Mr. Steve Letwin reports
IAMGOLD EXCEEDS PRODUCTION TARGET AND EXPECTS TO ACHIEVE COST GUIDANCE FOR 2016; PLANNED PRODUCTION TO INCREASE IN 2017 WITH LOWER ALL-IN SUSTAINING COSTS
Iamgold Corp. has released preliminary operating results for 2016 and guidance for 2017. All 2016 numbers are preliminary and unaudited and subject to final adjustment. All amounts are expressed in U.S. dollars, unless otherwise indicated.
Iamgold's president and chief executive officer, Steve Letwin, said: "With gold production increasing in each consecutive quarter of 2016, we had a strong finish to the year. Strong operating performance drove production above guidance to 813,000 ounces. Production at all sites exceeded the top end of the guidance ranges, and Westwood's achievement of ambitious underground development targets was outstanding, which well positions them to nearly double production in 2017. We expect cash costs and all-in sustaining costs to be within guidance, reflecting continued success optimizing mine performance and improving productivity.
"The year 2016 was pivotal for Iamgold," continued Mr. Letwin, "as strong operating performance and the achievement of critical milestones have well positioned us for growth. With strategies to capitalize on organic growth opportunities at all of our mines and a balance sheet that enables us to internally fund this growth, we're confident that by 2020 we can take production to one million ounces and reduce all-in sustaining costs by 15 per cent. We expect production in 2017 to increase by 4 to 9 per cent from last year with all-in sustaining costs ranging between $1,000 and $1,080 an ounce."
Performance highlights for 2016:
-
Attributable gold production of 813,000 ounces; above guidance of 770,000 to 800,000 ounces; fourth quarter production 215,000 ounces;
- Total cash costs (1) expected to be within guidance of $740 to $770 per ounce;
- All-in sustaining costs (1) expected to be within guidance of $1,050 to $1,100 per ounce;
- Capital expenditures of approximately $280-million were relatively in line with guidance of $275-million;
- Approximately $750-million in cash, cash equivalents and restricted cash as at Dec. 31, 2016.
Guidance highlights for 2017:
- Attributable gold production expected to be between 845,000 and 885,000 ounces;
- Total cash costs expected to be between $740 and $780 per ounce;
- All-in sustaining costs expected to be between $1,000 and $1,080 per ounce;
- Capital expenditures guidance of $250-million plus or minus 5 per cent.
(1) This is a non-generally accepted accounting principle measure.
Preliminary operating results
for 2016
Full-year attributable production of 813,000 ounces was higher than guidance of 770,000 to 800,000 ounces. All of the company's operating mines exceeded the top end of their guidance. Attributable gold production for the fourth quarter 2016 was 215,000 ounces.
The attached production by operating site table presents attributable production by operating site.
PRODUCTION BY OPERATING SITE
(000s oz)
Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016 Guidance
Owner/operator
Essakane (90%) 88 89 104 96 377 365-375
Rosebel (95%) 68 73 72 83 296 285-295
Westwood (100%) 15 16 16 18 65 50-60
Total owner/operator 171 178 192 197 738 700-730
Joint ventures
Sadiola (41%) 19 18 17 16 70
Yatela (40%) 1 1 1 2 5
Total joint ventures 20 19 18 18 75 70
Total 191 197 210 215 813 770-800
Both total cash costs and all-in sustaining costs for 2016 are expected to be within guidance ranges of $740 to $770 per ounce and $1,050 to $1,100 per ounce, respectively.
Production and cost guidance for 2017
Full-year guidance (1):
Essakane: 370,000 to 380,000 ounces
Rosebel: 295,000 to 305,000 ounces
Westwood: 115,000 to 125,000 ounces
Total owner/operator production: 780,000 to 810,000 ounces
Joint ventures: 65,000 to 75,000 ounces
Total attributable production: 845,000 to 885,000 ounces
Total cash costs (2, 3) -- owner/operator: $740 per ounce to $780 per ounce
Total cash costs (2, 4): $740 per ounce to $780 per ounce
All-in sustaining costs (2, 3) -- owner/operator: $1,000 per ounce to $1,080 per ounce
All-in sustaining costs (2, 4): $1,000 per ounce to $1,080 per ounce
(1) Guidance for 2017 is based on the following assumptions:
- Average gold price per ounce of $1,250;
- Average crude oil price
per barrel of $48;
- U.S.-dollar value of the euro of $1.08;
- Canadian-dollar value of the U.S. dollar of $1.35.
(2) This is a non-generally accepted accounting principle measure.
(3) Consists of Rosebel, Essakane and Westwood on an attributable
basis.
(4) Consists of Rosebel, Essakane, Westwood, and joint ventures
Sadiola and Yatela on an attributable basis.
In 2017, the company expects gold production to increase to 845,000 to 885,000 ounces, compared with 813,000 ounces in 2016. Westwood will continue to focus on underground development, with expected production of 115,000 to 125,000 ounces, nearly double that of 2016. The higher production at Westwood reflects commercial levels of production from three mining blocks, including the zone where remedial work was completed last year. At Rosebel, the company expects higher grades and improving productivity will drive production higher despite the lower throughput anticipated with the proportion of hardrock approaching 70 per cent. At Essakane, throughput and recoveries are expected to increase while grades are expected to be lower. The joint ventures are expected to produce between 65,000 and 75,000 ounces.
The company has lowered its all-in sustaining cost guidance to a range of $1,000 to $1,080 per ounce, as it has continued to realize significant benefits from performance optimization initiatives across the sites.
CAPITAL EXPENDITURE GUIDANCE FOR 2017
(plus or minus 5 per cent)
($ millions)
Sustaining Development/expansion (non-sustaining) Total (3)
Essakane $85 $5 $90
Rosebel 65 5 70
Westwood 20 45 65
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Owner/operator 170 55 225
Corporate and development projects - 10 10
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Total owner/operator 170 65 235
Sadiola (joint venture) (1) 5 10 15
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Total (2) (plus or minus 5%) 175 75 250
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(1) Expansionary capital expenditures exclude new construction for Sadiola.
(2) Capitalized borrowing costs are not included.
(3) Includes $20-million of capitalized exploration expenditures. See the
exploration plan for 2017 section and table.
In 2017, the company expects capital spending to be $250-million plus or minus 5 per cent. Of the $170-million allocated to sustaining capital for owner-operated mines, 39 per cent is for capitalized stripping at Essakane ($39-million) and Rosebel ($28-million), and another 30 per cent is related to spending on capital spares and equipment at these sites. Westwood's non-sustaining capital of $45-million is mainly for expansion/ramp-up development. At Sadiola, the $10-million in non-sustaining capital is for advancing the Sadiola sulphide project in 2017, including completing an optimization study to refine project economics. Spend for new construction is not included in the guidance provided at this time. As previously communicated, the company's intention is to move ahead with the project with its partner conditional upon the government of Mali renewing construction and operating permits, the power agreement, and fiscal terms related to the project. Once these have been achieved and the timing of project commencement known, guidance will be adjusted accordingly.
The $10-million spend on corporate and development projects includes spending at Cote Gold and Boto Gold. At Cote Gold, the focus continues to be on derisking the project, with the completion of a prefeasibility study expected by the end of the second quarter 2017.
Exploration plan for 2017
An active exploration program is critical to replenishing reserves and resources. Its exploration program is focused on the discovery of new ounces through the company's wholly owned and joint venture projects in South and Central America, West Africa, and Canada, as well as through targeting of softrock resources near its existing mines. The company has been very selective as to the projects it continues to advance and is focusing on highly prospective projects. In 2017, it increased its budget for exploration projects to $47-million to reflect exploration programs at its Saramacca project, the saddle zones at Rosebel and highly prospective targets at Essakane. This year, the company is targeting initial resource estimates for its Saramacca project near Rosebel in Suriname, its Monster Lake project in Quebec and its Eastern Borosi joint venture project in Nicaragua. The increase in planned expenditures for feasibility and other studies is largely due to the continuation of technical studies for the Boto Gold project and Cote Gold.
EXPLORATION PLAN FOR 2017
($ millions)
2016 actual 2017 plan
Capitalized Expensed Total Capitalized Expensed Total
Exploration projects -- greenfield $2 $17 $19 $- $25 $25
Exploration projects -- brownfield (1) 9 11 20 11 11 22
Exploration projects 11 28 39 11 36 47
Feasibility and other studies 2 3 5 9 6 15
Total exploration 13 31 44 20 (2) 42 62
(1) Excludes expenditures related to joint ventures of $1-million for 2016
actual and $2-million for the 2017 plan, and includes near-mine and resource
exploration of $9-million for 2016 actual and $11-million for the 2017 plan.
(2) The capitalized portion of the 2017 plan of $20-million is included in
the company's capital-spending guidance of $250-million plus or minus 5 per
cent.
Conference call
A conference call will be held on Feb. 23, 2017, at 8:30 a.m. (Eastern Standard Time), for a discussion with management regarding Iamgold's fourth quarter and full-year 2016 operating performance and financial results. A webcast of the conference call will be available through Iamgold's website.
Conference call information:
North America toll-free: 1-800-319-4610
International number: 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 international number: 1-604-638-9010, passcode: 1091 followed by the number sign.
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, PGeo, senior vice-president, exploration, Iamgold. Mr. MacDougall is a qualified person as defined by National Instrument 43-101.
About Iamgold
Iamgold 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.
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