All 2014 numbers are preliminary and unaudited
and subject to final adjustment.
All amounts are expressed in US dollars,
unless otherwise indicated.
TORONTO, Jan. 22, 2015 /CNW/ - IAMGOLD Corporation
("IAMGOLD" or the "Company") announces preliminary operating
results for 2014 and guidance for 2015.
IAMGOLD's President and CEO, Steve
Letwin said, "Our operating results in 2014 underscore our
commitment to operational excellence. Production climbed steadily
throughout the year, with production at Essakane growing 33% and
Westwood successfully ramping up
commercial production. We ended the year a much more efficient and
productive company, reflecting the successful implementation of
cost reduction initiatives by our sites and the restructuring of
our corporate office. All-in sustaining costs, which declined in
each consecutive quarter, were better than the lower end of
our guidance, and pave the way for 2015 guidance $75 an ounce lower than that of the previous
year.
"We enter 2015 with a strong balance sheet, further bolstered by
the sale of Niobec. Presently, we are seeing an improving gold
price and a stronger U.S. dollar relative to the Canadian dollar
and the Euro, and we are beginning to benefit from the significant
decline in oil prices," continued Mr. Letwin. "Although we
benefit from these positive factors, our strategy is to build on
our achievements in 2014 to optimize the performance of our
operations and to continue focusing on cost reduction, disciplined
capital spending and cash preservation."
Performance Highlights for 2014
- Attributable gold production of 844,000 ounces; with 241,000
ounces in the fourth quarter.
- Preliminary total cash costs1 – gold
mines2 estimated at $845 to
$865 per ounce, in line with guidance; fourth quarter
expected at or below low end of guidance.
- Cash costs for IAMGOLD owner-operator mines for
2014 expected to be at the upper end of guidance of
$790 to $830 per ounce.
- Preliminary all-in sustaining costs1,3 – gold mines
estimated at $1,100 to $1,120 per
ounce, better than the lower end of guidance of $1,150 per ounce; fourth quarter estimated to be
approximately $100 per ounce below
low end of guidance.
- All-in sustaining costs for IAMGOLD owner-operator mines for
2014 expected to be at the low end of guidance of $1,100 to $1,200 per ounce.
- Capital expenditures were approximately $325 million in 2014, 51% lower than 2013 and
well below the 2014 guidance.
- Revenue for 2014 was $1.2 billion
compared to $1.1 billion in
2013.
- In the second half of 2014, as part of the Company's risk
management strategy, we entered into a number of fuel contracts to
hedge a portion of our expected fuel consumption. Subsequent to
entering into these contracts, oil prices continued to decline
significantly resulting in non-cash unrealized losses of
$49.9 million being recorded in the
fourth quarter. See the section OIL HEDGES on page 2 for further
detail.
- As a result of the year-end review of asset retirement
obligations, the Company recorded non-cash expenses of
approximately $40.5 million related
to the rehabilitation costs associated with the closure of the
Doyon Mine.
- As at December 31, 2014, cash,
cash equivalents and gold bullion (market value) was approximately
$333 million.
Guidance Highlights for 2015
- Attributable gold production expected to range between 820,000
and 860,000 ounces.
- Total cash costs – gold mines expected to range between
$850 and $900 per ounce.
- IAMGOLD owner-operator mines expected at a lower range of
$825 to $865 per ounce.
- All-in sustaining costs – gold mines expected to range between
$1,075 and $1,175 per ounce.
- IAMGOLD owner-operator mines expected at a lower range of
$1,050 to $1,150 per ounce.
- Capital expenditures guidance of $230
million ±10%, approximately 30% lower than 2014.
- With the closing of the Niobec sale, the Company's cash, cash
equivalents and gold bullion (at market) position increases by
$500 million.
OIL HEDGES
Fuel is a key input in our mining operations. To mitigate the
risk of price fluctuations, particularly in volatile markets, we
enter into derivative contracts to hedge a portion of the fuel we
expect to consume. A portion of the exposure remains unhedged
so that particularly in a falling commodity price environment the
Company can continue to benefit from further price declines.
At the end of 2014, the following zero cost contracts were in place
covering 2015 to 2017:
- For 2015, 73% of fuel exposure hedged at a price of
$75 - $95/barrel of WTI crude
- For 2016, 75% of fuel exposure hedged at a price of
$68 - $95/barrel of WTI crude
- For 2017, 50% of fuel exposure hedged at a price of
$71 - $95/barrel of WTI crude
The price range, or collar, protects the Company in a rising
price environment by locking in a ceiling price, allows the Company
to trade at the spot price within the boundary of the range and
locks in a floor price, all at a zero cost. Subsequent to entering
into these future contracts, oil prices continued to decline
significantly, resulting in non-cash unrealized losses of
$49.9 million being recorded in the
fourth quarter. This means that the losses have not been
realized, but only reflect what the loss would be were the contract
to have been exercised, in this case, below the floor price.
Should oil prices begin to recover over the three year duration of
the contracts, these unrealized losses could potentially
reverse.
2014 GOLD OPERATIONS
Full year attributable production was 844,000 ounces, within the
guidance range of 835,000 to 850,000 ounces. Attributable
gold production for the fourth quarter 2014 was 241,000 ounces, the
best quarter of the year as a result of improved grades at Rosebel
and Essakane.
For the full year 2014, total cash costs – gold mines are
expected to range between $845 and
$865 per ounce, with total cash costs for IAMGOLD
owner-operator sites expected to be at the upper end of our
guidance. All-in sustaining costs – gold mines for 2014 are
expected to range between $1,100 and
$1,120 per ounce, with IAMGOLD owner-operator sites at the
low end of guidance.
For the fourth quarter 2014, total cash costs - gold mines
and owner-operator are expected to be at or below low end of
guidance. All-in sustaining costs - gold mines are expected to be
approximately $100 per ounce below
the low end of guidance and all-in sustaining costs owner-operator
are expected to be lower than guidance.
The following table presents actual production by site:
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2014
|
|
Q2
2014
|
|
Q3
2014
|
|
Q4
2014
|
|
2014
|
Owner-Operator
|
|
|
|
|
|
|
|
|
|
|
Rosebel
(95%)
|
|
80
|
|
68
|
|
83
|
|
94
|
|
325
|
Essakane
(90%)
|
|
68
|
|
92
|
|
83
|
|
89
|
|
332
|
|
Doyon - Mouska
(100%)
|
|
-
|
|
11
|
|
1
|
|
-
|
|
12
|
|
Doyon – Westwood
(100%)
|
|
1
|
|
9
|
|
35
|
|
35
|
|
80
|
Total Doyon
Division1
|
|
1
|
|
20
|
|
36
|
|
35
|
|
92
|
Total
Owner-Operator
|
|
149
|
|
180
|
|
202
|
|
218
|
|
749
|
Joint
Ventures
|
|
-
|
|
|
|
|
|
|
|
|
Sadiola
(41%)
|
|
19
|
|
24
|
|
21
|
|
20
|
|
84
|
Yatela
(40%)
|
|
4
|
|
2
|
|
2
|
|
3
|
|
11
|
|
|
23
|
|
26
|
|
23
|
|
23
|
|
95
|
Total
|
|
172
|
|
206
|
|
225
|
|
241
|
|
844
|
|
|
|
|
|
|
|
|
|
|
|
1The Doyon Division consists of ore from both Mouska
and Westwood. Westwood was in pre-commercial production in
the first half of the year and entered commercial production in the
third quarter of 2014.
2014 NIOBIUM OPERATIONS
IAMGOLD produced 5.6 million kilograms of niobium in 2014 at an
average operating margin1 of approximately $20 per kilogram, which exceeded guidance of 5.2
- 5.5 million kilograms at $17 - $19
a kilogram. Record performance was achieved through excellent
recoveries and grade together with higher throughput.
2015 PRODUCTION AND COST GUIDANCE
The following assumptions have been used for 2015 guidance:
- Average gold price per ounce of $1,250;
- Average crude oil price per barrel of $73;
- U.S. dollar value of the Euro of $1.20; and
- Canadian dollar value of the U.S. dollar of $1.15.
|
|
|
|
|
|
IAMGOLD Full Year
Guidance
|
|
|
|
|
2015
|
Rosebel (000s
oz)
|
|
|
|
|
290 -
300
|
Essakane (000s
oz)
|
|
|
|
|
360 -
370
|
Westwood (000s
oz)
|
|
|
|
|
110 -
130
|
Total owner-operator
production (000s oz)
|
|
|
|
|
760 -
800
|
Joint ventures (000s
oz)
|
|
|
|
|
60
|
Total attributable
production (000s oz)
|
|
|
|
|
820 -
860
|
|
|
|
|
|
|
Total cash
costs1 – owner-operator ($/oz)
|
|
|
|
|
$825 -
$865
|
Total cash costs –
gold mines ($/oz)
|
|
|
|
|
$850 -
$900
|
|
|
|
|
|
|
All-in sustaining
costs1, 2 – owner-operator ($/oz)
|
|
|
|
|
$1,050 –
$1,150
|
All-in sustaining
costs – gold mines ($/oz)
|
|
|
|
|
$1,075 –
$1,175
|
|
|
|
|
|
|
|
|
|
|
|
|
1 This is a non-GAAP measure.
2 By-product credits are included in the calculation of
this measure.
Gold Production and Cash Costs
Our production outlook for 2015 is between 820,000 and 860,000
ounces of gold. We expect a ramp-up in production at Westwood in its first full year of commercial
production. There will be some variation from quarter to quarter,
with the first quarter the lightest due to the significant amount
of underground development. Building on the 33% increase in
production that we had at Essakane in 2014, this operation is
expected to have four strong quarters of production as the
operation continues to benefit from higher grades and the previous
mill expansion to accommodate a higher proportion of hard rock
processing. At Rosebel, we continue to focus on improving
grades and increasing productivity. The joint ventures are expected
to produce 60,000 ounces. In 2014, the Company made significant
progress in reducing its all-in sustaining costs throughout the
year. Building on this momentum, we are reducing our all-in
sustaining cost guidance by $75 an
ounce from what we guided in 2014 to a range of $1,075 to $1,175 an ounce.
2015 CAPITAL EXPENDITURE GUIDANCE
|
|
|
|
|
|
|
|
|
|
|
|
($
millions)
|
|
|
|
Sustaining1
|
|
|
Development/
Expansion
(Non-sustaining)
|
|
|
|
Total
|
Gold
segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rosebel
|
|
|
$
|
70
|
|
|
$
|
10
|
|
|
$
|
80
|
|
Essakane
|
|
|
|
55
|
|
|
|
5
|
|
|
|
60
|
|
Westwood
|
|
|
|
30
|
|
|
|
50
|
|
|
|
80
|
Total gold
segments
|
|
|
|
155
|
|
|
|
65
|
|
|
|
220
|
Côté Gold
|
|
|
|
-
|
|
|
|
5
|
|
|
|
5
|
Total capital
expenditures, consolidated
|
|
|
|
155
|
|
|
|
70
|
|
|
|
225
|
Joint
ventures
|
|
|
|
5
|
|
|
|
-
|
|
|
|
5
|
TOTAL
(±10%)
|
|
|
$
|
160
|
|
|
$
|
70
|
|
|
$
|
230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Includes capitalized stripping of
$20 million at Rosebel and
$20 million at Essakane.
The Company is forecasting capital spending of $230 million ± 10%. This represents an
approximate 30% reduction from 2014, reflecting the completion of
the Essakane expansion and divestment of Niobec. Options for
Sadiola continue to be explored; however, expansion related capital
is not planned at this time. With respect to all future expansion
and development projects, our focus continues to be on de-risking
the projects, completing the permitting and continuing to monitor
market conditions.
Of the $160 million allocated to
sustaining capital, approximately 25% is for capitalized stripping
at Essakane and Rosebel. The following summarizes the primary uses
for capital spending by site:
- Rosebel - Capital spending of $80
million includes non-sustaining capital for the tailings dam
expansion ($7 million) and tailings
pump upgrade ($3 million). Sustaining
capital includes capitalized stripping ($20
million), capital spares ($18
million), mobile equipment ($9
million), tailings dam raise ($6 million), resource
development ($4 million), and other sustaining capital
($13 million).
- Essakane - Capital spending of $60 million includes non-sustaining capital
primarily of $5 million. Sustaining
capital includes capitalized stripping ($20
million), capital spares ($10
million), generator overhaul ($5 million), mobile
equipment ($4 million), resource
development ($3 million), and other sustaining capital
($7 million).
- Westwood – Capital
spending is expected to be $80
million, and includes capitalized development ($57 million), mobile and underground equipment
($11 million), underground
construction ($9 million), and
development drilling ($3 million).
Non-sustaining capital of $50 million
included above relates to ramp-up to full production design levels
in mining blocks that are not expected to be in production in the
near term.
- Côté Gold – Expansion capital is for completion of the
pre-feasibility study, initiation of the feasibility study and
ongoing work for the permitting process.
2015 EXPLORATION PLAN
The Company remains highly disciplined with respect to
exploration spending. In 2014, the exploration spend was reduced by
29% to $68.9 million, including a
greater than 50% reduction in spending for brownfield exploration
and the scoping and feasibility study at the Côté Gold project in
Ontario, Canada.
A focused plan to advance the best properties has resulted in a
pipeline of quality projects with high-grade potential. In
addition to targeting soft rock around the Rosebel and Essakane
mines, the Company is advancing the wholly-owned projects of
Boto Gold in Senegal and Pitangui in Brazil as well as several joint venture
projects in South and Central
America, West Africa and
Canada.
In 2015, with planned spending of $58.5
million, the greenfield and brownfield exploration programs
will continue to focus on discovering "new ounces". In 2015,
project studies have been reduced to $11.7
million, and will focus on both the Côté Gold and
Boto Gold projects.
The following table presents 2014 actual and 2015 plan for
exploration and project studies:
|
|
|
|
|
|
|
|
|
|
|
|
2014
Actual
|
|
|
2015
Plan
|
($
millions)
|
|
|
Capitalized
|
|
Expensed
|
|
|
Total
|
|
Capitalized
|
|
Expensed
|
|
|
Total
|
Exploration projects
- greenfield
|
|
|
$
|
-
|
|
$
|
34.6
|
|
$
|
34.6
|
|
$
|
-
|
|
$
|
26.9
|
|
$
|
26.9
|
Exploration projects
- brownfield ¹
|
|
|
|
14.8
|
|
|
7.2
|
|
|
22.0
|
|
|
11.4
|
|
|
8.5
|
|
|
19.9
|
Total Corporate
Exploration¹
|
|
|
|
14.8
|
|
|
41.8
|
|
|
56.6
|
|
|
11.4
|
|
|
35.4
|
|
|
46.8
|
Côté Gold scoping,
feasibility and pre-feasibility studies
|
|
|
|
11.4
|
|
|
0.6
|
|
|
12.0
|
|
|
7.2
|
|
|
-
|
|
|
7.2
|
Other scoping and
pre-feasibility studies
|
|
|
|
-
|
|
|
0.3
|
|
|
0.3
|
|
|
-
|
|
|
4.5
|
|
|
4.5
|
Total Scoping/
feasibility studies
|
|
|
|
11.4
|
|
|
0.9
|
|
|
12.3
|
|
|
7.2
|
|
|
4.5
|
|
|
11.7
|
Grand
Total
|
|
|
$
|
26.2
|
|
$
|
42.7
|
|
$
|
68.9
|
|
$
|
18.6
|
|
$
|
39.9
|
|
$
|
58.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Exploration projects - brownfield excludes
planned expenditures related to Sadiola and Yatela of $0.9 million for 2014 Actual and $1.2 million for 2015 Plan, and includes planned
near mine and resource exploration of $14.7
million for 2014 Actual and $11.3
million for 2015 Plan.
END NOTES (excluding tables)
- This is a non-GAAP measure.
- 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.
- We have begun including the income from our Diavik royalty as
an offset to operating costs in the calculation of this
measure.
CONFERENCE CALL
A conference call will be held on Thursday, February 19,
2015 at 8:30 a.m. (Eastern Standard Time) for a
discussion with management regarding IAMGOLD`s 2014 fourth quarter
and full-year 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 International Number: 1-604-638-5340.
A replay of this conference call will be accessible for one
month following the call by dialing: North
America toll-free: 1-800-319-6413 or International Number:
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 "2015 Production and Cost Guidance,
2015 Capital Expenditure Forecast and 2015 Exploration Plan", 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, 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", "assumption", "forecast", "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
not to place any reliance whatsoever on forward-looking information
or forward-looking statements. Forward- looking information and
forward-looking statements involve risks, uncertainties and
other factors that may cause the actual financial results,
performance or achievements of IAMGOLD to be materially different
from the Company's estimated future results, performance or
achievements expressed or implied by those forward-looking
statements, and the forward-looking statements are not guarantees
of future performance. These risks, uncertainties and other factors
include, but are not limited to, changes in the global prices for
gold, copper, silver or certain other commodities (such as diesel
and electricity); changes in U.S. dollar and other currency
exchange rates, interest rates or gold lease rates; risks arising
from holding derivative instruments; the level of liquidity and
capital resources; access to capital markets, and financing; mining
tax regimes; ability to successfully integrate acquired assets;
legislative, political or economic developments in the
jurisdictions in which the Company carries on business; operating
or technical difficulties in connection with mining or development
activities; laws and regulations governing the protection of the
environment; employee relations; availability and increasing costs
associated with mining inputs and labour; the speculative nature of
exploration and development, including the risks of diminishing
quantities or grades of reserves; adverse changes in the Company's
credit rating; contests over title to properties, particularly
title to undeveloped properties; and the risks involved in the
exploration, development and mining business. With respect to
development projects, IAMGOLD's ability to sustain or increase its
present levels of gold production is dependent in part on the
success of its projects. Risks and unknowns inherent in all
projects include the inaccuracy of estimated reserves and
resources, metallurgical recoveries, capital and operating costs of
such projects, and the future prices for the relevant minerals.
Development projects have no operating history upon which to base
estimates of future cash flows. The capital expenditures and time
required to develop new mines or other projects are considerable,
and changes in 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.
About IAMGOLD
IAMGOLD (www.iamgold.com) is a mid-tier mining company with four
operating gold mines (including current joint ventures) on three
continents. 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