IAMGOLD(IAG) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported attributable gold production of 107,000 ounces in Q2, contributing to a year-to-date total of 220,000 ounces, aligning with the production guidance target of 410,000 to 470,000 ounces for the year [16][31] - Cash costs increased to $1,372 per ounce sold, with all-in sustaining costs at $1,912 per ounce, primarily due to higher supply costs and increased rehabilitation costs at Westwood [17] - Revenue from continuing operations totaled $238.8 million from sales of 111,000 ounces at an average realized price of $1,973 per ounce [53] Business Line Data and Key Metrics Changes - At Essakane, Q2 attributable gold production was 88,000 ounces, with year-to-date production at 180,000 ounces. Mining activities totaled 13.5 million tonnes, a significant increase quarter-over-quarter [18] - Westwood produced 19,000 ounces in the quarter and 40,000 ounces year-to-date, with expectations to meet guidance of 78,000 to 90,000 ounces for the year [2][5] - Mill throughput at Essakane was 3.1 million tonnes with an average head grade of 1.11 grams per tonne, a 42% increase from Q1 [19] Market Data and Key Metrics Changes - The company is experiencing inflationary pressures affecting costs, particularly in fuel and consumables, which have impacted overall operating costs [20][76] - The security situation in Burkina Faso remains a concern, but the company has successfully managed to repatriate funds, receiving a dividend of $120 million from Essakane [42][124] Company Strategy and Development Direction - The company aims to become a high-margin intermediate gold producer with a strong operating base in Canada, focusing on ramping up Côté Gold and improving margins at Essakane and Westwood [12][14] - A life of mine update for Essakane is planned for Q4 2023, which will assess the stockpile material and outline future capital plans [1] - The company is increasing sustaining capital expenditure guidance for Westwood by $35 million to support ongoing underground development [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational improvements at Westwood and the potential for increased production and lower costs in the second half of the year [5][12] - The company is focused on achieving a steady ramp-up of operations at Côté Gold, with expectations for first gold pours in early 2024 [12][114] - Management acknowledged the challenges posed by inflation and security issues but emphasized the resilience of the operations and the strategic focus on safety and efficiency [31][92] Other Important Information - The Côté Gold project is approximately 86% complete, with significant progress made in construction and operational readiness [10][24] - The company has secured a $400 million term loan to support capital requirements for Côté Gold, improving financial flexibility [43] Q&A Session Summary Question: What is the long-term vision for IAMGOLD, particularly regarding geographic focus? - Management indicated a focus on building a strong Canadian platform while continuing to operate safely in Burkina Faso [91] Question: Will the life of mine for Essakane be reduced due to changes in mining plans? - Management stated that there is no expectation of a reduction in the life of mine, emphasizing the team's efforts to replace mined ounces [82] Question: What is the expected production range for Westwood in the near future? - Management expressed confidence that Westwood could produce between 125,000 to 150,000 ounces at improved margins, focusing on quality over quantity [84] Question: When will the technical study for Gosselin be released? - Management noted that drilling at Gosselin is ongoing, with results expected in early Q4, and emphasized the importance of expanding the mineralized envelope [49] Question: What measures are being taken to mitigate security risks in Burkina Faso? - The company is increasing inventory levels on-site and has successfully managed to repatriate funds, ensuring operational continuity [124]