Caledonia Mining Corporation Plc press release
IAMGOLD Reports Second Quarter 2023 Results
NYSE - New York Stock Exchange · Jersey
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.
Toronto, Ontario--(Newsfile Corp. - August 10, 2023) - IAMGOLD Corporation(NYSE: IAG) (TSX: IMG) ("IAMGOLD" or the "Company") today reported its financial and operating results for the second quarter ended June 30, 2023.
HIGHLIGHTS:
Operations
Attributable gold production from continuing operations was 107,000 ounces.
Revenues from continuing operations were $238.8 million from sales of 121,000 ounces (111,000 ounces on an attributable basis) at an average realized gold price of $1,973 per ounce.
Cost of sales per ounce sold from continuing operations was $1,376, cash cost1per ounce sold from continuing operations was $1,372 and all-in-sustaining-cost1("AISC") per ounce sold from continuing operations was $1,912.
Attributable gold production guidance for 2023 is unchanged and is expected to be in the range of 410,000 to 470,000 ounces. Full year costs are expected to come in at the top end of the guided ranges of between $1,125 and $1,175 per ounce sold for cash costs1and between $1,625 to $1,700 per ounce sold for AISC1.
In health and safety, for the six months ended June 30, 2023, the Company reported a DARTFR (days away, restricted, transferred duty frequency rate) of 0.39 and a TRIFR (total recordable injuries frequency rate) of 0.68, with a decreasing trend since the last quarter.
Financial
Net earnings attributable to equity holders1of $92.6 million or $0.19 per share and adjusted net loss attributable to equity holders1of $3.3 million or $0.01 per share.
Net cash from operating activities was $23.2 million. Net cash from operating activities, before movements in non-cash working capital and non-current ore stockpiles1was $21.8 million.
Earnings before interest, income taxes, depreciation and amortization ("EBITDA")1from continuing operations was $166.2 million and adjusted EBITDA1was $63.8 million.
Mine-site free cash flow1from continuing operations was $14.6 million.
The Company has available liquidity of $1,200.2 million comprised of cash and cash equivalents of $747.7 million and the available balance of the secured revolving credit facility ("Credit Facility") of $452.5 million as at June 30, 2023.
Côté Gold
As of June 30, 2023, the Côté Gold Project was estimated to be 85.7% complete.
Since commencement of construction, $2.23 billion ($1.56 billion at 70%) of the planned $2.965 billion ($2.08 billion at 70%) of project expenditure has been incurred.
The estimated cost to complete the Côté Gold Project on a 100% basis is $665 to $735 million ($465 to $515 million at 70%) on an incurred basis assuming a USDCAD rate of 1.32, with the top end of the range approximating the planned $2.965 billion.
Sumitomo Metal Mining Co., Ltd. and SMM Gold Cote Inc. ("Sumitomo" or "SMM") funded the final $61.0 million of the Company's funding obligation and an incremental $18.0 million based on its increased ownership during the second quarter 2023 as per the Joint Venture Funding and Amending Agreement ("JV Funding and Amending Agreement"), reducing the Company's interest in the unincorporated joint venture to 60.3%.
On a 100% basis at the UJV level, the Côté Gold Project incurred project expenditures1of $270.1 million ($189.1 million at 70%) in the second quarter 2023. IAMGOLD is expected to fund $425 to $475 million during the remainder of 2023 based on its 60.3% ownership in Côté Gold unincorporated joint venture. See "Côté Gold Project".
Corporate
On April 25, 2023, the Company completed the sale of its 90% interest in the Boto Gold Project in Senegal and its 100% interest in the early-stage exploration properties of Boto West, Senala West, Daorala and the vested interest in the Senala Option Earn-in Joint Venture, also in Senegal ("Senegal Assets") for aggregate gross cash proceeds of $197.6 million. See "Bambouk Assets".
On May 16, 2023, the Company announced that it had entered into a five-year second lien secured term loan (the "Term Loan") of $400 million from three institutional lenders. The Term Loan proceeds have been used to pay down amounts drawn under its existing revolving Credit Facility, increasing liquidity and flexibility during the completion of construction, commissioning and ramp up of Côté Gold, as it allows for the Credit Facility to be available to support working capital and additional liquidity in case of unforeseen changes in the operating or macroeconomic environment.
On August 1, 2023, the Company entered into an agreement to sell its 100% interest in the Pitangui Project, a greenfield exploration property located in Brazil, as well as its interest in the Acurui Project, to Jaguar Mining Inc. ("Jaguar") via a share purchase agreement. The Company will receive 6.3 million common shares from Jaguar, for an aggregate value of $9.0 million. The Company will also retain a net smelter returns royalty on both projects. The transaction is subject to customary closing conditions, including the approval of the TSX. The transaction is expected to close in the third quarter 2023.
"As we move into the second half of 2023, IAMGOLD is proud of its achievements so far this year," said Renaud Adams, President and Chief Executive Officer of IAMGOLD. "Gold production from continuing operations year to date is 220,000 ounces at cash costs of $1,234 per ounce sold. We have seen remarkable progress and a transformation of Côté Gold as project activities begin the critical transition from bulk construction to finishing activities and operational readiness, including a steady ramp up of autonomous mining activities towards production early next year. The project is now over 86% complete and the remaining capital outlay is in line with our estimates. At Essakane, we saw the mine return to full mining and milling capacity in the second quarter, as our teams worked tirelessly to manage the in-country supply chain while commencing the next phase of mining in the pit. On health and safety, the company has seen an improving trend with improvements year over year, though we will continuously work to achieve our goal of Zero Harm®for the people and the places where we operate."
"As we look to the end of this year, we see IAMGOLD is well on track to meet its gold production guidance targets of 410,000 to 470,000 ounces. We are currently forecasting costs to come in on the upper end of our guidance ranges, due to sustained higher costs of doing business from cooling, yet still present, inflationary pressures and associated complexities in the regions in which we operate. We are excited about where IAMGOLD is positioned today, as when Côté Gold comes online, the Company will have a significantly higher production base and lower cost profile, providing a strong foundation of cashflow and growth opportunities in Canada," added Mr. Adams.
QUARTERLY SUMMARY
The following table summarizes certain operating and financial results for the three months ended June 30, 2023 (Q2 2023), June 30, 2022 (Q2 2022) and the six months ended June 30 (or YTD) 2023 and 2022 and certain measures of the Company's financial position as at June 30, 2023 and December 31, 2022. Financial results of Rosebel include the one month period ended January 31, 2023, prior to the closing of the sale to Zijin Mining Group Co. Ltd. ("Zijin") that was announced on October 18, 2022.
| | | Q2 2023 | | | Q2 2022 | | | YTD 2023 | | | YTD 2022 | | Key Operating Statistics | | | | | | | | | | | | | Gold production - attributable (000s oz) | | | | | | | | | | | | | - Essakane | | 88 | | | 107 | | | 180 | | | 219 | | - Westwood | | 19 | | | 14 | | | 40 | | | 30 | | Total from continuing operations | | 107 | | | 121 | | | 220 | | | 249 | | - Rosebel | | - | | | 49 | | | 25 | | | 95 | | Total gold production - attributable (000s oz) | | 107 | | | 170 | | | 245 | | | 344 | | Gold sales - attributable (000s oz) | | | | | | | | | | | | | - Essakane | | 93 | | | 104 | | | 181 | | | 223 | | - Westwood | | 18 | | | 14 | | | 39 | | | 30 | | Total from continuing operations | | 111 | | | 118 | | | 220 | | | 253 | | - Rosebel | | - | | | 52 | | | 24 | | | 98 | | Total gold sales - attributable (000s oz) | | 111 | | | 170 | | | 244 | | | 351 | | Cost of sales1($/oz sold) - attributable | | | | | | | | | | | | | - Essakane | $ | 1,274 | | $ | 838 | | $ | 1,171 | | $ | 810 | | - Westwood | | 1,909 | | | 2,463 | | | 1,773 | | | 2,176 | | Total from continuing operations | $ | 1,376 | | $ | 1,034 | | $ | 1,277 | | $ | 974 | | - Rosebel | | - | | | 1,349 | | | 949 | | | 1,359 | | Total cost of sales1($/oz sold) - attributable | $ | 1,376 | | $ | 1,130 | | $ | 1,245 | | $ | 1,081 | | Cash costs2($/oz sold) - attributable | | | | | | | | | | | | | - Essakane | $ | 1,273 | | $ | 836 | | $ | 1,122 | | $ | 807 | | - Westwood | | 1,896 | | | 2,427 | | | 1,761 | | | 2,141 | | Total from continuing operations | $ | 1,372 | | $ | 1,028 | | $ | 1,234 | | $ | 967 | | - Rosebel | | - | | | 1,327 | | | 949 | | | 1,321 | | Total cash costs2($/oz sold) - attributable | $ | 1,372 | | $ | 1,119 | | $ | 1,206 | | $ | 1,066 | | AISC2($/oz sold) - attributable | | | | | | | | | | | | | - Essakane | $ | 1,587 | | $ | 1,124 | | $ | 1,377 | | $ | 1,129 | | - Westwood | | 2,903 | | | 3,147 | | | 2,689 | | | 2,738 | | Total from continuing operations | $ | 1,912 | | $ | 1,485 | | $ | 1,719 | | $ | 1,434 | | - Rosebel | | - | | | 1,874 | | | 1,358 | | | 1,832 | | Total AISC2($/oz sold) - attributable | $ | 1,912 | | $ | 1,604 | | $ | 1,684 | | $ | 1,545 | | Average realized gold price($/oz) | | | | | | | | | | | | | - Continued operations | $ | 1,973 | | $ | 1,773 | | $ | 1,933 | | $ | 1,781 | | - Discontinued operations | | - | | | 1,861 | | | 1,905 | | | 1,873 | | Total average realized gold price($/oz) | $ | 1,973 | | $ | 1,799 | | $ | 1,930 | | $ | 1,806 |
1. Throughout this news release, cost of sales, excluding depreciation, is disclosed in the cost of sales note in the consolidated interim financial statements. 2. This is a non-GAAP measure. See "Non-GAAP Financial Measures" disclosure at the end of this news release for a description and calculation of these measures.
| | | Q2 2023 | | | Q2 2022 | | | YTD 2023 | | | YTD 2022 | | Financial Results ($ millions from continuing operations) | | | | | | | | | | | | | Revenues | $ | 238.8 | | $ | 232.1 | | $ | 465.0 | | $ | 497.1 | | Gross profit | $ | 26.6 | | $ | 34.1 | | $ | 69.7 | | $ | 105.1 | | EBITDA1 | $ | 166.2 | | $ | 101.4 | | $ | 249.0 | | $ | 236.3 | | - Continuing operations | $ | 166.2 | | $ | 71.7 | | $ | 234.6 | | $ | 181.9 | | - Discontinued operations | $ | - | | $ | 29.7 | | $ | 14.4 | | $ | 54.4 | | Adjusted EBITDA1 | $ | 63.8 | | $ | 110.0 | | $ | 170.6 | | $ | 247.5 | | - Continuing operations | $ | 63.8 | | $ | 81.8 | | $ | 147.2 | | $ | 192.5 | | - Discontinued operations | $ | - | | $ | 28.2 | | $ | 23.4 | | $ | 55.0 | | Net earnings (loss) attributable to equity holders | $ | 92.6 | | $ | (9.6) | | $ | 104.5 | | $ | 14.2 | | - Continuing operations | $ | 92.6 | | $ | (22.2) | | $ | 98.9 | | $ | (6.2) | | - Discontinued operations | $ | - | | $ | 12.6 | | $ | 5.6 | | $ | 20.4 | | Adjusted net earnings (loss) attributable to equity holders1 | $ | (3.3) | | $ | (6.3) | | $ | 36.6 | | $ | 19.8 | | - Continuing operations | $ | (3.3) | | $ | (14.6) | | $ | 22.0 | | $ | 1.8 | | - Discontinued operations | $ | - | | $ | 8.3 | | $ | 14.6 | | $ | 18.0 | | Net earnings (loss) per share attributable to equity holders - continuing operations | $ | 0.19 | | $ | (0.05) | | $ | 0.21 | | $ | (0.01) | | Adjusted net earnings (loss) per share attributable to equity holders1- continuing operations | $ | (0.01) | | $ | (0.03) | | $ | 0.05 | | $ | - | | Net cash from operating activities before changes in working capital1- continuing operations | $ | 21.8 | | $ | 67.0 | | $ | 77.5 | | $ | 175.7 | | Net cash from operating activities | $ | 23.2 | | $ | 81.9 | | $ | 52.0 | | $ | 224.2 | | - Continuing operations | $ | 23.2 | | $ | 33.9 | | $ | 36.6 | | $ | 149.9 | | - Discontinued operations | $ | - | | $ | 48.0 | | $ | 15.4 | | $ | 74.3 | | Mine-site free cash flow1 | $ | 14.6 | | $ | 42.0 | | $ | 23.2 | | $ | 128.7 | | - Continuing operations | $ | 14.6 | | $ | 36.4 | | $ | 17.3 | | $ | 123.3 | | - Discontinued operations | $ | - | | $ | 5.6 | | $ | 5.9 | | $ | 5.4 | | Capital expenditures1,2- sustaining | $ | 46.3 | | $ | 39.4 | | $ | 81.3 | | $ | 95.5 | | Capital expenditures1,2- expansion | $ | 173.5 | | $ | 170.8 | | $ | 332.6 | | $ | 250.8 | | | | June 30 | | | December 31 | | | June 30 | | | December 31 | | | | 2023 | | | 2022 | | | 2023 | | | 2022 | | Financial Position ($ millions) | | | | | | | | | | | | | Cash and cash equivalents | $ | 747.7 | | $ | 407.8 | | $ | 747.7 | | $ | 407.8 | | Long-term debt | $ | 837.3 | | $ | 918.7 | | $ | 837.3 | | $ | 918.7 | | Net cash (debt)1 | $ | (280.3) | | $ | (605.6) | | $ | (280.3) | | $ | (605.6) | | Available credit facility | $ | 452.5 | | $ | 26.6 | | $ | 452.5 | | $ | 26.6 |
1. This is a non-GAAP measure. See "Non-GAAP Financial Measures" disclosure at the end of this news release for a description and calculation of these measures. 2. Capital expenditures represent incurred expenditures for property, plant and equipment and exploration and evaluation assets, and exclude right-of-use assets.
OUTLOOK
Operating Performance Outlook
| | | Actual YTD 2023 | | | Full Year Guidance 20231 | | Essakane (000s oz) | | 180 | | | 340 - 380 | | Westwood (000s oz) | | 40 | | | 70 - 90 | | Total attributable production (000s oz)2 | | 220 | | | 410 - 470 | | Cost of sales2($/oz sold) | $ | 1,277 | | $ | 1,125 - $1,175 | | Cash costs2.3($/oz sold) | $ | 1,234 | | $ | 1,125 - $1,175 | | AISC2,3($/oz sold) | $ | 1,719 | | $ | 1,625 - $1,700 | | Depreciation expense ($ millions) | $ | 91.0 | | $ | 245 - $255 | | Income taxes4paid ($ millions) | $ | 43.0 | | $ | 70 - $80 |
1. The full year guidance is based on the following 2023 full year assumptions, before the impact of hedging: average realized gold price of $1,650 per ounce, USDCAD exchange rate of 1.32, EURUSD exchange rate of 1.10 and average crude oil price of $91 per barrel. 2. Consists of Essakane and Westwood on an attributable basis of 90% and 100%, respectively. 3. This is a non-GAAP financial measure. See "Non-GAAP Financial Measures". 4. The income taxes paid guidance reflects continuing operations and does not include the cash tax obligation arising as part of the Bambouk sales process. See "Bambouk Assets" for additional details.
Production Outlook
Attributable gold production guidance for 2023 is unchanged and is expected to be in the range of 410,000 to 470,000 ounces.
Costs Outlook
The Company expects full year costs to come in at the top end of the guided ranges of between $1,125 and $1,175 per ounce sold for cash costs1and between $1,625 to $1,700 per ounce sold for AISC1.
At Essakane, the landed cost of fuel has increased due to the measures taken to reduce the impact of the security situation on the supply chain which allowed for a return to full mining and milling capacity during the quarter. In addition, heavy fuel used for power generation is periodically substituted with more expensive light fuel due to availability, further increasing the cost of producing energy used in the mill.
At Westwood, the level of ground support required for the development and rehabilitation work increased relative to the annual plan; however, productivity rates are higher than plan and allowed for an increased rate of underground rehabilitation and repair work thereby advancing a portion of the 2024 scope of work into the current year to de-risk future years.
The Company notes that continued pressures on the Essakane supply chain and costs may result in an increase to costs and capital expenditure guidance estimates and will provide further updates as warranted.
Capital Expenditures
Sustaining capital expenditures¹ for 2023 have been revised upwards to approximately $230 million (± 5%) of which the majority is related to capitalized stripping at Essakane and underground development and rehabilitation work at Westwood. At Westwood, the sustaining capital guidance is being raised by $35 million as underground rehabilitation and development has been progressing ahead of schedule due to better than planned productivity rates moving some of the 2024 work into 2023 and reducing the work required in 2024, while some of the rehabilitation work requires more ground support increasing costs (as outlined above). During the second quarter of 2023, Essakane ramped up its stripping program in line with the mine plan. The Company expects that Essakane will be able to complete its capital stripping program for the year should the fuel supply remain stable, reversing the impact of lower stripping in the first quarter due to supply chain issues encountered at the time. (see quarterly update on "Essakane, Burkina Faso" and "Westwood, Canada").
Expansion capital1and project expenditures¹ for 2023 are expected to be approximately $830 to $880 million, on an incurred basis, including approximately $825 to $875 million of project expenditures for Côté Gold, on a 70% basis (see also "Côté Gold Project") and consists of capital expenditures, right of use assets purchased through leasing, supplies inventory and the cost to build the ore stockpile. Other expansion capital expenditures¹ (excluding Côté Gold) are expected to be approximately $5 million (± 5%) at Essakane in fulfillment of the relocation commitment to the Essakane village.
| | | Actual YTD 2023 | | | Full Year Guidance 20232 | | | | | | | | | | | | | | ($ millions) | | Sustaining3 | | | Expansion | | | Total | | | Sustaining3 | | | Expansion | | | Total | | Essakane | $ | 46.6 | | $ | 1.0 | | $ | 47.6 | | $ | 150 | | $ | 5 | | $ | 155 | | Westwood | | 34.4 | | | 0.2 | | | 34.6 | | | 80 | | | - | | | 80 | | | $ | 81.0 | | $ | 1.2 | | $ | 82.2 | | $ | 230 | | $ | 5 | | $ | 235 | | Côté Gold4,5 | | - | | | 359.8 | | | 359.8 | | | - | | | 825 - 875 | | | 825 - 875 | | Corporate | | 0.3 | | | - | | | 0.3 | | | - | | | - | | | - | | Total6,7,8 | $ | 81.3 | | $ | 361.0 | | $ | 442.3 | | $ | 230 | | $ | 830 - 880 | | $ | 1,060 - 1,110 |
1. 100% basis, unless otherwise stated. 2. Capital expenditures guidance (±5%) at Essakane and Westwood. Sustaining capital expenditure guidance at Westwood increased by $35 million. Côté Gold expansion capital guidance narrowed from $800 - $875 million to $825 - $875 million. 3. Sustaining capital includes capitalized stripping of (i) $14.3 million for Essakane and $1.2 million for Westwood in the second quarter 2023, (ii) $20.7 for Essakane and $3.9 million at Westwood YTD 2023, and (iii) $90 million for Essakane and $6.0 million for Westwood for the full year guidance. See "Outlook" sections below. 4. 70% basis. 5. Represents Côté Gold project expenditures of $359.8 million (see Côté Gold Project) that consists of capital expenditures of $331.4 million, right of use assets of $34.8 million, supplies inventory and the cost to build the ore stockpile, less certain cash and non-cash corporate level adjustments included in capital expenditures. 6. Includes $3.0 million of capitalized exploration and evaluation expenditures also included in the Exploration Outlook guidance table. 7. Capitalized borrowing costs are not included. 8. See "Costs Outlook" section above.
Exploration Outlook
Exploration expenditures for 2023 are expected to be approximately $18.0 million, including $3.0 million on the Gosselin resource delineation drilling program, as well as other near-mine and greenfield programs.
| | | Actual YTD 2023 | | | Full Year Guidance 2023 | | | | | | | | | | | | | | ($ millions) | | Capitalized | | | Expensed | | | Total | | | Capitalized | | | Expensed | | | Total | | Exploration projects - greenfield | $ | - | | $ | 5.7 | | $ | 5.7 | | $ | - | | $ | 13 | | $ | 13 | | Exploration projects - brownfield | | 2.1 | | | 1.0 | | | 3.1 | | | 3 | | | 2 | | | 5 | | | $ | 2.1 | | $ | 6.7 | | $ | 8.8 | | $ | 3 | | $ | 15 | | $ | 18 |