Golden Goose Resources Corp. press release
IAMGOLD Reports First Quarter 2022 Results; Announces Appointment of Maryse Bélanger as Interim President and CEO & Provides Côté Gold Project Update
CSE - Canadian National Stock Exchange · Gold · Lithium · Silver · Copper · Canada
All monetary amounts are expressed in U.S. dollars, unless otherwise indicated. For more information, refer to the management discussion and analysis ("MD&A") and unaudited consolidated interim financial statements as at and for the three months ended March 31, 2022.
Q1 2022 HIGHLIGHTS:
Attributable gold production of 174,000 ounces on continued strong performance from Essakane and improvements at Rosebel. Cost of sales per ounce sold of $1,035, cash cost1per ounce sold of $1,017 and all-in sustaining costs1("AISC") per ounce sold of $1,490. Mine-site free cash flow1of $87.5 million. Net earnings and adjusted net earnings1per share attributable to equity holders of $0.05. Earnings before interest, income taxes, depreciation and amortization ("EBITDA")1of $135.0 million and adjusted EBITDA1of $137.6 million. Cash, cash equivalents and short-term investments and available liquidity1at the end of the quarter of $524.4 million and $1.0 billion, respectively. The Company estimates, based on the ongoing analysis, assessment and preliminary information available to date, that the remaining Côté Gold project costs to completion at April 1, 2022 could be between approximately $1,200 to $1,300 million. Accordingly, the Company is withdrawing its 2022 and 2023 Côté Gold project costs guidance and will provide a detailed updated costs and schedule estimates review before the end of the second quarter. Subsequent to the approval of the consolidated interim financial statements, Maryse Bélanger, Chair of the Board was also appointed Interim President and Chief Executive Officer ("CEO") and David Smith was appointed Lead Director.
Toronto, Ontario--(Newsfile Corp. - May 3, 2022) - IAMGOLD Corporation(NYSE: IAG) (TSX: IMG) ("IAMGOLD" or the "Company") today reported its financial and operating results for the first quarter ended March 31, 2022, the appointment of current Chair of the Board, Maryse Bélanger, as Interim President and CEO and an update to the Côté Gold Project.
Maryse Belanger, Chair of the Board and incoming Interim President and CEO, said: "The Company delivered good results in the first quarter of 2022, resulting primarily from solid operating performance at Essakane. However, preliminary cost estimates from the ongoing risk analysis at our Côté development project, coupled with the need for additional liquidity represent significant near- and mid-term challenges.
"Given the complexity of the business from both an operational and project development standpoint, in addition to the need to actively investigate financing measures, further management capacity is needed to bridge the gap until a search for a permanent CEO is concluded. As a result, I have agreed to step in as Interim President and CEO. On behalf of the entire Board, I thank Daniella for effectively leading the Company through a difficult period. I am looking forward to working closely with Daniella and the rest of the management team to complete the Côté risk analysis and advance project development, to continue operational and efficiency improvements at our mines, and to address the Company's liquidity. I am confident we will address these near-term challenges and we remain fully focused on our goal of becoming a leading high-margin gold producer."
Daniella Dimitrov, Chief Financial Officer and Executive Vice President, Strategy and Corporate Development, said: "I am delighted to welcome Maryse as Interim President and CEO. She has been actively engaged in the business since being appointed Chair and I look forward to working more closely with her under her leadership as Interim President and CEO. Her proven strengths and experience in operational and efficiency improvements and in project development bring important capacity and capability to the management team as we actively address the challenges before us."
The following table summarizes certain financial results for the three months ended March 31, 2022 (Q1 2022), December 31, 2021 (Q4 2021) and March 31, 2021 (Q1 2021):
| | | Q1 2022 | | | Q4 2021 | | | Q1 2021 | | | Financial Results($ millions, except where noted) | | | | | | | | | | | Revenues | $ | 356.6 | | $ | 294.6 | | $ | 297.4 | | | Gross profit (loss) | $ | 81.0 | | $ | (76.3 | ) | $ | 44.2 | | | EBITDA1 | $ | 135.0 | | $ | (193.4 | ) | $ | 113.8 | | | Adjusted EBITDA1 | $ | 137.6 | | $ | 90.0 | | $ | 100.1 | | | Net earnings (loss) attributable to equity holders | $ | 23.8 | | $ | (194.1 | ) | $ | 19.5 | | | Adjusted net earnings attributable to equity holders1 | $ | 26.1 | | $ | 44.3 | | $ | 6.2 | | | Net earnings (loss) per share attributable to equity holders | $ | 0.05 | | $ | (0.41 | ) | $ | 0.04 | | | Adjusted net earnings per share attributable to equity holders1 | $ | 0.05 | | $ | 0.09 | | $ | 0.01 | | | Net cash from operating activities before changes in working capital1 | $ | 133.9 | | $ | 76.0 | | $ | 82.5 | | | Net cash from operating activities | $ | 142.3 | | $ | 67.5 | | $ | 101.7 | | | Mine-site free cash flow1 | $ | 87.5 | | $ | 12.3 | | $ | 89.5 | | | Capital expenditures1- sustaining | $ | 76.6 | | $ | 41.4 | | $ | 13.7 | | | Capital expenditures1- expansion | $ | 92.1 | | $ | 190.1 | | $ | 88.8 | |
1 This is a non-GAAP measure. See "Non-GAAP Financial Measures".
QUARTERLY REVIEW
Operating Results
| | | Q1 2022 | | | Q4 2021 | | | Q1 2021 | | | Key Operating Statistics | | | | | | | | | | | Gold production - attributable (000s oz) | | 174 | | | 153 | | | 156 | | | Gold sales - attributable (000s oz) | | 181 | | | 152 | | | 153 | | | Average realized gold price1($/oz) | $ | 1,813 | | $ | 1,794 | | $ | 1,781 | | | Cost of sales2($/oz sold) - attributable | $ | 1,035 | | $ | 1,597 | | $ | 1,075 | | | Cash costs1($/oz sold) - attributable | $ | 1,017 | | $ | 1,213 | | $ | 1,073 | | | AISC1($/oz sold) - attributable | $ | 1,490 | | $ | 1,537 | | $ | 1,238 | |
1 This is a non-GAAP measure. See "Non-GAAP Financial Measures".
Attributable gold production for the first quarter was 174,000 ounces, up 21,000 ounces or 14% from the prior quarter, on continued strong performance from Essakane and improvements at Rosebel. Attributable gold sales of 181,000 ounces came in above production due to the timing of sales of gold inventory at Essakane, with the average realized gold price of $1,813 per ounce reflecting the delivery of 37,500 ounces at $1,500 per ounce in accordance with the 2019 prepay arrangement.
Cost of sales (excluding depreciation) per ounce sold was $1,035 for the first quarter, down $562 per ounce or 35% from $1,597 per ounce sold in the prior quarter. Excluding depreciation and the NRV write-downs, cost of sales per ounce sold was lower by $245 per ounce sold due to higher production resulting from higher head grades at Essakane and higher sales volumes, partially offset by higher operating costs of $18 per ounce sold.
Cash costs1per ounce sold in the first quarter was $1,017, down $196 per ounce or 16% from the prior quarter on strong gold sales. AISC per ounce sold of $1,490 was down $47 per ounce or 3% from the prior quarter, due to higher sales volume of $235 per ounce sold, partially offset by higher sustaining capital expenditures of $179 per ounce sold.
Health and Safety
Health and safety is core to the Company's relentless pursuit of its Zero Harm® vision. Through various programs, the Company continuously promotes a safe work environment and a wellness program at all sites. The DARTFR2(days away, restricted, transferred duty frequency rate) was 0.29 for the first quarter 2022, tracking below the global annual target of 0.42. The TRIFR2(total recordable injuries frequency rate) was 0.85 for the first quarter 2022, tracking above the global annual target of 0.73. Côté Gold has surpassed over 4.7 million hours with no lost time injuries to date. Our operations have been increasing focus on risk awareness and preventive activities related to work tasks.
The global COVID-19 pandemic continues to evolve and the management thereof remains a significant focus for the business. Rising positive cases at our operations, including at Rosebel, Westwood and Côté Gold project, resulted in some of the workforce being unavailable during the first half of the first quarter 2022. See "Operations and Projects" below for more information on each site. The Company continues to closely monitor developments and is taking necessary measures to manage the impact of the COVID-19 pandemic on its personnel, operations, construction and development projects and exploration activities.
Financial Results
For the first quarter ended March 31, 2022, net earnings and adjusted net earnings1per share attributable to equity holderswere $0.05, EBITDA was $135.0 million and adjusted EBITDA1was $137.6 million.
First quarter 2022 mine site free cash flow1was $87.5 million, up $75.2 million from the prior quarter, on higher operating cash flow at Essakane primarily due to higher sales and average realized gold price ($55.9 million), Rosebel primarily due to higher average realized gold price and lower operating costs ($11.0 million), and Westwood primarily due to higher sales and average realized gold price ($8.5 million), partially offset by higher capital expenditures at Westwood ($2.4 million).
Net cash from operating activities for the first quarter 2022 was $142.3 million, an increase of $74.8 million from the prior quarter, primarily due to higher net cash earnings ($47.3 million), proceeds from the 2022 Prepay Arrangements ($59.0 million), partially offset by deferred revenue recognized on the 2019 Prepay Arrangement ($48.8 million) and a net inflow from working capital movements ($16.9 million).
Net cash used in investing activities for the first quarter 2022 was $160.5 million, a decrease of $102.8 million from the prior quarter, primarily due to a decrease in capital expenditures for property, plant and equipment mainly due to lower expenditures at Côté Gold as a result of timing of construction activities ($63.0 million), lower borrowing costs paid as interest on the Company's unsecured senior notes paid on October 15th($20.6 million) offset by proceeds received from the disposal of marketable securities ($7.8 million). The prior quarter's investing activities also included the acquisition of a royalty interest by the Company's subsidiary, EURO Ressources S.A., ($7.2 million) and an increase to restricted cash in support of environmental closure cost obligations at Essakane ($6.0 million).
Net cash used in financing activities for the first quarter 2022 was $7.5 million, an increase of $7.9 million from the prior quarter, primarily due to a decrease in interest paid ($7.6 million).
LIQUIDITY AND CAPITAL RESOURCES
As at March 31, 2022, the Company had $519.5 million in cash and cash equivalents, $4.9 million in short-term investments and net debt of $6.5 million. Restricted cash in support of environmental closure costs obligations related to Essakane totaled $41.2 million.
Approximately $498 million was available under the Company's secured revolving credit facility resulting in available liquidity at March 31, 2022 of $1.0 billion. The Company drew down $100 million on the Credit Facility on April 29, 2022 to prepare for Côté Gold cash calls during the remainder of the second quarter while the Company was completing certain cash repatriation initiatives, including a dividend declared and paid by Essakane in April 2022.
On April 29, 2022, the Company, on behalf of the Côté Gold UJV, entered into a master lease agreement with Caterpillar Financial Services Limited to lease certain mobile equipment, expected to be delivered over the course of 2022 and 2023, with a value of approximately $125 million. In connection therewith, Sumitomo Metal Mining Co. Ltd ("SMM") entered into a guarantee of 30% of the obligations under such agreement, reflecting its pro rata interest in the Côté Gold UJV.
Prepay Arrangements
During 2019, the Company entered into gold sale prepayment arrangements with a syndicate of banks with a collar range of $1,300 to $1,500 per ounce at a cost of 5.38% per annum. Pursuant to the 2019 prepay arrangement, the Company received a cash prepayment of $169.8 million in December 2019 in exchange for delivering 150,000 gold ounces in 2022. The first 37,500 ounces were delivered into this prepay arrangement in the first quarter 2022 and the Company received $7.5 million in cash in relation to the collar.
During 2021, the Company entered into gold sale prepayment arrangements (the "2022 Prepay Arrangements") at a weighted average cost of 4.45% per annum in respect of 150,000 gold ounces. These arrangements have an average forward contract price of $1,753 per ounce on 50,000 gold ounces and a collar range of $1,700 to $2,100 per ounce on 100,000 gold ounces. This will result in a total prepayment to the Company of $236 million over the course of 2022 and the requirement on the part of the Company to physically deliver such ounces over the course of 2024. The 2022 Prepayment Arrangements have the effect of rolling the 2019 prepay arrangement from 2022 to 2024 after the completion of the construction of Côté Gold. The Company received $59.0 million during the first quarter 2022 pursuant to the 2022 Prepay Arrangements.
Liquidity Outlook
Based on the information currently available, the Company's cash and cash equivalents balance, the net cash expected to be generated by the Company's operations in the next twelve months and undrawn amounts of the Credit Facility are expected to be sufficient to continue to fund the construction of Côté Gold, to meet obligations and to fund planned investing activities at the Company's existing operations for approximately the next twelve months. The Company expects that the change in the remaining costs to complete and schedule of the Côté Gold project (see "Côté Gold Project - Remaining Costs to Complete and Schedule") will result in the Company requiring additional financing in 2023, in addition to its existing Credit Facility, to complete the construction of Côté Gold. The Company is, therefore, actively investigating measures to increase its liquidity and capital resources including additional debt or equity financing, strategically disposing of assets or pursuing joint-venture partnerships. Readers are encouraged to read the "Caution Regarding Forward Looking Statements" and the "Risk Factors" sections contained in the Company's 2021 Annual Information Form, which is available on SEDAR at www.sedar.com and the "Risk and Uncertainties" section of the MD&A.
OUTLOOK
| | | Actual YTD 2022 | | | Full Year Guidance 20221 | | | Essakane (000s oz) | | 112 | | | 360 - 385 | | | Rosebel (000s oz) | | 46 | | | 155 - 180 | | | Westwood (000s oz) | | 16 | | | 55 - 75 | | | Total attributable production (000s oz)2 | | 174 | | | 570 - 640 | | | Cost of sales2($/oz sold) | $ | 1,035 | | $ | 1,100 - $1,150 | | | Cash costs2,3($/oz sold) | $ | 1,017 | | $ | 1,100 - $1,150 | | | AISC2,3($/oz sold) | $ | 1,490 | | $ | 1,650 - $1,690 | |
1 The full year guidance is based on the following 2022 full year assumptions: average realized gold price of $1,700 per ounce, USDCAD exchange rate of 1.25, EURUSD exchange rate of 1.20 and average crude oil price of $70 per barrel. 2 Consists of Essakane, Rosebel and Westwood on an attributable basis of 90%, 95% and 100%, respectively. 3 This is a non-GAAP financial measure. See "Non-GAAP Financial Measures".
Production Outlook
Attributable gold production guidance for 2022 is unchanged and is expected to be in the range of 570,000 to 640,000 ounces.
Costs Outlook
Costs guidance for 2022 is unchanged with cash costs¹ expected to be between $1,100 and $1,150 per ounce sold and AISC¹ expected to be between $1,650 and $1,690 per ounce sold. These estimates included an inflation assumption of 5% to 7% on key consumables, translating to an increase of 1% to 2% in cash costs and AISC (reflected in the guidance figures). Towards the end of the first quarter, additional cost pressures emerged arising from systemic inflation, constrained global supply chains and the sanctions on trade with Russia, increasing the average cost of key consumables, such as oil, ammonium nitrate, grinding media, lime and cyanide. The Company continues to work with its supply chain and seek alternatives to mitigate ongoing costs pressures, including the sourcing of appropriate alternatives, albeit at higher prices and/or varying quality, as well as progressing productivity initiatives at its operations through the IAMALLIN operational improvement program. Increases in oil prices have been partially mitigated by the existing oil hedge program, details of which can be found in the "Market Risk" section of the Company's MD&A. For reference, excluding the impact of the Company's hedging program, a $10/bbl increase in the oil price would translate to a $15 per ounce increase in cash costs; however with current hedges in place, the same movement would equate to a $6 per ounce increase in cash costs. The Company notes that continued external cost pressures may result in an increase to costs and capital expenditures guidance estimates and will provide further updates next quarter.
_Capital Expenditures_1
| | | Actual YTD 2022 | | | Full Year Guidance 2022 | | | | | | | | | | | | | | | ($ millions) | | Sustaining2 | | | Expansion3 | | | Total | | | Sustaining2 | | | Expansion3 | | | Total | | | Essakane | $ | 47.7 | | $ | 1.0 | | $ | 48.7 | | $ | 165 | | $ | 5 | | $ | 170 | | | Rosebel4 | | 20.5 | | | 6.0 | | | 26.5 | | | 105 | | | 35 | | | 140 | | | Westwood | | 7.3 | | | 0.5 | | | 7.8 | | | 40 | | | 10 | | | 50 | | | | | 75.5 | | | 7.5 | | | 83.0 | | | 310 | | | 50 | | | 360 | | | Côté Gold5(70%) | | - | | | 78.5 | | | 78.5 | | | - | | | under review | | | under review | | | Boto Gold | | - | | | 6.1 | | | 6.1 | | | - | | | 20 | | | 20 | | | Corporate | | 1.1 | | | - | | | 1.1 | | | - | | | - | | | - | | | Total6,7,8,9(±5%) | $ | 76.6 | | $ | 92.1 | | $ | 168.7 | | $ | 310 | | | NA | | | NA | |
1 100% basis, unless otherwise stated. 2 Sustaining capital includes capitalized stripping of (i) $29.9 million for Essakane and $12.5 million for Rosebel in Q1 2022, and (ii) for the full year 2022 guidance $110 million for Essakane and $45 million for Rosebel. Refer to site "Outlook" sections below. 3 Expansion capital includes capitalized stripping of (i) $nil million for Essakane and $3.5 million for Rosebel in Q1 2022, and (ii) for the full year 2022 guidance $nil for Essakane and $20 million for Rosebel. Refer to site "Outlook" sections below. 4 Rosebel includes Saramacca at 70%. 5 Based on the ongoing review of project costs and schedule estimates, the Company has withdrawn its 2022 and 2023 Côté Gold remaining project cost guidance (previously $590 - $620 million). 6 Includes $10 million of capitalized exploration and evaluation expenditures also included in the Exploration Outlook guidance table. 7 Capitalized borrowing costs are not included. 8 In addition to the above capital expenditures, $24 million in total principal lease payments are expected. 9 See "Costs Outlook" section above.
Exploration
| | | Actual YTD 2022 | | | Full Year Guidance 2022 | | | | | | | | | | | | | | | ($ millions) | | Capitalized | | | Expensed | | | Total | | | Capitalized | | | Expensed | | | Total | | | Exploration projects - greenfield | $ | - | | $ | 6.9 | | $ | 6.9 | | $ | - | | $ | 21 | | $ | 21 | | | Exploration projects - brownfield1 | | 1.8 | | | 1.3 | | | 3.1 | | | 10 | | | 4 | | | 14 | | | | $ | 1.8 | | $ | 8.2 | | $ | 10.0 | | $ | 10 | | $ | 25 | | $ | 35 | |
1 Exploration projects - brownfield includes planned near-mine exploration and resource development of (i) $1.8 million for 2022, and (ii) $10 million for the full year 2022 guidance.
OPERATIONS AND PROJECTS
Essakane District, Burkina Faso - Essakane Mine (IAMGOLD interest - 90%)1
| | | Q1 2022 | | | Q4 2021 | | | Q1 2021 | | | Key Operating Statistics | | | | | | | | | | | Ore mined (000s t) | | 3,832 | | | 4,113 | | | 4,435 | | | Waste mined (000s t) | | 11,346 | | | 10,903 | | | 10,437 | | | Material mined (000s t) - total | | 15,178 | | | 15,016 | | | 14,872 | | | Strip ratio2 | | 3.0 | | | 2.7 | | | 2.4 | | | Ore milled (000s t) | | 3,162 | | | 3,292 | | | 3,189 | | | Head grade (g/t) | | 1.39 | | | 1.13 | | | 1.34 | | | Recovery (%) | | 88 | | | 91 | | | 82 | | | Gold production (000s oz) - 100% | | 124 | | | 108 | | | 113 | | | Gold production (000s oz) - attributable 90% | | 112 | | | 98 | | | 102 | | | Gold sales (000s oz) - 100% | | 131 | | | 102 | | | 114 | | | Average realized gold price3($/oz) | $ | 1,885 | | $ | 1,794 | | $ | 1,783 | | | Financial Results ($ millions)1 | | | | | | | | | | | Revenues5 | $ | 248.2 | | $ | 184.2 | | $ | 204.1 | | | Operating costs | | (90.4 | ) | | (84.2 | ) | | (103.4 | ) | | Royalties | | (12.3 | ) | | (9.2 | ) | | (10.1 | ) | | Cash costs3 | $ | (102.7 | ) | $ | (93.4 | ) | $ | (113.5 | ) | | Other mine costs4 | | (0.4 | ) | | (43.2 | ) | | (0.3 | ) | | Cost of sales5 | $ | (103.1 | ) | $ | (136.6 | ) | $ | (113.8 | ) | | Sustaining capital expenditures3,6 | | (47.7 | ) | | (22.9 | ) | | (5.4 | ) | | Other costs and adjustments7 | | 1.7 | | | 41.6 | | | (1.7 | ) | | AISC3 | $ | (149.1 | ) | $ | (117.9 | ) | $ | (120.9 | ) | | Expansion capital expenditures3,8 | $ | (1.0 | ) | $ | (24.1 | ) | $ | (14.5 | ) | | Performance Measures9 | | | | | | | | | | | Cost of sales excluding depreciation ($/oz sold) | $ | 784 | | $ | 1,333 | | $ | 999 | | | Cash costs3($/oz sold) | $ | 781 | | $ | 912 | | $ | 997 | | | AISC3($/oz sold) | $ | 1,134 | | $ | 1,150 | | $ | 1,061 | |