All monetary amounts are expressed in U.S.
dollars, unless otherwise indicated.
For more information, refer to the Management
Discussion and Analysis (MD&A) and Unaudited Consolidated
Interim Financial Statements for the three months ended
March 31, 2018.
TORONTO, May 7, 2018 /PRNewswire/ - IAMGOLD
Corporation ("IAMGOLD" or the "Company") reported its
consolidated financial and operating results for the quarter ended
March 31, 2018.
"We had an outstanding quarter," said Steve Letwin, President and CEO of IAMGOLD.
"Earlier in the year we said our priorities were to meet
expectations and to execute a robust set of growth projects. Gold
production in the quarter was up year-over-year, with Essakane and
Westwood setting record highs.
All-in sustaining costs of $953 an
ounce were down $118 an ounce from
the fourth quarter of last year. A significant improvement in our
bottom line drove operating cash flow up 58%. Annual production and
cost guidance remains unchanged and our growth projects are firmly
on track. At Essakane, the world's largest hybrid solar/thermal
power plant was completed, and the pre-feasibility study for a heap
leaching project, as part of our expansion of the mine, is nearing
completion. In the second half of this year, we expect to have a
mineral reserve estimate for Saramacca and a completed feasibility
study for our Boto Gold Project. With recent resource estimates for
our Monster Lake and Eastern Borosi projects, nearly all of our
advanced greenfield projects have confirmed a resource."
First Quarter 2018 Highlights
Operating Performance
- Attributable gold production of 229,000 oz, up 7% from
Q1/17.
- Attributable gold sales of 235,000 oz, up 11% from Q1/17.
- Cost of sales1 of $741/oz sold, down $28/oz from Q1/17.
- All-in sustaining costs2 of $953/oz sold, down $39/oz from Q1/17.
- Total cash costs2 of $737/oz produced, down $29/oz from Q1/17.
- Gold margin2 of $594/oz, up $130/oz
from Q1/17.
- Production and cost guidance for 2018 maintained.
Financial Results
- Revenues of $314.5 million, up
21% from Q1/17.
- Gross profit of $75.8 million, up
117% from Q1/17.
- Net earnings attributable to equity holders of $42.3 million, or $0.09 per share; up from Q1/17 by $60.3 million, or $0.13 per share, representing a 335%
increase.
- Adjusted net earnings attributable to equity
holders2 of $40.4 million,
or $0.09 per share2; up
from Q1/17 by $35.3 million, or
$0.08 per share2,
representing a 692% increase.
- Net cash from operating activities of $106.0 million, up $39.1
million or 58% from Q1/17.
- Net cash from operating activities before changes in working
capital2 of $119.6
million, up $35.2 million from
Q1/17.
- Cash, cash equivalents, short-term investments in money market
instruments, and restricted cash of $856.3
million at March 31,
2018.
Strategic Developments
- On April 3, 2018, we reported a
new resource estimate for the Eastern Borosi Project, comprising,
on a 100% basis, 4.4 million tonnes of inferred resources grading
4.93 g/t Au and 80 g/t Ag for 700,500 ounces of contained gold and
11,359,500 ounces of contained silver, respectively.
- On March 28, 2018, we reported
the first mineral resource estimate for the Monster Lake Project,
comprising, on a 100% basis, 1.1 million tonnes of inferred
resources grading 12.14 g/t Au for 433,300 ounces of contained
gold.
- On March 19, 2018, we announced
the completion of the 15 megawatt-peak solar power plant at our
Essakane mine in Burkina Faso,
which will save approximately 6 million litres of fuel per year and
reduce carbon dioxide emissions by 18,500 tonnes annually.
- On March 6, 2018, IAMGOLD and its
joint venture partner, Sumitomo Metal Mining Co., Ltd. ("SMM" or
"Sumitomo"), were awarded the Prospectors and Developers
Association of Canada's 2018 Viola
R. MacMillan Award in recognition of their leadership in the
financing and management of the Côté Gold Project as it advances
towards development.
- On February 28, 2018, we
announced further high-grade intersections from infill and
expansion drilling at the Saramacca Project. Highlights included
11.73 g/t Au over 46.0 metres, 22.90 g/t Au over 15.0 metres, and
3.70 g/t Au over 31.5 metres.
Upcoming Growth Catalysts
- Mineral reserve estimate expected for Saramacca H2/18;
production start expected H2/19.
- Completion of pre-feasibility study for Essakane's Heap Leach
Project, as part of our expansion of the mine, expected Q2/18.
- Commissioning of oxygen plant to improve recoveries at Essakane
expected Q4/18.
- Completion of Boto Gold feasibility study expected H2/18.
- Westwood ramp-up to full
production expected by 2020.
- Completion of feasibility study at Côté Gold expected H1/19;
potential production start 2021.
- Expect to receive remaining $95
million cash payment from Sumitomo by end of 2018 in
conjunction with the sale of a 30% interest in the Côté Gold
Project in June 2017.
- Targeting initial resource estimate for Nelligan Project in
Quebec in Q4/18.
- Targeting initial resource estimate for Gossey satellite
prospect at Essakane in Q4/18.
- Advance exploration at Brokolonko to confirm the presence of
mineralization and evaluate the resource potential.
SUMMARY OF
FINANCIAL AND OPERATING RESULTS
|
|
|
|
Three months ended
March 31,
|
Financial Results
($ millions, except where noted)
|
2018
|
|
2017
|
Revenues
|
$
|
314.5
|
|
$
|
260.5
|
Cost of
sales
|
$
|
238.7
|
|
$
|
225.5
|
Gross
profit
|
$
|
75.8
|
|
$
|
35.0
|
Net earnings (loss)
attributable to equity holders of IAMGOLD
|
$
|
42.3
|
|
$
|
(18.0)
|
Net earnings (loss)
attributable to equity holders ($/share)
|
$
|
0.09
|
|
$
|
(0.04)
|
Adjusted net earnings
attributable to equity holders of IAMGOLD1
|
$
|
40.4
|
|
$
|
5.1
|
Adjusted net earnings
attributable to equity holders ($/share)1
|
$
|
0.09
|
|
$
|
0.01
|
Net cash from
operating activities
|
$
|
106.0
|
|
$
|
66.9
|
Net cash from
operating activities before changes in working
capital1
|
$
|
119.6
|
|
$
|
84.4
|
Key Operating
Statistics
|
|
|
|
Gold sales –
attributable (000s oz)
|
235
|
|
212
|
Gold production –
attributable (000s oz)
|
229
|
|
214
|
Average realized gold
price1 ($/oz)
|
$
|
1,331
|
|
$
|
1,230
|
Cost of
sales2 ($/oz)
|
$
|
741
|
|
$
|
769
|
Total cash
costs1 ($/oz)
|
$
|
737
|
|
$
|
766
|
All-in sustaining
costs1 ($/oz)
|
$
|
953
|
|
$
|
992
|
Gold
margin1 ($/oz)
|
$
|
594
|
|
$
|
464
|
1
|
This is a non-GAAP
measure. Refer to the non-GAAP performance measures section of the
MD&A.
|
2
|
Cost of sales,
excluding depreciation, as disclosed in note 30 of the Company's
consolidated interim financial statements is on an attributable
ounce sold basis (excluding the non-controlling interests of 10% at
Essakane and 5% at Rosebel) and does not include Joint Ventures
which are accounted for on an equity basis.
|
FIRST QUARTER 2018 HIGHLIGHTS
Financial Performance
- Revenues for the first quarter 2018 were $314.5 million, up $54.0
million or 21% from the same prior year period. The increase
was primarily due to higher sales volume at Essakane ($25.4 million) and Westwood ($12.9
million), and a higher realized gold price ($23.9 million), partially offset by lower sales
volume at Rosebel ($7.7
million).
- Cost of sales for the first quarter 2018 was $238.7 million, up $13.2
million or 6% from the same prior year period. The increase
was primarily due to higher operating costs ($9.5 million), higher royalties expense
($2.8 million), and higher
depreciation ($0.9 million).
Operating costs were higher primarily due to higher energy costs at
Essakane and Rosebel, a weaker U.S. dollar relative to the euro and
the Canadian dollar, and higher operating costs at Westwood resulting from the continued ramp-up,
partially offset by higher capitalized stripping due to mine
sequencing at Essakane.
- Depreciation expense for the first quarter 2018 was
$64.3 million, up $0.9 million from the same prior year period. The
increase was primarily due to higher amortization of capitalized
stripping, and higher production at Essakane, partially offset by
an increase in reserves at Rosebel.
- Income tax expense for the first quarter 2018 was $11.8 million, up $3.1
million from the same prior year period. Income tax expense
for the first quarter 2018 comprised current income tax expense of
$22.5 million (Q1/17 - $11.4 million) and deferred tax recovery of
$10.7 million (Q1/17 - $2.7 million). The increase in income tax expense
was primarily due to changes in deferred income tax assets and
liabilities, fluctuations in foreign exchange, and differences in
the level of taxable income in IAMGOLD's operating jurisdictions
from one period to the next.
- Net earnings attributable to equity holders for the first
quarter 2018 were $42.3 million, or
$0.09 per share, up $60.3 million, or $0.13 per share, from the same prior year period.
The increase was mainly due to higher gross profit ($40.8 million), higher interest income,
derivatives and other investment gains ($18.2 million), and lower finance costs
($3.5 million), partially offset by
higher income tax ($3.1
million).
- Adjusted net earnings attributable to equity
holders2 for the first quarter 2018 were $40.4 million, or $0.09 per share2, up $35.3 million, or $0.08 per share2, from the same prior
year period.
- Net cash from operating activities for the first quarter 2018
was $106.0 million, up $39.1 million from the same prior year period.
The increase was mainly due to higher earnings after non-cash
adjustments ($32.2 million) and
higher net settlement of derivatives ($3.1
million).
- Net cash from operating activities before changes in working
capital2 for the first quarter 2018 was $119.6 million, up $35.2
million from the same prior year period.
Financial Position
- We ended the first quarter in a strong financial position, with
Cash, cash equivalents, short-term investments in money market
instruments and restricted cash of $856.3
million at March 31, 2018, up
$40.5 million from December 31, 2017. The increase was primarily due
to cash generated from operating activities ($106.0 million), partially offset by spending on
Property, plant and equipment ($57.1
million) and Exploration and evaluation assets ($11.3 million).
Production and Costs
- Attributable gold production, inclusive of joint venture
operations, was 229,000 ounces for the first quarter 2018, up
15,000 ounces from the same prior year period. The increase was due
to higher grades at Essakane (16,000 ounces) and higher grades and
continued ramp-up at Westwood
(10,000 ounces), partially offset by lower grades at Rosebel (9,000
ounces) and lower throughput at the Joint Ventures (2,000
ounces).
- Attributable gold sales, inclusive of joint venture operations,
were 235,000 ounces for the first quarter 2018, up 23,000 ounces
from the same prior year period. The increase was primarily due to
higher sales at Essakane (19,000 ounces) and Westwood (10,000 ounces), partially offset by
lower sales at Rosebel (5,000 ounces) and the Joint Ventures (1,000
ounces).
- Cost of sales1 per ounce for the first quarter 2018
was $741, down 4% from the same prior
year period. The decrease was primarily due to higher sales volume
and capitalized stripping, partially offset by higher energy costs
at Essakane and Rosebel, and a weaker U.S. dollar relative to the
euro and the Canadian dollar.
- Total cash costs2 for the first quarter 2018 were
$737 per ounce produced, down 4% from
the same prior year period. The decrease was primarily due to
higher production volume and capitalized stripping, partially
offset by higher energy costs at Essakane and Rosebel, higher
royalties driven by a higher gold price and a weaker U.S. dollar
relative to the euro and the Canadian dollar.
- All-in sustaining costs2 per ounce sold for the
first quarter 2018 were $953, down 4%
from the same prior year period. The decrease was primarily due to
higher sales volume and capitalized stripping, partially offset by
higher energy costs at Essakane and Rosebel, higher sustaining
capital, and a weaker U.S. dollar relative to the euro and the
Canadian dollar.
- While there was no impact on total cash costs2 and
all-in sustaining costs2 for the first quarter 2018, the
first quarter 2017 included a reduction of $3 per ounce produced and sold, respectively, for
the normalization of costs and the revised ramp-up at Westwood. Total cash costs2 and
all-in sustaining costs2 for the first quarter 2018
included realized derivative gains from fuel and currency hedging
programs of $11 per ounce produced
and $13 per ounce sold, respectively
(Q1/17 - $nil and $nil).
- We maintain our full-year attributable production and cost
guidance for 2018. Production in the second quarter is expected to
be at a lower level than the first quarter and to trend upwards
from there in the second half of the year. While first quarter
production benefited from planned mining in higher grade areas
augmented by significant positive grade reconciliation at Essakane
and Westwood, the second quarter
is expected to reflect the impact of scheduled mill maintenance
activities at Rosebel and Essakane and the seasonal rains at
Rosebel. All-in sustaining costs2 are expected to move
higher in the second quarter before trending downwards in the
second half of the year.
Commitment to Zero Harm Continues
- The DART rate3, representing the frequency of all
types of serious injuries across all sites and functional areas for
the first quarter 2018 was 0.78, above the Company's target of
0.50. Zero Harm remains our number one priority, and this year we
are accelerating the deployment of a new Health and Safety
Management System and new prevention initiatives across all
sites.
ATTRIBUTABLE GOLD
PRODUCTION AND COSTS
|
|
|
|
|
|
|
Gold
Production
(000s oz)
|
Cost of
Sales1 ($ per ounce)
|
Total Cash
Costs2 ($ per ounce
produced)
|
All-in
Sustaining
Costs2
($ per ounce
sold)
|
Three months ended
March 31,
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
Owner-operator
|
|
|
|
|
|
|
|
|
Essakane
(90%)
|
109
|
93
|
$
|
712
|
$
|
793
|
$
|
665
|
$
|
766
|
$
|
914
|
$
|
973
|
Rosebel
(95%)
|
65
|
74
|
798
|
737
|
829
|
727
|
914
|
886
|
Westwood
(100%)3
|
40
|
30
|
719
|
792
|
716
|
759
|
873
|
965
|
Owner-operator4
|
214
|
197
|
$
|
741
|
$
|
769
|
725
|
750
|
955
|
990
|
Joint
Ventures
|
15
|
17
|
|
|
904
|
962
|
924
|
1,011
|
Total
operations
|
229
|
214
|
|
|
$
|
737
|
$
|
766
|
$
|
953
|
$
|
992
|
Cost of
sales1 ($/oz)
|
|
|
$
|
741
|
$
|
769
|
|
|
|
|
Cash costs, excluding
royalties
|
|
|
|
|
$
|
678
|
$
|
715
|
|
|
Royalties
|
|
|
|
|
59
|
51
|
|
|
Total cash
costs2
|
|
|
|
|
$
|
737
|
$
|
766
|
|
|
All-in sustaining
costs2
|
|
|
|
|
|
|
$
|
953
|
$
|
992
|
1
|
Cost of sales,
excluding depreciation, as disclosed in note 30 of the Company's
consolidated interim financial statements is on an attributable
ounce sold basis (excluding the non-controlling interests of 10% at
Essakane and 5% at Rosebel) and does not include Joint Ventures
which are accounted for on an equity basis.
|
2
|
This is a non-GAAP
measure. Refer to the non-GAAP performance measures section of the
MD&A. Consists of Essakane, Rosebel, Westwood and the Joint
Ventures on an attributable basis.
|
3
|
There was no
normalization of cost of sales per ounce for Westwood for the first
quarter 2018 (Q1/17 - $25). Normalization of costs ended at the
onset of the second quarter 2017.
|
4
|
Owner-operator cost
of sales and all-in sustaining costs include corporate general and
administrative costs. Refer to all-in sustaining costs
reconciliation on page 27 of the MD&A.
|
OPERATIONS ANALYSIS BY MINE SITE
Essakane Mine - Burkina Faso
(IAMGOLD interest - 90%)
Essakane had another record quarter, with attributable gold
production of 109,000 ounces up 17% from the same prior year
period. The increase was mainly due to higher grades as a result of
mine sequencing, and higher mill recoveries as mining continues in
non-graphitic zones. Total material mined was 13% higher than the
first quarter 2017, reflecting the commencement of mining at the
Falagountou East pit.
Cost of sales of $712 per ounce
sold and total cash costs of $665 per
ounce produced for the first quarter 2018 were lower than the same
prior year period by 10% and 13%, respectively. The decreases were
primarily the result of higher sales and production volumes, and
higher capitalized stripping due to mine sequencing, partially
offset by higher energy costs, and a weaker U.S. dollar relative to
the euro.
All-in sustaining costs of $914
per ounce sold for the first quarter 2018 were 6% lower than the
same prior year period. The decrease was primarily due to
lower cost of sales per ounce, including the positive impact of
higher sales volume, partially offset by higher sustaining capital
expenditures. Included in total cash costs and all-in sustaining
costs for the first quarter 2018 was the positive impact of
realized derivative gains from fuel and currency hedging programs
of $18 per ounce produced and
$21 per ounce sold, respectively
(Q1/17 - losses of $1 and
$1).
Essakane continues to benefit from mill improvements in 2017, as
throughput exceeded annualized nameplate capacity of 10.8 million
tonnes despite 85% hard rock content (Q1/17 - 90%). The
pre-feasibility study for the Heap Leach Project is on track for
completion by the second quarter 2018 with a construction decision
expected in the second half of this year. The geometallurgical
study to help better identify pockets of graphitic material in the
ore zones was completed during the first quarter 2018, with
validation of results on-going. In addition, construction of the
oxygen plant which began in the fourth quarter 2017 is expected to
be commissioned in the fourth quarter 2018. The oxygen plant is
expected to increase recoveries through improved leach kinetics and
to improve the efficiency of the circuit by reducing reagent
consumption.
The construction of the solar power plant was completed during
the first quarter 2018. The 15 megawatt-peak solar power plant is
expected to decrease Essakane's fuel consumption by approximately 6
million litres per year and CO2 emissions by 18,500
tonnes annually. The solar power plant will complement the existing
57 megawatt thermal power plant, making it the largest
solar/thermal hybrid power plant in the world.
On the concessions surrounding Essakane, a second phase of
delineation drilling commenced at the Gossey satellite prospect,
located approximately 15 kilometres northwest of the Essakane
operation. We expect to declare an initial resource estimate for
Gossey by the end of this year.
Sustaining capital expenditures for the first quarter 2018 of
$24.3 million included capitalized
stripping of $19.1 million, capital
spares of $2.5 million, and various
other sustaining capital expenditures of $2.7 million. Non-sustaining capital expenditures
for the first quarter 2018 of $11.1
million included tailings liners of $7.4 million, heap leach pre-feasibility study of
$2.0 million, and various other
non-sustaining capital expenditures of $1.7
million.
Outlook
While first quarter 2018 production benefited from expected
higher grades and significant positive grade reconciliation, mill
maintenance is scheduled during the second quarter. As a result,
production is expected to be lowest in the second quarter. We
maintain full-year production guidance of 380,000 to 395,000
attributable ounces. Capital expenditures are expected to be
approximately $150 million,
comprising $75 million for sustaining
capital and $75 million for
non-sustaining capital.
Rosebel Mine - Suriname (IAMGOLD interest - 95%)
Attributable gold production of 65,000 ounces for the first
quarter 2018 was 12% lower than the same prior year period,
primarily due to lower grades and throughput. Grades were lower due
to mine sequencing and the draw down of lower grade stockpiles.
Mill throughput was lower mainly due to an increase in the hard
rock blend.
Cost of sales of $798 per ounce
sold and total cash costs of $829 per
ounce produced for the first quarter 2018 were higher than the same
prior year period by 8% and 14%, respectively. The increases were
primarily the result of lower capitalized stripping due to mine
sequencing, higher energy costs, and lower sales and production
volumes.
All-in sustaining costs per ounce sold of $914 for the first quarter 2018 were 3% higher
than the same prior year period. The increase was primarily due to
higher cost of sales per ounce, including the impact of lower sales
volume, partially offset by lower sustaining capital.
Following the announcement of the maiden resource estimate for
the Saramacca deposit in September
2017, drilling continued to further refine the resource
model and target resource expansions immediately adjacent to the
initial resource pit shell. During the first quarter, we announced
assay results from the remaining 60 diamond drill holes completed
as part of its delineation drilling program in the fourth quarter
of 2017. Highlights included: 11.73 g/t Au over 46.0 metres, 3.70
g/t Au over 31.5 metres, and 22.90 g/t Au over 15.0 metres (see
news release dated February 28,
2018). The results will be incorporated into an updated
resource model for use with the ongoing engineering studies. The
program has continued to deliver strong results, which, when
combined with the ongoing engineering studies, is expected to
result in the declaration of a mineral reserve estimate in the
second half of 2018. We intend to advance Saramacca towards
production in the second half of 2019.
During the quarter, we were awarded the exploration rights to
the Brokolonko property. Located 30 kilometres southwest of the
Rosebel mill, Brokolonko is believed to be on the same
mineralization trend as Saramacca, with high potential for yielding
another source of higher grade softer rock.
The opportunities presented by Saramacca and Brokolonko,
together with the significant increase in reserves at Rosebel and
the continued focus on cost containment, are expected to extend the
life of the mine and improve its profitability.
Sustaining capital expenditures for the first quarter 2018 of
$8.1 million included capital spares
of $3.1 million, capitalized
stripping of $1.1 million, mobile
equipment of $1.1 million, and
various other sustaining capital expenditures of $2.8 million. Non-sustaining capital expenditures
for the first quarter 2018 of $5.0
million related to the Saramacca deposit.
Outlook
Production at Rosebel is expected to be highest in the second
half of 2018 as seasonal rains in the second quarter typically
restrict access to higher grade zones at the bottom of the pits.
Mill maintenance has also been scheduled for the second quarter.
Grade improvement is expected in the second half of the year which
will help mitigate the progressive increase in the proportion of
hard rock. We maintain full-year production guidance of 295,000 to
310,000 attributable ounces. Capital expenditures are expected to
be approximately $130 million,
comprising $45 million of sustaining
capital and $85 million of
non-sustaining capital.
Westwood Mine - Canada
(IAMGOLD interest - 100%)
Westwood achieved record
quarterly production of 40,000 ounces in the first quarter 2018, up
33% from the same prior year period. The increase was primarily due
to higher grades, and the continued successful ramp-up resulting in
higher throughput. While head grades to the mill for the quarter
were higher than the same prior year period, they were lower than
the grades mined due to the processing of marginal ore stockpiles
to use available mill capacity as the mine continued to ramp-up.
Head grade, excluding marginal ore for the first quarter 2018, was
8.56 g/t Au (Q1/17 - 6.95 g/t Au).
Underground development continued in the first quarter 2018 to
open up access to new mining areas with lateral and vertical
development of approximately 2,800 and 300 metres, respectively,
averaging 35 metres per day. Westwood plans to complete 12.2 kilometres of
underground development in 2018 (10.8 kilometres lateral and 1.4
kilometres vertical), with a focus on ramp breakthroughs and
infrastructure development in future development blocks at lower
levels.
Cost of sales of $719 per ounce
sold and total cash costs of $716 per
ounce produced for the first quarter 2018 were lower than the same
prior year period by 9% and 6%, respectively. The decreases were
primarily due to cost efficiencies from higher sales and production
volumes with the continued ramp-up, partially offset by a weaker
U.S. dollar relative to the Canadian dollar.
All-in sustaining costs of $873
per ounce sold for the first quarter 2018 were 10% lower than the
same prior year period. The improvement was primarily due to lower
cost of sales per ounce, including the impact of higher sales
volume resulting from the continued ramp-up, partially offset by a
weaker U.S. dollar relative to the Canadian dollar, and higher
sustaining capital expenditures.
Westwood had been normalizing
costs attributed to inventory in accordance with International
Financial Reporting Standards since the seismic event in
May 2015. Normalization of these
costs ended at the onset of the second quarter 2017 when
Westwood reached normal production
levels. Costs for the first quarter 2017 were normalized by
$0.7 million, which impacted total
cash costs and all-in sustaining costs for the first quarter 2017
by $23 per ounce produced and
$25 per ounce sold, respectively.
Total cash costs and all-in sustaining costs for the first quarter
2018, included the positive impact of realized derivative gains
from currency hedging programs of $8
per ounce produced and $11 per ounce
sold, respectively (Q1/17 - gains of $1 and $1).
Sustaining capital expenditures for the first quarter 2018 of
$6.0 million included deferred
development of $4.7 million and
various other sustaining capital expenditures of $1.3 million. Non-sustaining capital expenditures
for the first quarter 2018 of $7.7
million included deferred development of $4.9 million, development drilling of
$1.4 million, underground
construction of $1.1 million, and
various other non-sustaining capital expenditures of $0.3 million.
Outlook
Production at Westwood is
expected to be more heavily weighted in the first half of 2018 with
the mining of high grade stopes. The first quarter benefited from
significant positive grade reconciliation. We maintain full-year
2018 production guidance of 125,000 to 135,000 ounces. Capital
expenditures are expected to be approximately $65 million, comprising $20 million in sustaining capital and
$45 million in non-sustaining
capital.
Sadiola Mine - Mali (IAMGOLD
interest - 41%)
Attributable gold production of 15,000 ounces for the first
quarter 2018 was 6% lower than the same prior year period mainly
due to lower throughput and recoveries. Total cash costs of
$926 per ounce produced and all-in
sustaining costs of $939 per ounce
sold for the first quarter 2018 were 3% and 8% lower than the same
prior year period, respectively, as a result of greater drawdowns
of marginal ore stockpiles.
Sadiola is expected to produce between 50,000 and 60,000 ounces
in 2018.
Discussions with the Government of Mali continue regarding the Sadiola Sulphide
Project. Despite the Company's efforts and the benefits the Project
would generate locally and to the Government of Mali, there has been no resolution around the
terms critical to moving the Project forward. Subsequent to the end
of the first quarter 2018 with the depletion of oxide ore, mining
activities ceased and the mill is now processing stockpiles.
Although the Company remains committed to the Project, upon
failing to reach an agreement the operation will enter a phase of
suspended exploitation (care and maintenance) when stockpiles are
exhausted which is expected by the second half of 2019.
DEVELOPMENT PROJECTS
Côté Gold Joint Venture Project, Canada
The Côté Gold Project is a 70:30 joint venture between the
operator IAMGOLD and Sumitomo Metal Mining Co., Ltd. ("SMM"). The
Project hosts estimated mineral reserves as at December 31, 2017 on a 100% project basis
comprising probable reserves of 196.1 million tonnes grading 0.94
g/t Au for 5.9 million ounces. Also on a 100% project basis,
indicated resources (inclusive of reserves) are estimated at 281.2
million tonnes grading 0.89 g/t Au for 8.0 million ounces of gold
and inferred resources of 76.5 million tonnes grading 0.50 g/t Au
for 1.2 million ounces (see news release dated February 12, 2018).
During the first quarter, the joint venture partners working
with Wood Group (formerly Amec Foster Wheeler) continued to work on
the feasibility study which is expected to be completed in the
first half of 2019. As part of the study, a delineation drilling
program initiated in 2017 to further refine the resource model
continued during the quarter with approximately 21,700 metres of
diamond drilling completed. Geotechnical investigations to evaluate
pit slope stability and to investigate proposed locations of key
project infrastructure were also initiated.
Subject to an acceptable feasibility study, a favourable
development environment and a positive construction decision by the
Côté Gold Joint Venture, commercial production is expected to begin
in 2021.
Regional exploration activities also continue within the
516-square-kilometre property surrounding the Côté Gold deposit to
develop and assess exploration targets that could further maximize
the Company's flexibility with respect to any future development
decisions.
EXPLORATION
In the first quarter 2018, we spent $20.5
million on exploration and project studies compared to
$14.2 million in the same prior year
period. The increase is primarily due to increased spending on
feasibility and other studies. Of the $20.5
million spent in the first quarter 2018, $8.3 million was expensed and $12.2 million was capitalized. The following
summarizes the status of our most advanced greenfield projects:
Wholly-Owned Projects
Boto - Senegal
As reported previously, we announced the results of a
pre-feasibility study ("PFS") for the Boto Gold project in the
first quarter 2018 (see news release dated February 12, 2018). A technical report
summarizing the PFS was subsequently filed on SEDAR.
Based on the results of the PFS, the Boto Gold Project hosts
estimated mineral reserves as at December
31, 2017 comprising probable reserves of 26.8 million tonnes
grading 1.64 g/t Au for 1.4 million ounces. Indicated resources
(inclusive of reserves) are estimated at 37.4 million tonnes
grading 1.60 g/t Au for 1.9 million ounces of gold and inferred
resources are estimated at 11.0 million tonnes grading 1.66 g/t Au
for 594,000 ounces of gold.
The PFS recommended the completion of a feasibility study ("FS")
to validate and detail the elements of the development concept set
out in the PFS, and which would include additional drilling,
metallurgical testing, engineering and environmental studies,
including hydrological, hydrogeological and geotechnical analyses.
The FS has been initiated and is expected to be completed in the
second half of 2018. Importantly, the FS contemplates using a mill
throughput 25% higher than was used for the PFS.
Exploration activities supporting the FS and evaluating priority
targets for additional mineral resources continued during the
quarter and involved the completion of approximately 11,900 metres
of diamond and reverse circulation drilling, including just under
1,800 metres for geotechnical investigations.
Siribaya - Mali
Effective December 31, 2017, total
resources estimated for the Siribaya Project comprised indicated
resources of 2.1 million tonnes grading 1.9 g/t Au for 129,000
ounces of gold, and inferred resources of 19.8 million tonnes
grading 1.7 g/t Au for 1.1 million ounces (see news release
dated February 12, 2018).
During the first quarter 2018, we announced drilling results for
the 2017 drilling program on the Diakha deposit which successfully
delineated high-grade structures within the known resources and
confirmed extensions of the mineralization. Highlights included
6.79 g/t Au over 26.0 metres, including 20.52 g/t Au over 8.0
metres; 11.06 g/t Au over 18.0 metres, including 32.45 g/t Au over
6.0 metres; 7.65 g/t Au over 16.0 metres, including 28.94 g/t Au
over 4.0 metres; and 2.01 g/t Au over 50.0 metres (see news release
dated January 31, 2018).
Approximately 5,300 metres of diamond and reverse circulation
drilling were completed during the quarter. The drilling
program is designed to test for and confirm resource expansions at
the Diakha deposit as well as to evaluate other identified
exploration targets. The drilling results, along with those from
the 2017 program, will be incorporated into the deposit model and
used to update the mineral resources in 2018.
Pitangui - Brazil
Effective December 31, 2017,
reported mineral resources at the São Sebastião deposit comprised
an inferred resource of 5.4 million tonnes grading 4.7 g/t Au for
819,000 ounces of gold (see news release dated February 12, 2018).
In the first quarter 2018, just over 2,800 metres of diamond
drilling was completed with the objective of expanding resources at
the São Sebastião deposit and testing priority exploration targets
for additional zones of mineralization.
Joint Venture Projects
Following are the highlights for our joint venture exploration
projects. The agreements are typically structured in a way that
gives us the option of increasing our ownership interest over time,
with the decision dependent upon the exploration results as time
progresses.
Monster Lake - Canada
(Option Agreement with TomaGold Corporation)
During the first quarter 2018, we announced an initial NI 43-101
compliant resource estimate for the Monster Lake Project
comprising, on a 100% basis, 1,109,700 tonnes of inferred resources
grading 12.14 g/t Au for 433,300 ounces of contained gold, assuming
an underground mining scenario. The effective date of this resource
estimate is February 26, 2018 (see
news release dated March 28,
2018). A supporting NI 43-101 Technical Report will be
filed on SEDAR in the second quarter 2018.
We also completed approximately 8,300 metres of diamond drilling
during the quarter as part of our 2018 exploration program. The
drilling program is focused on additional infill drilling targeting
the upper part of the 325-Megane zone; testing for extensions along
strike and at depth, and evaluating newly discovered areas of
mineralization adjacent to the 325-Megane zone. Assay results will
be reported once received, validated and compiled.
Nelligan - Canada (Option
Agreement with Vanstar Mining Resources Inc.)
The Nelligan Project in the province of Quebec is held under an earn-in option to
joint venture agreement with Vanstar Mining Resources Inc.
("Vanstar"). The agreement was amended on February 27, 2018 to grant IAMGOLD an immediate
51% interest in the property as well as in other identified claims
for consideration of a C$ 2.15
million cash payment. As part of the Amending Agreement, we
can acquire a further 24% interest to hold a total 75% interest, by
completing further cash payments totaling C$2.75 million as well as an NI 43-101 compliant
resource estimate and supporting technical report within four
years. IAMGOLD then retains the right to earn an additional 5%
interest to hold an 80% interest should it elect to complete a
feasibility study at any time after it has vested a 75% interest in
the Nelligan Project (see Vanstar news release dated
February 27, 2018).
During the first quarter, we commenced the 2018 diamond drilling
program, completing nearly 800 metres. The program is
evaluating the resource potential of a recently discovered
mineralization system, now referred to as the Renard Zone, located
immediately north of the previously known Liam and Dan
zones. Assay results will be reported once received, validated
and compiled. An NI 43-101 resource estimate is targeted for the
fourth quarter 2018.
Eastern Borosi - Nicaragua
(Option Agreement with Calibre Mining Corporation)
The 2018 drilling program at the Eastern Borosi project will
target select mineralized zones for potential extensions as well as
other priority targets for the presence of mineralization. During
the first quarter 2018, approximately 1,800 metres of diamond
drilling was completed.
On April 3, 2018, we reported an
updated NI 43-101 resource estimate incorporating an additional
26,000 metres of drilling completed by the joint venture partners
over the last four years. The estimate included initial resource
estimates for the Blag, East Dome, Guapinol, and Vancouver veins, as well as updated mineral
resource estimates for the Riscos de Oro and La Luna veins. The resource models
assumed open pit extraction for the La Luna veins, and underground
mining extraction for the other veins. The underground resource
estimate comprised, on a 100% basis, inferred resources totaling
3,219,000 tonnes grading 6.03 g/t Au and 104 g/t Ag for 624,000
ounces of contained gold and 10,758,500 ounces of contained silver.
The open pit resource estimate comprised, on a 100% basis, inferred
resources totaling 1,199,000 tonnes grading 1.98 g/t Au and 16 g/t
Ag, for 76,500 ounces of contained gold and 601,000 ounces of
contained silver, respectively. The effective date of this resource
estimate was March 15, 2018 (see
news release dated April 3,
2018). A supporting NI 43-101 Technical Report will be
filed on SEDAR in the second quarter 2018.
Other
Loma Larga (formerly Quimsacocha) - Ecuador
IAMGOLD, through its 35.6% equity ownership of INV Metals Inc.
("INV Metals"), has an indirect interest in the Loma Larga gold,
silver and copper project in southern Ecuador. INV Metals has completed a
preliminary feasibility study ("PFS") supporting the proposed
development of an underground mine with an anticipated production
rate of 3,000 tonnes per day, average annual gold production of
150,000 ounces, and a mine life of approximately 12 years (see
INV Metals news release dated July 14,
2016). Based on the results of the PFS, INV Metals
commenced a feasibility study that is expected to be completed at
the end of 2018 (see INV Metals news release dated June 22, 2017).
End Notes (excluding tables)
1
|
Cost of sales,
excluding depreciation, as disclosed in note 30 of the Company's
consolidated interim financial statements is on an attributable
ounce sold basis (excluding the non-controlling interests of 10% at
Essakane and 5% at Rosebel) and does not include Joint Ventures
which are accounted for on an equity basis.
|
2
|
This is a non-GAAP
measure. Refer to the reconciliation in the non-GAAP performance
measures section of the MD&A.
|
3
|
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 Tuesday, May 8, 2018 at 7:00 a.m. (Eastern Daylight Time) for a
discussion with management regarding IAMGOLD`s first quarter 2018
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: 2155#.
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 "Upcoming Growth
Catalysts", "Operations Analysis by Mine Site", "Development
Project", and "Exploration", and include, without limitation,
statements with respect to: the Company's guidance for production,
cost of sales, 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",
"transformation", "targets", "significant", "outstanding",
"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, and, as
such, undue reliance must not be placed on them. 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. Forward-looking statements are in
no way 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. Risks and unknowns
inherent in IAMGOLD's operations and projects include the
inaccuracy of estimated reserves and resources, metallurgical
recoveries, capital and operating costs, and the future price of
gold. Exploration and 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 continued development or
operation of a project.
For a comprehensive discussion of the risks faced by the
Company, and which may cause the actual financial results,
operating performance or achievements of IAMGOLD to be materially
different from the company's estimated future results, operating
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 and verified 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.
For further information please contact:
Ken Chernin, VP Investor
Relations, IAMGOLD Corporation
Tel: (416) 360-4743 Mobile: (416) 388-6883
Laura Young, Director,
Investor Relations, IAMGOLD Corporation
Tel: (416) 933-4952 Mobile: (416) 670-3815
Martin Dumont, Senior
Analyst, Investor Relations, IAMGOLD Corporation
Tel: (416) 933-5783 Mobile: (647) 967-9942
Toll-free: 1-888-464-9999 info@iamgold.com
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.
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presse, veuillez consulter le
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SOURCE IAMGOLD Corporation