IAMGOLD Corporation Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Safety and Sustainability: Safety remains a top priority with total recordable injury frequency rate trending below prior year. Released 2024 sustainability report, marking 18th year of responsible mining disclosure.
• Côté Gold Progress: Successful ramp-up, achieved nameplate throughput ahead of plan. Q2 production 96,000 ounces. Working on updated Côté life of mine to be announced in second half 2026, targeting over 20 million ounces of measured and indicated resources from Côté and Gosselin zones.
• Production Guidance: On track to achieve 735,000 to 820,000 ounces of gold production, but revised cost guidance to $1,830 to $1,930 per ounce for all-in sustaining costs due to higher royalties, foreign currency impact, and Côté ramp-up costs.
• Debt Repayment: Concluded gold prepayment arrangements with 75,000 ounces delivered, prioritizing repayment of high-cost second lien term loan, having repaid $40 million post-quarter end.
• Essakane Ownership: Ownership reduced to 85% from 90%, affecting attributable production guidance, but new dividend structure improves cash flow repatriation.

Segment Performance

• Côté Gold: In Q2, produced 96,000 ounces on a 100% basis. Mining activity totaled 11.8 million tonnes with 3.2 million ore tonnes mined (strip ratio 2.7). Mill throughput was 2.9 million tonnes with head grades of 1.1 grams per tonne and recoveries averaging 93%. Cash cost guidance revised to $1,100 to $1,200 per ounce sold, and all-in sustaining cost to $1,600 to $1,700 per ounce sold. Revenue contribution from Côté is significant due to its production and ramp-up progress.
• Québec (Westwood): Produced 29,000 ounces in Q2. Underground mining totaled 98,000 tonnes. Cash cost guidance is $1,275 to $1,375 per ounce sold, and all-in sustaining cost between $1,800 to $1,900 per ounce sold. Revenue contribution from Westwood is part of the Québec operations.
• Essakane: Produced 77,000 ounces on a 90% basis. Mining activity was 10.7 million tonnes with 2.2 million ore tonnes mined (strip ratio 4:1). Cash cost was $1,855 per ounce and all-in sustaining cost $2,224 per ounce. Guidance for attributable production revised to the lower end of 360,000 to 400,000 ounces, with cash cost guidance $1,600 to $1,700 per ounce sold and all-in sustaining cost $1,850 to $1,950 per ounce sold. Revenue contribution from Essakane is affected by ownership change and cost revisions.
• Nelligan and Monster Lake: Ongoing drilling with updated resources at Nelligan, aiming for over 10 million ounces of gold resources.

Guidance

• Production: On track to achieve 735,000 to 820,000 ounces of gold production for the year, with stronger second half expected due to Côté stabilization and grade improvements at Essakane and Westwood.
• Costs: Revised cash cost guidance to $1,375 to $1,475 per ounce sold, and all-in sustaining cost to $1,830 to $1,930 per ounce due to higher royalties (e.g., Essakane royalty increase above $3,000/oz gold), foreign currency impact, and Côté ramp-up costs.
• Côté Outlook: Anticipates processing costs to fall with installation of additional secondary crusher in Q4, and mining costs to improve with transition to bulk mining and direct feed.
• Essakane Outlook: Attributable production guidance revised to lower end of 360,000 to 400,000 ounces due to ownership change, with costs impacted by higher royalties and Euro strength.

Risks

• Higher Royalties: Essakane royalty increased when gold prices above $3,000/oz, impacting costs. Côté also faces higher royalties with rising gold prices.
• Foreign Currency Impact: Strength of Euro affected costs in Essakane's country.
• Côté Ramp-up Challenges: Temporary higher costs at Côté due to ramp-up and stabilization activities, including rehandling adding costs but uplifting mill grade.
• Essakane Grade Transition: Lower grades in early stages of Phase 7 at Essakane, with grade improvement expected later but affecting short-term costs.

Question and Answer

Q: Anita Soni with CIBC World Markets asks about Côté cost increase and strip ratio.

A: Renaud Adams and Bruno Lemelin discuss strip ratio expected to be slightly below H1, with rehandling due to reduce as transition to direct feed occurs, and secondary crusher installation to improve costs.

Q: Matthew Murphy with BMO asks about HPGR performance at Côté.

A: Bruno Lemelin states HPGR performance is good despite tire wear, with plan to replace tires for longer longevity, and second cone crusher to further stabilize crushing.

Q: Steven Green with TD Securities asks about Essakane new agreement.

A: Marthinus Theunissen explains new dividend structure benefits both IAMGOLD and Burkina Faso government, with intercompany loan structure for efficient cash repatriation.

Q: Tanya Jakusconek with Scotia Bank asks about Essakane mine life and Côté cost stabilization.

A: Renaud Adams mentions Essakane mine life looks strong with potential 5-year permit extension, and Côté costs expected to stabilize by mid-2026 as rehandling and crusher installation reduce costs.

Q: Mohamed Sidibe with National Bank Financial asks about Essakane second half grades and taxes.

A: Bruno Lemelin anticipates higher grades in second half as mining moves deeper into Phase 7, and Maarten Theunissen discusses tax payment cadence with withholding taxes paid in Q3 and remaining equal in Q4