IAMGOLD Corporation (IAG) Earnings

Management highlights

Health and safety: Total recordable injury rate was 0.44, an improvement from prior year. Cote achieved triple zero in first quarter and Westwood had first full quarter at zero tripper. Operation: Produced 183,600 ounces in first quarter. Cote was impacted by conveyor downtime but belt to be replaced in May. Westwood and ESACAN had strong starts. Financial results: Revenues from operations total $1 billion, adjusted EBITDA $666 million in first quarter, adjusted earnings per share $0.67, operating cash flow $629.5 million before working capital changes, capital expenditure $101.6 million, $260 million for share buyback, $100 million repaid on credit facility, cash position increased by $128.3 million.

Guidance

First quarter production 183,600 ounces, well positioned to achieve full - year guidance of 720,000 to 820,000 ounces. Over next 12 - 18 months, expect updated technical reports across assets. At Cote, year - end technical report expected to contemplate larger - scale operations with updated mineral resource estimate this quarter. At Nelligan, advancing towards preliminary economic assessment next year. Westwood and ESACAN have potential for mine life extension and production growth.

Segment performance

IAM Gold produced 183,600 attributable ounces of gold in the first quarter. Revenue exceeded $1 billion and mine-side free cash flow was $525 million. Cash costs, including royalties, were $1,301 per ounce for the quarter for Cote Gold. Westwood produced 36,300 ounces with cash costs of $1,217 per ounce. ESACAN produced 111,900 ounces with cash costs excluding royalties of $1,083 per ounce. Revenue from operations totaled $1 billion from sales of 211,500 ounces. Adjusted EBITDA was $666 million in the first quarter, and trailing 12 - month EBITDA was approximately $2 billion.

Risks & headwinds

Energy market volatility due to Middle East conflicts affecting oil prices, which impacts cash costs of some mines. For example, ESACAN and Cote are affected by oil price changes. Fuel supply risk, such as potential supply disruptions and increased risk to price and supply in ESACAN.

Analyst Q&A

• Q: Hi, good morning. Thanks for taking my questions. My first question is on SKN. Are you seeing any risks in terms of potential supply disruptions for diesel or fuel oil over there? How much inventory do you currently have on site? You also talked about the direct cost impact from higher oil prices, but how should we think about the indirect inflationary pressures? Or maybe Martin, you take that one, please.

  A: Morning, Sadiq. We are de - risking the fuel supply at ISACAN. We have supply at site that's five to six weeks, and we try to maintain that at a maximum capacity. But then what we have also done is we continue to secure additional fuel out the supply chain. So we have secured that fuel. So for the next two to three months, SACAN has already secured sufficient fuel. The impact, as we stated, for the direct impact on the actual cost per fuel that is linked to the market price is about $20 per ounce for every $10 per barrel. There is other costs at Issacan as well. There's taxes on fuel and those impacts, but we have not seen other inflationary pressures at Issacan or the other mines at this point, and it's hard to estimate those. If you look at our energy costs as a company, it's about 20% of our operating costs and our consumables is about 15 to 16%. So that's kind of like the level of our cost structure that could be impacted by inflationary pressures. But it's hard to, I think for anyone to predict at this point, what exactly that would look like.

• Q: Hi, good morning guys. Thanks for taking my question. I just wanted to ask a little bit about Westwood. So this quarter, a little bit lower production from the Grand Duke deposit or from the open pit. I'm not sure if it's still Grand Duke, but how long does that, how long do you expect to have that? Or I think it said into Q into 2027, but I was just trying to figure out, you know, when it ends and sort of the ramp up in 2026 in terms of the tonnage over the course of the year.

  A: Good morning, Anita. This is Bruno. Good question. We are seeing from Grand Duc to be extended even beyond 2027. We have also options, Phase 5, that could go even beyond to 2029. That's what we're doing right now. We're currently evaluating those options. So Grand Duc has been like a great support for Westwood. And the moment that it will be fading off, it would be also a great moment for the eastern zone that I'm referring to, the thicker part of the underground at Westwood to replace that material. If I may add, Anita, so what I really like about the work that's been done and the drilling that took place in the last two years, our effort has always been, you know, to protect the production profile on an upside, the basis, the potential phase five of the Grand Duke, you know, should we be able to maintain this up to 2029 - 30, Followed after that, you know, by an increase of the underground in the East Room. So this is the focus right now. So you don't see any gap. And if anything, you know, continued to increase profile. It's a bit of about the same thinking. And I appreciate Burkina Faso's different situations we monitor and so forth. But the best, of course, would be to completely offset the gap and fit the Nelligan camp, you know, also being capable to maintain the production profile. So that's really the focus at this stage, understanding that we would be continuing to monitor the situation in West Africa.

• Q: Oh, great. Good morning, everybody. Thank you for taking my questions. Maybe I'll do the financial one first. Um, Martin over to you to maybe talk about, um, the 400 million dividends, um, after tax that you're getting in Q2, um, from ESECAN. Should I do think that all of that now could be going to share buyback, um, in like Q2 or Q3? How should I be thinking the payment of this 400 million over for the share buyback from a quarterly perspective?

  A: Good morning, Tania. So we have about 200 million left on the shelter account for last year's dividend. We expect that cash to be repatriated by June or July of this year. And then the reason why there's a bit of a slowdown is because of the tax payments we have to make in Q2, as well as the government is getting the 100 million portion of the dividend. So the cash that we bring in, we expect for the remainder of this quarter to spend approximately 40 to 50 million a month. We already did 40 million in April. So kind of like getting to that 400 million for the year. Likely on the cashier buyback, they will continue to evaluate. But that 400 million that we then declare in June is then a new shareholder account of 400 million. And then as we then repatriate cash from its account, we would then continue to use that to potentially fund share buybacks for the second half of the year into next year. Gold price dependence is the exact sequence of that, but we have good vision on the next quarter, second half to the middle of the year.

• Q: Hi, Renaud and Tim, and thanks for taking my question. Maybe I could maybe ask a question on the underground. We've now seen two quarters of mining rates above that 1.1 thousand tons per day and grades over that 9.8 grams per ton mine. So could you maybe help me understand how to think about the next few quarters in terms of mining productivity in the grid over the coming quarters?

  A: Renaud? Yes. The hoisting, the mucking is going very well. Our targets are close to 1,000 tons per day. And in fact, we're exceeding those metrics every day now. It's done through optimization and better engineering, better preparation. Hoisting, you know, we have a 4,000 tonne per week capacity at Westwood, so we have plenty of capacity at the hoist, so it's not constrained. Therefore, that's the reason why it gives us great hope that whatever improvement that will be done at Westwood will become an immediate catalyst into the coal production of the month. But overall, what we plan is We plan what we do and we do what we've done. So trying to make sure that we have stabilized the operation and we improve in an increment manner the Westwood operation on all metrics. The meter of advance per day, meter per minute shift. The drilling is going very well also and we have a new SIMBA drill coming in. So the drilling performance is also improving very well. The ability of our mining crews to rearm new zones are improving also with the algorithm that we have developed over time. So overall, it's going well. And I appreciate that you've seen, you know, like quite a significant increase. I mean, again, it's a little bit of the questions on the cost side. Depends a bit where you mine as well. What we want is reliable and safe operation. Are we going to see a continued increase? The focus is really to deliver, you know, sustainable and safe operations. So we're very comfortable, really like the last quarter. But I think like being in the zone of the 1,000 to the 1,200 is a good zone. And we're going to always prioritize the safe operations, Mohamed. But I appreciate your questions. Thanks for that.

• Q: Yeah, thank you very much. I apologize. I just want to clarify a couple of things. I'm having trouble hearing some of the data points. Just going back to some of the details on Cote, you know, this comment about the plants operating above main plate in the second half of the year and some of the tonnage numbers that was provided, you know, the numbers look to imply about maybe 10% to 15% above main plate in the second half. I just want to clarify, does that sound correct? And then is it reasonable to assume that those throughput levels can be sustained beyond 2026, even before the expansion takes hold?

  A: Yeah, when we say that we can produce above main plate, we have more than many days above 36,000 tons per day, even eating 42,000 tons per day, many times. With the addition of the second cone crusher and also allowing the geometry of the ore protecting now the HPGR, which is going to be running very efficiently, we expect to remain into that zone between the 36 and 42 in average. So that's very promising for us. With the shutdowns that we have in August and other shutdowns that we have in certain areas, we are still evaluating and planning an overall average throughput of 36. But overall, like when you have a very well run rate, it goes well beyond 36. What we've experienced, Josh, with the second column is, you know, for only a few weeks, unfortunately, before we started to have the issues on the conveyor. So the objective has always been to stabilize at the 36. So what we've seen is effectively, of course, if you want to reach 36 when you upgrade, you need to be above. But you also heard Bruno say, earlier talking about slightly better grade as well. So it's not just a matter of throughput. It's a matter that we should access as well better grade in the second half. But the priority at this stage is to demonstrate that minimum 36 average all time in the dry, in the wet. As you crush finer, you will unlock more potential in the wet as well. So for the first stage first is as soon as we change a tire, we change the bell, we park the aggregate plan. The focus in June is to demonstrate that we actually can operate at an end point. Then will come the optimizations on the step - by - step basis. But so far, so good for what we've seen with the crusher.