Q3 2022 IAMGOLD Corp Earnings Call
Speaker 1: Thanks for watching!
Speaker 2: This is the conference operator. Welcome to the IAMGOLD third quarter 2022 operating and financial results conference call and webcast. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call?
Speaker 2: you may signal an operator by pressing star then zero. I would now like to turn the conference over to Graham Jennings, VP Investor Relations and Corporate Communications for IAMGOLD. Please go ahead Mr. Jennings.
Speaker 3: Thank you, operator, and welcome everyone to the IAMGOLD third quarter 2022 operating and financial results conference call. Today, joining me on the call are Maurice Belanger, chair of the board and interim president CEO , Martin Thi datasets. Is a
Speaker 3: Bruno Lemelin, Senior Vice President Operations and Projects Craig McDougall, Executive Vice President Growth Tim Bradford, Senior Vice President General Counsel and Corporate Secretary
Speaker 3: Our remarks on this call will include forward-looking statements. Please refer to the cautionary statement included in the presentation under the heading Cautionary Statement Regarding Forward-Looking Information and be advised that the same cautionary language applies to our remarks during the call.
Speaker 3: non-GAAP measures will also be referenced on the call and we direct you to review the cautionary statement included in the presentation and the reconciliation of these measures included in our most recent MD&A each under the heading non-GAAP Financial Measures.
Speaker 3: With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information.
Speaker 3: The slides referenced on this call can be viewed on our website.
Speaker 3: I will now turn the call over to our Chair and Interim President and CEO , Maryse Belanger.
Speaker 2: Thank you, Graham. Good morning, everyone, and thank you for joining us today.
Speaker 2: IANGOLD reported another strong quarter building on operational and productivity initiatives put in place earlier in the year.
Speaker 2: Based on the exceptional performance of our operating teams, we forecast that 2022 production will exceed the top end of our guidance.
Speaker 4: Consequently, we increase our production guidance for the year to between 650 and 705,000 ounces.
Speaker 4: of from 570 to 640,000 ounces as previously guided.
Speaker 4: On behalf of the board and the executive team, we applaud the tireless efforts of the IAM goal team for their continued commitment to operating safely, responsibly and consistently.
Speaker 4: The Cody Gold Project saw a significant ramp-up in activity and is advancing well.
Speaker 4: It is following the schedule and costs re-baseline provided to the market in the summer.
Speaker 4: Currently, COTI is over 64% complete and is nearing peak manpower capacity with approximately 1,500 workers at site.
Speaker 4: The site recently celebrated 6.9 million hours without a long-term injury.
Speaker 4: which is a testament to the safety, commitment, skills, and dedication of the Coding Gold Team.
Speaker 4: Financially, the company took a significant step in addressing its funding requirement for the COTI Gold project with the announcement of the sale of our interest in the Roosevelt Mine Complex to decision mining for $360 million in cash and $40 million in assumed liability.
Speaker 4: The transaction also showed strong support from our lenders as they provided consent to release Roosevelt from the security package.
Speaker 4: The remaining funding alternatives are well advanced and we expect to be able to provide further updates in the default quarter.
Speaker 4: I am 100% confident in our ability to address the near-term challenges in order to deliver food intake on its updated schedule for initial production early in 2024.
Speaker 4: Power pool remains the same.
Speaker 4: to be a leading high-margin gold producer.
Speaker 4: And we will better position IAMGOLD as a more resilient and agile company.
Speaker 4: Now starting with health and safety.
Speaker 4: Our performance continues to improve and tracks below our annual targets with days away restricted and transferred with a rate of 0.27 and total recordable injury rate of 0.72.
Speaker 4: Ensuring all of our employees go home safe after every shift is fundamental and core to our business. Industry
Speaker 4: Every gold ounce produced has to be done safely.
Speaker 4: In the third quarter, IAMGOLD reported 184,000 ounces of attributable production.
Speaker 4: achieving the highest quarter of production in over 2.5 years.
Speaker 4: This hot performance was driven by record production at Eseken, steady performance from Roosevelt and early signs of operating improvements at Westwood.
Speaker 4: The strong production results in sales volumes translated to cash costs of $1,126 per ounce sold and all-insustaining cost of $1,559 per ounce sold.
Speaker 4: We have seen continued cost pressure from inflation.
Speaker 4: Though these pressures stabilized during the third quarter of 2022 relative to the first half of the year.
Speaker 4: Further, the impacts of these cost pressures on mining and processing costs were partially mitigated through the production performance of our operations.
Speaker 4: Based on the strong operating performance this year, the company expects that annual production will exceed the top end of the previous guidance range of 579 to 640,000 ounces. For more information, visit www.potterybarn.com
Speaker 4: and he's revising its guidance upward to between 650,000 and 700,000 and 5,000 ounces.
Speaker 4: The primary driver of this increase is at Eshakyan.
Speaker 4: where we have increased guidance to 410,000 to 430,000 ounces.
Speaker 4: up from 360 to 385 ounces previously.
Speaker 4: We also adjusted guidance on costs. With all the sustaining costs forecast to be below original expectations,
Speaker 4: coming in between $1600 to $1650 per ounce sold down from the original $1650 to $1690 per ounce.
Speaker 4: As noted on the prior slide, we have seen continued cost pressures from external market forces. We have seen continued cost pressures from external market forces from external market
Speaker 4: which have shown sorry to stabilize and have been partially mitigated through our operating performance.
Speaker 4: Further, we continue to see benefits from our oil and foreign exchange tensions.
Speaker 4: For example, this year we have an 80% hedge ratio on WTI and a 71% ratio on Brent contracts at price points between $38 and $65 per barrel.
Speaker 4: These hedges further insulated us from rising costs in the first nine months of the year.
Speaker 4: I will now turn it over to Martin to walk us through financial review.
Speaker 5: Thank you, Maurice, and good morning.
Speaker 5: The following are some key highlights of our third quarter financial results.
Speaker 5: Gold revenues in the third quarter totaled $343 million for a year-to-date total of just over $1 billion.
Speaker 5: The average to realize sales price for gold for the quarter was $1,690 per ounce.
Speaker 5: And that includes the impact of delivering 37,500 ounces at $1,500 per ounce under our 2019 prepay arrangement.
Speaker 5: We have 37,500 ounces remaining to be delivered in the fourth quarter under the pre-buy arrangement.
Speaker 5: adjusted EBITA came in at $103 million for the quarter and exclude the 74 million after tax non-cash impairment charge recognized to align the carrying value of the Roosevelt cash generating unit.
Speaker 5: with the self-spried of them.
Speaker 5: with the sales price of the asset as well as the impact of unrealized non-H derivatives and foreign exchange losses.
Speaker 5: due to the impact of the weakening Canadian dollar on the cash balances held in Canadian dollar.
Speaker 5: Year to date adjusted EBITDA was 350.6 million.
Speaker 5: The company reported a third quarter net loss of $129.1 million and an adjusted net loss of $13.7 million or $0.03 per share, bringing the adjusted earnings year-to-date to $6.1 million or $0.01 per share.
Speaker 5: The adjustments mainly relate to the non-cash impairment charge on the reservoir and the foreign exchange differences previously mentioned.
Speaker 5: Operating cash flow changes in working capital was 108.8 million for the quarter and 336.6 million for the year to date.
Speaker 5: Mindsight Pre-Cash Flow increased
Speaker 5: to 59.2 million in the quarter and totals 189.3 million for the years to date.
Speaker 5: In terms of our financial position, we ended the quarter with approximately $536 million in cash and cash equivalent and short-term investment and we had approximately $107 million available under our created facility.
Speaker 5: I have to tone down 380 million.
Speaker 5: Here today, an accounting for the letters of credit in the amount of 19.3 million issued under the Prince-Ely rotor.
Speaker 5: for certain charity bonds issued as environmental indemnities.
Speaker 5: Taken together, this translates to approximately 637 million in total liquidity at quarter end.
Speaker 5: Of note, 238 million of our cash in cash equivalents.
Speaker 5: is helped by Coate Gold and Isacam.
Speaker 5: as the cartoon called UJP.
Speaker 5: requires its joint venture partners to fund in advance.
Speaker 5: two months of future expenditures.
Speaker 5: And that if it can, the company uses dividends and intercompany loans to repatriate funds from its operations.
Speaker 5: and the timing of dividends is usually in the second and third quarter of every year.
Speaker 5: As a result, we typically hold between 200 and 250 million of cash on our balance sheet for normal course business purposes.
Speaker 5: At the end of the third quarter, the remaining attributable spent a complete deconstruction of the Go To Golf Project.
Speaker 5: It is estimated to be between 1 and 1.1 billion.
Speaker 5: By sending information currently available and providing market conditions,
Speaker 5: We continue to expect that Eingold will require additional equity in 2023.
Speaker 5: In addition to the proceeds expected to be received from the sale of Roosevelt to complete the construction of the project
Speaker 5: The company is actively pursuing various alternatives to increase its liquidity and capital resources.
Speaker 5: including the options listed here.
Speaker 5: The funding alternatives are advancing well and we expect to be able to provide an update later in the fourth quarter.
Speaker 5: It is worth highlighting that the strategic review of our development and exploration assets in the bamboo region of West Africa is active and ongoing and we will provide further updates in due course.
Speaker 4: Thank you, Martin.
Speaker 4: Now on the operations.
Speaker 4: So we'll talk first about Etaquan.
Speaker 4: This again achieved its highest quota of production ever, reporting attributable goal production of 115,000 ounces.
Speaker 4: The mine continues to benefit from the fire-grade mineralization in the lower portion of the Phase IV pet with higher amounts of post-glove.
Speaker 4: Mining activity of 12.6 million tons increased from the prior quarter as mining operation resumed at full capacity in September , thanks to an easing of supply chain challenges in-country and abroad.
Speaker 4: Mill throughput increased in the third quarter to 3 million tons, benefiting from improved ground size and a higher plant availability at 93%.
Speaker 4: Head grades were reported at 1.5 grams per ton.
Speaker 4: and recoveries at 90%, remaining at the same level as seen in the second quarter.
Speaker 4: As announced subsequent to Quarter End, there were political developments in Burkina Faso with a change of leadership within the military-led government.
Speaker 4: All IAMGOLD personnel were safe and the ESACAN operation continues to operate as per the business plan.
Speaker 4: The company continues to takeain proactive measure to ensure the safety and security of our in-country personnel and we continuue to adjust protocols and activity levels that signence according to the security situation.
As we look to the end of the year, we have increased our production guidance for a second to between 410 and 430,000 ounces, up from 360 to 385,000 ounces previously.
And second, is well positioned to have its best production year ever and does the best year on record.
We are continuing to review the positive reconciliation between headgrates and the updated block model, while we are also executing on targeted operational improvements.
Recent initiatives focused on increasing mill throughput and recovery with improved blast fragmentation and enhanced gravity circuit recoveries through the planned addition of the double deck screen.
Not turning to Roosevelt.
Over operationally, the turnaround at Roosevelt has continued with Q3 attributable production of 50,000 ounces.
This is the fifth progressive quarter of higher production as a result of the infrastructure improvements initiated at the end of last year and the new life of mine plan announced earlier this year.
It outlined a roadmap to return Roosevelt to being a 300,000 ounces plus producer by 2025.
Subsequent to quarter end on October 18,
The company announced that it had entered into a definitive agreement with Zijin Mining Group to sell its interest in the Roosevelt mine for total consideration of 401 million dollars with cash consideration of 360 million and the assumption of $3.5 million.
Sorry, $41 million of liabilities related to equipment leases.
When we initiated our strategic review process for Roosevelt, our goal was to find a new owner committed to the future of the Roosevelt complex and who would make the necessary investments in the operation and place it on the path for long-term success.
Roosevelt has been an important contributor to Iron Gold and we are pleased that a company with the capabilities and reputation of the Genes, a leading global mining company, has
We'll be taking over this operation for the benefit of all stakeholders.
The transaction is expected to go in the first quarter of 2023 or earlier, subject to some regulatory approvals.
With the exceptional diligence and efforts of our Roosevelt employees and management, personnel is expected to produce 175 to 200,000 ounces up from our prior guidance of the
155 to 180,000 ounces.
Cross pressures remain in Syria as the country is heavily exposed to the U.S. dollar and the net importer of goods, though oil prices continue to be partially mitigated by our existing hedge program.
On Westwood.
Gold production was 19,000 ounces in the quarter as a result of higher volumes of underground ore at a higher grade and higher tonnages from the Grand Duke Satellite Open Pen.
Level of development in the third quarter was 951 meters.
lagging from the previous quarter due to continued labor constraints and lower mechanical availability of underground equipment.
However, underground rehabilitation progress at the planned rate, despite challenging ground conditions and impacts from supply chain challenges. Space hobbies find robust therapy across all axis routes 30 meters Begin shadows and impacts through to high data. Which is a heavy earthquakewater drill shot? diy freezer programmed to gwir from this hole and to the wyer. The dunes of these giants go back to the Cheers.
Underground mining activity in the third quarter focused on accessing additional stope sequences within the eastern zones.
To supplement the recently opened higher grade western and central zones,
in order to secure multiple ore phases which will allow for simultaneous exploitation underpinning the 2023 production plan.
As a result of the improvements seen in Q3 and expectations for Q4, we raised the bottom end of our production guidance.
to 65,000 to 75,000 ounces, up from 55,000 to 75,000 ounces previously.
Now, I'll turn it to Q&A.
The project has made significant progress over the last few months.
Progress rates are currently at these levels, in line with the updated project plan.
The site is currently near capacity with approximately 1,500 workers.
I was not on that site a couple weeks ago and I have to commend the project management team for their diligence and focus to keep everyone on task.
As of September 30th, the company's estimated attributable remaining project spend to complete construction and bring COTG into production is $1 to $1.1 billion net of leases and working capital.
It is worth no day.
Considering the current market, then this estimate also assumed a Canadian to US exchange rate of 1.25 to 1.
So any further strength in the US dollar provides a benefit to COTI Gold's construction costs as our contracts and expenses on Canadian dollars denominated.
The company is putting in additional Canadian dollar foreign exchange hedges in addition to its existing hedges to increase exposure to current rates over the construction period.
The project at the end of September was 64.2% complete with monthly project advancement estimated to be approximately 3-4% per month during this peak construction period.
Detailed engineering is now 100% complete, so all focus is on
execution and mechanical installation.
Key progress milestones in the third quarter include revving up of structural, mechanical, and piping activities in the processing plant with the ball mill mounted on the reception cradle and the pump boxset in place.
significant progress on the tailings management facility, water re-alignments channels, polishing pandem and underwater management infrastructure dams.
the handover and assembly of the autonomous control room.
Completion of the primary crusher concrete to the 409 elevation was just
one more vertical lift remaining, and concrete foundations for the HPGR secondary crusher, screening building, and fine orbits, and over to SMPEI contractors.
The gravity goals continue to track well to the updated project schedule towards initial production in early 2024.
I am both and our partner Sumitomo aligned and focused on the
on building code days safely on time.
and to the current scope and budget.
At this time, the critical path for the project continues to be through the processing plant, and all teams are focused on ensuring outdoor work has been executed to facilitate mechanical installation within the plant once the winter season hits.
The company cautions that potential further disruption
including without limitation.
caused by COVID-19, the Ukraine War, weather, potential labor disruption, and the tight labor market could continue to impact the timing of activity, availability of workforce productivity and supply chain logistics, and consequently, could further impact the timing of actual commercial production and project costs.
Now right next to Gauté, Gosselin.
At the end of last year, we announced an initial resource for the Gosselin deposit, which is located immediately adjacent to Cote.
GoFundMe contains 3.4 million ounces of measured and indicated resources.
and in addition 1.7 million ounces of inferred resources.
Notably, Gosselin has only been drilled to ask the death of Côté and he's open among strike and a death.
This year we conducted a 16,000 meter diamond drill campaign targeting further delineation of the model of the resource and extension of the mineralization zone outside the resource boundary.
Results of this program will be reported once complete.
It is worth reminding everyone that the Cote de Gaulle Life of Mind Plan, as defined today, is based on mineral reserves of 7.2 million ounces contained within the Cote de Paul.
Taken together, Pote and Goughland have a total of 13.5 million ounces in measured and indicated.
resource.
We firmly believe that Cody Gold is not just a project.
But this stopped for the new mining district.
And there is significant upside to be uncovered.
as there has been minimal historical exploration targeting these Cody Gosselin-style intrusion-hosted deposits within our 596-square-kilometer land package.
With that update, I would like to pass the call back to the operator for Q&A.
Thank you.
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question comes from Tanya Jiskuskinek with Scotiabank. Please go ahead.
Great, good morning and thank you for taking my questions. Mariz, Martin, thank you for the insights. Mariz, can I ask a couple of things? I have three questions. So, I'm going to start number one on inflationary pressures. I want to get an understanding are you starting to see any easing of inflation in your costs?
either you know labor and or you know diesel and or consumable just are you starting to see that ease a little bit? That's my first question.
If you don't mind, I'll answer the question.
We have seen sharp increases like our peers in the first half of the year with inflation for oil type costs and oil link commodities such as our grinding media. In Q3 we started seeing those costs plateau so we have not seen further increases but the costs remain elevated at those levels that we saw in Q2.
Okay.
Alright, and where would you, so you're seeing it mainly in diesel and other consumables related to fuel?
Yes, and items like steel grinding media that requires energy to produce.
Okay.
Nothing in labor.
No.
Okay, my second question again is another technical question which would have to do with the reserves. I'm just interested to understand what exactly is happening at ESSICAN that you know you're getting this positive block model reconciliation on the grade like what do you think is happening with this complex geology and my second part would be you know as you look at your reserves in 2020.
year end 2022, are you thinking about adjusting the gold price upward to reflect these additional or higher costs?
I don't know Martin, you or Omari is on that one.
Okay, I'll take the question on the S again.
We've had a few consecutive months of positive reconciliation at the ESSAC GAN. It is linked to really, cause gold in the phase 4 pets.
And that course goal in fact seems to report directly to gravity. So we have great benefits from that.
And we are in the process of validating those.
into process of validating those
our block model and further we are now drilling.
and trying to better understand the type of mineralization and what's going on.
So I would suspect next quarter we would be able to provide more visibility to what we see
of if I can adjust.
and talking about cost and all of the technical aspects.
We have not seen any changes to our cut of grade at SACAD.
What about the company itself for 2022 year-end?
Sorry Tania, would you please repeat? I guess it was just you're only left with really wet wood so it's an underground operation. That's fine. I just answered my own question there. So my last question if I could was just on the additional liquidity that you're looking to put in place by year end. You mentioned that the BOTO and exploration is well advanced. I thought my understanding was that you wanted to get all of that drilling.
make sure that we get the value for the assets as part of the sales process and that it's not a fire sale so we are looking closely at the process and then the underlying value that that part is offering for it.
Okay, so you feel you could get this done in Q4?
Okay. And then I noticed in your release that...
you removed joint ventures off as one of your options. The joint venture partnerships, we had mentioned these on previous calls. So we're still looking to keep 100% of EstaCan and Westwood. Is that a fair statement?
Yes, it is Tanya.
Okay, and then my last question just on this funding gap is just you know once we Sell or get value for Boto and other expiration You know would you put your packing order as you know options on?
royalties and streams as a preferred option to debt and or equity. I'm just trying to understand the ranking of the remaining funding.
So we are looking at the options with the various solutions in the capital structure and
There's a trade-off between the cost of capital and the permanency of solutions. So we have not decided a picking order. We are looking through the various options.
with that competitive tension between the cost of capital and the permanency of the solutions.
I guess I'll stay tuned. Do you think you will have the full funding, so including your other option in addition to the sale of Boto and other by year-end?
Yes, we will be able to communicate this to the market before year-end.
Okay, good. Great. Congratulations on the progress.
Thank you, Dania.
The next question is from Anita Sony with CIBC World Market. Please go ahead.
Good morning, everyone. Thanks for taking my questions. First question, you mentioned the amount of capital or the amount of cash that is held between Esekane and Kote. Could you give us a break out of that? I think it's critical to my thinking in terms of how much is actually put ahead for the Kote construction already.
Bye.
So Anita, why does the code tie...
spending or cash calls work is we have to provide two months of funding but the cash calls is on the beginning of the month so at the end of the month
we have approximately
one month of expenditures remaining and then we need to fund on the next day. So we see it as two months of cash. I would say that it's roughly 50-50 of that amount that we've included.
in the in the mDNA
Okay, so 50-50 between Ethocaine and how long does it take you to upstream cash from Ethocaine to go into Tecote?
It doesn't take us long at all, however we only can do it in a certain window and that window is normally Q2 and Q3. So that's why the cash balance built up in Q4 and Q1 and then we start repaying cash again in that window.
Okay.
All right, and then as I look to just a minor point, but going into Q4, the guidance for the year at FK would imply a week or a quarter, so somewhere around the range, I think it was about 85,000 ounces or so. And you did mention that you'd be focusing on stripping to prepare yourself for the grade profile in 2023 and 2024. So is that accurate, my assumption that, you know, you'd be focused more on stripping and less on delivering more to the...
and a flower light and a hall rock.
And also, we have noted the security situation in the country. That's putting a bit of pressure on our people. The situation is managed.
But at this point, I would rather be a little conservative when it comes to E
And then just moving backwards to the funding gap and the BEMBUK package of assets, I believe you carry it on the balance sheet right now for about $258 million. Is that an accurate assumption of the value that you're trying to achieve when you sell that or is there something else that we should be thinking about?
Anita, um...
Thanks for the question. It is very commercially sensitive at this stage in our process and we cannot comment on value. That is not our carrying value of these assets on our balance sheet. For Boto it is closer to 80 million.
Oh, no, I meant the package of assets. All of them together were $2.58, I thought. But Bodo itself is $80 million, you said? So the other asset is exploration assets, and we don't – we expense our exploration expenditures. We don't have significant value on the balance sheet.
But the value of the, the carrying, the accounting carrying value is not representative of the value of the package in our view.
The counting carrying value is not representative of the value of the package in our view.
All right, okay, thank you very much.
All right, okay, thank you very much.
Thank you very much. You're welcome.
Once again, if you have a question, please press star then 1.
The next question is from Lawson Winder with Bank of America. Please go ahead.
Hi, good morning and thank you for the update.
On the African asset sales, I just wanted to...
I sort of drilled down a little bit more on your previous comment. When you say you expect to have some sort of announcement with regard to the strategic alternatives for West Africa by the end of Q4, do you mean for OTO, what's the two smaller exploration stage assets?
Yes.
Yes, it would be for the package. It would be for the three properties.
And
Is the idea that they would all be sold together as a package or could there be multiple buyers for each of those assets within that package?
would all be sold together as a package or you know could there be multiple buyers for each of those assets within that package?
They could be sold separately, two of them, three of them together. It really depends on where we see the value and where we can create some value for the company.
So, no definitive answer yet on this and it's still a work in progress.
Okay, got it. That's great. And then just on Roosevelt, with the higher guidance, I think it's great that you're getting the benefit of that improved guidance.
What I want to understand, will there be any sort of adjustment upon closing as a result of that higher guidance or why I'm going to be able to fully benefit from that?
Good morning, Austin. For Roosevelt, the purchase price is 360 million, would not be adjusted based on the agreement, but there is certain working capital adjustments.
that will be made based on the standard working capital and the company also receives the cash on the balance at the time of the sale. So if there is overperformance, it could result in...
in increasing proceeds.
In our negotiations we have shared these...
Forecast with with the purchaser as well. So
is in line with what they are seeing as well.
Okay, excellent. And then just going to Eseken with the CAPAC now running at a hundred and... Sorry, for the $75 million of sustaining CAPAC. I think you look into 2023, and even beyond, is that kind of the correct level for maintaining that operation?
We are currently working on the budget, Lawson, right now. I think it's too early to tell. There will be some stripping to be done in 2023 and 2024 for sure. But again, to give you the best level of...
of the capital for the coming years. We are actually finalizing our budgets.
Okay, well, stay tuned for that. And then just finally, I'm not sure if, Maurice, you can provide any color on the search for
Well, the CEO search is active and ongoing and the work that has been conducting an extensive process because we really want to find the right candidate for the job.
And done.
And I would say in terms of timing, I would say that the
We expect to be able to make an announcement before the end of the year.
Excellent. Thank you very much for answering my questions.
Thank you.
We have a follow-up question from Anita Sony with CIBC World Markets. Please go ahead.
Hi, can I just get some, I guess some color I'm sure I could probably find in the technical report if I looked, but the working capital requirements that you would have for COTE you sort of leading up into the, I guess, leading up into the commercial production declaration, early 2024. Could you give me a ballpark number of what you're looking at there?
The technical report does have information in there. I think what is important, because it's an unincorporated joint venture, we will continue to follow the legal process, and it still makes things quicker.
to have to fund two months of expenditures going forward. And then each partner gets the gold credits back. So the working capital is included in the cost assumptions for the construction period, also included in the
in the technical report quantity and operation.
From an angle perspective we need to continue to fund the cash calls for that.
ongoing.
ongoing cash outflows of the project.
All right, thank you.
The next question is from Sean Wandrack with Deutsche Bank. Please go ahead.
Hi, good morning. Thanks for taking my questions.
Just the first question, I believe you provide a liquidity bridge on slide nine.
Your cash balance went up about $130 million quarter over quarter. Can you just describe what exactly drove that? Sorry if I missed it.
We drew down on our credit facility at the end of September and that was to assist us to make the cash call for COTI at the beginning of October . We also drew down a bit more and for a bit longer period to take advantage of savings in an increasing interest rate environment. So we drew down more on the facility than we needed in the short term.
Okay, that makes sense. Thank you. And then if I take a look at your income statement, it does appear that exploration and SG&A expense both came down a little bit. Is this a fair run rate to use moving forward?
We are working through our updated plans and budget process and we would be giving an update on that in our guidance.
So I
I don't think we're in a position to say that that is our run rate and we're also kind of looking at our exploration expenditures and levels based on what happens with the acid disposition of exploration acids in West Africa for example as well. So we just need to complete our assessment of our plant activities.
Understood, understood. And then is there any concern out there around the Roosevelt sale closing?
Anything in particular that could slow the closing or gives you any pause with it.
At this point, no, there's nothing that gives me pause. We have the normal regulatory requirements and we are proceeding through those. As a matter of fact, I'm on my way to Suriname today with the decision representatives to do a joint visit and...
It's really just about customary regulatory approvals at this point.
Okay, thank you very much.
This concludes the time allocated for questions. I'd like to hand the conference back over to Marissa Bellanger for closing remarks.
Thank you very much, operator, and thanks to everyone for joining us this morning and for your continued engagement with IMGOLD. As always, should you have any additional questions, please do not hesitate to reach out to myself or Graham Jennings if you would like to set up a meeting. Thank you all and have a great day.
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
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