TSX: IMG NYSE: IAG
All amounts are unaudited and expressed in US dollars, unless otherwise
indicated.
TORONTO, Jan. 21, 2014 /CNW/ - IAMGOLD Corporation ("IAMGOLD" or the "Company") announces production results and
preliminary cash costs for 2013 and guidance for 2014.
IAMGOLD's President and CEO, Steve Letwin said, "Our overarching goal in
2013 to maximize shareholder value was no different from any other
year. But what did change was the blueprint for getting us there. Early
in the year we established three critical priorities - cost reduction,
disciplined capital allocation and cash preservation - that placed the
emphasis squarely on economic returns as the predominant driver of our
business decisions. We have made excellent progress on all three. We
finished 2013 with cash costs near the bottom of the guidance range,
which, midway through the year had been revised downward following
excellent traction with our $100 million cost reduction program. All-in
sustaining costs are within guidance, we continue to be disciplined
around capital spending and we ended the year with approximately $380
million in cash and bullion and $750 million in undrawn credit
facilities. Our persistent efforts to preserve cash, cut costs and
tighten capital spending are paying off despite our lower production
this year as we focus on profitable ounces. As we work to get our
production to the level where we want it to be in 2014, these three
priorities remain unchanged as they are critical to generating the best
economic returns feasible in this gold price environment."
Performance Highlights for 2013
-
Preliminary total cash costs of approximately $800 per ounce at lower
end of guidance of $790-$840 per ounce
-
Cash costs for IAMGOLD owner-operator mines expected to be 7% lower at
approximately $740 per ounce, and lower than guidance of $750 to $800
per ounce.
-
Preliminary all-in sustaining costs of approximately $1,235 per ounce
(approximately $1,155 per ounce net of Niobec's contribution) for 2013
within guidance of $1,150 to $1,250 per ounce.
-
All-in sustaining costs for IAMGOLD owner-operator mines expected to be
5% lower at approximately $1,175 per ounce, and within guidance of
$1,100 to $1,200 per ounce.
-
Attributable gold production of 835,000 ounces; with 195,000 ounces in
the fourth quarter.
-
Record niobium production of 5.3 million kilograms (up 13% from 2012) is
equivalent to 154,000 ounces1 of gold on a gold equivalent basis.
-
The 8% by which niobium production exceeded the mid-point of guidance
equates to 12,000 ounces1 of gold on a gold equivalent basis.
-
Niobium operating margin of $18 per kilogram up 20% from 2012.
-
Cash, cash equivalents and gold bullion (market value) approximately
$380 million at December 31, 2013.
-
Capital expenditures for 2013 within guidance.
Guidance Highlights for 2014
-
Total cash costs expected to range between $825 and $875 per ounce.
-
IAMGOLD owner-operator mines expected to be within a lower range of $790
to $830 per ounce.
-
All-in sustaining costs expected to range between $1,150 and $1,250 per
ounce.
-
IAMGOLD owner-operator mines expected to be within a lower range of
$1,100 to $1,200 per ounce.
-
Net of Niobec's contribution, all-in sustaining costs expected to range
between $1,080 and $1,185 per ounce.
-
Attributable gold production expected to range between 835,000 and
900,000 ounces.
-
Niobium production expected to range between 4.7 and 5.1 million
kilograms, with an operating margin of $15 to $17 per kilogram.
-
Capital expenditures reduced 40% with forecast of $400 million ±5%.
-
Essakane expansion completed in 2013.
-
Rosebel full expansion deferred until 2015 - 2016.
-
Deferral of Niobec and Sadiola expansions.
"Our 2014 production guidance of 835,000 to 900,000 ounces reflects the
planned ramp-up in production at Westwood in the second half of the
year," continued Mr. Letwin, "and the robust post-expansion ramp-up
expected at Essakane beginning in the first quarter. We've scaled back
capital spending considerably with the completion of the Essakane
expansion, and we're maintaining all-in sustaining cost guidance for
2014 at the same level as 2013. We expect to see some variation in
quarterly production and cash costs, with costs rising in the first
half of the year, but falling in line with guidance in the second half
of the year with the ramp-up at Westwood. We will continue with our
cost reduction efforts, including a number of initiatives to reduce
working capital, and we will challenge our operations to seek further
productivity gains to temper cost escalations that have been the norm
in our industry."
2013 GOLD OPERATIONS
Attributable gold production for the fourth quarter 2013 was 195,000
ounces, bringing full year 2013 production to 835,000 ounces. Full year
production was approximately 5% below the bottom of the guidance range
of 875,000 to 950,000 ounces primarily due to grade variation and pit
sequencing at Rosebel in the fourth quarter, which accounted for about
three-quarters of the shortfall. The balance was mainly attributed to
the performance at our joint venture operations.
Total cash costs for the fourth quarter 2013 are expected to be
approximately $830 per ounce, with total cash costs for IAMGOLD
owner-operator sites 10% lower at approximately $750 per ounce. All-in
sustaining costs for the fourth quarter 2013 are expected to be
approximately $1,250 per ounce (approximately $1,135 net of Niobec's
contribution), with IAMGOLD owner-operator sites approximately $1,225
per ounce. For the full year 2013, total cash costs are expected to be
approximately $800 per ounce, with total cash costs for IAMGOLD
owner-operator sites 7% lower at approximately $740 an ounce. All-in
sustaining costs for 2013 are expected to be approximately $1,235 per
ounce (approximately $1,155 net of Niobec's contribution) with IAMGOLD
owner-operator sites approximately $1,175 an ounce.
The following table presents actual production by site:
|
Q1 2013
|
Q2 2013
|
Q3 2013
|
Q4 2013
|
2013
|
Owner-Operator
|
|
|
|
|
|
Rosebel (95%)
|
89
|
82
|
95
|
70
|
336
|
Essakane (90%)
|
65
|
62
|
64
|
59
|
250
|
Doyon - Mouska (100%)
|
5
|
41
|
2
|
15
|
63
|
Doyon - Westwood (100%)
|
|
10
|
43
|
20
|
73
|
Total Doyon Division1
|
5
|
51
|
45
|
35
|
136
|
Total Owner-Operator
|
159
|
195
|
204
|
164
|
722
|
Joint Ventures
|
|
|
|
|
|
Sadiola (41%)
|
19
|
24
|
19
|
24
|
86
|
Yatela (40%)
|
10
|
5
|
5
|
7
|
27
|
|
29
|
29
|
24
|
31
|
113
|
Total
|
188
|
224
|
228
|
195
|
835
|
1 The Doyon Division consists of ore from both Mouska and Westwood. While
the ore from Mouska is commercial production, the ore from Westwood is
at pre-commercial levels. Westwood is expected to enter commercial
production in the third quarter of 2014.
|
2013 NIOBIUM OPERATIONS
IAMGOLD produced 5.3 million kilograms of niobium in 2013 at an average
operating margin of $18 per kilogram, which exceeded guidance of 4.7 -
5.1 million kilograms at $15 - $17 a kilogram. Excellent recoveries and
grade were behind the record performance, with good mill throughput
also contributing.
2014 PRODUCTION AND COST GUIDANCE
The following assumptions have been used for 2014 guidance:
-
Average gold price per ounce of $1,300;
-
Average crude oil price per barrel of $95;
-
U.S. dollar value of the Euro of $1.30; and
-
Canadian dollar value of the U.S. dollar of $1.05.
|
|
IAMGOLD Full Year Guidance
|
2014
|
Rosebel (000s oz)
|
330-350
|
Essakane (000s oz)
|
315-330
|
Doyon division1 (000s oz)
|
100-120
|
Total owner-operator production (000s oz)
|
745-800
|
Joint ventures (000s oz)
|
90-100
|
Total attributable production (000s oz)
|
835-900
|
|
|
Total cash costs2,3 - owner-operator ($/oz)
|
$790-$830
|
Total cash costs - gold mines ($/oz)
|
$825-$875
|
|
|
All-in sustaining costs2, 4 - owner-operator ($/oz)
|
$1,100 - $1,200
|
All-in sustaining costs - gold mines ($/oz)
|
$1,150 - $1,250
|
All-in sustaining costs - total5 ($/oz)
|
$1,080 - $1,185
|
|
|
Niobec production (millions of kg Nb)
|
4.7 - 5.1
|
Niobec operating margin2 ($/kg Nb)
|
$15 - $17
|
1 The Doyon Division consists of ore from both Mouska and Westwood. While
the ore from Mouska is commercial production, the ore from Westwood is
at pre-commercial levels. Westwood is expected to enter commercial
production in the third quarter of 2014.
|
2 This is a non-GAAP measure.
|
3 The total cash costs computation does not include Westwood
pre-commercial production.
|
4 By-product credits are included in the calculation of this measure.
|
5 Total, as used with all-in sustaining costs, includes the impact of
niobium contribution, defined as the Niobec mine's operating margin and
sustaining
capital on a per gold ounce sold basis.
|
Gold Production and Cash Costs
The Company is conservatively forecasting gold production in the range
of 835,000 to 900,000 ounces for 2014. Production is expected to build
throughout the year following a first quarter that should be relatively
flat with the fourth quarter of 2013. With the mill expansion completed
at Essakane, we expect production at this operation to increase by
approximately 25% during the year versus 2013 as the new processing
line will be processing higher-grade hard rock. The second half of the
year is expected to see a lift in production from Westwood as it ramps
up from the first half which will mainly focus on underground
development. Rehabilitation of the zone impacted by the rockburst at
Westwood in 2013 is on schedule, with access now being established to
all of the affected sublevels. Close to 80% of gold production in 2014
at Westwood will be in the second half of the year. As a result,
production from the Doyon division will be marginal in the first half
of the year as Mouska prepares for closure in the first quarter with
limited production.
Total cash costs for 2014 are expected to range between $825 and $875
per ounce, with the forecast for IAMGOLD owner-operator mines expected
to be lower at $790 to $830 per ounce. As a result of the changing
production mix through the year from different operations, quarterly
variations in cash costs are expected. Guidance for all-in sustaining
costs for 2014 remains unchanged from 2013 levels and is expected to
range between $1,150 and $1,250 per ounce, with IAMGOLD owner-operator
mines forecast at between $1,100 and $1,200 per ounce. All-in
sustaining costs net of Niobec's contribution are expected to range
between $1,080 and $1,185 per ounce. The netting of the operating
margin of Niobec less its sustaining capital expenditures, against
all-in sustaining costs recognizes the impact of Niobec`s cash flow on
our overall cost of gold production.
Niobium Production and Margins
The Company expects to produce between 4.7 and 5.1 million kilograms of
niobium in 2014, which, on a gold equivalent basis, equates to
approximately 152,000 ounces2 of gold at the midpoint of the range. The operating margin for 2014 is
forecast at $15 to $17 a kilogram.
2014 CAPITAL EXPENDITURE FORECAST
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
|
|
Sustaining
|
|
|
Development/
Expansion
|
|
|
Total
|
Owner-operator
|
|
|
|
|
|
|
|
|
|
|
Rosebel
|
|
$
|
701
|
|
$
|
30
|
|
$
|
100
|
|
Essakane
|
|
|
801
|
|
|
25
|
|
|
105
|
|
Westwood
|
|
|
35
|
|
|
55
|
|
|
90
|
|
Côté Gold
|
|
|
-
|
|
|
15
|
|
|
15
|
|
|
|
185
|
|
|
125
|
|
|
310
|
Niobec
|
|
|
20
|
|
|
50
|
|
|
70
|
Total capital expenditures, consolidated
|
|
|
205
|
|
|
175
|
|
|
380
|
Joint ventures - Sadiola and Yatela
|
|
|
10
|
|
|
10
|
|
|
20
|
TOTAL (±5%)
|
|
$
|
215
|
|
$
|
185
|
|
$
|
400
|
1 Includes capitalized stripping of $15 million at Rosebel and $55 million
at Essakane.
|
|
The Company is forecasting capital spending of $400 million ± 5%.This
represents an approximate 40% reduction from 2013, reflecting the
completion of the Essakane expansion. The timing of capital spending
related to the Niobec expansion will be tied to the completion of
ongoing work to assess a phased development approach. The earliest we
would begin the full expansion at Rosebel would be 2015. Options for
Sadiola continue to be explored, and, as such, expansion related
capital is limited for this operation. With respect to all future
expansion and development projects, our focus is on de-risking the
projects, completing the permitting and continuing to monitor market
conditions. We continue to review life-of-mine plans at all the
operations to better understand our options under a wide range of metal
price scenarios.Of the $215 million allocated to sustaining capital,
approximately 33% is for capitalized stripping at Essakane and Rosebel.
The following summarizes the primary uses for the planned capital
spending by site:
-
Rosebel - Sustaining capital includes mine equipment and other capital
expenditures to sustain the operation ($40 million), tailings dam
construction ($15 million) and capitalized stripping ($15 million).The
full expansion at Rosebel has been deferred until 2015-16. The
expansion capital for 2014 includes the tailings dam expansion ($15
million) and the construction of the solar plant ($12 -14 million).
-
Essakane - Sustaining capital includes capitalized stripping ($55 million), mine
equipment and other capital expenditures to sustain the operation ($25
million). The expansion capital includes the river diversion project
($10 million) and mill expansion carry overs ($15 million).
-
Westwood - Sustaining capital includes expenditures after the commencement of
commercial production. The expansion/development capital relates to
underground development, pre-commercial production costs and
underground equipment primarily in the first half of the year. Until
the Westwood mine achieves commercial production, the contribution from
gold sold will be applied as a credit against capital expenditures.
-
Niobec - Expansion capital relates to the feasibility study, permitting and
some mine development.
-
Côté Gold - Expansion capital is for completion of the pre-feasibility study,
initiation of the feasibility study and ongoing work for the permitting
process.
2014 EXPLORATION PLAN
In 2013, in conjunction with the Company's cost reduction program, the
exploration plan was reduced by 34%, resulting in a downsizing of the
program and a significant restructuring of the exploration group, which
will be sustained going forward. In 2014, with planned spending of
$59.6 million, the greenfield and brownfield exploration programs will
continue to focus on discovering "new ounces'. In 2014, project studies
of $19.3 million are planned at Côté Gold, Ontario, Canada and Boto
Gold project, Senegal.
The following table presents 2013 actual and 2014 plan for exploration
and project studies:
|
|
|
|
|
|
|
2013 Actual
|
|
2014 Plan
|
($ millions)
|
Capitalized
|
Expensed
|
Total
|
|
Capitalized
|
Expensed
|
Total
|
Greenfield exploration
|
$ 0.1
|
$ 28.1
|
$ 28.2
|
|
$ 0.2
|
$ 38.2
|
$ 38.4
|
Brownfield exploration1
|
24.2
|
17.0
|
41.2
|
|
9.6
|
11.6
|
21.2
|
|
24.3
|
45.1
|
69.4
|
|
9.8
|
49.8
|
59.6
|
Côté Gold studies
|
0.1
|
23.2
|
23.3
|
|
15.0
|
-
|
15.0
|
Other studies
|
-
|
0.9
|
0.9
|
|
-
|
4.3
|
4.3
|
|
0.1
|
24.1
|
24.2
|
|
15.0
|
4.3
|
19.3
|
Exploration and Project Studies
|
$ 24.4
|
$ 69.2
|
$ 93.6
|
|
$ 24.8
|
$ 54.1
|
$ 78.9
|
1 Sustaining capital expenditures related to mine site resource infill and
condemnation drilling of $8.8 million are excluded from the 2014 plan,
which is a part of the 2014 Capital Expenditure Forecast table on page
4, but the comparable amount for 2013 Actual is included as it was not
segregated in 2013.
Footnotes
1Gold equivalent ounces are calculated using 2013 average realized metal
prices of Niobium at US$40.60/kg and gold at US$1,399/oz.
2 Gold equivalent ounces for the 2014 outlook are calculated using
average realized metal prices of Niobium at US$40.25/kg and gold at
US$1,300/oz.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
All information included in this news release, including any information
as to the Company's future financial or operating performance, and
other statements that express management's expectations or estimates of
future performance, other than statements of historical fact,
constitute forward looking information or forward-looking statements
and are based on expectations, estimates and projections as of the date
of this news release. For example, forward-looking statements contained
in this news release are found under, but are not limited to being
included under, the headings "2014 Production and Cost Guidance, 2014
Capital Expenditure Forecast and 2014 Exploration Plan", and include,
without limitation, statements with respect to: the Company's guidance
for production, total cash costs, all-in sustaining costs, depreciation
expense, effective tax rate, niobium production and operating margin,
capital expenditures, operations outlook, cost management initiatives,
development and expansion projects, exploration, the future price of
gold, the estimation of mineral reserves and mineral resources, the
realization of mineral reserve and mineral resource estimates, the
timing and amount of estimated future production, costs of production,
permitting timelines, currency fluctuations, requirements for
additional capital, government regulation of mining operations,
environmental risks, unanticipated reclamation expenses, title disputes
or claims and limitations on insurance coverage. Forward-looking
statements are provided for the purpose of providing information about
management's current expectations and plans relating to the future.
Forward-looking statements are generally identifiable by, but are not
limited to the, use of the words "may", "will", "should", "continue",
"expect", "anticipate", "assumption", "forecast", "estimate",
"believe", "intend", "plan", "suggest", "guidance", "outlook", "potential", "prospects", "seek",
"targets", "strategy" or "project" or the negative of these words or
other variations on these words or comparable terminology.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
management, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. The Company cautions
the reader not to place any reliance whatsoever on forward-looking
information or forward-looking statements. Forward- looking information
and forward-looking statements involve risks, uncertainties and other
factors that may cause the actual financial results, performance or
achievements of IAMGOLD to be materially different from the Company's
estimated future results, performance or achievements expressed or
implied by those forward-looking statements, and the forward-looking
statements are not guarantees of future performance. These risks,
uncertainties and other factors include, but are not limited to,
changes in the global prices for gold, niobium, copper, silver or
certain other commodities (such as diesel, aluminum and electricity);
changes in U.S. dollar and other currency exchange rates, interest
rates or gold lease rates; risks arising from holding derivative
instruments; the level of liquidity and capital resources; access to
capital markets, and financing; mining tax regimes; ability to
successfully integrate acquired assets; legislative, political or
economic developments in the jurisdictions in which the Company carries
on business; operating or technical difficulties in connection with
mining or development activities; laws and regulations governing the
protection of the environment; employee relations; availability and
increasing costs associated with mining inputs and labour; the
speculative nature of exploration and development, including the risks
of diminishing quantities or grades of reserves; adverse changes in the
Company's credit rating; contests over title to properties,
particularly title to undeveloped properties; and the risks involved in
the exploration, development and mining business. With respect to
development projects, IAMGOLD's ability to sustain or increase its
present levels of gold production is dependent in part on the success
of its projects. Risks and unknowns inherent in all projects include
the inaccuracy of estimated reserves and resources, metallurgical
recoveries, capital and operating costs of such projects, and the
future prices for the relevant minerals. Development projects have no
operating history upon which to base estimates of future cash flows.
The capital expenditures and time required to develop new mines or
other projects are considerable, and changes in costs or construction
schedules can affect project economics. Actual costs and economic
returns may differ materially from IAMGOLD's estimates or IAMGOLD could
fail to obtain the governmental approvals necessary for the operation
of a project; in either case, the project may not proceed, either on
its original timing or at all.
For a more comprehensive discussion of the risks faced by the Company,
and which may cause the actual financial results, performance or
achievements of IAMGOLD to be materially different from the company's
estimated future results, performance or achievements expressed or
implied by forward-looking information or forward-looking statements,
please refer to the Company's latest Annual Information Form, filed
with Canadian securities regulatory authorities at www.sedar.com, and filed under Form 40-F with the United States Securities Exchange
Commission at www.sec.gov/edgar.html. The risks described in the Annual Information Form (filed and viewable
on www.sedar.com and www.sec.gov/edgar.html, and available upon request from the Company) are hereby incorporated
by reference into this news release.
The Company disclaims any intention or obligation to update or revise
any forward-looking statements whether as a result of new information,
future events or otherwise except as required by applicable law.
About IAMGOLD
IAMGOLD (www.iamgold.com) is a mid-tier mining company with six operating gold mines (including
current joint ventures) on three continents and one of the world's top
three niobium mines. A solid base of strategic assets in Canada, South
America and Africa is complemented by development and exploration
projects and continued assessment of accretive acquisition
opportunities. IAMGOLD is in a strong financial position with
extensive management and operational expertise.
Please note:
This entire news release may be accessed via fax, e-mail, IAMGOLD's
website at www.iamgold.com and through CNW Group's website at www.newswire.ca. All material information on IAMGOLD can be found at www.sedar.com or at www.sec.gov.
Si vous désirez obtenir la version française de ce communiqué, veuillez
consulter le http://www.iamgold.com/French/Home/default.aspx.
SOURCE IAMGOLD Corporation