Q3 2023 IAMGOLD Corp Earnings Call
Yeah.
Thank you for standing by this is the conference operator, welcome to the I am Gold's third quarter, 2023, operating and financial results conference call and webcast.
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.
And 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 V. P of Investor Relations and corporate communications for Ion called Please go ahead Mr. Jennings.
Yes.
Thank you operator, and welcome everyone to our call. This morning, joining me today on the call are no Adams, President and Chief Executive Officer.
Information Chief Financial Officer.
Chief Operating officer, Tim Bradburn, Senior Vice President General Counsel, and corporate Secretary and journey or the housekeeper Executive project director of contango.
Before we begin we are joined today to providing those trucks are office, which is located at <unk> 13 territory on the traditional lands of many nations talking to the credit the honest novack Chippewa isn't necessarily the wind up peoples.
We believe respecting and upholding interest rates started upon relationships and foster trust transparency and mutual respect.
Please note that our remarks on this call will include forward looking statements and refer to it on a first measures. We encourage you to refer to the cautionary statements and disclosures on non <unk> 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 please refer to the information in the presentation under the heading qualified person that technical information.
The slides referenced referenced on this call can be viewed on our website.
I'll now turn the call over to our President and CEO no items.
Thank you Graham and good morning, everyone and thank you for joining us today.
This is really an exciting time frame.
We found a company called project mix significant strength to where it is now.
But our orders being taken over to project.
Amortization of construction.
Great commissioning activities ramping towards production early next year.
As we approach production started okay retention is laser focused on managing.
The operation.
And the goal in mind to make policy one of the most successful large scale mining Chicago today in our industry.
Okay.
This is a project that is critical.
The positioning of this company.
I am going to have a higher production base lower cost profile with a strong foundation and long life cash flow generation and growth opportunities.
Turning to the quarter itself.
I'm proud of the work was acute this year to date attributable production from continuing operations of 329000 ounces.
The company well on track to maintenance annual production guidance of 410 to 170000 ounces.
We continue to see the resilience and professionalism.
But the.
The mine on track for guidance this year, despite the complexities within the region.
At Westwood, where our teams efforts to rebuild the mining underground has begun to show improvement.
We will walk through to quantitate in operating results in more detail in a moment I.
I want to be clear the virus.
Chart 10 goals.
Got it.
Brian Coney online with a focus on achieving steady and sustainable manner.
Operations.
My jaw perforation economy to Westwood with a focus on improving profitability.
Ensuring the safety of our people and the community.
In which we operate.
And our longer term outlook.
Our goal remains that we want to become a low cost high margin intermediate gold producer with a strong operating base in Canada.
Financially, we will prioritize returning our 70% position in copay, 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, which is days away restricted transcript uniti radar from 36, and a total recordable injury rate of one.
<unk>. This is all based on $200000.
And shrink.
By using contractors golf in phase III would always be a primary focus.
I'd like to thank everyone.
This has to be done safely and our goal continues to be healthy.
Zero harm for people.
In places where we are.
On production in the third quarter the company produced 109000 ounces.
The chips all basis.
Slightly higher than the previous quarter.
Bringing our year to date from auctions to 229000 ounces.
As we won't get into all of them.
Production results were driven.
Alright, this iconic responding effectively to plan despite continued pressures.
The supply chain and an increase in tons from recent rehab as we pay that off.
Yes.
Humans.
<unk> saw a further increase in <unk>.
And I, even go out with quality third quarter cash costs.
Patrick.
And then all in sustaining costs of <unk> $75.
Okay got it.
This would bring our year to date cash cost through 12 contracted $88, an ounce and an all in sustaining costs.
To Asia.
$103 Max sitting above our prior guidance targets do you see here on the block.
As a result.
Revise our cost guidance higher with cash cost now forecasted to be between 450 <unk> hundred $35.
And all in sustaining cost to be between 17 and $25 an ounce.
The increase in cost trends and forecast is due to continued cost pressures.
Resulting from the security situation.
Omar.
Okay.
Furthermore, we have seen sustained and debated in the recent.
Question every periods.
And on that we are seeing now find that prices are beginning to see these however.
However, the rate of basement never matches the pace of increase.
Looking at our at our guidance for patients we have reduced.
Banking capital forecast.
Alright.
Our economy, if you will recall in the first quarter, we were unable to complete the planned stripping program to their supply chain issues.
Which was rectified in the second quarter of the stripping program rather than line with plan.
This last quarter, we were able to start to recoup the shortfall in Q1. However, it does not appear that we'll be able to do so in time for calendar year <unk>.
Finally, we will constantly in 2024 and support of our 2024.
Gotcha.
Likewise.
At Westwood, we have reduced our sustaining capital as a result of increased visibility into end of the year underground development rehab patient range.
With that I will pass the call over to our CFO to walk us through our financial results.
Martin.
Thank you Renaud and good morning, everyone.
Looking at our Q3 financials revenues from continuing operations totaled $224 5 million from sales of 116000 ounces at an average realized price of $1937 droughts.
Adjusted EBITDA from continuing operations was $57 8 million for the quarter translating to an adjusted loss per share uplift in St.
In terms of our financial position.
<unk> ended the quarter with cash and <unk>.
Equivalent of $548 5 million.
On a fully undrawn credit facility.
Equating to charging 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 from January one 2025.
As part of the extension.
Grant to study the west reduced or right sized to $425 million based on the company's requirement for senior revolving facility on its overall business.
The extension of our credit facility to be available as well as non current during 2024 shenkman required additional liquidity and Caltex being commission and wrapping up.
We note that within cash cash equivalents 76, eight volume was helped by coach a gold and $54 6 million was helped by a cat.
Company to create a dividend from east of CAD 120 million in the second quarter, which was received in the third quarter net of minority interest in withholding taxes.
The company has to find an estimated $325 million of the cards that project expenditures during the remainder of 'twenty three.
Into 2024.
The project is completed and commission.
Advanced to use the available cash and cash equivalents undrawn amounts under the revolving credit facility.
Any proceeds from the site of the BELBUCA assays.
As we look forward to 2024, the gold prepayment.
Prepayment is coming into focus.
Just visit arrangement the company Astrophysically, either left or 150000 ounces over the course of 2024.
With regard to the range of 1700 to $2100 per ounce on 100000 of the bolt ons that will be delivered.
We had the company will participate in the Gulf price within the current range.
Company does not participate in gold price upside once the remaining 50000 ounces of gold ounces that you need to deliver.
While the Gulf Peabody's many right.
<unk> operating cash flows in 2024, the company could potentially roll forward, a portion or all of the range, but should the need arise.
And with that I will pass the call back to you or not.
Thank you Anna.
Thank you Mark.
Turning to reflect kind of.
The mind reported third quarter attributable gold production of 84000 ounces, bringing.
Bringing the year to date total to 250 forecast.
This was down slightly from 88000 ounces produced in the second quarter on modestly lower 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 during August due to the disruptions in the fuel supply, resulting from the region audio quality issues, including the cooling nature.
As well as the continued challenges in the ongoing security situation within the country.
The situation improved towards the end of the quarter for the mining fleet operating at capacity during September and October have grades remained effectively flat in the quarter at one one grams, a tonne which is below the reserve model great as mining activities were truly batches from phase five.
And mindful as we are blended with lower grade stockpile.
We are seeing potential indications upgrades and improvements.
Amber Dover.
As activity began to advance into the lower benches of the face.
On a comp basis as a kind of reported cash cost was <unk> $170, an ounce approximately $100 now increase from the prior quarter due to higher volumes of operating waste, resulting.
The strip ratio as demand answers new basis, the impact of the security situation, resulting in higher mine that fuel prices transportation amps, as well as higher labor costs due to the depreciation.
Okay.
In addition to the fuel pricing pressures.
Power generation cost increase has very few bogey was nominally west period, Activations acute with our expenses why fuel to maintain operations when supply was limited.
As mining activity and I'll get into the fourth quarter is worth noting that at quarter end.
Patients fall off your hands to maintain normal levels of operating activity.
Further <unk> is expanding its fuel storage facility fees by approximately 50% to mitigate the impact potential limited fuel supplies in the future.
Despite the disruptions in markets.
It was able to reach the sustaining capital expenditures quarter over quarter spending 30 to $6 6 million third quarter in support of their 2015.
In fact production.
While we revised our sustaining capital expenditure downwards to 125 million following a challenging first quarter disruptions in August we are encouraged to see that.
And all spending program was able to be deployed over the last two quarters.
As a result, our all in sustaining cost for the quarter were in connection with a high seven came at 798 Congress accounts sharp, reflecting the higher production cost and expanded capital program.
The company continues to plan to file an updated technical report for Satcom segment also incurred an updated mineral reserve and mineral resources to for the future.
Turning to Westwood.
Gold production was 25000 ounces in the quarter, bringing the total production year to date to six different continents.
It was an interesting quarter Westwood as we start mining rates from underground.
Yeah.
Which resulted in a step down in Capex.
The last 18 months.
Essentially rebuilding beyond their crop in mind, they are slowing down at Westwood can take the next step.
Production and cost reduction as we exit the year.
Mining activity in the third quarter.
10000 tonnes of ore.
Underground contributing 79.
Which was the highest level, we have seen since the reopening of the mine in 2020.
This increase in underground tons is attributed to the continued progress and rehabilitation and development of underground activities, which has resulted in an increase in production available.
The mill throughput in the third quarter was 283000 tons, an increase from the prior quarter when the operation is impacted from it.
Are these partners forest fires.
<unk> increased to $2 90 to 94 grams, a tonne and ethane from the increased production proportion of higher grade ore from underground and.
In addition to the introduction of higher grade material from this site.
Accordingly, cash cost step down in the quarter to $56 an ounce.
Which notably includes an estimated $127 an ounce of cost related to development incurred after payout.
Otherwise expense due to the sharp decline of the department.
Our all in sustaining costs of 2100, <unk>, obviously announced remain above the spot gold price.
Expanding capital program continues to include development and rehabilitation work in support of the 2004 2025.
But as we noted in our MD&A in September.
<unk> reported a major achievement.
On an all in sustaining cost basis.
Looking at Westwood.
Westwood is well on track to achieve the upper end.
<unk> to 90000 ounces sold.
Sure.
Production and unit costs are expected to continue into the fourth quarter.
From the continued advancement of our partners around development, providing access to more and higher grade stopes.
We are really excited to see the progress at Westwood.
Now that we have deferred their release, our updated life of mine plan for Westwood into 2000.
Sure.
As the plan needs to be optimized based on the performance of the operation now.
April despite the mining in previously calls carry up tomorrow.
Turning to corner.
Thanks, Marc Jacobs 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 a $40 and up to the September two.
Bill on behalf of the planned $2 96, five building project expenditure has been incurred.
With 425 million black to be anchored on a 100%.
The product remains in line with budget.
It is important to note at this time.
<unk> completion, which includes the amortization of this initial production. Accordingly, we have noted that a portion of the project expenditures are expected to be incurred during commissioning and ramp up next year.
A ferret pumping products to meet the mandated agreement to 60% to 62% with working capital and leases I Havent gone Hasnt remaining funding requirements for countries caused a 307.
As a reminder, our haynesville ended the quarter with cash and cash equivalents of approximately 549.
Total liquidity of nearly $1 billion. So the company sure well position to fund the remainder of the construction commissioning and ramp up.
With that I will hand, it over to Tricia. Thank you Ed.
In the third quarter once again saw considerable progress.
Advancements in construction.
The most noticeable change in tone.
Good luck.
Shifting for a major construction amortization pre commissioning and commissioning.
At the end of quarter of the project is estimated to be 6% compete under construction is up approximately 2%.
I believe we shipped peak.
During the quarter and since then we have seen our numbers to drive certain contracts of soybeans.
Despite the crowds are construction teams contractors and subcontractors continue great job.
By the $13 2 million hours worked was telco.
In very frequent rate or quality.
Perfect.
Looking at the site and moving from left to.
To the right top to bottom.
We have a bird's eye view.
Open pit mining operation and to show great mixture.
And the stockpile.
Hello <unk>.
This slide.
During the third quarter. The primary Doctor was demobilized successfully homelink.
Dewatering drilling overburden stock buybacks dividends has brought him over operations combining teams.
There are now 14 costs southern latency autonomous haul trucks commissions and the autonomous drilling regardless Big Walker was the Viper smelting operations.
Owner mining has progressed well with nearly $1 6 million tonnes mined.
Alright.
Let's talk about <unk> four.
4 million tons at the end of October.
We're well on track target to build up a five month of the year.
Sure.
In the top center is the southwest in view of the tailings management facility.
As you can see the second phase of the Tms as well on the chart, which is the bulk food luxury Andres <unk>.
Targets deliberation with Sunbelt incline of work.
At the end of October 1 billion cubic meters of wells are accumulated.
Approaching our target was one one to one 5 million.
Sure.
Next in the door.
The view of the north side of the plant.
Voltage substation in the suburbs.
We'll probably motive power substation is operational.
<unk> mortgage.
Our distribution network.
So our stronghold of electrification.
Bottom left is the conveyors. The crushers section. These are compete was the first test in started.
Started in October.
Our political is growing.
Installation of the bulk of new lines versus compete more towards in Salt Lake or.
So has been turned on.
<unk>.
To remind that the alignment of the ring gear of the bulk of it was out of Torrance. So we have the OEM service team on site to address the problem.
And finally bottom right.
Each of our target completion of the Lynch tongues is making progress following some delays.
And commenced last month, and we are working through the progressive private investor.
Good.
Turning to the final of the timeline calls ago continues to track well. So the updates of the project schedule works initial production in the first quarter performance.
Our focus this quarter and some additional of that process as well and the ramp up of the pre commissioning and commissioning activities.
We are working in close alignment with our partners to be lower.
Our contractors to ensure the safe.
Safely on time, and those carbon budget and the scope.
Without alternative bucket.
Standard, Okay, very good and I would like to add that our focus is less on pushing together first of all mark out of court.
It's possible.
Right right.
Ensuring that all the elements and preparations are in place for a small grant box that project in the first half next year.
Always straightforward, we wanted to ramp up according to be among the most successful projects.
We hosted about Applegate.
Spending best in show at the end of last month and I believe it showed that we have hired people with the right experience and technical expertise.
<unk> ramp up and operations. Okay. This is a team that has done it before and I think we are well position to take the next step of the program.
Of course, when we are talking about the future we need to continue to highlight gossiping at the end of last month, we announced the results of an additional 21 diamond drill holes have gosman targeted expansion potential of the deposit at that specific way below the east and west franchise.
Body that the gap between these area.
The results confirm the expansion of golf mineralization and numerous drill holes up to meters vertically below the previous resource pit shell over an approximate one kilometer strike.
We found the right training.
Sure.
The deposit is right next to the quality of net with a maiden resource estimate are three of them $3 4 million analysis indicated an amount of one 7 million ounces have been incurred.
And a high potential to grow.
Got it.
Next year as <unk> ramps up production, we will continue to push the testing.
Moving the advanced testing mining and infrastructure studies in order to begin reviewing our alternatives and.
Inclusion of the <unk> deposit into future quarters, Wi Fi mine planning.
Quality calls to date is a power Jack.
We believe strongly.
Got to mining camp and we will provide a strong foundation for buying songs for many years to come.
With that I will pass the mic to <unk>.
Pass the call back to the operator for Q&A Park them.
Operator.
Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request.
If youre using a speakerphone please pick up the handset before pressing any key.
With John 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 question. So firstly.
Again, you're talking about let's assume it's not how's that you've built up there I think it was $9 9 million tons over the life of the mine and they're Gonna have released a study on that could you remind me what kind of grades that you would see alright, I know in the original heap Leach pad.
At like four times as much tonnage, but at lower grade. So I was wondering if you were gonna be high grading at any point in time.
Yeah.
I'll ask <unk> to comment on basketball.
Yes.
For the <unk>.
<unk> was to be between four and six gram per tonne.
Actually studying the capacity to process that material to the CIO is the reason why we want to do.
G&A in the technical report taking this into account.
Okay.
Not material, though it was like 43 million tonnes I thought at that.
0.4 gram per tonne material.
And if 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, Im not sure, but the intention is a core strategy would be a highlight as to process all of his heart.
In the conventional way proprietary or in building capacity.
And it is the higher grade parts of the stockpile that is separated that will be priced.
Okay or could it be that that 43 million tonnes is now just 10 million tons.
Some of that overtime.
Anyway, 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.
Unit costs, and then I wanted to get some color model.
Martin.
The mining cost.
It was about $28 per ton.
For the total tons before stripping and it's about $90 per ton.
After you take out the debate at the times.
So $9 is that just the underground portion yes.
Yes.
Okay.
And then the deferrals.
Right.
I need to I apologies.
That is the total mining costs, including for the other areas.
I've got a separate are driving trying to EBIT, we can get back to you on that as well.
Okay. Thank you.
The deferrals of Capex at Westwood and Arthur King with those moved 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 or is that is that ultimately going to be done in 2024 and 2025.
Yeah, I think I think.
That's what we're going to be addressing that if you really look at the last three years that their needs are I mean, the mine has been systematically more on this trip ratio Star Wars likely 'twenty two inventory.
And we.
We mentioned in the <unk>, we ask those efforts now to increase that and catch up on so I am sorry, Yes, you should expect 24, and 25 to come up more and the higher strip ratio to catch up so we could unlock.
And for the year so that's.
That's all about.
Specialty reserves the mind.
So what was the what was the strip ratio like overall life of mine close to abandon it was lower I guess, you said two to three so it would've been more like a four or five is that what it is yes, correct. So we intend to be more into four or five and over the next three years.
Okay.
No not anything too.
I'll just note that before the end of the year, we'll be having come out with an updated 43 101, which includes the full life of mine plan. So.
Okay.
Now moving to coach and my apologies to my colleagues, but there are a few questions.
Q I get down.
Maybe it's a good question for Jonathan.
The capex guidance for the remainder of completion I noticed went from $825 million to $875 million up to 875, plus or minus 5%, which would imply a high end of the range is now nine routine. So I'm wondering why why that inquiry.
Yes. It is indeed, an increase and what are the components of that and the second part of that question and this will be the last one.
What was the 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.
That $875 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, we added range and I'd say <unk> five was the high end up the range and that amount based on what we've spent up to the end of 2022 would have gotten us to that 296 5 billion.
At a 100% that could be adding that technical report.
Now that we are in November and close to the end of the year, we are indicating that we are.
Still trending in line with the budget of $2 965 billion.
75 gets us there so we've not just update it because we are closer to the end of the project.
We still have two incurred $425 million at 100% to get to the 296 five.
If you look at the amount that's been third in Q3, it was $317 million.
We will continue to incur at that right, but as you get closer to 100% construction that tapers off and that's why we are.
Seeing box being incurred in Q4 at around this and <unk>.
Three might be slightly lower at the end of the reminded tapers off into Q1 of next year.
Okay sustaining capital question.
Can we get an idea of what that's going to look like in one place in the corner.
So we are working through our budgets on sustaining capital for next year. So.
We are still guiding towards that technical report with adjustments for inflation, but we will provide a detailed update on the production cost and sustaining capital early next year, when we provide our 2020 for guidance.
Okay, Alright, thank you very much I'll leave it there.
Thank you afternoon.
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 Ron or myself, a phone or email. Thank you all be safe and have a great day.
This.
Today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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