Nouveau Monde Graphite Inc. press release
IAMGOLD Reports Fourth Quarter and Year-End 2021 Results; Generated $285 Million in Operating Cash Flow
TSXV - TSX Venture Exchange · Graphite · 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 audited consolidated financial statements for the year ended December 31, 2021._
FY2021 HIGHLIGHTS:
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Attributable production of 601,000 ounces near the top of updated production guidance
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Achieved updated operating cost guidance with full year cost of sales per ounce sold of $1,270, cash cost1per ounce sold of $1,132 and all-in sustaining cost1per ounce sold of $1,426
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Generated $293 million in operating cash flow before changes in working capital1
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Mine-site free cash flow1of $133.8 million and adjusted EBITDA1of $355.7 million
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Net loss attributable to equity holders of $0.53 per share and adjusted net earnings attributable to equity holders1of $0.06 per share
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Total available liquidity1of $1.1 billion, including $544.9 million in cash and cash equivalents
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Côté Gold project 43.4% complete and detailed engineering at 92.2%
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Initial mineral resource estimate for Gosselin deposit, located adjacent to Côté, of 3.35 million indicated ounces and 1.71 million inferred ounces
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Committed to achieving net negative greenhouse gas ("GHG") emissions by no later than by 2050
Toronto, Ontario--(Newsfile Corp. - February 23, 2022) - IAMGOLD Corporation (TSX: IMG) (NYSE: IAG) ("IAMGOLD" or the "Company") reports consolidated financial and operating results for the fourth quarter and year ended December 31, 2021. Preliminary operating results for the fourth quarter and year ended 2021 were disclosed on January 12, 2022. Key highlights of financial results include:
Corporate Highlights
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On February 14, 2022, the Company announced a collaboration agreement with RCF Management L.L.C ("RCF"). Pursuant to the Agreement, Maryse Bélanger, David Smith and Ian Ashby were appointed to the Board of Directors of IAMGOLD (the "Board") as independent directors, and Ms. Bélanger was appointed Chair. Richard Hall stepped down from the Board. With today's announcement of the Company's year-end results, Ronald Gagel has resigned from the Board, effective immediately. In addition, Mr. Tim Snider has advised that he will not stand for re-election at the Company's 2022 annual shareholders' meeting.
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The Company continues to advance its strategy to prioritize an appropriate allocation of capital and resources between the Company's existing mines and its Côté Gold project to generate the best return on invested capital while advancing Côté Gold to production.
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On January 29, 2022, Donald Charter, Chair of the Board, retired from the Company's Board in accordance with his longstanding plans and the 2020 Board guidelines regarding tenure and Board composition.
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On January 12, 2022 Gordon Stothart, President and Chief Executive Officer ("CEO"), stepped down from his role and resigned from the Board. Daniella Dimitrov, Chief Financial Officer ("CFO"), was appointed President, CFO and Interim CEO.
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In December 2021, the Company appointed Jerzy Orzechowski as Executive Project Director for Côté Gold to oversee management of the development of Côté Gold.
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IAMGOLD launched the IAMALLIN operational excellence program focused on uncovering improvement opportunities in the areas of cash preservation, cost control, capital allocation and process optimization across operations. The program was initiated at Essakane and will be launched at Rosebel and Westwood this year.
| ($ millions, except where noted) | | Q4 2021 | | | Q3 2021 | | | 2021 | | | 2020 | | | Revenues | $ | 294.6 | | $ | 294.1 | | $ | 1,151.7 | | $ | 1,241.7 | | | Gross profit | $ | (76.3 | ) | $ | 6.9 | | $ | 2.7 | | $ | 250.3 | | | EBITDA1 | $ | (193.4 | ) | $ | 19.6 | | $ | 27.1 | | $ | 380.3 | | | Adjusted EBITDA1 | $ | 90.0 | | $ | 82.5 | | $ | 355.7 | | $ | 450.4 | | | Net earnings (loss) attributable to equity holders | $ | (194.1 | ) | $ | (75.3 | ) | $ | (254.4 | ) | $ | 38.5 | | | Adjusted net earnings (loss) attributable to equity holders1 | $ | 44.3 | | $ | (20.1 | ) | $ | 26.8 | | $ | 87.7 | | | Net earnings (loss) per share attributable to equity holders | $ | (0.41 | ) | $ | (0.16 | ) | $ | (0.53 | ) | $ | 0.08 | | | Adjusted net earnings (loss) per share attributable to equity holders1 | $ | 0.09 | | $ | (0.04 | ) | $ | 0.06 | | $ | 0.19 | | | Net cash from operating activities before changes in working capital1 | $ | 76.0 | | $ | 79.6 | | $ | 293.0 | | $ | 368.1 | | | Net cash from operating activities | $ | 67.5 | | $ | 78.5 | | $ | 285.0 | | $ | 347.6 | | | Mine-site free cash flow1 | $ | 12.3 | | $ | 31.9 | | $ | 133.8 | | $ | 223.2 | | | Capital expenditures1- sustaining | $ | 41.4 | | $ | 26.4 | | $ | 105.4 | | $ | 79.1 | | | Capital expenditures1- expansion | $ | 190.1 | | $ | 113.0 | | $ | 520.3 | | $ | 213.6 | | | | | Dec 31 | | | Sep 30 | | | Dec 31 | | | Dec 31 | | | | | 2021 | | | 2021 | | | 2021 | | | 2020 | | | Financial Position ($ millions) | | | | | | | | | | | | | | Cash, cash equivalents and short-term investments | $ | 552.5 | | $ | 748.3 | | $ | 552.5 | | $ | 947.5 | | | Long-term debt | $ | 464.4 | | $ | 466.8 | | $ | 464.4 | | $ | 466.6 | | | Available Credit Facility | $ | 498.3 | | $ | 498.3 | | $ | 498.3 | | $ | 498.3 | |
1. This is a non-GAAP measure. See "Non-GAAP Financial Measures".
Financial Results
Net earnings (loss) per share attributable to equity holders was $(0.41) for the fourth quarter and $(0.53) for the year ended December 31, 2021. Adjusted net earnings (loss) per share attributable to equity holders1was $0.09 for the fourth quarter and $0.06 for the year ended December 31, 2021, after adjusting for the non-cash net realizable value ("NRV") write-down of ore stockpiles and impairment charge on Rosebel, discussed below.
Loss before interest, income taxes, depreciation and amortization1was $193.4 million for the fourth quarter and earnings before interest, income taxes, depreciation and amortization ("EBITDA")1was $27.1 million for the year ended December 31, 2021. Adjusted EBITDA1was $90.0 million for the fourth quarter and $355.7 million for the year ended December 31, 2021.
Mine-site free cash flow1was $12.3 million for the fourth quarter and $133.8 million for the year ended December 31, 2021. Annual mine-site free cash flow was down $89.4 million from the prior year, primarily due to lower operating cash flow at Rosebel ($111.6 million) and Westwood ($68.5 million), and higher capital expenditures at Rosebel ($30.8 million) and Essakane ($21.9 million), partially offset by higher operating cash flow at Essakane ($136.5 million).
Net cash from operating activities was $67.5 million ($76.0 million before changes in working capital) for the fourth quarter and $285.0 million ($293.0 million before changes in working capital) for the year ended December 31, 2021. Annual net cash from operating activities was down $62.6 million from the year prior, primarily due to lower revenue and higher cash operating costs ($98.2 million), higher income taxes paid ($10.5 million), partially offset by higher cash receipts from the settlement of derivatives ($31.7 million) and proceeds from insurance claims ($10.2 million).
The updated mineral reserves and mineral resources estimates and life-of-mine plan for Rosebel were considered by the Company to be an indicator of impairment. A non-cash impairment charge of $205.1 million (post-tax impairment charge of $132.9 million) was recognized in the consolidated statements of earnings (loss) in the fourth quarter.
Operating Performance
| | | Q4 2021 | | | Q3 2021 | | | 2021 | | | 2020 | | | Gold production - attributable (000s oz) | | 153 | | | 153 | | | 601 | | | 653 | | | Gold sales - attributable (000s oz) | | 152 | | | 150 | | | 590 | | | 646 | | | Average realized gold price2($/oz) | $ | 1,794 | | $ | 1,787 | | $ | 1,790 | | $ | 1,778 | | | Cost of sales1($/oz sold) - attributable | $ | 1,597 | | $ | 1,247 | | $ | 1,270 | | $ | 1,057 | | | Cash costs2($/oz sold) - attributable | $ | 1,184 | | $ | 1,208 | | $ | 1,132 | | $ | 988 | | | AISC2($/oz sold) - attributable | $ | 1,537 | | $ | 1,508 | | $ | 1,426 | | $ | 1,232 | |
1. Throughout this news release, cost of sales, excluding depreciation, is disclosed in the cost of sales note in the annual consolidated financial statements. 2. This is a non-GAAP measure. See "Non-GAAP Financial Measures".
Attributable gold production was 153,000 ounces for the fourth quarter and 601,000 ounces for 2021, near the top of the updated production guidance.
Cost of sales (excluding depreciation) per ounce sold was $1,597 for the fourth quarter and $1,270 per ounce sold for the year ended December 31, 2021, up 20% from $1,057 per ounce sold in 2020. Included was a non-cash NRV write-down of ore stockpile and finished goods inventories of $147 per ounce sold (2020 - $nil) comprised of $49 per ounce included in cash costs and AISC per ounce sold as short-term and $98 per ounce excluded from cash cost and AISC per ounce sold as long-term, and the positive impact of realized derivative gains of $19 per ounce sold (2020 - loss of $27 per ounce sold). Excluding the NRV write-down, cost of sales per ounce sold was higher primarily due to lower production and sales volumes.
Cash cost1per ounce sold was $1,184 for the fourth quarter and $1,132 per ounce sold for the year ended December 31, 2021, in line with the updated guidance. Cash costs were up 15%, from $988 per ounce sold in 2020, due to higher operating costs, which included a non-cash NRV write-down of short-term ore stockpile and finished goods inventories of $50 per ounce sold (2020 - $nil), and lower production and sales volumes.
AISC per ounce sold was $1,537 for the fourth quarter and $1,426 per ounce sold for the year ended December 31, 2021, near the top end of the updated guidance. AISC were up 16%, from $1,232 per ounce sold in 2020, primarily due to lower production and sales volumes as well as higher sustaining capital expenditures. Included was a non-cash NRV write-down of short-term ore stockpile and finished goods inventories of $50 per ounce sold (2020 - $nil).
The DARTFR2(days away, restricted, transferred duty frequency rate) was 0.37 and the TRIFR2(total recordable injuries frequency rate) was 0.76 for 2021, below the global annual targets of DARTFR 0.51 and TRIFR 0.85, respectively. Côté Gold has surpassed over 3.4 million hours with no lost time injuries to date.
Exploration
| ($ millions) | | Q4 2021 | | | Q3 2021 | | | 2021 | | | 2020 | | | Exploration projects - greenfield | $ | 5.6 | | $ | 7.4 | | $ | 27.8 | | $ | 19.9 | | | Exploration projects - brownfield1 | | 5.5 | | | 4.8 | | | 19.6 | | | 16.4 | | | | $ | 11.1 | | $ | 12.2 | | $ | 47.4 | | $ | 36.3 | |
1. Exploration projects - brownfield for the fourth quarter 2021 included near-mine exploration and resource development of $3.0 million (third quarter 2021 - $2.5 million, fourth quarter 2020 - $2.7 million, 2021 - $10.7 million, 2020 - $8.4 million).
For the fourth quarter, expenditures for exploration and project studies totaled $11.1 million, of which $8.1 million was expensed and $3.0 million was capitalized. During the year, drilling activities on active projects and mine sites totaled approximately 195,000 metres.
Liquidity and Capital Resources
As at December 31, 2021, the Company had $544.9 million in cash and cash equivalents, $7.6 million in short-term investments and net cash1of $16.3 million. Approximately $498 million was available under the Company's secured revolving credit facility (the "Credit Facility") resulting in available liquidity1at December 31, 2021 of $1.1 billion.
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 150,000 gold ounces over the course of 2024. The 2022 Prepay Arrangements have the effect of rolling the 150,000 ounce gold sale prepay arrangement entered into in 2019 (the "2019 Prepay Arrangement"), from 2022 to 2024 after the completion of the construction of Côté Gold. In January 2022, the first 12,500 ounces were delivered into the 2019 Prepay Arrangement and the Company received $2.5 million in cash in relation to the collar on the 2019 Prepay Arrangement and $19.7 million in cash pursuant to the 2022 Prepay Arrangements.
The Company is in the process of finalizing lease agreements for mobile equipment with a value of approximately $125 million that will be purchased on behalf of the unincorporated Côté Gold joint venture. Sumitomo Metal Mining Co. ("SMM") will guarantee some of the leases for their 30% ownership. The remaining Côté Gold project development costs are net of these leases, as previously disclosed.
In addition to the gold sale prepayment arrangements noted above, and in order to mitigate volatility during the construction of Côté Gold between 2021 and mid-2023, the Company entered into certain derivative contracts in respect of certain of its future gold sales, exchange rates and certain other commodities exposure. At December 31, 2021, approximately 26% and 10% of the Company's 2022 and 2023 estimated attributable production, respectively, was hedged at average prices between $1,300 per ounce and $3,000 per ounce. The Company has also entered into various oil and currency hedging transactions. Refer to the MD&A "Market Risk - Summary of Hedge Portfolio" for information relating to the Company's outstanding derivative contracts.
The net cash generated by operations is highly dependent on the gold price as well as other factors, including the USDCAD exchange rate. The Company is scheduled to complete the remaining construction of Côté Gold during 2022 and 2023 resulting in significant capital expenditures that, together with sustaining and expansion capital expenditures at its existing mines, are expected to exceed total current cash and cash generated from operations. As a result, the Company expects to make its first draw down on its credit facility in the first half of 2022 and expects to draw down most this facility over the course of 2022 and 2023. Assuming the continuation of prevailing commodity prices and exchange rates, operations performing in accordance with the 2022 guidance and 2023 plan, and no significant change in the Côté Gold costs or the time of achieving commercial production (see also "Côté Gold Project" section below), the Company believes it should have adequate liquidity, in addition to its existing credit facility and the additional equipment leases, to implement its near-term operational plans and complete the development of Côté Gold.
To ensure adequate liquidity and flexibility, the Company regularly reviews expenditures and assesses opportunities taking into consideration current liquidity, the capital markets, foreign exchange rates, ongoing operational and financial performance and progress in the development of projects. As a result, the Company may take additional measures to increase its liquidity and capital resources including additional financing, strategically disposing of assets or pursuing joint-venture partnerships.
OPERATIONS AND PROJECTS
Essakane District, Burkina Faso - Essakane Mine (IAMGOLD interest - 90%)1
| | | Q4 2021 | | | Q3 2021 | | | 2021 | | | 2020 | | | 2019 | | | Key Operating Statistics | | | | | | | | | | | | | | | | | Ore mined (000s t) | | 4,113 | | | 3,908 | | | 16,015 | | | 15,762 | | | 17,702 | | | Waste mined (000s t) | | 10,903 | | | 11,335 | | | 44,405 | | | 39,479 | | | 38,605 | | | Material mined (000s t) - total | | 15,016 | | | 15,243 | | | 60,420 | | | 55,241 | | | 56,307 | | | Strip ratio2 | | 2.7 | | | 2.9 | | | 2.8 | | | 2.5 | | | 2.2 | | | Ore milled (000s t) | | 3,292 | | | 3,298 | | | 12,948 | | | 12,439 | | | 13,373 | | | Head grade (g/t) | | 1.13 | | | 1.33 | | | 1.31 | | | 1.18 | | | 1.04 | | | Recovery (%) | | 91 | | | 83 | | | 84 | | | 86 | | | 91 | | | Gold production (000s oz) - 100% | | 108 | | | 118 | | | 457 | | | 404 | | | 409 | | | Gold production (000s oz) - attributable 90% | | 98 | | | 106 | | | 412 | | | 364 | | | 368 | | | Gold sales (000s oz) - 100% | | 102 | | | 122 | | | 453 | | | 399 | | | 413 | | | Average realized gold price3($/oz) | $ | 1,794 | | $ | 1,790 | | $ | 1,794 | | $ | 1,791 | | $ | 1,400 | | | Financial Results ($ millions)1 | | | | | | | | | | | | | | | | | Revenue5 | $ | 184.2 | | $ | 217.4 | | $ | 813.9 | | $ | 715.0 | | $ | 579.2 | | | Operating costs | | (80.3 | ) | | (95.5 | ) | | (364.8 | ) | | (335.4 | ) | | (330.6 | ) | | Royalties | | (9.2 | ) | | (10.9 | ) | | (40.7 | ) | | (36.8 | ) | | (27.1 | ) | | Cash costs3 | $ | (89.5 | ) | $ | (106.4 | ) | $ | (405.5 | ) | $ | (372.2 | ) | $ | (357.7 | ) | | Other mine costs4 | | (47.1 | ) | | (5.9 | ) | | (66.6 | ) | | (35.8 | ) | | (7.7 | ) | | Cost of sales5 | $ | (136.6 | ) | $ | (112.3 | ) | $ | (472.1 | ) | $ | (408.0 | ) | $ | (365.4 | ) | | Sustaining capital expenditures3,6 | | (22.9 | ) | | (11.6 | ) | | (51.2 | ) | | (37.3 | ) | | (39.0 | ) | | Other costs and adjustments7 | | 41.6 | | | (1.5 | ) | | 36.7 | | | 7.6 | | | (20.2 | ) | | All-in sustaining costs3 | $ | (117.9 | ) | $ | (125.4 | ) | $ | (486.6 | ) | $ | (437.7 | ) | $ | (424.6 | ) | | Expansion capital expenditures3,8 | $ | (24.1 | ) | $ | (27.2 | ) | $ | (84.4 | ) | $ | (76.4 | ) | $ | (62.0 | ) | | Performance Measures9 | | | | | | | | | | | | | | | | | Cost of sales excluding depreciation ($/oz sold) | $ | 1,333 | | $ | 925 | | $ | 1,042 | | $ | 1,023 | | $ | 884 | | | Cash costs3($/oz sold) | $ | 873 | | $ | 878 | | $ | 895 | | $ | 934 | | $ | 866 | | | All-in sustaining costs3($/oz sold) | $ | 1,150 | | $ | 1,033 | | $ | 1,074 | | $ | 1,098 | | $ | 1,028 | |
1. 100% basis, unless otherwise stated. 2. Strip ratio is calculated as waste mined divided by ore mined. 3. This is a non-GAAP financial measure. See "Non-GAAP Financial Measures". 4. Other mine costs include the add-back of non-cash long-term portion of stockpile inventory NRV write-down for the fourth quarter of $42.9 million (third quarter 2021 - $nil; 2020 - $nil and 2019 - $nil) in addition to certain taxes and permits related costs, certain provisions, prior period operating costs and the exclusion of by-product credits. 5. As per note 36 of the annual consolidated financial statements for revenue and cost of sales. Cost of sales is net of depreciation expense. 6. Includes sustaining capitalized stripping for the fourth quarter 2021 of $6.7 million (third quarter 2021 - $1.0 million) and 2021 of $7.7 million (2020 - $nil and 2019 - $3.6 million). 7. Other costs and adjustments include adjustments to exclude the non-cash long-term portion of stockpile inventory NRV write-down for the fourth quarter and 2021 of $42.9 million (third quarter 2021 - $nil; 2020 - $nil and 2019 - $nil), in addition to sustaining lease principal payments, environmental rehabilitation accretion and depletion, and prior period operating costs, partially offset by by-product credits. 8. Includes expansion capitalized stripping for the fourth quarter 2021 of $21.1 million (third quarter 2021 - $21.8 million) and 2021 of $65.0 million (2020 - $57.8 million and 2019 - $30.4 million). 9. Cost of sales, cash costs and AISC per ounce sold may not be calculated based on amounts presented in this table due to rounding.
Essakane continued to deliver strong results and achieved attributable gold production of 98,000 ounces in the fourth quarter and a record 412,000 ounces for the year. Production was lower in the quarter due to lower grades in the mining schedule, partially offset by higher recovery.
Mining activity of 15.0 million tonnes for the fourth quarter was in line with the prior quarter, while the strip ratio of 2.7 was lower by 7%. The mine began sequencing out of the enriched ore zones at the bottom of the main pit resulting in lower grade in the fourth quarter. Mining activity of 60.4 million tonnes for the year was higher than in 2020 as a result of operational efficiencies and reduction of cycle times achieved from the modifications to the hauling fleet. The strip ratio of 2.8 in 2021 was higher by 12% as a result of continued focus on stripping campaigns in the upper benches during the year.