Nouveau Monde Graphite Inc. press release

IAMGOLD Reports Third Quarter 2022 Results

2022-11-08

TSX - Toronto Stock Exchange · Graphite · Canada

All monetary amounts are expressed in U.S. dollars, unless otherwise indicated.

Toronto, Ontario--(Newsfile Corp. - November 8, 2022) - IAMGOLD Corporation(NYSE: IAG) (TSX: IMG) ("IAMGOLD" or the "Company") today reported its financial and operating results for the third quarter ended September 30, 2022.

HIGHLIGHTS:

Attributable gold production of 184,000 ounces in the third quarter and 528,000 ounces year-to-date ("YTD") as a result of continued strong performance from Essakane and improvements at Rosebel. The Company expects that annual production will exceed the top end of the previous guidance range of 570,000 to 640,000 ounces and is revising guidance upwards to 650,000 to 705,000 ounces. Cost of sales per ounce sold of $1,140 ($1,102 YTD), cash cost1per ounce sold of $1,126 ($1,087 YTD) and all-in sustaining costs1("AISC") per ounce sold of $1,559 ($1,550 YTD). The Company expects AISC1to be below the bottom end of guidance range of $1,650 to $1,690 and revised guidance downwards to between $1,600 and $1,650 per ounce sold. Cash costs1guidance for 2022 is revised downwards to be between $1,100 and $1,130 per ounce sold from the previous guidance range of $1,100 to $1,150 per ounce. Earnings before interest, income taxes, depreciation and amortization ("EBITDA")1of $(41.3) million ($195.0 million YTD) and adjusted EBITDA1of $103.1 million ($350.6 million YTD). Mine-site free cash flow1of $59.2 million ($189.3 million YTD). Net loss and adjusted net loss per share attributable to equity holders1of $(0.23) and $(0.03), respectively; YTD net earnings (loss) and adjusted net earnings (loss) per share attributable to equity holders1of $(0.20) and $0.01, respectively. Cash, cash equivalents and short-term investments of $536.1 million and liquidity1of $636.8 million at September 30, 2022. As of September 30, 2022, the Côté Gold project was approximately 64.2% complete, with detailed engineering fully complete and construction in line with the updated technical report. The Company's share of remaining project spend to bring Côté Gold into production is estimated to be between $1.0 and $1.1 billion from October 1, 2022, net of leases and working capital. On October 18, 2022, the Company announced that it had entered into a definitive agreement with Zijin Mining Group Co. Ltd. to sell its interests in the Rosebel mine for cash consideration of $360 million plus working capital adjustments, as well as the release of approximately $41 million of IAMGOLD obligations related to equipment leases, on closing.

"IAMGOLD has continued to build upon its recent successes, reporting attributable gold production of 184,000 ounces, which represents the highest quarterly production for the Company in over 2.5 years, driven by record production from Essakane," said Maryse Bélanger, Chair and Interim President and CEO of IAMGOLD. "On behalf of the Board and the executive team, we applaud the tireless efforts of the IAMGOLD team for this achievement and their continued commitment to operating safely and responsibly.

"The Côté Gold Project is approximately 64% complete and advancing well following the schedule and cost update released in the summer. With approximately 1,500 workers on site, the project is nearing peak capacity and has seen significant progress in the third quarter towards the target of production in early 2024. The announced sale of Rosebel to Zijin Mining last month represents the first significant step towards addressing the funding commitments to deliver Côté Gold. The remaining funding alternatives are well advanced and we expect to be able to provide further updates in the fourth quarter."

QUARTERLY REVIEW

The following table summarizes certain operating and financial results for the three months ended September 30, 2022 (Q3 2022), June 30, 2022 (Q2 2022) and September 30, 2021 (Q3 2021) and the nine months ended September 30 (or YTD), 2022 and 2021 and certain measures of the Company's financial position as at September 30, 2022, June 30, 2022 and December 31, 2021:

| | | Q3 2022 | | | Q2 2022 | | | Q3 2021 | | | YTD 2022 | | | YTD 2021 | | | Key Operating Statistics | | | | | | | | | | | | | | | | | Gold production - attributable (000s oz) | | 184 | | | 170 | | | 153 | | | 528 | | | 448 | | | Gold sales - attributable (000s oz) | | 187 | | | 170 | | | 150 | | | 538 | | | 438 | | | Average realized gold price1($/oz) | $ | 1,690 | | $ | 1,799 | | $ | 1,787 | | $ | 1,766 | | $ | 1,788 | | | Cost of sales2($/oz sold) - attributable | $ | 1,140 | | $ | 1,130 | | $ | 1,247 | | $ | 1,102 | | $ | 1,157 | | | Cash costs1($/oz sold) - attributable | $ | 1,126 | | $ | 1,119 | | $ | 1,245 | | $ | 1,087 | | $ | 1,155 | | | AISC1($/oz sold) - attributable | $ | 1,559 | | $ | 1,604 | | $ | 1,508 | | $ | 1,550 | | $ | 1,387 | | | Financial Results($ millions, except where noted) | | | | | | | | | | | | | | | | | Revenues | $ | 343.3 | | $ | 334.0 | | $ | 294.1 | | $ | 1,033.9 | | $ | 857.1 | | | Gross profit | $ | 29.7 | | $ | 49.4 | | $ | 6.9 | | $ | 160.1 | | $ | 79.0 | | | EBITDA1 | $ | (41.3 | ) | $ | 101.4 | | $ | 19.6 | | $ | 195.0 | | $ | 220.5 | | | Adjusted EBITDA1 | $ | 103.1 | | $ | 110.0 | | $ | 82.5 | | $ | 350.6 | | $ | 265.7 | | | Net earnings (loss) attr. to equity holders | $ | (108.3 | ) | $ | (9.6 | ) | $ | (75.3 | ) | $ | (94.1 | ) | $ | (60.3 | ) | | Adjusted net earnings (loss) attr. to equity holders1 | $ | (13.7 | ) | $ | (6.3 | ) | $ | (20.1 | ) | $ | 6.1 | | $ | (17.5 | ) | | Net earnings (loss) per share attr. to equity holders | $ | (0.23 | ) | $ | (0.02 | ) | $ | (0.16 | ) | $ | (0.20 | ) | $ | (0.13 | ) | | Adjusted EPS3attr. to equity holders1 | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | 0.01 | | $ | (0.04 | ) | | Net CFO4before changes in working capital1 | $ | 108.8 | | $ | 93.9 | | $ | 79.6 | | $ | 336.6 | | $ | 217.0 | | | Net cash from operating activities | $ | 117.7 | | $ | 81.9 | | $ | 78.5 | | $ | 341.9 | | $ | 217.5 | | | Mine-site free cash flow1 | $ | 59.2 | | $ | 42.8 | | $ | 31.9 | | $ | 189.3 | | $ | 121.6 | | | Capital expenditures1,5- sustaining | $ | 71.1 | | $ | 67.1 | | $ | 26.4 | | $ | 214.8 | | $ | 64.0 | | | Capital expenditures1,5- expansion | $ | 158.9 | | $ | 189.0 | | $ | 113.0 | | $ | 440.0 | | $ | 330.2 | | | | | September 30 | | | June 30 | | | December 31 | | | September 30 | | | December 31 | | | | | 2022 | | | 2022 | | | 2021 | | | 2022 | | | 2021 | | | Financial Position ($ millions) | | | | | | | | | | | | | | | | | Cash, cash equivalents and short-term investments | $ | 536.1 | | $ | 452.9 | | $ | 552.5 | | $ | 536.1 | | $ | 552.5 | | | Long-term debt | $ | 844.6 | | $ | 612.0 | | $ | 464.4 | | $ | 844.6 | | $ | 464.4 | | | Net cash (debt)1 | $ | (409.3 | ) | $ | (225.1 | ) | $ | 16.3 | | $ | (409.3 | ) | $ | 16.3 | | | Available credit facility | $ | 100.7 | | $ | 348.7 | | $ | 498.3 | | $ | 100.7 | | $ | 498.3 | |

1. This is a non-GAAP measure. See "Non-GAAP Financial Measures". 2. Throughout this news release, cost of sales, excluding depreciation, is disclosed in the cost of sales note in the annual consolidated financial statements. 3. EPS: "net earnings (loss) per share " 4. CFO: "cash from operating activities" 5. Starting in 2022, a higher portion of stripping costs are categorized as sustaining capital versus expansion capital, due to the particular areas that are scheduled to be mined and the stage of the life of mine aligning with World Gold Council guidelines. See "Non-GAAP Financial Measures section".

Operating Results

Attributable gold production for the third quarter was 184,000 ounces, up 14,000 ounces or 8% from the prior quarter, primarily due to higher production at Essakane (8,000 ounces) and Westwood (5,000 ounces). Attributable gold sales of 187,000 ounces were slightly higher than production due to the timing of gold sales, with the average realized gold price of $1,690 per ounce reflecting the delivery of 37,500 ounces at $1,500 per ounce under the 2019 Prepay Arrangement.

Cost of sales (excluding depreciation) per ounce sold was $1,140 for the third quarter, up $10 per ounce or 1% from $1,130 per ounce sold in the prior quarter. Production costs per ounce sold were in line with the prior quarter with higher costs being offset by higher production. Included was the positive impact of realized derivative gains of $40 per ounce sold (second quarter 2022 - gains of $64 per ounce sold).

Cash costs per ounce sold in the third quarter were $1,126, up $7 per ounce or 1% from the prior quarter. Cash costs per ounce sold reflected higher cost of sales per ounce, partially offset by the exclusion of the long term NRV adjustment that is included in cost of sales. AISC per ounce sold of $1,559 was down $45 per ounce or 3% from the prior quarter, primarily due higher sales volume and a decrease in general administrative expenses.

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 0.27 (on YTD basis) at the end of the third quarter of 2022, tracking below the global annual target of 0.42, with a decreasing trend. The TRIFR2(total recordable injuries frequency rate) was 0.72 (on YTD basis) at the end of the third quarter of 2022, tracking below the global annual target of 0.73, also with a decreasing trend. Côté Gold has surpassed over 6.9 million hours with no lost time injuries to date. The operations have been increasing focus on situational awareness and preventative activities related to work tasks.

The global COVID-19 pandemic continues to evolve and the management thereof remains a focus for the business. 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. COVID-19 detection and mitigation protocols at our sites are reviewed on an ongoing basis to adapt to the evolving situation.

Financial Results

For the third quarter ended September 30, 2022, net loss and adjusted net loss1per share attributable to equity holderswere ($0.23) and ($0.03), respectively. EBITDA1was ($41.3) million and adjusted EBITDA1was $103.1 million. Adjusted net loss per share attributable to equity holders and adjusted EBITDA include the reversal of an after-tax non-cash impairment charge of $74.0 million ($115.8 million before tax) related to the announced definitive agreement to sell IAMGOLD's interests in the Rosebel mine to align the carrying value of the Rosebel cash generating unit with the sales price.

Mine-site free cash flow for the third quarter 2022 was $59.2 million, up $16.4 million, from the prior quarter, primarily due to higher free cash flow at Essakane ($20.2 million) and Westwood ($9.2 million) due to higher sales volume, partially offset by lower free cash flow at Rosebel ($13.0 million) primarily due to changes in working capital and lower average realized gold price.

Net cash from operating activities for the third quarter 2022 was $117.7 million, an increase of $35.8 million from the prior quarter, primarily due to decrease in income taxes paid ($22.4 million) and a net inflow in non-cash working capital movements ($20.9 million), partially offset by lower net cash earnings ($5.2 million) and lower settlement of derivatives ($1.7 million). Net cash from operating activities for YTD 2022 was $341.9 million, an increase of $124.4 million from the same prior year period, primarily due to proceeds from 2022 Prepay Arrangements ($177.0 million) and an increase of cash inflows from the settlement of derivatives ($21.9 million), partially offset by lower net cash earnings ($48.9 million), an increase in income taxes paid ($21.1 million), and a decrease in proceeds from insurance claim ($9.5 million).

Net cash used in investing activities for the third quarter 2022 was $228.9 million, a decrease of $40.3 million from the prior quarter, primarily due to a decrease in capital expenditures for property, plant and equipment ($26.1 million) mainly related to the Cóté Gold construction and timing of financing costs paid and capitalized as borrowing costs ($9.8 million). Net cash used in investing activities for YTD 2022 was $658.6 million, an increase of $291.2 million from the same prior year period, primarily due to an increase in capital expenditures for property, plant and equipment ($261.1 million) mainly related to the Cóté Gold construction and an increase in financing costs paid and capitalized as borrowing costs ($8.8 million), partially offset by proceeds from the disposal of marketable securities ($25.1 million).

Net cash from financing activities in the third quarter 2022 was $217.4 million, an increase of $87.5 million from the prior quarter, primarily due to proceeds from the Credit Facility drawdowns ($80.0 million), proceeds from the equipment loans ($4.6 million), and decrease in dividends paid to non-controlling interest ($4.8 million) on the declaration of dividends from subsidiaries. Net cash from financing activities for YTD 2022 was $339.8 million, an increase of $381.4 million from the same prior year period, primarily due to proceeds from the Credit Facility drawdowns ($380.0 million).

Liquidity and Capital Resources

As at September 30, 2022, the Company had $535.6 million in cash and cash equivalents, $0.5 million in short-term investments and net debt1of $409.3 million. Approximately $100.7 million was available under the Company's secured revolving credit facility ("Credit Facility") resulting in liquidity1at September 30, 2022, of approximately $637 million.

The Côté Gold UJV required its joint venture partners to fund, in advance, two months of future expenditures. During the third quarter, the Côté UJV amended this requirement to two months from three months. The Company uses dividends and intercompany loans to repatriate funds from its operations and the timing of dividends may impact the timing and amount of required financing, including the Company's drawdowns under the Credit Facility. As at September 30, 2022, $237.8 million of cash and cash equivalents was held by Côté Gold and Essakane. The company has funded its portion of the Côté UJV funding cash generated from its operations and drawdowns on the Credit Facility. Restricted cash in support of environmental closure costs obligations related to Essakane, Doyon division and Côté Gold project totaled $47.2 million.

The following table summarizes the Company's outstanding long-term debt:

| | | September 30 | | | June 30 | | | December 31 | | | ($ millions)1 | | 2022 | | | 2022 | | | 2021 | | | Credit Facility | $ | 380.0 | | $ | 150.0 | | $ | - | | | 5.75% senior notes | | 447.5 | | | 447.4 | | | 445.7 | | | Equipment loans | | 17.1 | | | 14.6 | | | 18.7 | | | | $ | 844.6 | | $ | 612.0 | | $ | 464.4 | |

1. Long-term debt does not include leases of $78.9 million as at September 30, 2022 (June 30, 2022 - $62.0 million; December 31, 2021 - $65.6 million),

Credit Facility

The Company has a $500 million Credit Facility, which was entered into in December 2017 and amended including in February 2021, to primarily extend the maturity date from January 31, 2023, to January 31, 2025, for $490 million of the available credit. During the nine months ended September 30, 2022, the Company drew down $380 million on the Credit Facility. As at September 30, 2022, the Company had letters of credit in the amount of $19.3 million issued under the Credit Facility to guarantee certain environmental indemnities and $100.7 million was available under the Credit Facility.

The Credit Facility is secured by certain of the Company's real assets, guarantees by certain of the Company's subsidiaries and pledges of shares of certain of the Company's subsidiaries. The key terms of the Credit Facility include certain limitations on incremental debt, certain restrictions on distributions and financial covenants including Net Debt to EBITDA and Interest Coverage. The Company entered into an amendment in conjunction with entering into a definitive agreement to sell its interests in the Rosebel mine where the lenders under the credit facility provided consent to release their security over the Rosebel mine at the close of the transaction. The amendment requires that the proceeds from the sale be used for funding the Côté Gold project with certain exceptions.

OUTLOOK

Liquidity Outlook

The remaining attributable spend to complete the construction of the Côté Gold project is estimated to be between $1.0 and $1.1 billion from October 1, 2022, net of leases and working capital (see "Côté Gold Project"). At September 30, 2022, the Company had $536.1 million in cash and cash equivalents (compared to $452.9 million at June 30, 2022) and $100.7 million available for draw down under the Credit Facility. As at September 30, 2022, $237.8 million of cash and cash equivalents was held by Côté Gold and Essakane.

On October 18, 2022, the Company announced that it had entered into a definitive agreement with Zijin Mining Group Co. Ltd. to sell its interests in the Rosebel mine for cash consideration of $360 million plus working capital adjustments on closing. The transaction is expected to close in the first quarter 2023 or earlier.

Based on the information currently available and prevailing market conditions, which impact project expenditures and operating cash flows, the Company will require additional liquidity in 2023, in addition to the proceeds expected to be received from the sale of Rosebel, to complete construction of the Côté Gold project and continues to seek a financing plan by the end of the year. The Company is actively pursuing various alternatives to increase its liquidity and capital resources including additional secured debt and/or royalties and streams, which could be provided by banks, private capital providers and/or institutional investors and specialist streaming or royalty companies, additional unsecured debt including unsecured and/or convertible notes, sales of common shares and the extension of the 2022 Prepay Arrangement. In addition, the Company continues to progress its strategic alternatives with respect to certain of its development and exploration assets in South America and West Africa (excluding Essakane), that may include the disposition of all or an interest in one or more of such assets.

There can be no assurance that the Company will be successful in achieving financing solutions in time and/or on terms acceptable to the Company or that the strategic evaluations discussed above will result in a transaction. In this case and in order to execute its plans for the foreseeable future, including financing alternatives, the Company has developed certain potential alternatives to defer or reduce its capital spending and various other expenditures. These alternatives may impact future operating and financial performance and/or could extend the Côté Gold project construction timeline and significantly increase project costs, and/or dilute the Company's interest in the Côté Gold project. Reductions in capital expenditures at the Côté Gold project requires approval from the Côté UJV oversight committee.

The Company's financial results are highly dependent on the price of gold, oil and foreign exchange rates and future changes in these prices will, therefore, impact performance. The Company will be dependent on the cash flows generated from the Côté Gold project to eventually repay its existing and any additional indebtedness that it may incur to fund the remaining construction costs of the Côté Gold project. 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.comand the "Caution Regarding Forward Looking Statements" and "Risk and Uncertainties" section of the MD&A.