IAG provided 2013 guidance, costs up: "Production of 875-950kozs reiterated, but asset by asset clarity not provided. Cash costs for 2013 expected to be up 28% YoY to $850-925/oz. IAG guided for total cash costs of $850-$925/oz in 2013, 36% above Credit Suisse estimate of $652/oz. IAG attributed 1/3rd of the cost increase to inflation, 1/3rd on lower ore grades (Credit Suisse expects Essakane) and 1/3rd to harder ore at mature mines (Credit Suisse expected Essakane and Rosebel) and higher unit costs at Westwood attributed to lower production in its first year of operation."
Credit Suisse areas of concern reiterated, including: "(i) low non-growth FCF, i.e. our metric of operating cash flow less non-growth related capex or the WGC's similar recently introduced "all-in-cost" metric yield a very small margin (if any) in 2013 and we suspect, 2014. That is to say even excluding capital spend in 2013 that will result in growth (Niobec, Westwood, Cote Lake), IAG is not likely to be CF positive this year; (ii) the details of the Westwood ramp up and achievement of the expected production and costs there; (iii) Essakane production and cost profile in 2013 and 2014 given the harder ore (and now grades) and the expansion coming on stream; and (iv) concerns regarding the Sadiola sulphide expansion receipt of go ahead."
2013 capex guidance given for some assets, largely in-line with Credit Suisse: "Credit Suisse continues to estimate $720M in capex for 2013, IAG did not provide a consolidated figure. IAG provided guidance for Essakane, Westwood and Niobec totaling $485M vs. Credit Suisse est. of $450M."
"As Credit Suisse expected, 2012 production misses low end of guidance of 840-910kozs at 830kozs. Cash costs to come in +/- 3% of the upper end of $670-$695/oz guidance, in-line with $703/oz Credit Suisse estimate."
"Growth (to a IAG projected 1.4-1.6Mozs by 2017) in our view is highly back-end loaded. Cote Lake 5% increase to resources, positive but expected."