Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Iamgold Corp (IAG, Financial) reported a strong quarter with the first full quarter of operations at Côté Gold and strong performances from Essakane and Westwood.
- The company increased its overall production guidance for the year, reflecting confidence in its operational capabilities.
- Iamgold Corp (IAG) achieved a total recordable injury frequency rate of 0.6, an improvement from the prior quarter, demonstrating a strong commitment to safety.
- The company reported cash and cash equivalents of $511.4 million, with total liquidity of approximately $915.7 million, indicating a strong financial position.
- Essakane mine reported a significant increase in attributable gold production, up 26% from the prior year, contributing to the company's overall strong performance.
Negative Points
- Despite strong performance, Iamgold Corp (IAG) faces challenges with inflationary pressures and pricing for certain consumables, which remain in line with 2023 levels.
- The company continues to see risks in recouping all VAT receivables, particularly in Burkina Faso, which could impact liquidity.
- Côté Gold experienced issues with wear parts due to the high abrasiveness of the ore, requiring corrective actions and a planned multi-day shutdown in September.
- Westwood mine, while improving, still faces challenges in maintaining consistent production and grade levels, impacting overall performance.
- The company has significant obligations and factors influencing liquidity over the next 12 months, including the need to deliver 150,000 ounces under gold prepay arrangements.
Q & A Highlights
Q: What factors drove the indication that you will be near the bottom end of the production guidance range at Côté Gold? How long will the shutdown last in September?
A: The main factor is the total tonnes milled. We set the guidance early in the year, specifying confidence in the high grade, which is happening. We took time in Q2 to properly stop and correct things, which may impact short-term ounces but will benefit us in 2025. Originally, we planned for a five-day shutdown in September, but we are prepared to extend it to 10-15 days if necessary to correct all issues.
Q: Can you give an indication of how the processing costs are going at this stage?
A: The processing costs are well within our expectations and plans. There are some additional costs for fixing or replacing certain things, but we expect the dollar per tonne cost to be in the ranges previously guided and disclosed, with slight increases due to inflation.
Q: How are the autonomous operations performing in haulage and drilling?
A: Autonomous haulage is performing extremely well with high availability. There are no significant issues, and it has improved health and safety by reducing the need for operators behind the steering wheel. The implementation has been successful, and we would redo it anytime.
Q: Do you see the grades at Westwood continuing through the year? Is there potential upside to the targeted run rate from the underground beyond 900 tonnes per day?
A: The grades are improving, and we are close to mining at the reserve grade of 10.4 grams per tonne. We aim to increase the underground run rate closer to 1,100 tonnes per day. The upcoming technical report will provide more clarity on targets and the life of mine.
Q: Can you provide more clarity on the final payment for the Bambouk assets and any associated credit risk?
A: The process has been lengthy, but we are making great progress. We are confident in closing the Guinea transaction in the second half and addressing the Mali transaction afterward. We expect to close both this year, with approximately $80 million in gross proceeds.
Q: Are there any planned shutdowns at Westwood or Essakane?
A: There are no extraordinary shutdowns planned beyond the regular maintenance. Both mines should maintain or improve their availability levels seen in Q2.
Q: Should we assume the mill at Côté will run at around 60% through August up until the shutdown?
A: Yes, 60% is the new baseline. We will continue to improve, with a slight dip in September for the shutdown, but 60% will remain the baseline.
Q: What is the availability of your trucks at Côté?
A: The trucks are operating at around 85% availability, which is within the expected range for a new build.
Q: Can you provide the stockpile tonnages for the 1.6 grams per tonne ore at Côté?
A: We have about 0.5 million tonnes of 1.6 grams per tonne ore stockpiled, with additional high-grade ore available directly in the pit.
Q: Will the processing costs at Côté be in USD?
A: Yes, the processing costs quoted are in USD.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
