IAMGOLD REPORTS Q1 RESULTS – BEATS COST GUIDANCE Refer to the interim Management Discussion and Analysis (MD&A) and unaudited consolidated Financial Statements for more information.
TSX: IMG NYSE: IAG
NEWS RELEASE
IAMGOLD REPORTS Q1 RESULTS – BEATS COST GUIDANCE
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Refer to the interim Management Discussion and Analysis (MD&A) and unaudited consolidated Financial Statements for more information.
Toronto, Ontario, May 7, 2013 – IAMGOLD Corporation (“IAMGOLD” or the “Company”) today reported its unaudited consolidated financial and operating results for the first quarter ending March 31, 2013.
- Attributable gold production of 188,000 ounces, with attributable sales of 171,000 ounces.
- Total cash costs of $787 an ounce, $63 below the bottom of guidance.
- Adjusted net earnings1 attributable to equity holders of $57.7 million, or $0.15 a share.
- Reported net earnings attributable to equity holders of $10.9 million, or $0.03 a share, inclusive of $27.4 million impairment of investments (at market value).
- Revenues of $305.3 million.
- Operating cash flow before changes in working capital1 of $115.2 million, or $0.31 a share.
- Quarter-end cash, cash equivalents and gold bullion (at market value) of $863.3 million.
- Westwood begins production.
- Launched $100 million cost reduction program.
- Rosebel Definitive Agreement approved by National Assembly of Suriname on April 13, 2013.
- 2013 consolidated total all-in sustaining cost guidance: $1,200-$1,300 an ounce.
“With the initiation of our $100 million cost reduction program before the drop in gold prices and our history of disciplined capital allocation, IAMGOLD was well ahead of the curve in responding to the challenges in our industry,” said Steve Letwin, President and CEO. “We are very encouraged with cash costs coming in at $787 an ounce, $63 below the bottom of our guidance, and we will revisit our cost guidance in the second quarter. At the same time, our continued focus on maintaining a strong balance sheet gives us the option of deferring capital expenditures apart from what is essential to sustaining the current operations.
We will move forward only with expansion and development projects that meet our criteria for delivering attractive returns. The traction we are making on the cost front together with our renewed commitment to capital discipline points to a positive outlook ahead.
“Meanwhile, we continue to execute on our business plan, and brought Westwood into production as scheduled at the end of the first quarter,” continued Mr. Letwin. “And in mid-April, the National Assembly of the Government of Suriname unanimously approved the joint venture agreement respecting future resource development and related power costs. The 50% reduction in the power rate applicable to new concessions and future expansions beyond the one currently under review will open a new chapter for Rosebel. We continue to have dialogue with the government with respect to power rates at the existing Rosebel operation.”
FOURTH
FIRST QUARTER 2013 HIGHLIGHTS
Change in Accounting for Joint Venture Interests
As a result of the adoption of IFRS 11, Joint Arrangements, effective January 1, 2013, IAMGOLD began accounting for its joint venture interests, Sadiola (41%) and Yatela, (40%) using the equity method of accounting instead of proportionate consolidation. We now report earnings from these joint ventures in the consolidated statements of earnings in one line as share of net earnings (losses) from associates and joint ventures. Although there is no change to net earnings and earnings per share, individual line items such as revenues, cost of sales and income tax expense were affected by collapsing the impact of Sadiola and Yatela to one line. As well, consolidated operating cash flows and investing activities within the consolidated statements of cash flows were impacted due to the difference in equity accounting as compared to proportionate consolidation. We continue to present operational information about our joint ventures, including cash costs and gold production.
Financial Performance
- Revenues for the first quarter 2013 were $305.3 million, down 14% from the same prior year period. The decrease was mainly due to a lower volume of gold sales ($39.1 million) and a lower realized gold price ($11.5 million). The reduction in sales volumes was primarily related to lower production, as expected, from processing lower grades at Essakane and timing differences between production and sales.
- Cost of sales for the first quarter 2013 was $184.4 million, up 3% from the same prior year period. The increase was due to higher than expected operating costs mainly related to longer hauling distances at Rosebel and the mining and processing of harder rock ($4.6 million) and higher depreciation expense ($1.0 million).
- Adjusted net earnings1 attributable to equity holders for the first quarter 2013 were $57.7 million ($0.15 per share1), down $33.9 million ($0.09 per share) or 37% from the same prior year period.
- Net earnings attributable to equity holders for the first quarter 2013 were $10.9 million ($0.03 per share), down from $119.2 million in the first quarter 2012. The decrease was mainly related to lower revenues and higher cost of sales ($54.4 million), higher impairment of investments ($22.8 million), derivative losses ($17.6 million) and higher foreign exchange losses ($12.7 million). The impairment of investments includes an $18.6 million impairment charge for the Company’s equity investment in INV Metals Inc. (“ÌNV”) as a result of a significant decline in the market value of INV shares. Since IAMGOLD has no ability to control the investment, it is not permitted to utilize an alternate valuation method which may have otherwise found the investment to have a market value in excess of its carrying amount.
- Operating cash flow for the first quarter 2013 was $99.5 million, down $49.7 million, or 33% from the same prior year period. The decrease was mainly due to lower revenues ($48.8 million).
- Operating cash flow before changes in working capital1 for the first quarter 2013 was $115.2 million ($0.31 per share1), down $65.6 million ($0.17 per share) or 36% from the same prior year period.
Financial Position
- Cash, cash equivalents and gold bullion (at market value) was $863.3 million at March 31, 2013, down $157.3 million from December 31, 2012. The decrease was mainly due to capital expenditures related to mining assets ($194.7 million) and the payment of dividends ($48.6 million), partially offset by cash from operating activities ($99.5 million).
- As at March 31, 2013, no funds were drawn against the Company’s $750 million total unsecured revolving credit facilities.
Production, Cash Costs and Margins
Gold Operations
- Attributable gold production, inclusive of the joint venture operations, was 188,000 ounces in the first quarter 2013, down 19,000 ounces from the same quarter 2012. Production was lower due to lower grades at Essakane (15,000 ounces) and Sadiola (6,000 ounces) and lower throughput at Rosebel (4,000 ounces), partially offset by increased production at Yatela (3,000 ounces) and Mouska (3,000 ounces). With the ramp-up of contribution from the Doyon division, we are on track to meet our annual production guidance.
- Attributable sales volume, inclusive of joint ventures operations, for the first quarter 2013 was 171,000 ounces compared to attributable gold production of 188,000 ounces. The difference was mainly related to Rosebel (8,000 ounces), due in part to in-transit inventory related to switching to a different refiner for carbon fines, and ramp-up of processing at Mouska (5,000 ounces). The nominal amount of production from Mouska at the end of March did not get sold.
- Cash costs2 for the first quarter 2013, inclusive of joint venture operations, were $787 an ounce compared to $679 an ounce in the same quarter 2012, but $63 below the bottom of the 2013 guidance range. Cash costs for IAMGOLD operated sites were $731 an ounce compared to $596 an ounce for the first quarter 2012. As expected, the year-over-year increase was mainly due to the impact of lower grades on production, higher power costs associated with grinding and crushing harder rock and inflationary pressures across all sites. Mine re-sequencing, mostly at Rosebel, to access high grade ore and the proactive kick-off of our cost reduction program helped to reduce costs. While we anticipate further benefits from the cost reduction initiatives, we are maintaining our outlook on cash costs and will re-visit guidance in the second quarter.
- The gold margin2 in the first quarter 2013 was $844 an ounce, down 17% from the first quarter 2012, reflecting a 16% increase in cash costs per ounce and a lower average realized gold price of $1,631 an ounce compared to $1,702 an ounce in the same prior year period.
Niobium Operations
- Niobium production for the first quarter was 1.2 million kilograms, up 9% from the same quarter 2012.
- The operating margin2 was $16 per kilogram, unchanged from the same prior year period.
COST REDUCTION PROGRAM
In March, before the drop in the gold price, we announced a $100 million cost-reduction program to counter the cost pressure from inflation and the higher demand for power associated with increasing rock hardness at Essakane and Rosebel. We have completed comprehensive cost reviews at all operating and exploration sites and corporate offices to identify specific areas to reduce costs. We plan to reduce costs at our operations by $43 million, exploration expenditures by $40 million and mine site and corporate general and administrative costs by approximately $11 million and $6 million, respectively. Through a combination of greater control over discretionary spending, the prioritization of activities and measures to improve productivity we are making good progress with this program. The following are some examples:
- Prioritization of brownfield and greenfield exploration projects, leading to refocusing of objectives and cuts to, or elimination of, lower priority projects.
- Hiring freezes at most operations, with exceptions only for critical production roles.
- Re-sequencing of mining to defer waste stripping and to improve ore grades during 2013.
- Discussions with key suppliers to reduce costs of consumables and services as well as capital equipment.
- Reduced reagent consumption and prices at Niobec and increased productivity in the converter process thereby reducing unit production costs.
- Reduced corporate travel and revised travel policy.
- Fuel and waste oil management program to reduce fuel consumption.
OPERATING HIGHLIGHTS AND CORPORATE DEVELOPMENTS
Westwood/Mouska
The refurbished plant commenced production at the end of the first quarter 2013. The operation is initially processing stockpiled ore from the Mouska mine. The stockpiled ore from 2012 and the ore mined from Mouska in 2013 are expected to total approximately 60,000 commercial ounces for the year. Production from the Westwood mine, estimated at approximately 80,000 ounces for 2013, will ramp up throughout the year. Commercial production is expected to begin in October 2013. Until then, the contribution from ounces sold will be netted against capital expenditures. In total, the Westwood plant is expected to produce between 130,000 to 150,000 ounces in its first year of production.
Essakane Expansion
The plant expansion at Essakane, which began mid-2012 to accommodate an increasing proportion of hard rock, is on plan and on time for completion by the end of 2013. Ore grades in 2013 are expected to be 10%-15% lower than the life of mine average, mainly due to the processing of lower-grade, softer ore that had been stockpiled in prior years. As Essakane moves into harder rock, the higher grades will help to mitigate the impact of the higher energy consumption required to treat harder ore and improve grades in line with the life of mine average. We are also focused on bringing in softer ore from the Falagountou satellite resource, eight kilometres east of the main pit. Site evaluation drilling is expected to commence in the second quarter and we are looking at the possibility of advancing evaluation and development studies with the objective of bringing the resource into production in 2014, which would be a year ahead of the original mine plan.
Sadiola Sulphide Project
With the exception of prior commitments, sustaining capital and capitalized stripping, we are deferring capital expenditures with respect to the sulphide expansion project until our joint venture partner AngloGold Ashanti agrees to move forward. Regardless of project economics, this is not a project that we will proceed with on our own.
Côté Gold Project
The filing of the Project Description with the Canadian Environmental Assessment Agency in March 2013 initiated the permitting process for the Côté Gold Project in northern Ontario, which is expected to be completed by the end of 2014. The pre-feasibility study is expected to be completed by the end of 2013 followed by the completion of the feasibility study at the end of 2014. If the project economics based on the gold price environment at that time do not meet our required rate of return, we have the option of deferring the project. Côté Gold is an attractive long-term asset that will strengthen our production pipeline.
Niobec Expansion
The completion of the feasibility study for the Niobec expansion is expected in the third quarter 2013 followed by the finalization of the permitting process in the second quarter 2014. As previously stated, Niobec is a stable business that generates a predictable stream of cash flow. Regardless of the project economics related to the expansion, we will not move forward without a partner to jointly fund the project.
Rosebel Definitive Agreement
On April 13, 2013, the previously announced agreement with the Surinamese government on November 26, 2012 was unanimously approved by Suriname’s National Assembly. This agreement provides the opportunity to target softer rock at a significantly reduced power rate. The agreement:
- Extends the terms of the existing agreement by 15 years to 2042.
- Establishes a joint venture with the Government of the Republic of Suriname targeting an area within a 45-kilometre radius of the Rosebel mill, but excluding the existing Rosebel concession. IAMGOLD will
have a 70% participating interest and the Government of Suriname a 30% participating interest on a fully-paid basis for investment beyond the scope of the current operation. The power rate applicable to all production from the joint venture area will be $0.11 per kilowatt hour, representing a 50% reduction from the current power rate.
We are pursuing further discussions with the Government of the Republic of Suriname to reduce power rates applicable to our existing concession. The feasibility study will not be finalized until the power rate is determined.
Commitment to Zero Harm Continues
- IAMGOLD made the 2013 Maclean’s/Sustainalytics list of the 50 Most Socially Responsible Corporations in Canada for the fourth year in a row.
- Regarding health and safety, the frequency of all types of serious injuries (measured as DART rate3) for the first quarter 2013 was 0.96 compared to 1.12 for full year 2012, representing a 14% improvement.
SUMMARIZED FINANCIAL RESULTS
| Financial Position ($ millions, except where noted) | December 31, 20121 | ||||
|---|---|---|---|---|---|
| March 31, 2013 | Change | ||||
| Cash, cash equivalents, and gold bullion at market value at cost Total assets Long-term debt Available credit facilities | $ 1,020.6 $ 894.2 $ 5,295.6 $ 638.8 $ 750.0 | ||||
| $ | 863.3 | (15% | ) | ||
| $ | 744.9 | (17% | ) | ||
| $ | 5,282.5 | - | |||
| $ | 639.2 | - | |||
| $ | 750.0 | - |
Summary of Financial and Three months ended Operating Results March 31,
| ($ millions, except where noted) | 2013 | Change | 20121 | |||
| Financial Data Revenues Cost of sales | $ 354.1 178.8 | |||||
| $ | 305.3 | (14% | ) | |||
| 184.4 | 3% | |||||
| Gross earnings from mining operations | $ 175.3 | |||||
| $ | 120.9 | (31% | ) | |||
| Net earnings attributable to equity holders of IAMGOLD2 Basic net earnings per share ($/share)2 | $ 119.2 $ 0.32 | |||||
| $ | 10.9 | (91% | ) | |||
| $ | 0.03 | (91% | ) | |||
| Adjusted net earnings attributable to equity holders of IAMGOLD2 Basic adjusted net earnings per share ($/share)2 | $ 91.6 $ 0.24 | |||||
| $ | 57.7 | (37% | ) | |||
| $ | 0.15 | (38% | ) | |||
| Operating cash flow2 Operating cash flow ($/share)2 | $ 149.2 $ 0.40 | |||||
| $ | 99.5 | (33% | ) | |||
| $ | 0.26 | (35% | ) | |||
| Operating cash flow before changes in working capital2 Operating cash flow before changes in working capital ($/share)2 | $ 180.8 $ 0.48 | |||||
| $ | 115.2 | (36% | ) | |||
| $ | 0.31 | (35% | ) |
1 Balances related to 2012 have been reclassified as per note 2(c)(ii) of the consolidated interim financial statements.
2 The Company has included the following non-GAAP measures: adjusted net earnings attributable to equity holders of IAMGOLD, adjusted net earnings per share, operating cash flow per share, operating cash flow before changes in working capital per share. Refer to the Supplemental Information attached to this news release for reconciliation to GAAP measures.
KEY OPERATING STATISTICS
Three months ended March 31,
| 2013 | Change | 2012 | ||||
| Key Operating Statistics – Gold mines Gold sales – attributable (000s oz) Gold production – attributable (000s oz) | 195 207 | |||||
| 171 | (12% | ) | ||||
| 188 | (9% | ) | ||||
| Average realized gold price ($/oz) Total cash cost ($/oz)1 Gold margin ($/oz)1 | $ | 1,631 | (4% | ) | $ 1,702 $ 679 $ 1,023 | |
| $ | 787 | 16 | % | |||
| $ | 844 | (17% | ) | |||
| Key Operating Statistics – Niobec Mine Niobium production (millions of kg Nb) Niobium sales (millions of kg Nb) Operating margin ($/kg Nb)1 | 1.1 1.2 $ 16 | |||||
| 1.2 | 9 | % | ||||
| 1.2 | - | |||||
| $ | 16 | - |
1 The Company has disclosed the following non-GAAP measures: total cash cost per ounce, gold margin per ounce, and operating margin per kilogram of niobium sold at the Niobec mine. Refer to the Non-GAAP performance measures section of this news release for reconciliation to GAAP measures.
ATTRIBUTABLE GOLD PRODUCTION AND CASH COSTS
The table below presents the attributable gold production and total cash cost per ounce of production to the Company.
Gold Production (000s oz) Total Cash Cost (/oz)1
Three months ended Three months ended March 31, March 31,
| 2013 | 2012 | 2013 | 2012 | |||
| IAMGOLD Operator Rosebel (95%) Essakane (90%) Doyon division2 (100%) | 93 80 2 | $ 637 562 134 | ||||
| 89 | $ | 717 | ||||
| 65 | 729 | |||||
| 5 | 988 | |||||
| 159 | 175 | $ | 731 | $ 596 | ||
| Joint Ventures Sadiola (41%) Yatela (40%) | 25 7 | $ 1,010 1,613 | ||||
| 19 | $ | 1,043 | ||||
| 10 | 1,196 | |||||
| 29 | 32 | $ | 1,094 | $ 1,135 | ||
| Total | 188 | 207 | $ | 787 | $ 679 | |
| Cash cost, excluding royalties Royalties | $ 588 91 | |||||
| $ | 699 | |||||
| 88 | ||||||
| Total cash cost1 | $ | 787 | $ 679 |
Total cash cost is a non-GAAP measure. Refer to the non-GAAP performance measures section of this news release for the reconciliations to GAAP measures.
2 In 2012, the Mouska mine, as planned, did not produce gold other than marginal gold derived from the mill clean-up process. In 2013, the processing plant at Westwood began milling Mouska stockpiled ore.
FIRST QUARTER 2013 OPERATIONS REVIEW
ROSEBEL MINE, SURINAME
Attributable gold production was 89,000 ounces for the first quarter 2013, 4% lower than the same quarter in 2012 due to lower throughput partially offset by higher than expected grades and recoveries. The mine was able to sequence its mining to access higher grade ore to mitigate the increase in cash costs.
Throughput was lower due to unscheduled maintenance, which resulted in the mill being shut down for seven days, and a harder rock blend.
Total cash costs were $717 an ounce, 13% higher than the same period in 2012 mainly due to lower production, increased labour costs, higher maintenance costs and higher fuel costs from longer hauls.
Cost management initiatives Ongoing cost management initiatives at Rosebel include continuous improvement programs to improve utilization of primary production equipment in the mine, improve operator efficiency, optimize bench sizes, improve drill and blast performance and, additionally, optimize the intensive cyanide leach section of the gravity circuit to increase overall recovery and reduce total cyanide consumption. The operation continues to look for and implement opportunities to reduce manpower requirements, to reduce power consumption and to find additional soft rock resources to feed the plant.
ESSAKANE MINE, BURKINA FASO
Attributable gold production was 65,000 ounces, 19% lower than the same prior year period as a result of expected lower grades. Essakane continued stripping in Phase 2 of the push-back of the main pit. During this period, higher-grader ore was stockpiled while lower-grade, softer ore was mined and processed.
Total cash costs in the first quarter 2013 were $729 an ounce, up 30% from the same prior year period. The increase was mainly due to the impact of lower grades, higher energy prices and consumption and the upward pressure on consumable prices.
Cost management initiatives Ongoing cost management initiatives at Essakane include significantly improved loading and hauling productivity in the mine, improved primary crusher performance and a program to improve maintenance reliability in the plant to maximize operating time and improve circuit stability. As well, the construction team achieved early completion of two key elements of the expansion project: additional leach capacity and a pebble crusher for the existing grinding circuit. Commissioning and integration of these two elements during April will enhance performance, including improved efficiency of consumables. Manpower growth at Essakane is being managed tightly, and filling of open expatriate positions is being restricted. Efforts continue as well to review alternative power sources for Essakane.
DOYON DIVISION, CANADA
The Doyon division includes the Mouska Mine and the Westwood Mine. The Mouska Mine is scheduled to close at the end of 2013 and the Westwood plant commenced production at the end of the first quarter 2013. The Westwood plant is initially processing ore stockpiled from the Mouska Mine, which is expected to total approximately 60,000 ounces in 2013. The processing of ore from the Westwood Mine will ramp up throughout 2013, with production estimated at approximately 80,000 ounces for the year. Commercial production is expected to begin in October 2013. Until then, the contribution from ounces sold will be netted against capital expenditures. In total, the Westwood plant is expected to produce between 130,000 to 150,000 ounces in its first year of production.
With production commencing late in the quarter, production was nominal and the small amount of gold poured was sold in April 2013.
Total cash costs per ounce were $988 an ounce, reflecting the nominal amount of production in the first quarter.
Cost management initiatives Initiatives at Westwood are focused on improving underground development productivity. These efforts include greater involvement of senior supervisors underground, improvements to the supply chain for work materials to development crews, improved maintenance practices and scheduling additional working faces to provide greater flexibility. Improved underground development productivity will reduce requirements for both additional manpower and equipment going forward, as well as provide opportunities for increased production for the current year and a quicker project ramp up period.
SADIOLA MINE, MALI
Attributable gold production for the first quarter of 2013 was 19,000 ounces, 24% lower than in the first quarter 2012 due to lower grades partially offset by higher recovery.
Total cash costs were $1,043 an ounce, 3% higher than the same prior year period mainly as a result of lower gold production. Royalties were lower as a result of lower realized gold prices.
Sadiola did not distribute a dividend in the first quarter 2013 and 2012.
Cost management initiatives Sadiola will address the effectiveness of contractor management so as to improve mining efficiencies and mill performance to reduce costs and increase gold production.
YATELA MINE, MALI
Attributable gold production for the first quarter 2013 was 10,000 ounces, 43% higher than in the first quarter 2012. The increase was due to higher gold grades from the bottom of a satellite pit. Total operating material mined was 45% lower than in the same prior year period as the mine is approaching its end of life. Total cash costs in the first quarter 2013 were $1,196 an ounce, down 26% from the same prior year period. This was due to higher gold production and the impact of the impairment of inventories during 2012 which reduced the net cost of gold produced.
Yatela did not distribute a dividend in the first quarter 2013 and 2012.
Cost management initiatives Yatela is focused on improving the production of gold through accessing additional and/or higher grade ore zones as they are identified. During the end of life mining, we will continue to look for opportunities to leach additional gold from older heaps.
NIOBEC NIOBIUM MINE, CANADA
Niobium production in the first quarter 2013 of 1.2 million kilograms increased 9% from the same period in 2012 due to higher Nb2O5 ore grades and throughput.
Niobium revenues increased to $49.7 million in the first quarter 2013 compared to $48.4 million in the same prior year period due to marginally higher sales volume. The operating margin of $16 per kilogram remained unchanged compared to the same period in 2012.
Cost management initiatives For 2013, Niobec is focusing on improving underground development productivity and blasting efficiency. Improved stability of ore quality fed to the mill, together with enhanced flotation capacity, is providing improved metallurgical performance. In the converter, the operation has introduced larger melting vessels to improve overall productivity and reduce costs.
ATTRIBUTABLE GOLD SALES VOLUME AND REALIZED GOLD PRICE
Average Realized Gold Gold Sales1 (000s oz) Price ($/oz)
Three months ended Three months ended March 31, March 31,
| 2013 | 2013 | ||
| 155 | 178 30 | $ | 1,630 |
| 28 | $ | 1,638 | |
| 183 | 208 | $ | 1,631 |
2012
| IAMGOLD operator (100%) | $ | 1,704 |
| Joint ventures2 | $ | 1,690 |
| Total1 | $ | 1,702 |
1 Attributable sales volume for the first quarter 2013 and 2012 were 171,000 and 195,000 ounces, respectively, after taking into account 95% of the Rosebel sales and 90% of the Essakane sales.
2 Attributable sales of joint ventures: Sadiola (41%) and Yatela (40%).
NIOBEC PRODUCTION, SALES AND OPERATING MARGIN
Three months ended March 31,
| 2012 | ||||
| 2013 | Change | |||
| Total operating material mined (000s t) Ore milled (000s t) Grade (% Nb O ) 2 5 Niobium production (millions of kg Nb) Niobium sales (millions of kg Nb) Operating margin ($/kg Nb)1 | 590 | 4% | 570 555 0.55 1.1 1.2 $ 16 | |
| 565 | 2% | |||
| 0.58 | 5% | |||
| 1.2 | 9% | |||
| 1.2 | - | |||
| $ | 16 | - |
1 Operating margin per kilogram of niobium at the Niobec mine is a non-GAAP measure. Refer to the Supplemental Information section attached to this news release for reconciliation to GAAP measures.
CAPITAL EXPENDITURES
Capital expenditures (CAPEX) in the first quarter 2013 were $209.1 million, inclusive of joint ventures. The following table shows the split between expansion-related CAPEX and sustaining CAPEX.
| Three months ended March 31, 2013 | |
|---|---|
| Development/ ($ millions) Sustaining Expansion | |
| Total | |
| Gold segments Rosebel $ 36.0 $ 12.3 Essakane 30.5 45.6 Westwood - 51.9 | |
| $ 48.3 | |
| 76.1 | |
| 51.9 | |
| Total gold segments 66.5 109.8 Niobec 8.4 9.8 Corporate and other 0.2 - | 176.3 |
| 18.2 | |
| 0.2 | |
| Total capital expenditures, consolidated 75.1 119.6 Joint ventures1 – Sadiola and Yatela 7.0 7.4 | 194.7 |
| 14.4 | |
| $ 82.1 $ 127.0 | $ 209.1 |
1 Attributable capital expenditures of joint ventures: Sadiola(41%) and Yatela (40%).
Rosebel
Total capital expenditures were $48.3 million in the first quarter. Sustaining CAPEX was $36.0 million and included mining equipment ($18.9 million), capitalized stripping ($5.4 million), resource development exploration ($3.2 million) and tailings dam ($3.1 million). Expansion CAPEX of $12.3 million included mining equipment ($7.0 million), third ball mill ($4.9 million) and the feasibility study ($0.4 million) related to the future expansion.
Essakane
Total capital expenditures were $76.1 million in the first quarter. Sustaining CAPEX of $30.5 million included capitalized stripping ($19.4 million) and mining equipment ($5.9 million). Expansion CAPEX of $45.6 million relates to the expansion of the plant (construction, mine and mill equipment), which will be completed by the end of 2013, to accommodate the transition to hard rock.
Westwood
Total capital expenditures were $51.9 million in the first quarter and related to general mine infrastructure in preparation for start-up, including the refurbishment of the mill.
Niobec
Total capital expenditures were $18.2 million in the first quarter. Sustaining CAPEX was $8.4 million including underground development ($3.2 million) and mill optimization ($1.5 million). Although Niobec will not move forward with an expansion without a partner to participate in the funding, expansion CAPEX of $9.8 million included the expansion feasibility study, land costs and mine development associated with expansion and construction.
Joint Ventures
Total attributable capital expenditures were $14.4 million in the first quarter. Sustaining CAPEX of $7.0 million included capitalized stripping ($3.4 million) at Sadiola. While capital expenditures have, for the most part, been deferred pending final approval by AngloGold Ashanti to move the Sadiola sulphide project forward, expansion CAPEX of $7.4 million related to previous commitments for equipment.There were no significant capital expenditures at Yatela.
EXPLORATION
IAMGOLD was active at brownfield development and greenfield exploration projects in eight countries located in West Africa and North and South America for the three months ended March 31, 2013.
In the first quarter 2013, exploration expenditures totaled $28.8 million, of which $22.1 million was expensed and $6.7 million was capitalized. This compares to $27.7 million for the same period in 2012. Drilling activities from all projects totaled approximately 117,400 metres for the quarter.
In light of IAMGOLD`s $100 million cost reduction initiative, we have re-prioritized our global exploration activities and lowered our 2013 outlook by $40 million. The reduction in exploration activities relates to greenfield projects ($14.9 million), brownfield projects ($18.6 million) and the Côté Gold project ($6.5 million). The reduction in Côté Gold spending reflects the deferral of some exploration costs into future years, as well as a redesign of some study components. The changes are not anticipated to impact the timing of the project. Nevertheless, we plan to undertake significant greenfield exploration campaigns on priority projects in Ontario, Brazil and Senegal, and largely maintain planned resource development drilling programs at the Rosebel, Essakane, Westwood and Niobec operations. The outlook for 2013 exploration expenditures of $99.0 million is $48.2 million lower than 2012 full year exploration spend.
2013 OUTLOOK
PRODUCTION AND CASH COSTS – Guidance maintained for 2013
| IAMGOLD Full Year Guidance | 2013 |
| Rosebel (000s oz) Essakane (000s oz) Doyon division (000s oz)1 | 365 – 385 |
| 255 – 275 | |
| 130 – 150 | |
| Total owner-operated production (000s oz) Joint ventures (000s oz) | 750 – 810 |
| 125 – 140 | |
| Total attributable production (000s oz) | 875 – 950 |
| Owner-operated total cash cost ($/oz)2 Consolidated total cash cost ($/oz)2 | $810 – $880 |
| $850 – $925 |
| Owner-operated all-in sustaining cost ($/oz)3 Consolidated total all-in sustaining cost ($/oz)3 | $1,150 – $1,250 |
| $1,200 – $1,300 |
| Niobec production (millions of kg Nb) Niobec operating margin ($/kg Nb)2 | 4.7 – 5.1 |
| $15 – $17 |
Effective tax rate (%) 38%
1 Doyon division production of 130,000 – 150,000 ounces includes Westwood non-commercial production of 40,000 to 50,000 ounces. Associated contribution will be recorded against its mining assets in the consolidated balance sheet.
2 Cash cost per ounce and operating margin per kilogram of niobium sold at the Niobec mine are non-GAAP measures. Refer to the Non-GAAP performance measures section of this news release for reconciliation to GAAP measures.
3 All-in sustaining cost per ounce sold is defined as the sum of operating gold sites attributable cost of sales excluding depreciation and including byproduct credits, corporate general and administration expenses, sustaining exploration spending, sustaining capital expenditures and asset retirement obligation costs divided by attributable ounces sold. The Company plans to conform to the World Gold Council industry guidelines.