Q1 2023 IAMGOLD Corporation Earnings Call
Speaker 1: 3 Blue
Speaker 2: Thank you for standing by. This is the conference operator. Welcome to the IAM Gold, first quarter 2023, operating and financial results conference call and webcast. As a reminder, all participants are in listen only mode and the conference is being recorded. Thank you for your time.
Speaker 2: After the presentation, there will 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, you may signal an operator by pressing star and zero.
Speaker 2: At this time, I'd like to turn the conference over to Graham Jennings, the Vice President, Investor Relations, and Corporate Communications for I Am Gold. Please go ahead, Mr. Jennings.
Speaker 3: Thank you operator and welcome everyone to the I'm Gold's first quarter 2023 operating and financial results conference call. Joining me today on the call are Renew Adams, President Chief Executive Officer, Martin Dutton, Chief Financial Officer, Dr. Gollemoulins, Senior Vice President Operations and Projects.
Speaker 3: Craig McDougal, Executive Vice President Experation, Jersey Oshikoski, Executive Project Director, Kote Gold, and Tim Bradburn, Senior Vice President, General Counsel and Coverage Secretary.
Speaker 3: Before we begin, we are joined today from IAMGOLD's Toronto office, which is located on Treaty 13 territory on the traditional lands of many nations, including the Mississaugas of the Credit, the Anishinaabeg, the Chippewa and the Haudenosaunee and the Wendat peoples.
Speaker 3: At IAMGOLD, we believe respecting and upholding Indigenous rights is founded upon relationships that foster trust, transparency, and mutual respect.
Speaker 3: Please note that our remarks on this call will include forward-looking statements and refer to non-IFRS measures. We encourage you to refer to the cautionary statements and disclosures on non-IFRS measures, including the presentation and the reconciliation of these measures 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 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'll now turn the call over to our President, CEO , Bruno Adams.
Speaker 4: Thank you Graham and good morning everyone and thank you for joining us today.
Speaker 4: First off, I want to thank and congratulate the IMville teams, including our Chair, that is Bellangie. Our Board of Directors and Management, our Operations, Finance and Business Development teams.
Speaker 4: and everyone in the organization for positioning the company to where it is today.
Speaker 4: The company reported a strong first quarter responding to challenges with 113,000 ounces of a tribunal reduction from continuing operation while diligently focusing on managing the Zhen performed cause and bedeutet
Speaker 4: I've been asked by many stakeholders since I joined the company.
Speaker 4: company. So we'll bring in the future.
Speaker 4: I can't tell you before officially starting in the beginning of April , I spend several weeks behind the scenes, getting up to speed on the company and learning about the achievement in progress of the operations and code eight.
Speaker 4: It were clear to me then and even more so now that I am Galt is on the cusp of turning the corner towards Galt, of being a leading midterm high margin Galt.
Or is that kind of mine?
has been performing well with the teams and country demonstrating great initiative and resiliency.
Our Westwood mind is starting to make real gains on completing underground rehabilitation work.
and development in support of the future mine plan that is highlighted by new and transformative initiatives.
Then of course, all eyes are uncotated.
where the project continues to advance rapidly towards initial production early next year.
The project was approximately 80% complete at the end of March and is ramping up to these activity levels with a clear road map in front of us to achieve success.
The impact of Codigol on this company will be absolutely substantial, with the long-lifed low-cost assets shifting up production base to Canada. I'm excited and eager.
to turn our market focus from looking back to looking ahead of what is to come.
We will soon be making the transition from fixing operations and managing constructions.
towards the real value drivers in our business and demonstrating execution success, operation, and optimization, and unlocking growth potential.
all to the benefit of our stakeholders.
But that will not walk us through the quality of the regional Tim Highlight.
I'm on slide five.
Starting with health and safety, while our metrics in the first quarter has tracked our internal targets, this sure remains in line with our peers.
With a days away restricted transfer duty rate of 0.6 and total recordable injury rates of 0.84 based on 200,000 hours worked. Ensuring that all our employees and contractors go home safely will always be the primary focus of IMGO. As we like to say, every gold ounce produced has to be done safely.
and we continue to amend our system's safety protocol to ensure we achieve zero harm.
On production in Q1 the company produced 113,000 ounces of gold on an attributable basis from continuing operation.
putting us well on the path of our production guidance target of 410,000 to 470,000 ounces this year.
As we will get into a moment, the production results were driven by hired and expected grades at ISACM and it comes in your grandpa's voice word.
The relatively strong production results and sales volume translated to cash costs of $1094 per ounce sold.
and all in sustaining costs of $50, $25 per ounce. So lower than our God-in-Systemate of $11, $25, $11, $75 per ounce for cash costs and $16, $25, $1700 per ounce of all in sustaining costs. Manage you to lower the plan stripping at his account.
sustaining costs of $1525 per ounce. So lower than our guidance estimate of $1125 to $1175 per ounce for cash costs and $1625 to $1700 per ounce of all in sustaining costs. Many need you to lower the plant stripping at this account. Our costs were higher than our guidance
in the same period of last year as the inflation in ourself, the industry experience in the second half of last year, raised the general cost of doing business.
and are unlikely to decrease at the same pace. While the first quarter costs were below guidance,
I will know that we expect to see our cost increase in the second and third quarters of this year due to a higher volume and a waste shipping plant that is a gun drink this period.
that we expect to see our costs increase in the second and third quarters of this year due to a higher volume of waste dripping plant that is occurring during this period. I'm now turning to slide six.
Turning to Effect Diamond. The mine reported a tributal goal for actions of 92,000 ounces with higher than expected head rates due to continued positive rate reconciliation and the direct feed of material from the bottom of Phase 4 of the pit.
Mining activities were impacted by ongoing disruptions in the in-country supply chain, with the Sakan mining just over 1.6 million tons of ore and 4.6 million tons of waste, for total material minus 6.3 million tons.
version of the 15th branch of million pounds in the same period last year.
As we saw during the period of last year, the mining fleet could not be operated at folk capacities during January and February as a result of disruptions and the field's supply, resulting from the security situation.
It should be noted though that the situation improved during March and the mining fleet was operating at near full capacity during April .
Milk throughput in the first quarter was 2.2 million tons, at an average head rate of 1.6 times a whose head rate is 1.9 effect on theires.
With throughput 31% lower than the same prior year period.
The decline in the proquot and lower planned utilization during the quarter has primarily due to the guilt of why constraint discus.
The male achieve recovery of 91% in the first quarter, as the plan continues to benefit from recent improvement to all blending practices.
of 91% in the first quarter. As the plan comes in use to benefit us from recent improvement to all blending practices and the gravity circuit.
Recovery from the gravity continue to increase over historic levels, and we are finding on its developing additional screening in the second half of the year to target even further potential
On a cost basis, there is a kind of report cash cost of $964 per ounce and increase from the $781 an ounce last year due to inflationary pressures being offset by lower mining and milling costs as a result of lower activity level at higher grades.
All in sustaining cost for $1157 an ounce.
coming in below estimate as we were honorable to undertake the planned stripping program.
Looking ahead, the Fakane's on track to achieve this cold production guidance range of 340,000 to 380,000 ounces of dough.
Mining activity is trending towards normal operating level in April and it expected.
that we will be able to operate near the normal levels during the remainder of the shift.
including the plan, waste tripping, and the second and third water to provide access to the required mining areas in order to meet.
the 2000s wave or 2025 production lens.
Mill throughput is expected to return to normal levels with head grades expected to decrease over the course of the year as the mill feed incorporates lower grain material from stockafter diverse over
Turning to Westwood.
Gold production was 21,000oz of gold in the form. As a result of fire volume in our grade from underground, as well as the contribution for the grand eco-baked.
Underground development in the First Quarter experienced near record development rates with 1,494 meters of lateral development completed to secure safe access to multiple or faces.
including high-grade, task-producing area, which will allow...
for increased operational flexibility and support of the 2023 production plan.
I was on the ground at Westwood last month.
spending in some of the keystones in the central zone.
And it is absolutely impressive what the teams have done to bring access back into this area.
With a strong first quarter, Westwood is well on track to achieve its guidance range of 17,000 to 90,000 ounces of gold.
and we expect to see an increasing proportion of our source from the underground mine.
as the year progresses.
Mill feeds were continued to be supplemented from available surface deposits, and we should know that our guidance includes supplemental mill feed from satellite deposits, including from the Fion property in the second half of the year. Cash costs in all in-suspaining costs continue to remain high at Westwood complex, with a very high sensitivity to mine output. But as a production volume increases and the rehabilitation work decrease, we expect to see significant costs step down, with the goal of positioning the asset for pre-cashable starting towards the end of the year.
on time for a better and profitable 2024 and beyond.
for a better and profitable 2024 and beyond. Turning to CODI-Golf.
And as mentioned by Graham in the operating remarks, I am pleased to have our Executive Project Director with us today and I will hand out the call to him in a moment. One of my first initiatives when I started was to be at COTE where I spent time at site for the implementation of designed archives in the UK.
with the team. It is very exciting to see the progress the team has made and see the world. And I could see the project firsthand.
Cote Gold, once up and running, will be Canada's third largest gold mine. And the impact that Cote will have on this company will be substantial. With the long life, low-cost asset shifting is a significant proportion of our production base to Canada. Cote is now ramping up to peak activity.
Now that the spring has been nearing completion, there is a clear road map in front of us to achieve success. While there is a clear road map be sure to watch all videos and show where to exit to
Looking at the project spending in Q1 the project GV incurred $158.6 million in project expenditures on a 70% basis.
Bringing the project to date expanded you to $1.37 billion on a 70% basis or $1.96 billion on a 100% basis.
Coding all remains on schedule and the estimated attributable cost to complete the construction on a 70% in-care basis.
$625-700 million assuming a US GA rate of 132.
Accounting for a Submittable Funding Agreement, which Martin will go into more detail, IAMGOLD is expected to fund $460 to $535 million during the remaining of 2023 to bring the project to production, based on its due date 60.3% ownership and joint venture.
With that, I will turn the call over to our Executive Project Director for additional remarks. Go ahead, Jersey. Thank you, Renaud. As mentioned, this is one of the important progress for the project.
achieving significant milestones in their works, process and plant and operation readiness. At the end of the quarter, the project was approximately 80% complete, I think achieved 7% progress in the first quarter of this year, during which was a cold winter season.
We currently have over 1,700 workers on site.
Having recently added an additional 264 beds to support additional workforce for peak SMPI construction activities commissioning operation resources this spring and summer.
On artworks we have achieved...
The first target on the TMF reaching the elevation of 392 in March in preparation for the spring freshet to allow for the water accumulation to support commissioning activities later this year. The first target on the TMF reaching the elevation of 202 in March in preparation for the spring freshet to allow for the water accumulation to support commissioning activities later this year.
Having reached the Frechette milestone with the schedule float and the earthworks, we have used this opportunity to slow down the earthworks progress to advance more aggressively to progress in the process plan construction.
Our focus in Q2 and Q3
will be on completing the construction of the portions of the plant and starting pre-commissioning activities.
Q4 will be focused on phenolization of precommissioning and preparation for the OR introduction.
to achieve first gold in Q1 in sustainable production next year.
Let me give you a quick commentary to the pictures on your screens.
Taking it from the top left corner, this is the status of the high voltage incoming substation.
We are planning to start early commissioning activities in this area in early Q2 in preparation for utility collection of the primary power in August .
Moving clockwise, this is a grinding area.
You can see the ball mill which installed BM gear and vertical progress We have a very good progress in our fleet assembly and commissioning. All procurement is essentially complete and we currently have 14 TABs, 793 whole trucks, 2.94 loaders and 4 detail dozers delivered.
which are simply quite advanced on the first electric shovel. We have started the autonomous operation in the pit in early January , with four to six trucks operating depending on the material delivery target area.
and we are running autonomous fleet during the day and are planning to start 24-hour operation in Q3.
Finally, you can see in the bottom left corner the bird's eye view from the tongue form side.
This is another area which we are pushing for to start recommissioning activities. Moving to the timeline.
This is the high-level view. The goal continues to track well the updated project schedule towards initial production in early 2024.
We are welcome in close alignment with our parts in Itomo and our contractors to ensure that copies build safely, on time and on the current budget and scope. At this time the critical part of the project continues to be through the processing plant as mining operations are well advanced.
A key event this summer will be the connection of the cotyce substation to the power line. This will allow for electrification of the equipment in the plant as well as the rope shovel in the pit.
The Hydro One power line has been completed to site and to sustain and made significant progress in the quarter.
We are very much reliant on our workforce and are a major employer in the region, so I want to tip my hat to our Human Resources team ensuring the project is well stuffed up. We are only as good as our people and I am impressed with the team on the ground. With that I will turn it back to you right now. Thank you.
Thank you, Jersey. Of course, we cannot talk about CODI without talking about GoFundMe.
Earlier in the quarter, we reported as a result from the 2022 drill campaign.
which successfully intersected mineralization to the sauna and below the current resource boundary of the deposit.
Gosselin, with its main resources of 3.4 million indicated ounces and 1.7 million ounces inferred, continue to be in the early stage of discovery.
The deposit has only been drilled with a fraction of the meters compared to coating and to half the depth and remains open along strike and on depth. When you look at the coated life of mine, there is a step down in production in the year 2030-2033.
which could be a logical fit to bring Gosselin into the mind. While there is still a lot of work to do in order to realize this, this year we will be advancing technical studies to start reviewing and focusing on the potential inclusion of Gosselin into a future coded life of mine. We believe we are in the early days.
of the Cody District.
and believe that CODEGO is not just a project, but the start of the mining camp with substantial upside.
within our nearly 600 square kilometers land package.
Now I will pass the call over to our CFO to walk us through the financial review. Martin? No, don't go there.
Thank you and good morning everyone.
and good morning everyone. It was a busy quarter for the company.
following the strategic announcements at the end of last year. Before we look at the earnings, cash flows and liquidity picture, it is probably worth a moment to review the transactions and associated implications.
Early in the first quarter we closed the sale of the Roosevelt mine with total cash proceeds received of $386.4 million.
We still expect to receive an additional $9.8 million by the end of the second quarter related to cash still held at site and related working capital adjustments.
Subsequent to the quarter end, on April 26th we announced the closing of the sale of our Pveyton Cases and
for pre-tax gross proceeds of $197.6 million.
The closing of the other facets of the steamer
including the assets in Guinea and Mali, are expected to close in the third quarter.
The Simulatomic Funding Agreement announced at the end of last year began to take effect in the first quarter.
with Sumitomo contributing $189 million, the total $250 million of the iron gold funding obligations during the quarter. This is effectively equated to a 7.5% transfer of interest in the project to Sumitomo subsequent to the quartering and as of my first
Sumitomo has contributed the remaining $61 million to bring their project interest to $39.7 and on gold's interest to 60.3%.
interest in the project, Sumitomo contributed $7.1 million in incremental funding for project construction.
Over the remaining construction timeline Sumitomo will occupy approximately 82.8 million for a total of 90 million.
of incremental expenditures based on their increased 10% exposure to construction costs.
As a reminder, Angold has the right to purchase this 10% interest at one of seven future dates up to November 2026 and we want to reinforce that it is ours and Sumitomo's intention for Angold to ultimately return to its 70-30 joint venture structure in the future. With regard to the account for the transaction.
Eingot will continue to account for 70% of the assets and liabilities of Kaltai on our balance sheet and the transferred interest will not be recognised as a sale due to the existence of the repurchase option. We have recognised a repurchase option liability.
that represents the amount that Sumitomo contributed on behalf of UNGOLD that is also equal to the amount that UNGOLD needs to pay Sumitomo to repurchase our transferred interest.
and eventually return to 70% interest in the unincorporated joint venture. And this is as of March 31, 2023. All to achieving commercial production.
We will account for 60.3% of the revenue and costs in our income statement.
and receive 60.3% of the cash flows.
Turning to the Q1 financials, Revenues from continuing operations total of $200,000.
$26.2 million from sales of 119,000 ounces.
at an average relighted price of $1,893 per ounce. Adjusted EBITDA from continuing operations was 83 million for the year, across lightning to an adjusted earnings per share of $0.05.