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 for the
three months ended June 30, 2015 for
more
information.
TORONTO, Aug. 5, 2015 /CNW/ - IAMGOLD Corporation
("IAMGOLD" or the "Company") today reports its financial and
operating results for the second quarter ended June 30, 2015.
"We've adapted very well to gold price volatility in the past,
reducing our cost structure by more than $175 million since 2013," said Steve Letwin, President and CEO of IAMGOLD. "In
this gold price environment we have to do even more. As we
optimize our mine plans, we continue our efforts to further
reduce operating costs and sustaining capital. Additionally, we are
reviewing our future development projects. Consequently,
negotiations related to the potential acquisition of our partner's
interest in Sadiola have been suspended. Maintaining liquidity is
the prudent thing to do in this environment, and fortunately we
have a strong balance sheet with $836
million in cash and bullion.
"Gold production of 410,000 ounces in the first six months was
up 8% year-over-year, with 202,000 ounces produced in the second
quarter," continued Mr. Letwin. "Essakane began processing
ore from the Falagountou pit and the cost efficiency initiatives
designed to optimize Rosebel's performance are being implemented at
Essakane. Looking ahead, we expect enhanced performance at these
two operations in the second half of the year. At Sadiola we expect
to continue mining and processing the oxides well into 2016.
Westwood production was short of
expectations in the second quarter due to the localized ground fall
following the seismic event on May
26th. With seismic activity common in the Abitibi region, we
will advance development at a pace that is safe and reflects that
reality."
Second Quarter 2015
Overview:
- Attributable gold production of 202,000 oz.; with gold sales of
195,000 oz.
- Production commenced at Essakane's Falagountou deposit.
- All-in sustaining costs1,2 of $1,076/oz; lower than $1,113/oz in Q1/15 and $1,136/oz in Q2/14
- Total cash costs1,2,3 of $817/oz.; lower than $846/oz in Q1/15 and $881/oz in Q2/14.
- Cash, cash equivalents and gold bullion (at market value) of
$836.4 million at June 30, 2015.
- Net cash from operating activities of $31.7 million, bringing year-to-date net cash to
$61.7 million.
- 2015 production guidance revised due to localized ground fall
following a seismic event at Westwood on May 26,
2015:
- Westwood: from 110,000-130,000
oz. to 60,000-75,000 oz.
- Consolidated (attributable): from 820,000-860,000 oz. to
780,000-815,000 oz.
- 2015 total cash cost guidance maintained at $850-$900/oz. and AISC at $1,075-$1,175/oz.
Subsequent to Quarter-end:
- July 20, 2015 - assay results at
the Boto project in Senegal
confirmed continuity of mineralization with frequent high grades
over wide intervals and a deposit that remains open at depth.
Highlights include 36 metres grading 3.59 g/t Au, including 7
metres grading 9.46 g/t Au.
- July 7, 2015 - assay results at
the Pitangui project in Brazil
confirmed continuity of targeted zones with the intersection of
thicker intervals of higher grade mineralization. Highlights
include 11.9 metres grading 6.84 g/t Au, including 3 metres grading
17.0 g/t Au.
SUMMARY OF FINANCIAL AND OPERATING
RESULTS
|
|
|
|
|
Three months
ended
June
30,
|
Six months
ended
June
30,
|
Financial Results
($ millions, except where noted)
|
2015
|
2014
|
2015
|
2014
|
Continuing
Operations
|
|
|
|
|
Revenues
|
$
|
226.5
|
|
$
|
231.4
|
|
$
|
471.2
|
|
$
|
448.7
|
Cost of
sales
|
$
|
228.8
|
|
$
|
206.8
|
|
$
|
460.5
|
|
$
|
392.0
|
Earnings (loss) from
continuing mining operations1
|
$
|
(2.3)
|
|
$
|
24.6
|
|
$
|
10.7
|
|
$
|
56.7
|
Net earnings (loss)
including discontinued operations attributable to
equity holders of
IAMGOLD
|
$
|
(19.7)
|
|
$
|
(16.0)
|
|
$
|
4.4
|
|
$
|
(12.3)
|
Net earnings (loss)
including discontinued operations attributable to
equity holders of
IAMGOLD per share ($/share)
|
$
|
(0.05)
|
|
$
|
(0.04)
|
|
$
|
0.01
|
|
$
|
(0.03)
|
Adjusted net earnings
(loss) including discontinued operations
attributable to
equity holders of IAMGOLD1
|
$
|
(30.8)
|
|
$
|
8.8
|
|
$
|
(57.5)
|
|
$
|
20.9
|
Adjusted net earnings
(loss) including discontinued operations per
share
($/share)1
|
$
|
(0.08)
|
|
$
|
0.02
|
|
$
|
(0.15)
|
|
$
|
0.06
|
Net cash from
operating activities including discontinued operations
|
$
|
31.7
|
|
$
|
96.8
|
|
$
|
61.7
|
|
$
|
124.9
|
Net cash from
operating activities before changes in working capital
including
discontinued operations1
|
$
|
45.6
|
|
$
|
70.1
|
|
$
|
100.4
|
|
$
|
134.7
|
Net cash from
operating activities before changes in working capital
including
discontinued operations ($/share)1
|
$
|
0.12
|
|
$
|
0.19
|
|
$
|
0.26
|
|
$
|
0.36
|
Net earnings from
discontinued operations attributable to equity
holders of
IAMGOLD
|
$
|
—
|
|
$
|
6.2
|
|
$
|
40.6
|
|
$
|
24.0
|
Net earnings from
discontinued operations attributable to equity
holders of IAMGOLD
($/share)
|
$
|
—
|
|
$
|
0.02
|
|
$
|
0.10
|
|
$
|
0.07
|
Key Operating
Statistics
|
|
|
|
|
Gold sales –
attributable (000s oz)
|
195
|
|
192
|
|
403
|
|
368
|
Gold commercial
production – attributable (000s oz)
|
202
|
|
197
|
|
410
|
|
368
|
Gold production –
attributable2 (000s oz)
|
202
|
|
206
|
|
410
|
|
378
|
Average realized gold
price1 ($/oz)
|
$
|
1,194
|
|
$
|
1,288
|
|
$
|
1,208
|
|
$
|
1,287
|
Total cash
costs1,3,4 ($/oz)
|
$
|
817
|
|
$
|
881
|
|
$
|
832
|
|
$
|
883
|
Gold
margin1 ($/oz)
|
$
|
377
|
|
$
|
407
|
|
$
|
376
|
|
$
|
404
|
All-in sustaining
costs1,4 ($/oz)
|
$
|
1,076
|
|
$
|
1,136
|
|
$
|
1,095
|
|
$
|
1,165
|
1
|
This is a non-GAAP
measure. Refer to the non-GAAP performance measures section of the
MD&A.
|
2
|
Attributable gold
production includes Westwood pre-commercial production for the
three and six months ended June 30, 2014 of 9,000
ounces
and 10,000 ounces,
respectively.
|
3
|
The total cash costs
computation does not include Westwood pre-commercial production for
the three and six months ended June 30, 2014
of
9,000 ounces and 10,000 ounces,
respectively.
|
4
|
Consists of Rosebel,
Essakane, Westwood (commercial production), Mouska, Sadiola and
Yatela on an attributable basis.
|
SECOND QUARTER 2015
HIGHLIGHTS
Financial Performance
- Revenues from continuing operations for the second quarter 2015
were $226.5 million, down 2% from the
same prior year period. The decrease was the result of a lower
realized gold price ($15.1 million)
and lower royalties following the sale of the Diavik royalty asset
($2.3 million), partially offset by
higher gold sales from owner-operated mines of 12,000 ounces
($12.3 million). The higher sales
volume was mainly due to the inclusion of Westwood's revenues in the operating results
after commencing commercial production in the third quarter 2014,
partially offset by lower sales at Rosebel and Essakane and the
closure of Mouska.
- Cost of sales from continuing operations for the second quarter
2015 was $228.8 million, up
$22.0 million from the same prior
year period. The increase was mainly the result of higher
depreciation expense ($20.1 million)
and an increase in operating costs ($3.8
million), partially offset by lower royalties due to lower
realized gold prices ($1.9 million).
The marginal increase in operating costs was mainly due to the
commencement of commercial production at Westwood in the third quarter 2014
($27.5 million), almost fully offset
by lower operating costs at Essakane ($12.3
million) and Rosebel ($9.1
million) and the closure of Mouska ($2.5 million).
- Depreciation expense from continuing operations for the second
quarter 2015 was $66.4 million, up
$20.1 million from the second quarter
2014. This was primarily due to commencement of commercial
production at Westwood in the
third quarter 2014, higher amortization of capitalized stripping
and higher production at Rosebel, and lower reserves at Essakane
and Rosebel, partially offset by lower amortization of capitalized
stripping at Essakane.
- Income tax expense from continuing operations for the second
quarter 2015 was $6.7 million, up
$1.4 million from the same prior year
period. The increase was mainly due to an increase in the non-cash
deferred tax expense as a result of the strengthening U.S. dollar.
This reduced the tax basis of mining assets in foreign
jurisdictions, which lowered the future estimated tax deductions
available when translated into U.S. dollars.
- Net loss from continuing operations attributable to equity
holders for the second quarter 2015 was $19.7 million or $0.05 per share, down $2.5
million from the same prior year period. The improvement was
mainly due to higher net earnings from associates and joint
ventures ($13.3 million), net changes
in estimates of asset retirement obligations at closed sites
($7.3 million), higher non-hedge
derivative gains ($5.5 million) and
lower exploration expense ($3.5
million), partially offset by higher cost of sales
($22.0 million), lower revenues
($4.9 million) and lower capitalized
interest ($4.9 million).
- Net earnings for Niobec were presented separately as net
earnings from discontinued operations, net of income taxes, in the
Consolidated statements of earnings. Comparative periods have been
adjusted accordingly. Net earnings from discontinued operations for
the second quarter 2015 were $nil, down $6.2
million from the same prior year period. The decrease was
the result of the sale of Niobec in the first quarter 2015.
- The adjusted net loss including discontinued operations
attributable to equity holders1 for the second quarter
2015 was $30.8 million ($0.08 per share1), down $39.6 million ($0.10 per share) from adjusted net earnings of
$8.8 million ($0.02 per share1) for the same prior
year period.
- Net cash from operating activities including discontinued
operations was $31.7 million for the
second quarter 2015, down $65.1
million from the second quarter 2014. The decrease was
mainly due to higher inventory ($24.3
million), higher receivables ($16.0
million), net settlement of derivatives ($7.4 million) and the absence of earnings from
Niobec, which was sold in the first quarter 2015 ($6.2 million), partially offset by lower income
taxes paid ($4.8 million).
- Net cash from operating activities before changes in working
capital1 including discontinued operations for the
second quarter 2015 was $45.6 million
($0.12 per share1), down
$24.5 million ($0.07 per share1) from the same prior
year period.
Financial Position
- Cash, cash equivalents and gold bullion (at market value) were
$836.4 million as at June 30, 2015 compared with $889.1 million as at March
31, 2015. The decrease was mainly due to spending on
property, plant and equipment ($57.2
million), interest paid ($16.6
million), income taxes paid
($3.4 million) and a decrease in the
market value of gold bullion ($2.1
million), partially offset by cash generated from operating
activities ($35.1 million).
Production and Costs
Gold Operations
- Attributable gold production was 202,000 ounces, inclusive of
joint venture operations, in the second quarter 2015 compared to
206,000 ounces in the second quarter 2014. The lower production was
mainly due to the closure of Mouska (11,000 ounces) and lower
grades at Sadiola (7,000 ounces), partially offset by higher
production at Westwood, which
commenced commercial production in the third quarter 2014 (14,000
ounces).
- Attributable gold sales of 195,000 ounces, inclusive of joint
venture operations, for the second quarter 2015 was below
attributable gold production of 202,000 ounces, mainly due to
timing of sales at Essakane.
- Total cash costs1,2,3 for the second quarter 2015
were $817 per ounce produced, down
$64 an ounce from the second quarter
2014. The decrease was mainly due to the favourable impact on
production from higher grades at Rosebel and Essakane, as well as
lower mining costs at our joint ventures. Partially offsetting the
improvements at these operations were higher costs at Westwood as it was not in commercial
production in the second quarter 2014. Total cash costs for the
second quarter included:
- Realized hedge and non-hedge derivative losses, which increased
total cash costs by $44 per ounce
($nil for Q2/14).
- Normalization of Westwood's
costs by $5.4 million due to the
impact of the seismic event, which reduced total cash costs by
$27 per ounce at the consolidated
level.
- All-in sustaining costs1,2 were $1,076 per ounce sold in the second quarter 2015,
down $60 an ounce from the second
quarter 2014. The improvement was mainly due to higher sales volume
and lower cash costs partially offset by higher sustaining capital
expenditures. All-in sustaining costs for the second quarter
included:
- Realized hedge and non-hedge derivative losses, which increased
all-in sustaining costs by $53 per
ounce ($nil for Q2/14).
- Normalization of Westwood's
cash costs by $5.4 million due to the
impact of the seismic event, which reduced all-in sustaining costs
by $28 per ounce at the consolidated
level.
Commitment to Zero Harm Continues
- Regarding health and safety, the frequency of all types of
serious injuries (measured as the DART rate4), for the
second quarter 2015 was 1.14 compared to the target of 0.69, which
was based on a very low rate in 2014. The higher DART rate in the
second quarter was attributed to the localized ground fall
following a seismic event at the Westwood mine on May
26, 2015. While no employees were physically injured, the
event did result in some employees being absent subsequent to the
event.
Production and Cost Outlook for 2015
- On June 29, 2015 we announced a
revision to our gold production guidance for 2015 from
820,000-860,000 ounces to 780,000-815,000 ounces. This reflects a
reduction in Westwood's production
guidance to 60,000-75,000 ounces due to the seismic event.
Partially offsetting the reduced guidance for Westwood is a 10,000 ounce increase in our
production outlook for our joint venture operations in Mali to 70,000 ounces.
- We are maintaining our total cash cost guidance of $850 - $900 per ounce and all-in sustaining cost
guidance of $1,075 - $1,175 per
ounce.
ATTRIBUTABLE GOLD PRODUCTION, ALL-IN SUSTAINING
(AISC) AND TOTAL CASH COSTS
|
|
|
|
|
|
Gold
Production
(000s
oz)
|
Total Cash
Costs1,2,3
($/ oz.
produced)
|
AISC
1,3
($/ oz. sold)
|
Three months ended
June 30,
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
|
|
|
|
|
|
|
Owner-operator
|
|
|
|
|
|
|
Rosebel
(95%)
|
71
|
|
68
|
|
$
|
864
|
|
$
|
942
|
|
$
|
1,104
|
|
$
|
1,216
|
Essakane
(90%)
|
89
|
|
92
|
|
802
|
|
848
|
|
1,022
|
|
941
|
Westwood4
(100%)
|
23
|
|
11
|
|
837
|
|
490
|
|
1,044
|
|
693
|
|
183
|
|
171
|
|
831
|
|
861
|
|
1,112
|
|
1,137
|
Joint
ventures
|
|
|
|
|
|
|
Sadiola
(41%)
|
17
|
|
24
|
|
658
|
|
949
|
|
706
|
|
1,050
|
Yatela
(40%)
|
2
|
|
2
|
|
976
|
|
1,563
|
|
1,003
|
|
1,910
|
|
19
|
|
26
|
|
688
|
|
1,008
|
|
736
|
|
1,130
|
Total commercial
operations
|
202
|
|
197
|
|
817
|
|
881
|
|
1,076
|
|
1,136
|
Westwood
(100%)
|
—
|
|
9
|
|
—
|
|
—
|
|
—
|
|
—
|
|
202
|
|
206
|
|
817
|
|
881
|
|
1,076
|
|
1,136
|
Cash costs, excluding
royalties
|
|
|
768
|
|
818
|
|
|
|
Royalties
|
|
|
49
|
|
63
|
|
|
|
Total cash
costs
|
|
|
$
|
817
|
|
$
|
881
|
|
|
|
All-in sustaining
costs
|
|
|
|
|
$
|
1,076
|
|
$
|
1,136
|
1
|
This is a non-GAAP
measure. Refer to the non-GAAP performance measures section of the
MD&A. Consists of
Rosebel,
Essakane, Westwood (commercial
production), Mouska, Sadiola and Yatela on an attributable
basis.
|
2
|
The total cash costs
computation does not include Westwood pre-commercial production for
the three months
ended
June 30, 2014 of 9,000 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
|
Amounts for 2014
related to the Mouska Mine, which closed in the third quarter
2014.
|
|
|
|
|
|
Gold
Production
(000s
oz)
|
Total Cash
Costs 1,2,3
($/ oz.
produced)
|
AISC1,3
($/ oz. sold)
|
Six months ended
June 30,
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
|
|
|
|
|
|
|
Owner-operator
|
|
|
|
|
|
|
Rosebel
(95%)
|
147
|
|
148
|
|
$
|
857
|
|
$
|
872
|
|
$
|
1,069
|
|
$
|
1,117
|
Essakane
(90%)
|
178
|
|
160
|
|
781
|
|
859
|
|
1,004
|
|
1,068
|
Westwood4
(100%)
|
45
|
|
11
|
|
983
|
|
490
|
|
1,277
|
|
814
|
|
370
|
|
319
|
|
836
|
|
852
|
|
1,123
|
|
1,160
|
Joint
ventures
|
|
|
|
|
|
|
Sadiola
(41%)
|
36
|
|
43
|
|
778
|
|
1,019
|
|
815
|
|
1,099
|
Yatela
(40%)
|
4
|
|
6
|
|
943
|
|
1,556
|
|
997
|
|
1,896
|
|
40
|
|
49
|
|
794
|
|
1,086
|
|
832
|
|
1,199
|
Total commercial
operations
|
410
|
|
368
|
|
832
|
|
883
|
|
1,095
|
|
1,165
|
Westwood
(100%)
|
—
|
|
10
|
|
—
|
|
—
|
|
—
|
|
—
|
|
410
|
|
378
|
|
832
|
|
883
|
|
1,095
|
|
1,165
|
Cash costs, excluding
royalties
|
|
|
783
|
|
819
|
|
|
|
Royalties
|
|
|
49
|
|
64
|
|
|
|
Total cash
costs
|
|
|
$
|
832
|
|
$
|
883
|
|
|
|
All-in sustaining
costs
|
|
|
|
|
$
|
1,095
|
|
$
|
1,165
|
1
|
This is a non-GAAP
measure. Refer to the non-GAAP performance measures section of the
MD&A. Consists of
Rosebel, Essakane,
Westwood (commercial production), Mouska, Sadiola and Yatela on an
attributable basis.
|
2
|
The total cash costs
computation does not include Westwood pre-commercial production for
the six months ended
June 30, 2014 of
10,000 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
|
Amounts for 2014
related to the Mouska Mine, which closed in the third quarter
2014.
|
SECOND QUARTER 2015 - OPERATIONS
ANALYSIS BY MINE SITE
(Refer to the MD&A for further details and analyses of our
operations.)
WESTWOOD MINE – CANADA (IAMGOLD INTEREST –
100%)
In the second quarter 2015, Westwood produced 23,000 ounces of gold.
Although flat with the first quarter, production was below
expectation due to the localized fall of ground following a seismic
event on May 26, 2015. Total cash
costs were $837 per ounce produced
and all-in sustaining costs were $1,044 per ounce sold. In accordance with
International Financial Reporting Standards, we reduced the costs
attributed to inventory by $5.4
million to normalize for the amount of fixed overhead
allocated on a per unit basis as a consequence of the low quarterly
production. As a result, cash costs and all-in sustaining costs
were reduced by $244 per ounce
produced and $207 per ounce sold,
respectively.
Westwood's gold production in
the second half of the year is expected to be lower than the first
half due to the change in mine sequencing resulting from the
seismic event. Westwood's
production guidance for 2015 is expected to range between
60,000-75,000 ounces. All-in sustaining costs for 2015 are
expected to range between $1,300 and
$1,400 per ounce sold, although we are reviewing this range
with the objective of lowering it. Due to the lower production
guidance for Westwood in 2015, we
don't expect the higher cost guidance to have a material impact on
consolidated unit costs, and are therefore maintaining cost
guidance at the consolidated level.
While mining continues in the unaffected areas, we will proceed
at a pace of underground development that is safe and that
optimizes the future development of the resource.
ROSEBEL MINE – SURINAME (IAMGOLD INTEREST –
95%)
Rosebel produced 71,000 attributable ounces of gold in the
second quarter 2015 compared to 76,000 ounces in the first quarter
2015, mainly the result of lower throughput. Although the
proportion of soft rock increased from 16% in the first quarter to
28% in the second quarter, the volume of material mined was
lower.
Compared to the second quarter 2014, production increased by 6%
reflecting higher grades and recovery, partially offset by lower
throughput. The 8% increase in the grade to 0.8 g/t Au was
due to the sequence in which the pits are mined. Recoveries have
benefitted from the optimization of the carbon handling and elution
circuits implemented earlier in the year. Throughput was lower as
the proportion of soft rock in the mill feed fell from 44% to 28%.
Efforts continue at optimizing the mill feed blend in light of the
continued decline in the percentage of soft rock.
Second quarter 2015 total cash costs were $864 per ounce produced and all-in sustaining
costs $1,104 per ounce sold, compared
to $850 per ounce and $1,037 per ounce, respectively, in the first
quarter 2015. The increase over the previous quarter was the result
of lower production.
Compared to the second quarter 2014, total cash costs per ounce
produced and all-in sustaining costs per ounce sold were lower by
8% and 9%, respectively. Lower cash costs were mainly due to higher
grades, lower mining and power costs driven mainly by lower fuel
prices, lower mill consumables and the cost improvement program
initiated in 2014. Lower sustaining capital expenditures
contributed to the improvement in all-in sustaining costs. Our
priorities continue to be on improving grades and increasing
operating efficiency.
Attributable gold production guidance for Rosebel in 2015 is
maintained at 290,000-300,000 ounces. We expect that approximately
70% of the mining activity will be at the longer-haul southern
pits. And we expect the operation to continue benefitting from the
optimization of the mill feed blend which has significantly
improved circuit stability, reduced grinding media and reagent
consumption, and reduced power usage.
The drilling program at Rosebel continues to target
higher-grade, softer rock in the vicinity of the Rosebel operation
and on the Sarafina Option property, with results assessed on an
ongoing basis. We continue to evaluate possible transactions for
other prospective properties with the potential for higher-grade,
softer rock mineral resources.
ESSAKANE MINE - BURKINA
FASO (IAMGOLD INTEREST – 90%)
In June 2015, mining commenced at
the Falagountou deposit, 8 kilometres southeast of the Essakane
main pit. As announced in April 2015,
the Falagountou deposit contains an indicated resource of 12.5
million tonnes averaging 1.52 grams of gold per tonne for 613,000
ounces of gold (see news release dated April
23, 2015).
In the second quarter, Essakane produced 89,000 attributable
ounces of gold, a level unchanged from the first quarter 2015. This
reflects a 9% increase in mill throughput as the percentage of soft
and transition rock fed through the mill increased from 16% in the
first quarter to 36% in the second quarter. The benefits of higher
throughput were partially offset by lower grades. Half of the
278,000 tonnes mined at Falagountou in the month of June was ore.
The favourable strip ratio helped offset the higher proportions of
waste mined in the Essakane Main Zone pit.
Compared to the second quarter 2014, production was 3% lower as
a 26% decrease in throughput was partially offset by a 28% increase
in grade to 1.23 g/t Au. The decrease in throughput was the result
of a decline in the proportion of soft rock in the mill feed from
29% to 18%.
Total cash costs in the second quarter 2015 were $802 per ounce produced and all-in sustaining
costs $1,022 per ounce sold, compared
to $761 per ounce and $988 per ounce, respectively, in the first
quarter 2015.
Compared to the second quarter 2014, total cash costs per ounce
produced were 5% lower mainly due to higher grades, lower fuel
prices and mill consumables, and lower royalties resulting from
lower gold prices. Partially offsetting these positive factors were
an increased proportion of waste material mined and harder rock
milled. All-in sustaining costs increased by 9%
quarter-over-quarter mainly due to higher sustaining capital
expenditures and lower gold sales. Sustaining capital expenditures
in the second quarter 2015 were $16.0
million, an increase of $10.0
million from the same prior year period, primarily due to
higher capitalized stripping and mine equipment costs.
Our outlook for 2015 remains positive, with attributable
production expected to increase by about 10% to 360,000-370,000
ounces. We continue our intense focus on optimizing our mining and
milling processes and are implementing many of the same operating
efficiency initiatives that were rolled out at Rosebel in 2014.
SADIOLA MINE - MALI
(IAMGOLD INTEREST – 41%)
Attributable gold production at Sadiola was 17,000 ounces in the
second quarter 2015 compared to 19,000 ounces in the first quarter
2015. The slightly lower production from the previous quarter
reflects lower grades, partially offset by higher throughput and
recoveries.
Compared to the second quarter 2014, production was lower by
7,000 ounces mainly due to an 18% decline in grade to 1.1 g/t Au
and a 3% decline in throughput, partially offset by higher
recoveries.
Total cash costs in the second quarter 2015 were $658 per ounce produced, down $229 an ounce from the first quarter 2015. All-in
sustaining costs were $706 per ounce
sold, down $208 an ounce from the
previous quarter.
Compared to the second quarter 2014, total cash costs per ounce
produced were 31% lower and all-in sustaining costs 33% lower. The
decrease in unit costs was primarily due to lower prices for fuel
and other consumables, as well as favourable foreign exchange
rates.
In light of the present gold price environment, we are reviewing
all our capital spending programs, including future development
projects. Therefore, negotiations related to the potential
acquisition of AngloGold Ashanti's share of Sadiola and plans for
its future expansion have been suspended. We expect to continue
mining and processing the oxides well into 2016, and the site has
initiated a reverse circulation drilling program to evaluate
remnant oxide targets, which, given their potential to add
incremental resources, could extend the current operations.
EXPLORATION
In the second quarter 2015, expenditures for exploration and
project studies totaled $13.6
million, of which $8.0 million
was expensed and $5.6 million
capitalized. This compares to a total of $20.2 million for the same period in 2014. As
previously disclosed, our exploration budget for 2015 is
$56 million, of which $16 million will be capitalized. It should be
noted that the capitalized portion is included in our $230 million capital spending guidance for
2015.
(Refer to our second quarter 2015 MD&A for additional
disclosure)
Boto Gold – Senegal
The infill delineation drilling
program initiated in 2014 on the Malikoundi deposit at our Boto
project for the purpose of upgrading the resource has been
completed. By the end of the second quarter, approximately 14,400
metres of diamond drilling were completed, including nearly 1,150
metres to provide geotechnical information in areas of proposed
mine infrastructure. On July 20,
2015, we reported results from the final 26 drill holes,
further confirming continuity of mineralization with frequent high
grades over wide intervals, and indicating that the deposit appears
open at depth. Highlights of these final results include 36 metres
grading 3.59 g/t Au, including 7 metres grading 9.46 g/t Au and 25
metres grading 4.26 g/t Au, including 8 metres grading 8.8 g/t Au.
Results are being incorporated into a revised resource estimate,
which is expected to be completed in the third quarter 2015.
Various technical studies to examine the economic viability of the
Boto Gold project are in progress and will continue into 2016.
Pitangui – Brazil
On
July 7, 2015, we reported an update
from the infill drilling program at our Pitangui project in
Brazil. Highlights from the
drilling results include 11.9 metres grading 6.84 g/t Au, including
3.5 metres grading 17.02 g/t Au; 7.6 metres grading 9.78 g/t Au,
including 4.4 metres grading 16.56 g/t Au; and 7.4 metres grading
8.12 g/t Au. Results continue to confirm the continuity of targeted
zones and the intersection of thicker intervals of higher-grade
mineralization. Infill drilling within the core area of the São
Sebastião deposit has been completed. Once assay results are
received and validated, they will be incorporated into an updated
resource model.
Siribaya – Mali (Joint
Venture with Merrex Gold Inc.)
On June 11, 2015, Merrex Gold announced initial
assay results from the 2015 drilling program at the Diakha
prospect. Highlights include 40 metres grading 2.52 g/t Au;
including 9 metres grading 8.83 g/t Au, and 38 metres grading 2.52
g/t Au, including 10 metres grading 5.70 g/t Au (see Merrex news
release dated June 11, 2015). The
results continue to confirm the presence of multiple zones of gold
mineralization over a wide area. Depending on the results, the
objective of the 2015 infill and expansion delineation program is
to enable completion of an initial 43-101 compliant resource
estimate by the end of 2015.
Eastern Borosi – Nicaragua
(Option Agreement with Calibre Mining Corporation)
On
May 6, 2015, Calibre Mining reported
that drilling on the Blag vein system has extended high-grade gold
and silver mineralization a further 100 metres to the south of
previous drilling. Highlights include 2.1 metres grading 5.18
g/t Au and 1,026 g/t Ag and 2.6 metres grading 9.01 g./t Au and
949.1 g/t Ag. On June 11, 2015,
drilling updates were provided for both the Guapinol and
Vancouver vein systems, with
highlights including 1.4 metres grading 98.72 g/t Au and 49.1 g/t
Ag on the Guapinol vein and 7.1 metres grading 6.26 g/t Au and 41.4
g/t Ag on the Vancouver vein (see
Calibre news releases dated May 6 and
June 11, 2015). The 2015 exploration
drilling program is completed and results will be assessed to guide
future programs.
Monster Lake – Canada
(Option Agreement with TomaGold Corporation)
On June 25, 2015, we reported an update on the
Monster Lake project in Quebec.
Highlights from the 2015 winter drilling program included 1.5
metres grading 18.8 g/t Au and 10.7 metres grading 3.64 g/t
Au. During the second quarter geological mapping, prospecting
and ground geophysical surveys were initiated to assess and
prioritize targets for future drilling as results merit.
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
|
Consists of Rosebel,
Essakane, Westwood (commercial production), Mouska, Sadiola and
Yatela on an attributable basis.
|
3
|
The total cash costs
computation does not include Westwood pre-commercial production for
the three months ended June 30, 2014 of 9,000 ounces.
|
4
|
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, August 6, 2015 at 8:30 a.m. (Eastern Daylight Time) for a
discussion with management regarding IAMGOLD`s second quarter 2015
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 heading "Second Quarter 2015
Overview", 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", "estimate", "plan", "guidance", "outlook",
"potential", "targets", "strategy" or "project" or the negative of
these words or other variations on these words or comparable
terminology. Forward-looking statements are necessarily based upon
a number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant
business, economic and competitive uncertainties and contingencies.
The Company cautions the reader that reliance on such
forward-looking statements involve risks, uncertainties and other
factors that may cause the actual financial results, performance or
achievements of IAMGOLD to be materially different from the
Company's estimated future results, performance or achievements
expressed or implied by those forward-looking statements, and the
forward-looking statements are not guarantees of future
performance. These risks, uncertainties and other factors include,
but are not limited to, changes in the global prices for gold,
copper, silver or certain other commodities (such as diesel, and
electricity); changes in U.S. dollar and other currency exchange
rates, interest rates or gold lease rates; risks arising from
holding derivative instruments; the level of liquidity and capital
resources; access to capital markets, and financing; mining tax
regimes; ability to successfully integrate acquired assets;
legislative, political or economic developments in the
jurisdictions in which the Company carries on business; operating
or technical difficulties in connection with mining or development
activities; laws and regulations governing the protection of the
environment; employee relations; availability and increasing costs
associated with mining inputs and labour; the speculative nature of
exploration and development, including the risks of diminishing
quantities or grades of reserves; adverse changes in the Company's
credit rating; contests over title to properties, particularly
title to undeveloped properties; and the risks involved in the
exploration, development and mining business. With respect to
development projects, IAMGOLD's ability to sustain or increase its
present levels of gold production is dependent in part on the
success of its projects. Risks and unknowns inherent in all
projects include the inaccuracy of estimated reserves and
resources, metallurgical recoveries, capital and operating costs of
such projects, and the future prices for the relevant minerals.
Development projects have no operating history upon which to base
estimates of future cash flows. The capital expenditures and time
required to develop new mines or other projects are considerable,
and changes in the price of gold, costs or construction schedules
can affect project economics. Actual costs and economic returns may
differ materially from IAMGOLD's estimates or IAMGOLD could fail to
obtain the governmental approvals necessary for the operation of a
project; in either case, the project may not proceed, either on its
original timing or at all.
For a more comprehensive discussion of the risks faced by the
Company, and which may cause the actual financial results,
performance or achievements of IAMGOLD to be materially different
from the company's estimated future results, performance or
achievements expressed or implied by forward-looking information or
forward-looking statements, please refer to the Company's latest
Annual Information Form, filed with Canadian securities regulatory
authorities at www.sedar.com, and filed under Form 40-F with the
United States Securities Exchange Commission at
www.sec.gov/edgar.shtml. The risks described in the Annual
Information Form (filed and viewable on www.sedar.com and
www.sec.gov/edgar.shtml, and available upon request from the
Company) are hereby incorporated by reference into this news
release.
The Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise except as required by
applicable law.
Qualified Person Information
The technical information
relating to exploration activities disclosed in this news release
was prepared under the supervision of, and reviewed by,
Craig MacDougall, P.Geo., Senior
Vice President, Exploration, IAMGOLD. Mr. MacDougall is a
Qualified Person as defined by National Instrument 43-101.
About IAMGOLD
IAMGOLD (www.iamgold.com) is a mid-tier
mining company with four operating gold mines on three continents.
A solid base of strategic assets in North and South America and West Africa is complemented by development and
exploration projects and continued assessment of accretive
acquisition opportunities. IAMGOLD is in a strong financial
position with extensive management and operational
expertise.
Please note:
This entire news release may be accessed
via fax, e-mail, IAMGOLD's website at www.iamgold.com and through
CNW Group's website at www.newswire.ca. All material information on
IAMGOLD can be found at www.sedar.com or at www.sec.gov.
Si vous désirez obtenir la version française de ce communiqué,
veuillez consulter le
http://www.iamgold.com/French/accueil/default.aspx.
SOURCE IAMGOLD Corporation