FORM 6-K
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Report of Foreign Private
Issuer
Pursuant to Rule 13a-16
or 15d-16
of the Securities Exchange
Act of 1934
Date: August 8, 2018
Commission File Number 001-31528
IAMGOLD
Corporation
(Translation of registrant's name into English) |
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401 Bay Street Suite 3200, PO Box 153 |
Toronto, Ontario, Canada M5H 2Y4 |
Tel: (416) 360-4710
(Address of principal executive offices) |
Indicate by check mark whether the registrant
files or will file annual reports under cover Form 20-F or Form 40-F.
Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
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Note: Regulation
S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report
to security holders. |
Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
|
Note: Regulation
S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that
the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant
is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of
the home country exchange on which the registrant’s securities are traded, as long as the report or other document is
not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if
discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR. |
Indicate by check mark whether
by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
If
"Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________
Description
of Exhibit
Signatures
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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IAMGOLD CORPORATION |
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Date: August 8, 2018 |
By: |
/s/ Tim Bradburn |
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Tim Bradburn |
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Vice President, Legal and Corporate Secretary |
Exhibit 99.1
IAMGOLD Continues Successful Execution
of Growth Projects and Reports Solid Second Quarter 2018
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 six
months ended June 30, 2018.
TORONTO, Aug. 8, 2018 /CNW/ - IAMGOLD Corporation
("IAMGOLD" or the "Company") reported its consolidated financial and operating results for the quarter
ended June 30, 2018.
"Coming off an exceptional start to the
year, we had a solid second quarter," said Steve Letwin, President and CEO of IAMGOLD. "Operating performance to date
reaffirms our 2018 production and cost guidance established at the beginning of the year. The second quarter saw the completion
of Essakane's pre-feasibility study for heap leaching, which demonstrated an economically viable project, including a significant
increase in reserves. The incremental ounces more than replace this year's expected annual depletion for the entire company, and
Saramacca's reserves are yet to come. Supported by more than a billion dollars in liquidity, the steady execution of our growth
strategy continues, with our core projects on track and at the stage where we are finding opportunities to enhance expected returns."
Second Quarter 2018
Highlights
Operating Performance
- Attributable gold production of 214,000 oz, down 9,000
oz from Q2/17.
- Attributable gold sales of 215,000 oz, down 4,000 oz
from Q2/17.
- Cost of sales1 of $826/oz sold, up $59/oz
from Q2/17.
- All-in sustaining costs2 of $1,077/oz sold,
up $102/oz from Q2/17.
- Total cash costs2 of $812/oz produced, up
$77/oz from Q2/17.
- Gold margin2 of $487/oz, down $29/oz from
Q2/17.
- Production and cost guidance maintained for 2018.
- Capital expenditure guidance reduced by $40 million to
$325 million (±5%) for 2018; updated guidance primarily relates to the refinement of estimates for the expansion projects
and deferred timing of certain expenditures to early 2019, with no impact expected on overall project timelines.
Financial Results
- Revenues of $277.4 million, up $2.9 million from Q2/17.
- Gross profit of $29.6 million, down $6.3 million from
Q2/17.
- Net loss attributable to equity holders of $26.2 million,
or $0.06 per share; compared with net earnings of $506.5 million, or $1.09 per share in Q2/17, which included impairment charge
reversals relating to the Côté Gold Project and the Rosebel mine ($524.1 million).
- Adjusted net earnings attributable to equity holders2
of $13.1 million, or $0.03 per share2; up $8.8 million, or $0.02 per share2 from Q2/17.
- Net cash from operating activities of $50.6 million,
down $35.6 million from Q2/17.
- Net cash from operating activities before changes in
working capital2 of $73.4 million, up $5.5 million from Q2/17.
- Cash, cash equivalents, short-term investments in money
market instruments, and restricted cash of $803.9 million at June 30, 2018.
Strategic Developments
- On June 5, 2018, we reported a 39% increase in reserves,
before depletion, at Essakane based on positive results from the Heap Leach Project pre-feasibility study and higher grade intercepts
encountered during the drilling campaign. The results of the pre-feasibility study outlined an economically viable project that
increases average annual production by 16% to 480,000 ounces versus the previously disclosed mine plan, once heap leaching begins.
- On June 14, 2018, we announced further high-grade intersections
from infill drilling at the Monster Lake Project. Highlights included: 3.8 metres grading 23.96 g/t Au, 3.8 metres grading 39.24
g/t Au, 2.6 metres grading 72.17 g/t Au, and 5.3 metres grading 40.94 g/t Au.
Upcoming Growth Catalysts
- Mineral reserve estimate expected for Saramacca H2/18;
production start expected H2/19.
- Completion of Boto Gold Project feasibility study expected
H2/18.
- Commissioning of oxygen plant to improve recoveries at
Essakane expected Q4/18.
- Targeting initial resource estimate for Gossey satellite
prospect at Essakane in Q4/18.
- Expect to receive a $95 million cash payment from Sumitomo
Metal Mining Co., Ltd. by end of 2018 in conjunction with the sale of a 30% interest in the Côté Gold Project in June
2017.
- Completion of Essakane's Heap Leach Project feasibility
study expected Q1/19; production start expected 2020.
- Completion of feasibility study at Côté
Gold expected H1/19; expected production start 2021.
- Westwood ramp-up to full production expected by 2020.
- Advancing exploration at Brokolonko to confirm the presence
of mineralization and evaluate the resource potential.
SUMMARY OF FINANCIAL AND OPERATING RESULTS |
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Three months ended
June 30, |
Six months
ended June 30, |
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Financial Results ($ millions, except where noted) |
2018 |
2017 |
2018 |
2017 |
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Revenues |
$ |
277.4 |
$ |
274.5 |
$ |
591.9 |
$ |
535.0 |
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Cost of sales |
$ |
247.8 |
$ |
238.6 |
$ |
486.5 |
$ |
464.1 |
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Gross profit |
$ |
29.6 |
$ |
35.9 |
$ |
105.4 |
$ |
70.9 |
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Net earnings (loss) attributable to equity holders of IAMGOLD |
$ |
(26.2) |
$ |
506.5 |
$ |
16.1 |
$ |
488.5 |
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Net earnings (loss) attributable to equity holders ($/share) |
$ |
(0.06) |
$ |
1.09 |
$ |
0.03 |
$ |
1.06 |
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Adjusted net earnings attributable to equity holders of IAMGOLD1 |
$ |
13.1 |
$ |
4.3 |
$ |
52.8 |
$ |
9.4 |
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Adjusted net earnings attributable to equity holders ($/share)1 |
$ |
0.03 |
$ |
0.01 |
$ |
0.11 |
$ |
0.02 |
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Net cash from operating activities |
$ |
50.6 |
$ |
86.2 |
$ |
156.6 |
$ |
153.1 |
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Net cash from operating activities before changes in working capital1 |
$ |
73.4 |
$ |
67.9 |
$ |
193.0 |
$ |
152.3 |
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Key Operating Statistics |
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Gold sales – attributable (000s oz) |
215 |
219 |
450 |
431 |
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Gold production – attributable (000s oz) |
214 |
223 |
443 |
437 |
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Average realized gold price1 ($/oz) |
$ |
1,299 |
$ |
1,251 |
$ |
1,316 |
$ |
1,241 |
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Cost of sales2 ($/oz) |
$ |
826 |
$ |
767 |
$ |
781 |
$ |
768 |
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Total cash costs1 ($/oz) |
$ |
812 |
$ |
735 |
$ |
773 |
$ |
751 |
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All-in sustaining costs1 ($/oz) |
$ |
1,077 |
$ |
975 |
$ |
1,012 |
$ |
983 |
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Gold margin1 ($/oz) |
$ |
487 |
$ |
516 |
$ |
543 |
$ |
490 |
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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 31 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. |
SECOND QUARTER 2018
HIGHLIGHTS
Financial Performance
- Revenues for the second quarter 2018 were $277.4 million,
up $2.9 million from the same prior year period. The increase was primarily due to a higher realized gold price ($10.5 million)
and higher sales volume at Rosebel ($2.6 million), partially offset by lower sales volume at Essakane ($8.5 million) and Westwood
($0.8 million).
- Cost of sales for the second quarter 2018 was $247.8
million, up $9.2 million from the same prior year period. The increase was due to higher operating costs ($8.2 million), higher
depreciation expense ($0.8 million), and higher royalties ($0.2 million). Operating costs were higher primarily due to planned
maintenance at Essakane and Rosebel, a weaker U.S. dollar relative to the euro and the Canadian dollar, higher contractor costs
at Essakane given the long lead time for receiving mining equipment, higher energy costs, and the continued ramp-up at Westwood,
partially offset by higher capitalized stripping due to mine sequencing.
- Depreciation expense for the second quarter 2018 was
$72.3 million, up $0.8 million from the same prior year period. The increase was primarily due to higher depreciation on capital
spares and capitalized stripping, partially offset by an increase in reserves combined with lower production at Essakane and Rosebel.
- Income tax expense for the second quarter 2018 was $7.4
million, down $46.1 million from the same prior year period. Income tax expense for the second quarter 2018 comprised current income
tax expense of $11.4 million (Q2/17 - $19.7 million) and deferred tax recovery of $4.0 million (Q2/17 - expense of $33.8 million).
The decrease in income tax expense was primarily due to changes to deferred income tax assets and liabilities, differences in the
impact of fluctuations in foreign exchange, and differences in the level of taxable income in IAMGOLD's operating jurisdictions
from one period to the next.
- Net loss attributable to equity holders for the second
quarter 2018 was $26.2 million, or $0.06 per share compared to net earnings of $506.5 million, or $1.09 per share in the same prior
year period. The decrease was primarily due to reversals of impairment charges relating to the Côté Gold Project and
the Rosebel mine in the second quarter 2017 ($524.1 million), lower interest income, derivatives and other investment gains ($33.1
million), higher foreign exchange losses ($17.0 million), and lower gross profit ($6.3 million), partially offset by lower income
taxes ($46.1 million). Foreign exchange losses, which were substantially unrealized, were higher primarily due to the impact of
a weaker U.S. dollar relative to the euro and the Canadian dollar on non-U.S. dollar cash balances and short-term investments.
- Adjusted net earnings attributable to equity holders2
for the second quarter 2018 were $13.1 million, or $0.03 per share2, up $8.8 million, or $0.02 per share2,
from the same prior year period.
- Net cash from operating activities for the second quarter
2018 was $50.6 million, down $35.6 million from the same prior year period. The decrease was primarily due to changes in movements
in non-cash working capital items and non-current ore stockpiles ($41.1 million), and lower earnings after non-cash adjustments
($3.3 million), partially offset by higher net settlement of derivatives ($3.4 million), lower income taxes paid ($3.2 million),
and dividends received from Sadiola ($2.1 million).
- Net cash from operating activities before changes in
working capital2 for the second quarter 2018 was $73.4 million, up $5.5 million from the same prior year period.
Financial Position
- We ended the second quarter in a strong financial position,
with cash, cash equivalents, short-term investments in money market instruments and restricted cash of $803.9 million at June 30,
2018, down $11.9 million from December 31, 2017. The decrease was primarily due to spending on property, plant and equipment ($118.4
million) and exploration and evaluation assets ($23.2 million), interest paid ($14.2 million), and other investing activities ($10.9
million), partially offset by cash generated from operating activities ($156.6 million).
Production and Costs
- Attributable gold production, inclusive of joint venture
operations, was 214,000 ounces for the second quarter 2018, down 9,000 ounces from the same prior year period. The decrease was
due to lower throughput at Rosebel (4,000 ounces) and Essakane (4,000 ounces) attributed to the timing of planned mill maintenance,
and lower head grades at Westwood (2,000 ounces), partially offset by higher throughput at the Joint Ventures (1,000 ounces).
- Attributable gold sales, inclusive of joint venture operations,
were 215,000 ounces for the second quarter 2018, down 4,000 ounces from the same prior year period. The decrease was due to lower
sales at Essakane (6,000 ounces) partially offset by higher sales at Rosebel (2,000 ounces).
- Cost of sales1 per ounce for the second quarter
2018 was $826, up 8% from the same prior year period. The increase was primarily due to planned maintenance at Essakane and Rosebel,
a weaker U.S. dollar relative to the euro and the Canadian dollar, higher contractor costs at Essakane given the long lead time
for receiving mining equipment, and higher energy costs, partially offset by higher capitalized stripping due to mine sequencing.
- Total cash costs2 per ounce produced for the
second quarter 2018 were $812, up 10% from the same prior year period. The increase was primarily due to the factors noted above.
- All-in sustaining costs2 per ounce sold for
the second quarter 2018 were $1,077, up 10% from the same prior year period. The increase was primarily due to higher sustaining
capital and higher cost of sales per ounce.
- Total cash costs2 and all-in sustaining costs2
for the second quarter 2018 included realized derivative gains from hedging programs of $14 per ounce produced and $15 per ounce
sold, respectively (Q2/17 - $nil and $nil).
Capital Expenditure
Guidance (Refer to MD&A for more detail)
- Capital expenditure guidance for 2018 has been reduced
by $40 million to $325 million (±5%). This is the result of a $20 million increase in sustaining capital expenditures and
a $60 million decrease in non-sustaining capital expenditures. The increase in sustaining capital primarily relates to higher capitalized
stripping at Essakane, which represents a shift from operating costs that will not impact all-in sustaining costs. The decrease
in non-sustaining capital is primarily due to refined work schedules for Saramacca and the Heap Leach Project at Essakane, with
both projects having amended procurement timelines resulting in the deferral of certain expenditures to 2019. Targeted completion
dates for both projects remain intact. The change in non-sustaining capital guidance also includes an increase of $10 million for
the Côté Gold Project reflecting the advancement of detailed engineering and equipment design.
Commitment to Zero Harm
Continues
- The DART rate3, representing the frequency
of all types of serious injuries across all sites and functional areas for the second quarter 2018 was on target at 0.50. Zero
Harm remains our number one priority, and this year we are accelerating the deployment of a new Health and Safety Management System
and new prevention initiatives across all sites.
ATTRIBUTABLE GOLD PRODUCTION AND COSTS |
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Gold Production
(000s oz) |
Cost of Sales1
($ per ounce) |
Total Cash Costs2
($ per ounce
produced) |
All-in Sustaining
Costs2
($ per ounce sold) |
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Three months ended June 30, |
2018 |
2017 |
2018 |
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2017 |
2018 |
2017 |
2018 |
2017 |
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Owner-operator |
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Essakane (90%) |
97 |
101 |
$ |
771 |
$ |
750 |
$ |
728 |
$ |
698 |
$ |
1,003 |
$ |
922 |
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Rosebel (95%) |
70 |
74 |
862 |
752 |
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842 |
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722 |
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1,035 |
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923 |
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Westwood (100%)3 |
31 |
33 |
924 |
843 |
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929 |
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800 |
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1,129 |
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995 |
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Owner-operator4 |
198 |
208 |
$ |
826 |
$ |
767 |
$ |
799 |
$ |
723 |
$ |
1,086 |
$ |
975 |
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Joint Ventures |
16 |
15 |
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962 |
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910 |
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968 |
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965 |
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Total operations |
214 |
223 |
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$ |
812 |
$ |
735 |
$ |
1,077 |
$ |
975 |
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Cost of sales1 ($/oz) |
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$ |
826 |
$ |
767 |
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Cash costs, excluding royalties |
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$ |
756 |
$ |
682 |
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Royalties |
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56 |
53 |
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Total cash costs2 |
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$ |
812 |
$ |
735 |
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All-in sustaining costs2 |
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$ |
1,077 |
$ |
975 |
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Gold Production
(000s oz) |
Cost of Sales1
($ per ounce) |
Total Cash Costs2
($ per ounce
produced) |
All-in Sustaining
Costs2
($ per ounce sold) |
Six months ended June 30, |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
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2017 |
Owner-operator |
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Essakane (90%) |
206 |
194 |
$ |
739 |
$ |
770 |
$ |
695 |
$ |
730 |
$ |
956 |
$ |
946 |
Rosebel (95%) |
135 |
148 |
831 |
745 |
836 |
724 |
976 |
904 |
Westwood (100%)3 |
71 |
63 |
808 |
818 |
809 |
780 |
984 |
980 |
Owner-operator4 |
412 |
405 |
$ |
781 |
$ |
768 |
$ |
761 |
$ |
736 |
$ |
1,017 |
$ |
983 |
Joint Ventures |
31 |
32 |
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933 |
937 |
947 |
988 |
Total operations |
443 |
437 |
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$ |
773 |
$ |
751 |
$ |
1,012 |
$ |
983 |
Cost of sales1 ($/oz) |
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$ |
781 |
$ |
768 |
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Cash costs, excluding royalties |
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$ |
715 |
$ |
699 |
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Royalties |
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58 |
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52 |
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Total cash costs2 |
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$ |
773 |
$ |
751 |
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All-in sustaining costs2 |
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$ |
1,012 |
$ |
983 |
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1 |
Cost of sales, excluding depreciation, as disclosed in note 31 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 costs of sales per ounce for Westwood for the three and six months ended June 30, 2018 (three and six months ended June 30, 2017 - $nil and $12 per ounce, respectively). 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 26 of the MD&A. |
OPERATIONS ANALYSIS
BY MINE SITE
Essakane Mine - Burkina Faso (IAMGOLD interest
- 90%)
Essakane produced 97,000 attributable ounces
in the second quarter 2018, 4% lower the same prior year period. The decrease was primarily due to lower throughput resulting from
planned mill maintenance on the crushing and grinding circuit. Mining activities were lower compared to the same prior year period
due to longer hauling distances as a result of increased mining activity at Falagountou and lower equipment availability.
Cost of sales of $771 per ounce sold and total
cash costs of $728 per ounce produced for the second quarter 2018 were higher than the same prior year period by 3% and 4%, respectively.
The increases were primarily due to lower sales and production volumes, higher contractor costs given the long lead time for receiving
mining equipment, a weaker U.S. dollar relative to the euro, and planned mill maintenance, partially offset by higher capitalized
stripping.
All-in sustaining costs of $1,003 per ounce
sold for the second quarter 2018 were 9% higher than the same prior year period. The increase was primarily due to higher sustaining
capital expenditures and higher cost of sales per ounce.
Total cash costs and all-in sustaining costs
for the second quarter 2018 included the impact of realized derivative gains from hedging programs of $22 per ounce produced and
$24 per ounce sold, respectively (Q2/17 - $nil and $nil).
The oxygen plant, which is expected to increase
recoveries through improved leach kinetics and improve the efficiency of the circuit by reducing reagent consumption, is on track
for commissioning in the fourth quarter 2018.
Sustaining capital expenditures for the second
quarter 2018 of $24.2 million included capitalized stripping of $15.8 million, capital spares of $2.9 million, resource development
of $2.1 million, mobile equipment of $1.9 million, and other sustaining capital expenditures of $1.5 million. Non-sustaining capital
expenditures of $9.3 million included tailings liners of $6.8 million, oxygen plant of $1.4 million, and other non-sustaining capital
expenditures of $1.1 million.
Outlook
We maintain full-year 2018 production guidance
of 380,000 to 395,000 attributable ounces. Capital expenditures are expected to be approximately $140 million, comprising $90 million
of sustaining capital and $50 million of non-sustaining capital. The sustaining capital expenditure guidance reflects an increase
of $15 million in capitalized stripping, which represents a shift from operating costs that will not impact all-in sustaining costs.
The non-sustaining capital expenditure guidance reflects a decrease of $25 million, of which $20 million is related to the Heap
Leach Project, which is currently undergoing a feasibility study. Procurement activities have been deferred to 2019 until after
the completion of the feasibility study expected in the first quarter 2019, thus resulting in the decrease in guidance for 2018.
Production timelines for the Heap Leach Project remain intact.
Heap Leach Project
On June 5, 2018, we announced positive results
from the pre-feasibility study (PFS) for the Heap Leach Project. The PFS presented a heap leach-based extraction scenario in combination
with the existing Essakane operation. (see news release dated June 5, 2018). A National Instrument 43-101 technical
report summarizing the PFS was filed on SEDAR on July 19, 2018.
Based on the results of the PFS, and on a 100%
basis, Essakane's probable reserves increased by 39%, or 1.3 million ounces, to 4.7 million ounces, before depletion. Indicated
resources (inclusive of reserves) increased by 19%, or 0.8 million ounces, to 5.1 million ounces, and inferred resources increased
by 54%, or 0.2 million ounces, to 0.6 million ounces. The mineral reserves and resources reported in the June 5, 2018 news release
were before mining depletion, whereas the evaluation presented in the technical report included depletion from January 1, 2018
to June 5, 2018.
The infill drilling program, conducted to upgrade
targeted lower-grade inferred resources in support of the PFS, intersected higher than anticipated grades in several areas. These
higher-grade intercepts accounted for more than one-third of the 39% increase in reserves.
The PFS outlined an economically viable project
that has the potential to:
- extend the life of the Essakane mine by three years to
2026 from the life-of-mine reported in the 2016 Technical Report, and
- once heap leaching begins, increase average annual production
by 16% from the previously disclosed plan to 480,000 ounces at a projected all-in sustaining cost of $946 per ounce.
The PFS recommended that a feasibility study
("FS") be completed to further optimize the development design of the project, secure long lead equipment and optimize
project economics. The recommended FS has been initiated, and, in addition to the heap leach scenario, will consider additional
development alternatives, such as a gravity circuit upgrade and an increase in grinding capacity to increase throughput and recovery
of the carbon-in-leach and gravity circuits. The FS is expected to be completed in the first quarter 2019.
During the second quarter, approximately 23,900
metres of reverse circulation and diamond drilling were completed on the mine lease and surrounding concessions. On the mine lease,
a further phase of infill drilling was initiated at the Essakane Main Zone in support of the ongoing FS.
On the surrounding concessions, a second phase
of delineation drilling was completed during the second quarter at the Gossey prospect, located approximately 15 kilometres northwest
of the Essakane operation. The results of this drilling program will support the completion of a mineral resource estimate expected
later this year.
Rosebel Mine - Suriname (IAMGOLD interest
- 95%)
Attributable gold production of 70,000 ounces
for the second quarter 2018 was 5% lower than the same prior year period, primarily due to lower throughput. Mill throughput was
lower mainly due to planned mill maintenance on the crushing and grinding circuit, combined with an increase in the hard rock blend.
Cost of sales of $862 per ounce sold and total
cash costs of $842 per ounce produced for the second quarter 2018 were higher than the same prior year period by 15% and 17%, respectively.
The increases were primarily the result of planned mine and mill maintenance, higher energy costs, and lower capitalized stripping
due to mine sequencing.
All-in sustaining costs of $1,035 per ounce
sold for the second quarter 2018 were 12% higher than the same prior year period. The increase was primarily due to higher cost
of sales per ounce and higher sustaining capital expenditures.
Total cash costs and all-in sustaining costs
for the second quarter 2018 included the impact of realized derivative gains from hedging programs of $11 per ounce produced and
sold (June 30, 2017 - $nil and $nil).
Sustaining capital expenditures for the second
quarter 2018 of $12.7 million included capital spares of $4.2 million, capitalized stripping of $1.9 million, mobile equipment
of $1.8 million, pit infrastructure of $1.3 million, tailings management of $0.9 million, mill equipment of $0.7 million, and other
sustaining capital expenditures of $1.9 million. Non-sustaining capital expenditures were $6.5 million related to the Saramacca
Project.
Outlook
We maintain full-year 2018 production guidance
of 295,000 to 310,000 attributable ounces. Capital expenditures are expected to be approximately $90 million, comprising $45 million
of sustaining capital and $45 million of non-sustaining capital. The non-sustaining capital expenditure guidance reflects a decrease
of $40 million for the Saramacca Project, reflecting deferred procurement activity to early 2019 as a result of more specific scheduling
of construction work based on detailed engineering studies. Production timelines for the Saramacca Project remain intact.
Saramacca and Brokolonko
The Saramacca Project development is progressing
according to schedule. On July 31, 2018, the Environmental and Social Impact Assessment (ESIA) was submitted to the National Institute
for Environment and Development in Suriname (NIMOS). Optimization of the detailed engineering for the haul road construction has
been initiated, allowing for the selection of the haul fleet and a reduction in the road distance. A comprehensive metallurgical
testing program is also in progress to refine the recovery assumptions and to test the crushing and grinding characteristics of
the mineralization.
During the second quarter 2018, we completed
approximately 7,950 metres of reverse circulation and diamond drilling on the Saramacca property. The drilling program continued
to infill the deposit to upgrade the resources and target potential resource extensions or the discovery of additional zones of
mineralization along strike of the deposit.
We continued to revise the resource model for
Saramacca, incorporating infill drilling results obtained since the maiden resource estimate disclosed in September 2017 (see
news release dated September 5, 2017). The updated resource model will be used to support the ongoing engineering studies.
We intend to generate a mineral reserve estimate
for Saramacca during the second half of 2018 and to advance toward initial production in the second half of 2019.
During the second quarter, 4,550 metres of
reverse circulation and diamond drilling was completed on the adjacent Brokolonko property where a first pass drilling program
was initiated late in the quarter ahead of the rainy season.
Westwood Mine - Canada (IAMGOLD interest
- 100%)
Westwood produced 31,000 ounces in the second
quarter 2018, 2,000 ounces lower than the same prior year period. The decrease was due to mining lower grade stopes as part of
the mine plan. The head grade at 4.76 g/t Au was lower than the same prior year period due to the processing of a greater proportion
of marginal ore stockpiles to leverage available mill capacity as the mine continued to ramp-up. Excluding marginal ore, the head
grade in the second quarter 2018 was 6.26 g/t Au (Q2/17 - 8.60 g/t Au).
Underground development continued in the second
quarter 2018 to open up access to new mining areas with lateral and vertical development of approximately 2,700 and 100 metres,
respectively, averaging 31 metres per day. Westwood plans to complete 11,500 metres of underground development in 2018 (10,800
metres lateral and 700 metres vertical), with a focus on ramp breakthroughs on the central ramp as well as on level 132, which
is expected to provide access to high-grade domains for 2019. Infrastructure development continues in future development blocks
at lower levels, specifically including the 180 West level from which production is also expected in 2019.
Cost of sales of $924 per ounce sold and total
cash costs of $929 per ounce produced for the second quarter 2018 were higher than the same prior year period by 10% and 16%, respectively.
The increases were primarily due to a weaker U.S. dollar relative to the Canadian dollar.
All-in sustaining costs of $1,129 per ounce
sold for the second quarter 2018 were 13% higher than the same prior year period. The increase was primarily due to higher cost
of sales per ounce and higher sustaining capital expenditures.
Total cash costs and all-in sustaining costs
for the second quarter 2018, included the impact of realized derivative gains from hedging programs of $7 per ounce produced and
$9 per ounce sold, respectively (Q2/17 - of $nil and $nil).
Sustaining capital expenditures for the second
quarter 2018 of $6.0 million included deferred development of $4.0 million and other sustaining capital expenditures of $2.0 million.
Non-sustaining capital expenditures for the second quarter 2018 of $8.9 million included deferred development of $5.4 million,
underground construction of $1.7 million, development drilling of $1.2 million, and other non-sustaining capital expenditures of
$0.6 million.
Outlook
We maintain full-year 2018 production guidance
of 125,000 to 135,000 ounces. Capital expenditures are expected to be approximately $65 million, comprising $25 million of sustaining
capital and $40 million of non-sustaining capital. The shift of $5 million in capital expenditure guidance from non-sustaining
to sustaining reflects increased development work being performed on production blocks. Expansion development work continues to
open up access to areas of future production deeper within the mine.
Sadiola Mine - Mali (IAMGOLD interest -
41%)
Attributable gold production of 16,000 ounces
for the second quarter 2018 was 14% higher than the same prior year period mainly due to higher throughput. Total cash costs of
$970 per ounce produced and all-in sustaining costs of $979 per ounce sold for the second quarter 2018 were 8% and 5% higher than
the same prior year period, respectively, as a result of higher energy costs and mill maintenance.
Sadiola is expected to produce between 50,000
and 60,000 ounces in 2018.
During the quarter, the operation entered a
restricted exploitation phase as excavation activity ceased and the demobilization of the mining contractor commenced. The site
continues to process the remaining oxide ore stockpiles and marginal stockpiles which are expected to be depleted by mid-2019.
Discussions with the Government of Mali continue
regarding the Sadiola Sulphide Project. Despite the Company's efforts and the benefits the Project would generate for all stakeholders,
including the Government of Mali, there has been no resolution around the terms critical to moving the Project forward. If an agreement
with the Government of Mali is not reached, the operation will enter a phase of suspended exploitation (care and maintenance) after
the stockpiles are exhausted.
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. The Project hosted 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 second quarter, the Joint Venture
working with the Wood Group (formerly Amec Foster Wheeler) continued to advance a feasibility study which is expected to be completed
in the first half of 2019. The delineation drilling program initiated in 2017 to further refine the resource model was completed
at the end of the first quarter 2018. The results are being incorporated into the resource model to support an updated resource
estimate for use in the ongoing feasibility study. Geotechnical investigations to evaluate pit slope stability and to investigate
proposed locations of key project infrastructure were completed during the second quarter 2018 and the results are being incorporated
into the project design.
Subject to an acceptable feasibility study,
a favourable development environment and a positive construction decision by the Joint Venture, commercial production is expected
to begin in 2021.
Regional exploration activities, including
the completion of approximately 1,700 metres of diamond drilling, also continued during the quarter within the 516-square-kilometre
property surrounding the Côté Gold deposit. The purpose is to develop and assess exploration targets that could further
maximize the Company's flexibility with respect to any future development decisions.
EXPLORATION
In the second quarter 2018, we spent $21.9
million on exploration and project studies ($11.1 million expensed and $10.8 million capitalized) compared to $17.3 million in
the same prior year period. The increase is primarily due to increased spending related to a larger planned exploration program
and project studies. The following summarizes the status of our most advanced greenfield projects:
Wholly-Owned Projects
Boto - Senegal
Effective December 31, 2017, the Boto Gold
Project hosted estimated mineral reserves comprising probable reserves of 26.8 million tonnes grading 1.64 g/t Au for 1.4 million
ounces of gold. 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 (see
news release dated February 12, 2018).
During the second quarter, we continued to
advance the feasibility study ("FS") to validate and detail the elements of the development concept set out in the previously
disclosed pre-feasibility study (see news release dated February 12, 2018). The FS will include additional drilling, metallurgical
testing, engineering and environmental studies, including hydrological, hydrogeological and geotechnical analyses. The FS is expected
to be completed in the second half of 2018. Importantly, the FS contemplates 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, with approximately 5,500 metres of diamond
and reverse circulation drilling completed. Results will be incorporated into the resource model and used to guide further exploration.
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 of gold (see news release dated
February 12, 2018).
During the second quarter 2018, we completed
approximately 8,800 metres of diamond and reverse circulation drilling. The drilling program is designed to test for and confirm
resource expansions at the Diakha deposit as well as evaluate other identified exploration targets on the property. The drilling
results will be incorporated into the resource 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 second quarter 2018, just over 4,900
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)
Effective February 26, 2018, reported mineral
resources for the Monster Lake Project, on a 100% basis, comprised 1.1 million tonnes of inferred resources grading 12.14 g/t Au
for 433,300 ounces of contained gold, assuming an underground mining scenario (see news release dated March 28, 2018). A
supporting NI 43-101 Technical Report was filed on SEDAR on May 10, 2018.
In the second quarter 2018, we reported the
results from approximately 8,300 metres of diamond drilling completed during the first quarter of 2018. Highlights included:
3.8 metres grading 23.96 g/t Au; 3.8 metres grading 39.24 g/t Au; 2.6 metres grading 72.17 g/t Au and 5.3 metres grading 40.94
g/t Au (see new release dated June 14, 2018). The drilling results will be incorporated into the resource model and
used to guide further drilling programs in the deposit area. Exploration continues with the objective to identify additional
target areas which may be favourable to host additional zones of mineralization.
Nelligan - Canada (Option Agreement with
Vanstar Mining Resources Inc.)
During the second quarter 2018, we completed
nearly 3,700 metres of diamond drilling to evaluate the resource potential of a recently discovered mineralization system, referred
to as the Renard Zone, located immediately north of the previously known Liam and Dan zones. Assay results will be reported
once they are received, validated and compiled. The objective of the 2018 drilling program is to evaluate the resource potential
of the project with the aim of declaring an initial NI 43-101 compliant resource estimate.
Eastern Borosi - Nicaragua (Option Agreement
with Calibre Mining Corporation)
During the second quarter 2018, we reported
an updated NI 43-101 resource estimate incorporating an additional 26,000 metres of drilling completed by the Joint Venture 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 3.2 million 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
1.2 million 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 was filed on SEDAR on May 14, 2018.
During the second quarter, approximately 4,000
metres of diamond drilling was completed, targeting select mineralized zones for potential extensions as well as other priority
targets for the presence of mineralization.
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 31 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 Thursday,
August 9, 2018 at 8:30 a.m. (Eastern Daylight Time) for a discussion with management regarding IAMGOLD's second 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: 2449#.
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.
Si vous désirez obtenir la version française
de ce communiqué de presse, veuillez consulter le http://www.iamgold.com/French/accueil/default.aspx.
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SOURCE IAMGOLD Corporation
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CO: IAMGOLD Corporation
CNW 17:05e 08-AUG-18
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