Q3 2023 IAMGOLD Corp Earnings Call
Thank you for standing by this is the conference operator, welcome to the island Gold's third 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.
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.
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At this time I'd like to turn the conference over to Graeme Jennings VP Investor Relations and corporate communications for Ion Golf. Please go ahead Mr journey.
Yes.
Thank you operator, and welcome everyone to our call. This morning.
Joining me today on the call are Renaud Adams, President and Chief Executive Officer pardon, finishing.
Chief Financial Officer.
Bruno Lemelin, Chief operating Officer, Jim Brad Burke, Senior Vice President General Counsel, and corporate Secretary and Jersey, or the housekeeper Executive project Director call Jay Gould.
Before we begin we are joined today, you're providing those trunk office, which is located on 2013 territory on the traditional lands of many nations, Japan, obviously, the credit daughter stomach Chippewa Sony went up People's.
We believe respecting and are holding interest rates is founded upon our relationships at Foster trust transparency and mutual respect.
Please note that our remarks on this call will include forward looking statements I'm, referring to dawn I first measures. We encourage you to refer to the cautionary statements and disclosures on dawn forest measures, including the presentation and the reconciliations of these measures in our most recent MD&A each under the heading non-GAAP financial measures.
With respect to the technical information to be discussed.
The information in the presentation under the heading qualified person that technical information.
The slides referenced on this call can be viewed on our website.
I'll now turn the call over to our President and CEO no weapons.
Thank you Graham and good morning, everyone and thank you for joining us today.
This is really an exciting time for <unk>.
We found a company called project make significant strides to where it is now.
Without.
Taking over in a project.
Amortization of the cost structure.
Great formation activities ramping <unk> production early next year.
As we approach a production target okay.
Pension is laser focused on managing.
The operation.
And the goal in mind to main pokemon, the most successful large scale mining saga.
Our industry.
Okay.
Right.
This is a project that is critical.
The repositioning of this company.
Once online I am going to have a higher production base lower cost profile.
Foundation.
Cash flow generation and gross.
Canada.
Turning to the quarter itself I'm trying to work with what was achieved this year.
Continuing operations of 329000 ounces.
Companies are on track to meet the federal tax rate guidance for Canada.
Townsend.
Because you need to see the ratio keeps feedback profession.
And factory team and remain on track for guidance. This year, despite the complexities in the region.
But we're our team's efforts to build the mine underground.
I'm going to show up.
We will walk through in a quantity to operating results in more detail in a moment.
I wanted to be clear that our short term goals.
Yeah.
Great comedy.
With a focus on that Jamie.
Sustainable manner.
Operations.
Second.
Sure preparation.
Yes.
Okay, Toby profitability, while ensuring the safety of our people and to communicate correctly.
Which we operate.
And the longer term.
Our goal remains that we want to become a low cost high margin determined yet gold producer with a strong operating base in Canada.
Actually we will prioritize.
Bearing in our 70% position in Cotai, when our partners Sumitomo as well as use of our cash flows to optimize our balance sheet and demonstrate a company to have a more efficient and balanced capital structure.
With that we will not dive into any operating and financial results and highlights for the quarter.
Starting with health and safety the company has seen an improving trend year over year.
Just days away restricted transfer Judy radar Cerro Verde.
Required Richard Circle 60 days now.
Based on $200000 extra.
That's shrinking.
So you've got contractors golf in phase III.
Our primary focus.
I'd like to say every goal.
What do you attribute.
Okay.
Our goal continues to be healthy.
Zero harm for people.
So in places where we are.
On products.
Third quarter the company produced 190000 ounces.
Drinking all basis.
<unk> higher.
This quarter.
Bringing our year to date production to China.
25000 ounces.
As we've all gotten into a moment.
<unk> resolved we're addressing.
This iconic responding effectively to plan. Despite continued pressures on the supply chain and an increase in income from recent rate happily pay that off with my questions.
Yes.
Just a few minutes the PERC water saw a further increase in cost, but our evolving party third quarter cash costs, a fortune $500, an ounce and an all in sustaining cost 1970 $5.
Okay got it.
This would bring our year to date cash cost to <unk> $88, an ounce and an all in sustaining costs.
Adrian.
$803 an ounce.
Sitting above our prior guidance projects you see here on the block.
As a result.
We have to revise our cost guidance higher.
With cash cost now forecasted to be between 450, <unk> hundred $35 an ounce.
And all of the sustaining cost to be between 17 and 25 properties.
This increase in cost trends and forecast due to continued cost pressures.
The resulting from the securities duration.
Which will be below mark.
Furthermore, we have seen sustained elevated price right.
Switching over to periods.
That we are seeing now find at prices that are beginning to see.
However, the rate of baseline method matches the pace of increase.
Looking at our broader guidance, we have patients we have reviews.
Capital forecast.
Alright.
Okay.
You will recall in the first quarter, we were unable to complete the planned stripping partner to their supply chain issues.
Which was rectified in the second quarter of the stripping program.
Plant.
Last quarter, we were able to start to recoup the sharp fall in Q1. However, it does not appear that we'll be able to reduce our lead times for calendar year end.
And we will constantly in 2024 and support for our 2000 carats.
Gotcha.
Likewise.
We have reduced our sustaining capital as a result of increased visibility into end of the year underground development and rehab patients.
With that I will pass the call over to our CFO to walk us through our financial results.
Archie.
Thank you Renaud and good morning, everyone.
Looking at our Q3 financials revenues from continuing operations, Dr. Two up from $24 5 million from sales of 116000 ounces.
Average realized price of 1937 daughters droughts.
Adjusted EBITDA from continuing operations was $57 8 million for the quarter translating to an adjusted loss per share of <unk>.
In terms of our financial position.
<unk> ended the quarter with cash and equivalents of $548 9 million and a fully undrawn credit facility.
Equating to charges liquidity of approximately $1 billion.
As noted in our MD&A the company entered into a one year extension of its credit facility yesterday, extending the maturity to January 31, 2026 on January one 2025.
As part of the extension.
Grant to study the west reduced we're right sized to $425 million based on the company's requirement for senior revolving facility on its <unk> business.
The extensions about blueprint Saturday to be available as well as non current carrying 'twenty 'twenty four should be required additional liquidity and coach as being commissioned and wrapping up.
We note that with them cash and cash equivalents 76, eight volume was helped by coach that go at $54 6 million was helped by its a cat.
Company to create a dividend from S. A CAD 120 buzzing in the second quarter, which was received in the third quarter net of minority interest and withholding taxes.
The company has to find an estimated $225 million off to try to project expenditures carrying do in mind drove 23 had into 2024. That's a project is completed and commission advanced he used to available cash and cash equivalents undrawn amounts under the revolving credit facility.
By the proceeds from the site of the fact, we've got seats.
As we look forward to 2020 for the golf he might be but it's coming into focus that's good that arrangement.
And he has to physically those effort honored 50000 ounces over the course of 'twenty 'twenty four.
With regard to the range of 700 to 2012.
For us one.
100000 of the Bolthouse is that it will be delivered.
And we had the company will participate in the Gulf price within that part of the range.
The company does not participate in gold price upside with the remaining 50000 ounces of gold ounces that you need to deliver.
While the Gulf P. Vitamin regimen reduces operating cash flows in 2024, the company could potentially roll forward, a portion or all of the range, but should the need arise.
With that I will pass the call back to back.
Sure enough.
Yeah.
Turning to Canada.
<unk> reported third quarter, two but all volt productions are weighted more towards masters accounts, bringing the year to date totaled.
64 Paas.
This was down slightly from the 88000 ounces produced in the second quarter, a modest rate bulk of throughput and grades.
Mining activities totaled $10 6 million accounts in the quarter down from the prior quarter as the mining fleet did not operate at full capacity.
Due to the disruptions in the fuel supply, resulting in trying to reach a molecule.
Including the Covid measures.
As well as a continued challenges growing security situation within the country.
The situation improved for working out of the quarter finding fleet operating at capacity during September and October have grades remained effectively flat into Florida at one one grams, a tonne, which is below the reserve model great as mining activities were truly after batches from phase five.
And Mike Barnes is blended with longer grade stockpile.
We are seeing actual applications upgrades and improvements.
So September October as activity began to back pads due to lower benches of the feedstock.
On a cost basis.
Reported cash costs of $270, an ounce approximately $100 now increased from the prior quarter due to higher volumes of upgrading waste, resulting from increased strip ratio at the bank.
Anders you face the impact of the securities duration, resulting in higher laminate fuel prices.
Probation in the cabin and camp costs, as well as higher labor costs due to COVID-19.
Okay.
In addition to the fuel pricing pressures.
Power generation cost increase has.
EBIT will be more value.
Turning to case Institute with more expenses like fuel to maintain operations when supply was limited.
Hey, guys.
For the fourth quarter, it's worth noting that in the quarter Jim.
There are sufficient for a longer fewer hands to maintain normal levels of operating activity.
Alright.
I am calling in for Craig.
He is expanding its fuel storage facilities.
50% to mitigate the impact of potential fuel supply for the future.
Despite the disruptions in August and it was.
Walter.
Maintenance capital expenditures are over quarter spending $36 6 million third quarter in support of the 24th.
Chemical production tax law.
While we revised our sustaining capital expenditure downwards to 125 million.
A challenging first quarter disruptions and harvest we are encouraged to see the capital spending program was able to be deployed over the last two quarters.
As a result, our all in sustaining cost for the quarter were commensurately high after seven came at 798 honestly amounts.
Reflecting the higher production cost and expanded capital program.
The company continues to try to find innovative technical report for a second.
Could it not be in general reserve and mineral resources before Dr. Fischer.
Turning to Westwood.
Gold production was 25000 ounces in the quarter, bringing the total production year to date to six different contracts.
As far as an interesting quarter Westport as we start mining rates from underground take a step.
Which resulted in a step down in cash rents.
After the last 18 months.
After essentially rebuilding beyond the current mine there are signed at Westwood can take the next step.
Production and cost reduction as we exit the year.
Marketing activity in the third quarter travel traffic can pass in terms of Lora.
Underground contributing 79 times.
Which were the highest level, we haven't seen since the reopening of the mine in 2020 pounds.
The increase in underground tons is attributed to the continued progress and rehabilitation and development underground activities, which has resulted in an increase in production stope available.
Mill throughput in the third quarter were starting to have EBIT 3000 tonnes, an increase from the prior quarter when the operation was impacted from the currency farmers forest fires.
Grades increased to $2.
94 grams, a tonne and ethane from increased production a portion of it for higher grade ore from underground.
<unk> to the introduction of higher grade material.
Okay.
Accordingly, cash cost step down in the quarter to 50 miles $6 an ounce.
Which notably.
An estimated $127 an ounce of cost related to the development occurred after the sale.
<unk> expense due to the sharp decline.
Hi.
Our all in sustaining costs of 2008 conference amount remain above the spot gold price.
<unk> capital program continues to make sure if implemented rehabilitation work and support of the 2004 2025.
But as we noted in their DNA and September Westwood Balk at a major achievement breakeven on an all in sustaining cost.
Cost basis.
Looking at Westwood.
Westwood is well on track to achieve the Abraham.
70% to 90000 pounds sold.
Sure.
And auction them off in unit costs are expected to continue into the fourth quarter.
Thanks to continued advancement of our affirmative around development, providing access to more and higher grade stopes.
We are pretty excited to see the progress at Westwood.
Now that we have deferred their release, our updated life of mine plan for Westwood into 2020.
Sure.
The plan needs to be optimized based on the performance of the operation now.
April Miami and previously closed area Tomorrow.
Yeah.
Turning to corner.
Thanks for our executive project director in a moment to provide some highlights on the current status of the project. Our first I would like to draw your attention to the bottom line.
Since the commencement of construction of its body zone and up to the end of September.
Sure.
Bill do you have on the plan to <unk> six 5 billion project expenditure.
Sure.
With $400.
The black to be anchored on a 100%.
The project remains in line with budget.
It is important to note. This portal project completion, which includes the amortization of the initial production.
We have noted that a portion of the project expenditures are expected to be incurred during commissioning and ramp up next year.
Our first thing for us to meet them all amendments agreement too.
So 63% working capital leases I haven't golf hazard manage factory farming countries called <unk> 307.
As a reminder.
We ended the quarter with cash cash equivalents.
549.
Total liquidity of nearly $1 billion. So the company share authorization to fund the remainder of the construction commissioning and ramp up.
With that although handed over to <unk>. Thank you.
The third quarter also jumped so good progress there.
Advancements in construction, but what was the most noticeable change in the <unk>.
As Dr.
Two shifts from major construction amortization pre commissioning and commissioning.
At the end of quarter and appropriately so estimate it to be.
6% of the construction of that approach.
Welcome to Bristow.
I believe we should peak cost this quarter.
We have seen our numbers to try on certain contracts in soybeans, you talk with us despite.
Despite the crowds are construction teams contractors and subcontractors continue.
Great job.
But by the $13 2 million hours worked which is also a great quarter.
Looking at the site and moving from left.
To the right top to bottom.
You have a bird's eye view.
Open pit mining operation.
Sure.
The stockpile.
Below the culture.
During the third quarter the primary doctor.
Doctor was demobilized successfully crumbling.
Dewatering drilling another garden Starbucks did at the start of operations providing.
There are now 14 costs southern latency autonomous haul trucks commissions.
Drilling, regardless big Walter with the FERC for smelting operation.
Owner mining has progressed well.
One 6 million tons mined.
Okay.
4 million tons.
Well on track to target buildup of fiber.
Sure.
And the top centers or to the South was his view of the tailings management facility.
As you can see the second phase of the Tms swelling chart, which is the bulk through luxury all in place.
As I mentioned with Sunbeds incline of work volume.
At the end of October 1 billion cubic meters of wells are completed and the PMO.
Switching over to target was one five.
$5 million.
Yes.
Next is the Doctor is the view of the north side of the truck rolls and substation in the suburbs.
The primary power substation is operational and the legislation is moving.
Wireless traditional network.
So our Shanghai the cage.
Bottom left is the conveyors. The crushers section these are compete with.
With the start up in October.
While the level of guarantee.
Installation of the bulk of those lines versus complete water and Salt Lake are set.
So it hasnt been turned on.
During testament to remind that the alignment of the ring gear of the bulk of it was out of Florida. So we haven't seen OEM service vehicles side to address the problem.
And finally bottom horizons <unk> completion of the Leach tonnes is making progress following some delays.
Testing commenced last month, we are working through the progressive hydro testing of Mistras group.
Turning to the final of the timeline Covid Gulf continues to track well so the update for the project schedule works initial production on the first call. It four <unk>.
Our focus this quarter has traditionally been processing their own coupled with pre commissioning and commissioning activities.
We are working in close alignment with our partners to be a total lower contractors to ensure safe.
Safely all the time and those cut in Buffalo bills to cope with.
Now I'll turn the box, we don't know.
Thank you, Jerry and I would like to add that our focus with Blackstone pushing together first of all mark out of court.
But rather ensuring that all the elements in preparation already twice for a smooth ramp up of the project in the first half this year, our golf straightforward, we want the ramp up of Covid to be among the most successful projects.
We hosted them out.
Okay spending better toward the end of last month I believe it showed that we have hired people with the right experience and technical expertise.
Commissioning ramp up and operation is propane.
This is a team that has done this before.
We are well position to take the next step of the project.
Of course, when we are talking about the future we need to come to you to highlight gossiping at the end of last month, we announced the results of our conditional 20th one diamond drill holes at Golfman targeted expansion potential of the deposit at depth.
Specific place below with eastern glass breakthrough body at the gap between PS area.
The results confirm the expansion of government organization and numerous drill holes up to Petersburg.
Although the previous resource pit shell over an approximate one kilometer strike.
<unk> training of potential vascular new sphere. The deposit described Max so called event with a maiden resource estimate a true platform.
No me analysis indicated about a one seven building out or something.
At a high potential to grow with spare source.
Next here at school and erratic stopped production with little tempting to push to testing.
Moving the advanced tab.
Testing mining and infrastructure studies.
Harder to begin reviewing our churn et cetera.
Inclusion of the costs may get positive to in future quarters.
Life of mine plan.
Quality gala today is a contract.
We believe strongly that issued at the start of the mining can and will provide a strong foundation for many years to come.
With that I will pass and I would like to pass the call back to the operator for Q&A.
Operator.
Thank you.
I'll now begin the question and answer session.
Joining the question queue you May Press Star then one on your telephone keypad.
Cohn acknowledging your request.
We're using a speakerphone please pick up the handset.
To withdraw your question. Please press Star then two.
Our first question comes from Anita Soni with CIBC World markets. Please go ahead.
Good morning.
You'll note and team and thanks for taking my questions. So firstly on <unk>.
You're talking about.
And if not how that you've built up there I think it was $9 9 million tons over the life of the mine and they're going to have pretty steady on that could you remind me what kind of grades that you would see alright, I know in the rig market.
Probably like four times as much tonnage, but at lower grade. So I was wondering if people are going to be high grading at any point in time.
I'll ask <unk> to comment on that.
Yes.
The polls for the heap.
Ph was to be between four to six gram per tonne.
We're actually starting to ease the capacity to process that material to the CIO.
Reason why we want to.
Did you have named a technical report taking this into account.
Okay, but it wasn't that material, though it was like 43 million times I thought at that.
Four gram per tonne material.
And you're only taking 10 million tons of it. So I was wondering if you were gonna selectively upgrade it.
But I can come back to you after this call.
Yeah.
Sure, but the intention is of course would be a high bar as to process all of his hard work and.
In a conventional way right area of in building capacity.
And it is the highest grade parts of the stockpile.
That is separated that stuff will be priced right.
Or could it be that that 43 million tonnes is now just 10 million tons.
Some of it all the time.
We can take that offline.
In terms of Westwood Ah I was just wondering about the underground mining costs could you tell me what they were on a unit cost basis. This quarter I did notice the significant improvement in unit costs, and then I wanted to get that Shlomo.
Martin.
The mining cost.
It was about $28 per ton.
Well, the ductile tons before stripping and it's about $90 per ton.
After you take out the debate at the times.
Tonight is that just the underground portion.
Yes.
And then does it not affect us.
I need to I apologies.
That is the total mining costs, including for the other areas.
I've got it right in front of EBIT, we should get back to you on that as well.
Okay. Thank you.
The deferrals of Capex at Westwood and Essakane with those move into 2024 or I think you said at Westwood there might be savings, but that's the case I'm not sure what what's going to happen they're considering.
Shortened mine life is there is there a thought that you probably won't do that stripping alright that does it.
That ultimately can be done in 2025.
Yeah, I think I think.
That's what we're gonna be addressing that if you really look at the last three years <unk> been systematically and more on the strip ratio to awards like between the two and three.
We mentioned in the Allentown, we have days, Patrick now too to increase that and catch up on songs sorry, Yes, you should expect 24 and 25 to come off more.
The higher strip ratio to catch up so we could unlock.
And a further year such falls or default.
Before reserves behind.
So what was it what was the strip ratio like overall life of mine close to that then end up with lower I guess, you said two to three so it should have been more like a four five is that what it is yes, correct. So we intend to be market four or five and over the next three years.
Okay.
So now do you think.
Yep.
Note that before the end of the year will be coming out with an updated 43 101, which includes the full life of mine plan. So.
Okay.
Alright, now moving to coach and my apologies to my colleagues, but there are a few questions I think.
You write that down.
Maybe a question for JP that.
The capex guidance for the remainder of completion I noticed went from eight $5 million to $875 million up to 75, plus or minus 5%, which would imply.
End of the range that now nine months.
So I'm wondering why why that increased.
It is indeed, an increase in what.
Element to that and the second part of that question and this will be the last one.
So how should we think about first off what's what remains in 2024 can be spent like the breakout between Q4, and then 2024 hour initial capital of that about $75 million and secondly, what kind of sustaining capital or are we looking at a co pay in 2024.
I think well pass it to Martin for that.
Tessa.
When we guided at the beginning of the year, the EBIT range and I'd say <unk> five was the high end off the range I've got the MAU based on what we've spent up to the end of 2022 would have gotten us to that 296 5 billion.
<unk> that'd be I didn't take any COVID-19 Laurent.
Now that we are ended up amber at close to the end of the year we are indeed.
Indicating that we are.
Still trending in line with the budget of $2 96, 5 billion <unk> 70.
75 gets us there. So we've not just updated because we are closer to the end of the project.
We still have to incur.
$425 million at 100% to get to the 296 five.
If you look at the out between third in Q3, it was $317 million.
We will continue to incur at that rate, but I can get us at 200% construction that tapers off and that's why we are.
Seeing costs being incurred in Q4 at around this engagement as Q3 might be slightly lower at the end they reminded tapers off into Q1 of next year.
Okay sustaining capital question.
When you get an idea of what that's going to look like.
Good morning.
So we are working through our budgets on sustaining capital for next year. So.
We are still guiding towards that technical reports with adjustments for inflation, but we will provide a detailed update on the production cost and sustaining capital early next year, we provide our 2020 for guidance.
Okay, Alright, thank you very much.
Thank you.
Once again, if you have a question. Please press Star then one.
Seeing none I will hand, the call back over to Graeme Jennings for closing remarks.
Thank you very much operator, and thank you to everyone for joining us this morning.
Should you have any additional questions. Please reach out to a renault or myself via phone or email. Thank.
Be safe and have a great day.
Yes.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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