expansion
requires securing a long-term supply of lower-cost, reliable and
uninterrupted power. Our partner AngloGold has not yet committed to
the expansion, and while we have the ability to carry our fair
share of the project we will not assume full responsibility for the
project if, and when, it proceeds.
Niobec - Canada
Niobec continues to perform strongly, with 1.4 million kilograms of
niobium produced in the third quarter, up 8% from the same quarter
2013 and consistent with the previous quarter. The operating
margin1 in the third quarter 2014 was $22 per kilogram compared to $19 per kilogram in the third quarter 2013 and
$18 per kilogram in the second
quarter 2014. The higher production reflects improving grades and
recoveries as well as higher throughput resulting from mill
optimization efforts completed in 2013.
EXPLORATION
In the third quarter 2014, expenditures for exploration and
project studies totaled $14.9
million, of which $10.3
million was expensed and $4.6
million capitalized. This compares to $18.7 million for the same period in 2013, with
the reduction due to a smaller exploration program. In addition to
mine site and brownfield exploration programs, we continue to
advance our early to advanced stage greenfield exploration
projects.
Wholly-Owned Projects
Following are the highlights for our wholly-owned exploration
projects, with more detail provided in the MD&A.
Boto - Senegal
On October 20, 2014, subsequent to
the end of the third quarter, we announced assay results from our
ongoing delineation drilling program at our Boto Gold Project in
Senegal. The indicated resource
estimate for this project is 1.1 million ounces averaging 1.6 grams
of gold per tonne (refer to news release dated July 29, 2013). The recent results from the
largest deposit on the property - the Malikoundi prospect - are
very encouraging as they include drill intersections with wide
intervals of high grade mineralization at depth immediately below
the previous resource pit shell. Highlights include 64 metres
at 3.37 grams of gold per tonne, 45 metres at 2.62 grams of gold
per tonne, 50 metres at 2.03 grams of gold per tonne and 16 metres
at 7.73 grams of gold per tonne. These results were preceded by
results released on April 9, 2014
confirming the continuity of the mineralization within the defined
resource and extending the mineralization associated with the
Malikoundi deposit. Drill results will be incorporated in an
updated resource model as part of our ongoing scoping study.
Pitangui - Brazil
At our Pitangui project in Brazil,
7,000 metres of diamond drilling was completed during the third
quarter to determine the continuity of gold mineralized zones
within the core area of the São Sebastião deposit. Delineation
drilling will continue in the fourth quarter with assay results to
be incorporated in the resource model. The mineral resource
estimate for the São Sebastião gold deposit comprises a 4.07
million tonne inferred resource grading 4.88 grams of gold per
tonne for 638,000 contained ounces (refer to news release dated
April 9, 2014). Exploration
activities, including an airborne survey are expected to be
completed by the end of this year with the objective of identifying
potential new gold mineralized systems on the property.
Joint Venture Projects
Following are the highlights for our joint venture exploration
projects, with more detail provided in the MD&A.
Monster Lake – Canada
(Option Agreement with TomaGold Corporation)
On August 20, 2014, we reported that all assay results from
the Phase I diamond drilling program at our Monster Lake project,
which comprises three properties within a 4-kilometre long
mineralized corridor in the Abitibi Greenstone belt, had been
received and validated. The results from 4,528 metres of drilling
(9 holes) on the 325-Mega Zone have been positive and confirm the
presence of several mineralized structures and high grades. A
second phase of diamond drilling totaling approximately 5,000
metres is underway to test selected target areas along the main
mineralized corridor and is expected to be completed this
quarter.
Eastern Borosi – Nicaragua
(Option Agreement with Calibre Mining Corporation)
A phase I diamond drilling program was underway throughout the
third quarter at the Eastern Borosi project comprising 176 square
kilometres in Northeast Nicaragua.
On October 16, 2014, Calibre Mining
announced in a news release that assay results had been received
for 18 of the planned 30 holes, and that the drilling program was
being expanded to test additional vein systems and to follow-up
drilling of the high-grade gold intercepts received to date.
Siribaya – Mali –
(Partnership with Merrex Gold Inc.)
Our joint venture partner, Merrex Gold, provided exploration
updates on August 28, 2014 and
October 8, 2014 for the Diakha
prospect, a new discovery located on the southern extension of our
Boto Gold Malikoundi mineralized trend in Senegal. Assay results from a Phase II reverse
circulation and diamond drilling program confirmed results from the
Phase I reverse circulation drilling program and demonstrated the
continuity of mineralization over a wide area within the discovery
zone. The results from the Phase I drilling program had revealed
multiple zones of gold mineralization with similarities to the Boto
Gold deposits.
Caramanta – Colombia –
(Partnership with Solvista Gold Corporation)
At the Caramanta Project located in Colombia's Mid-Cauca Belt, we commenced a
4,000 metre diamond drilling program to test targets not previously
drilled by Solvista (refer to Solvista's news release dated
August 20, 2014). Nearly 1,800 metres
of drilling was completed in six drill holes on the Mal Abrigo,
Ajiaco Sur and Casa Verde gold-copper and silver porphyry
targets.
End Notes (excluding tables)
1
|
This is a non-GAAP
measure. Refer to the reconciliation in the non-GAAP performance
measures section of the MD&A.
|
2
|
We have begun
including the income from our Diavik royalty as an offset to
operating costs in the calculation of this measure. Previous
periods have been revised for comparability.
|
3
|
Gold mines, as used
with total cash costs and all-in sustaining costs, consist of
Rosebel, Essakane, Westwood (commercial production), Mouska,
Sadiola and Yatela on an attributable basis.
|
4
|
The total cash costs
computation does not include Westwood pre-commercial production for
the three months ended September 30, 2013 of 43,000
ounces
|
5
|
Total, as used with
all-in sustaining costs, includes the impact of niobium
contribution, defined as the Niobec operating margin and sustaining
capital, on a per gold ounce sold basis. Refer to the all-in
sustaining cost table in the non-GAAP performance measures section
of the MD&A.
|
6
|
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 Thursday, November 13, 2014 at 8:30 a.m. (Eastern Standard Time) for a
discussion with management regarding IAMGOLD`s third quarter 2014
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: 1952#.
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 headings "Third Quarter 2014 Highlights" and
"Third Quarter 2014 Operating Highlights", and include, without
limitation, statements with respect to: the Company's guidance for
production, total cash costs, all-in sustaining costs, depreciation
expense, effective tax rate, niobium production and operating
margin, 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", "anticipate", "estimate", "believe",
"intend", "plan", "suggest", "guidance", "outlook",
"potential", "prospects", "seek", "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, 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, 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 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.html. The risks described in the Annual
Information Form (filed and viewable on www.sedar.com and
www.sec.gov/edgar.html, 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 by, Craig
MacDougall, P.Geo., Senior Vice President, Exploration, for
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 five
producing gold mines (including current joint ventures) on three
continents and one of the world's top three niobium mines. A solid
base of strategic assets in Canada, South
America and 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,
veuillez consulter le
http://www.iamgold.com/French/Home/default.aspx.
SOURCE IAMGOLD Corporation