RE:Beat both revenue and per share earningTHE TD COWEN INSIGHT
IAMGOLD beat our estimates for Q3 as Westwood and Essakane performed above
expectations. The company generated positive FCF for the first time since Q4/20, and we
expect this transition to continue as Ct ramps up into 2025.
Impact: POSITIVE
Adjusted EPS of $0.18 was above our estimate of $0.09 and consensus of $0.10. CFPS
was $0.39 excluding gold pre-pay impacts (TD: $0.24). The beat vs TD was due to higher
production and lower costs, as well as lower G&A.
Production of 171koz was 4% above our estimate of 164koz. Cash costs of $1,165/
oz were 4% below our estimate. Essakane once again benefited from positive grade
reconciliation, milling an average grade of 1.26g/t vs. TD at 1.17g/t. Westwood also beat
our forecasts, with a slight beat on both throughput and grade. Ct production results
were previously released (LINK).
Positive FCF for the first quarter since Q4/20: We calculate IMG generated $108mm
of FCF during the quarter, consisting of $226mm OCF (pre w/c and gold prepay) less
$118mm of capex. The company generated $44mm of FCF including the $64mm of
recognized deferred revenue from gold prepay deliveries. OCF benefited from $27mm of
insurance proceeds.
Essakane and Westwood tracking to top end of production guidance. IMG expects
Essakane and Westwood gold production to be at the top end of the 495-540koz
guidance range (TD: 532koz). YTD production of 428koz represents 79% of the top of
the range, which suggests a weaker Q4. The company to expect costs to be within the
guidance range of $1,175-$1,275/oz, implying higher costs in Q4 (YTD: $1,115/oz)
Ct still on track for lower end of guidance. Ct is tracking to the low end of its
220-290koz production guidance (TD: 219koz). The company noted run rate operating
costs at the end of the year may exceed the previous guidance depending on the timing
of one-time improvements. Recall, IMG hosted a site visit of Cote in November (LINK).
Balance sheet stable; First quarter of prepay deliveries completed: IMG ended Q3 with
total liquidity of $959mm, including cash of $618mm (Q2: $511mm). Total debt was
$811mm (Q2: $815mm) plus $212mm of gold prepay liabilities (Q2: $271MM) and
$385mm of Ct repurchase option liabilities (to be exercised on Nov 30). The company
delivered 37.5koz of gold to fulfill the first of four consecutive quarters of gold prepay
obligations (112.5koz outstanding at quarter end).