All amounts are expressed in U.S. dollars, unless otherwise
indicated.
TSX: IMG NYSE: IAG
TORONTO, Nov. 13, 2012 /PRNewswire/ - IAMGOLD
Corporation ("IAMGOLD" or the "Company") today reported its
unaudited consolidated financial and operating results for the
third quarter ended September 30,
2012. Revenues were $386.8
million compared to $431.9
million in the third quarter 2011. Net earnings from
continuing operations (attributable to equity holders) increased by
56% to $78.0 million
($0.21 per share) from $50.0 million ($0.13 per share) in the third quarter 2011.
Excluding items not indicative of underlying operating performance,
adjusted net earnings1 (attributable to equity holders)
were $60.2 million ($0.16 per share) compared to $112.4 million ($0.30 per share) in the third quarter 2011. This
was due mainly to lower gold sales, including 12,000 ounces
produced late in the quarter and sold in October, and higher
exploration expenses. Operating cash flow1 before
changes in working capital was $114.3 million ($0.30 per share) compared to $174.1 million ($0.46 per share) for the third quarter 2011.
President and CEO Steve Letwin
commented, "We are performing well at the mines we own and operate.
Year-to-date production and cash costs at these operations, which
account for 85% of our production, are on target. In contrast, the
performance of the mines not operated by us was disappointing and
places us at the lower end of our production guidance. This
clearly demonstrates the benefits of re-positioning our company to
better leverage our expertise as operators.
"In many ways," continued Mr. Letwin, "we're ahead of the curve.
We have a much more geo-politically balanced asset profile than we
did a year ago and a solid pipeline of exploration and development
projects. We are prudent about managing our capital spending, and
with some of our expansion projects getting off to a later start
this year, we've reduced our capital expenditure guidance for 2012.
We have the capital available to fund a robust portfolio of
projects with attractive rates of return. With gold production
commencing at our Westwood project
in the first quarter of next year, a pre-feasibility study at Côté
Gold underway and expansion projects in West Africa, South
America and Canada, we
expect to nearly double production within five years."
THIRD QUARTER 2012 HIGHLIGHTS
Financial Performance and Position
- Revenues were $386.8 million,
down 10%, or $45.1 million from the
same prior year period, mainly the result of lower gold sales
volume.
- Net earnings from continuing operations attributable to equity
holders increased 56% to $78.0
million ($0.21 per share) from
$50.0 million ($0.13 per share) in the same period in 2011.
- Adjusting for items not indicative of underlying operating
performance, adjusted net earnings were $60.2 million ($0.16 per share) compared to $112.4 million ($0.30 per share) in the same prior year
period.
- Operating cash flow was $97.6
million ($0.26 per share),
compared to $174.5 million
($0.46 per share) in the same prior
year period. Adjusting for the changes in non-cash working capital
items, such as receivables, inventories and long-term stockpiles,
operating cash flow before changes in working capital was
$114.3 million ($0.30 per share).
- The Company's cash, cash equivalents and gold bullion (at
market value) position was $1,136.1
million at September 30, 2012,
compared to $614.9 million at
June 30, 2012.
- On September 21, 2012, the
Company completed the issuance of $650
million of senior unsecured notes bearing interest at 6.75%
due 2020. The Company intends to use the proceeds for general
corporate purposes, including the funding of capital expenditures
and exploration.
Production, Cash Costs and Margin
Gold Operations
- Attributable gold production of 205,000 ounces in the third
quarter 2012 compared to 222,000 ounces in the third quarter 2011.
The decrease was mainly due to lower production at Essakane,
resulting primarily from the processing of lower-grade ore, and at
Sadiola due to lower throughput and lower grades.
- Total cash costs2 were $710 per ounce, up from $674 per ounce in the third quarter 2011. Cash
costs increased mainly due to the impact of lower grades on gold
production. Cash costs at IAMGOLD-operated sites were $644 per ounce, up from $602 per ounce in the third quarter 2011.
- The gold margin2 was $960 per ounce in the third quarter 2012, down
from $1,001 per ounce in the same
quarter 2011, reflecting flat gold prices year-over-year and an
increase in cash costs.
Niobec Mine
- Niobium production was 1.2 million kilograms for the third
quarter 2012, virtually flat with the same period in 2011.
- The operating margin2 of $16 per kilogram increased from $14 per kilogram in the third quarter 2011,
mainly the result of higher niobium prices.
Operating Highlights
- IAMGOLD is in the process of disposing of its interest in the
Quimsacocha project in Ecuador to
INV Metals Inc. ("INV Metals") through the disposal of all shares
of its wholly-owned subsidiary IAMGOLD Ecuador S.A., in exchange
for 221.2 million common shares of INV Metals. As a
requirement of the transaction, INV Metals raised C$20.0 million in equity financing. The Company
participated in the financing in the amount of C$1.0 million and will hold approximately 47% of
the issued and outstanding INV Metals shares immediately after the
closing of the transaction.
- The Westwood project remains
on track for start-up in the first quarter 2013. In October, the
union membership ratified a six year contract effective from
December 1, 2011.
- At the Essakane mine in Burkina
Faso, the construction of the expanded plant to double hard
rock processing capacity commenced in early July. This followed a
favourable outcome to negotiations with the Government of
Burkina Faso on fiscal terms
related to mine expansions, including a reduction in the import
duty on expansion related-materials from 7.5% to 2.5%. Completion
of the construction project is expected by the end of 2013. Also at
Essakane, a contract was signed with employees allowing for a 5%
increase over each of the next three years.
- At the Rosebel mine in Suriname, the completed installation of
a temporary pre-crusher, a larger pebble crusher, and an expanded
gravity recovery circuit are having a positive impact on
recoveries. A third ball mill is under construction and will be
completed early in the first quarter 2013. In addition, a
feasibility study expected to be completed by the first quarter
2013 will provide greater design detail around various aspects
of the expansion project and is intended to further increase the
capacity to treat harder ore at the mill.
- In December 2011, IAMGOLD
announced an initial agreement with the Surinamese government on
the terms and conditions related to further expansion at Rosebel.
The Company is making good progress towards reaching a definitive
agreement, which will include attractively priced power to support
incremental capacity. The next step will be to complete a concept
study to further define the expansion potential of bringing in the
satellite resources.
- Production at IAMGOLD's joint venture operations with AngloGold
Ashanti in Mali was challenging
due to adverse weather conditions, low grade ore and processing
issues in the Sadiola plant resulting in low throughput.
- The Sadiola sulphide expansion project awaits a final decision
from the AngloGold Ashanti Board. The agreement on power and fiscal
terms was signed by the Malian ministers in May. Negotiations with
the Power Authority around the details of the agreement are
essentially complete pending the resolution of certain
administrative issues, which are expected to be completed shortly.
Permits for power line construction enabling connection to the
national grid are expected to reduce power costs by approximately
50%. Under the current project schedule, pre-stripping of the
Sadiola main pit to access the underlying sulphides will begin in
2013. Project completion and start-up of the new process
plant is scheduled for the end of 2014.
- The Company continues to be optimistic about the potential of
Niobec, and is making progress on the feasibility study, permitting
and the establishment of the financing framework for the expansion.
The completion of the feasibility study is expected by the third
quarter 2013 and the permitting process should be finalized by
2014. Additional funding is not required until the commencement of
construction.
- IAMGOLD continues to evaluate options for exploiting the large
Rare Earth Elements ("REE") resource near its Niobec mine
operation. Almost 8,000 metres of diamond drilling was carried out
during the third quarter to complete a resource delineation program
intended to upgrade the mineral resources. A planned 1,300 metre
exploration drift extending from the Niobec mine to the REE deposit
was also initiated. The drift is expected to be completed in early
2013 and will allow for the collection of a bulk sample to support
planned metallurgical studies and provide access for future
underground drilling programs.
Mineral Resource Update at Côté Gold
- On October 4, 2012, IAMGOLD
announced a mineral resource update for the Company's recently
acquired Côté Gold project in northern Ontario. The updated estimate incorporates
results from an additional 79 holes (44,856 metres) since the
February 24, 2012 estimate announced
by Trelawney Mining and Exploration Inc. An NI 43-101 technical
report was filed October 24,
2012.
- The results showed a 274% increase in indicated resources and a
substantial increase in total ounces compared to the last release
(pre-acquisition) by Trelawney Mining in February 2012. The indicated resource increased
to 131 million tonnes averaging 0.84 grams of gold per tonne for
3.56 million ounces. The inferred resource is estimated at 165
million tonnes, averaging 0.88 grams of gold per tonne for 4.66
million ounces. The percentage of the resource in the indicated
category increased to 44%, up from 14% in the previous
estimate.
- Resource delineation drilling will continue into the fourth
quarter, together with geotechnical studies and metallurgical test
work to support the commencement of a pre-feasibility study. A
further resource update will be completed as part of the Company's
annual year-end Mineral Reserves and Resources statement.
Commitment to Zero Harm
- The Company received approval from the Quebec provincial authorities to use the
inactive Doyon open pit to store tailings generated from the
Westwood mine.
- The frequency of all types of serious injuries (measured as
DART rate3) across IAMGOLD was 1.06 for the current year
to date compared to 1.12 for full year 2011, representing a 5%
improvement.
THIRD QUARTER FINANCIAL REVIEW
- Revenues for the third quarter 2012 were $386.8 million, down $45.1
million or 10% from the same prior year period. The decrease
in revenues was mainly related to lower gold sales volume
($49.0 million) and a lower realized
gold price ($1.2 million), partially
offset by higher niobium revenues ($5.3
million). The lower volume of gold sales was the result of
lower production (18,000 ounces) and gold produced late in the
quarter (12,000 ounces) and sold in October.
- Mining costs for the third quarter 2012 were $222.9 million, down $17.8
million or 7% from the same prior year period. The decrease
in mining costs is mainly related to lower asset retirement
obligation charges at closed sites ($12.3
million), lower sales due to timing of shipments and less
production ($7.3 million) and
lower royalties due to lower volume ($2.3
million), offset partially by higher depreciation expense
($4.1 million).
- The gold margin was $960 per
ounce during the third quarter 2012 compared to $1,001 per ounce in the same period 2011,
reflecting flat gold prices year-over-year and an increase in cash
costs.
- Net earnings from continuing operations attributable to equity
holders were $78.0 million
($0.21 per share) during the third
quarter 2012, compared to $50.0 million ($0.13 per share) in the same prior year period.
The increase in net earnings from continuing operations
attributable to equity holders was mainly related to higher
derivative gains on commodity and foreign exchange contracts
($39.6 million), lower income taxes
($23.6 million) and lower foreign
exchange losses ($9.4 million),
partially offset by the net change in gross earnings which
negatively impacted earnings ($27.3
million), higher exploration expenses ($13.2 million) and lower other income and net
investment gains ($4.3 million).
- Adjusted net earnings attributable to equity holders of
$60.2 million ($0.16 per share) in the third quarter 2012
compared to $112.4 million
($0.30 per share) in the same prior
year period. Lower gold sales and higher exploration expenses were
key contributing factors, partially offset by lower mining costs
and lower taxes.
- Operating cash flow in the third quarter 2012 was $97.6 million compared to $174.5 million in the same prior year
period. The decrease in operating cash flow is mainly
attributed to lower revenues, mostly from lower gold sales volume
($45.1 million), higher income taxes
paid ($7.2 million) and higher
non-cash working capital mainly due to the build-up of finished
goods inventories ($17.1
million).
- Operating cash flow before changes in working capital in the
third quarter 2012 was $114.3 million ($0.30 per share), compared to $174.1 million ($0.46 per share) in the same prior year
period.
Financial Position
- Cash, cash equivalents and gold bullion (at market value) was
$1,136.1 million at September 30, 2012, up $521.2 million since June
30, 2012 mainly due to the issuance of long-term senior
notes ($650.0 million) cash flow from
operating activities ($97.6 million)
and higher market value for gold bullion due to higher gold prices
($23.9 million), offset by capital
expenditures related to mining assets and exploration and
evaluation assets ($186.9 million)
and payment of dividends ($54.3
million).
- Working capital4 as at September 30, 2012 was $1,116.9 million, down $55.8 million compared to December 31, 2011 due to lower current assets
($76.9 million) partially offset by
lower current liabilities ($21.1
million). Current assets were mainly down due to less
cash and cash equivalents of $154.8
million resulting mainly from the acquisition of the Côté
Gold project ($485.7 million),
capital expenditures related to mining assets and exploration and
evaluation assets ($491.4 million),
the payment of dividends ($105.2
million) and acquisitions of investments ($48.9 million), offset partially by cash
generated from the issuance of 6.75% senior notes ($650.0 million) and operating activities
($322.1 million).
- At September 30, 2012, no funds
had been drawn against the unsecured revolving credit facilities of
IAMGOLD ($500 million) or Niobec
($250 million). As of September 30, 2012, the Company has committed
$70.0 million of its $75.0 million letters of credit facility for the
guarantee of certain asset retirement obligations compared to
$17.9 million at December 31, 2011. The increase in
collateral support to guarantee asset retirement obligations was
the result of Quebec, Canada
regulators accepting a revised asset retirement plan.
SUMMARIZED FINANCIAL RESULTS
|
|
|
|
Financial Position
($ millions, except where noted) |
September 30,
2012 |
|
Change |
December 31,
2011 |
Cash, cash
equivalents, and gold bullion |
|
|
|
|
|
|
|
- at market value |
$ |
1,136.1 |
|
(10%) |
$ |
1,262.5 |
|
- at cost |
$ |
993.7 |
|
(13%) |
$ |
1,148.4 |
Total assets |
$ |
5,214.3 |
|
20% |
$ |
4,349.7 |
Long-term debt |
$ |
638.3 |
|
- |
$ |
- |
Equity |
$ |
3,767.3 |
|
7% |
$ |
3,528.9 |
|
Summary of Financial and
Operating Results |
Three months ended
September 30, |
Nine months ended
September 30, |
($ millions, except where noted) |
|
2012 |
Change |
|
2011 |
|
2012 |
Change |
|
2011 |
Financial Data |
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
386.8 |
(10%) |
$ |
431.9 |
$ |
1,201.6 |
1% |
$ |
1,191.6 |
Mining costs |
|
222.9 |
(7%) |
|
240.7 |
|
688.6 |
6% |
|
650.2 |
Gross earnings from mining
operations |
$ |
163.9 |
(14%) |
$ |
191.2 |
$ |
513.0 |
(5%) |
$ |
541.4 |
Net earnings attributable to
equity holders of IAMGOLD1 |
$ |
78.0 |
56% |
$ |
50.0 |
$ |
250.1 |
(3%) |
$ |
257.7 |
Basic net earnings per share
($/share)1 |
$ |
0.21 |
62% |
$ |
0.13 |
$ |
0.67 |
(3%) |
$ |
0.69 |
Adjusted net earnings attributable
to equity holders of IAMGOLD1, 2 |
$ |
60.2 |
(46%) |
$ |
112.4 |
$ |
226.6 |
(24%) |
$ |
297.9 |
Basic adjusted net earnings per
share ($/share)1,2 |
$ |
0.16 |
(47%) |
$ |
0.30 |
$ |
0.60 |
(25%) |
$ |
0.80 |
Operating cash flow1 |
$ |
97.6 |
(44%) |
$ |
174.5 |
$ |
322.1 |
(17%) |
$ |
387.3 |
Operating cash flow ($/share)1 |
$ |
0.26 |
(43%) |
$ |
0.46 |
$ |
0.86 |
(17%) |
$ |
1.03 |
Operating cash flow before changes
in working capital1, 2 |
$ |
114.3 |
(34%) |
$ |
174.1 |
$ |
373.9 |
(20%) |
$ |
466.6 |
Operating cash flow before changes in working
capital ($/share)1, 2 |
$ |
0.30 |
(35%) |
$ |
0.46 |
$ |
0.99 |
(21%) |
$ |
1.25 |
1 |
Amounts represent results from continuing operations and do not
include discontinued operations. |
2 |
The Company has included the following non-GAAP measures:
adjusted net earnings attributable to equity holders of IAMGOLD,
adjusted net earnings per share, operating cash flow before changes
in working capital per share. Refer to the Supplemental
Information attached to this news release for reconciliation to
GAAP measures. |
KEY OPERATING STATISTICS
|
|
|
|
Three months ended
September 30, |
Nine months ended
September 30, |
|
2012 |
Change |
2011 |
2012 |
Change |
2011 |
Key Operating Statistics-Gold Mines |
|
|
|
|
|
|
|
|
|
|
Gold sales - 100% (000s oz)1 |
|
201 |
(13%) |
|
231 |
|
635 |
(8%) |
|
690 |
Gold sales - Attributable (000s
oz)1 |
|
188 |
(13%) |
|
217 |
|
595 |
(8%) |
|
648 |
Gold production - Attributable (000s
oz)2 |
|
205 |
(8%) |
|
222 |
|
616 |
(4%) |
|
643 |
Average realized gold price
($/oz)1 |
$ |
1,670 |
- |
$ |
1,675 |
$ |
1,653 |
8% |
$ |
1,524 |
Total Cash cost ($/oz)1, 3 |
$ |
710 |
5% |
$ |
674 |
$ |
708 |
12% |
$ |
634 |
Gold margin ($/oz)1, 3 |
$ |
960 |
(4%) |
$ |
1,001 |
$ |
945 |
6% |
$ |
890 |
Key Operating Statistics - Niobec mine |
|
|
|
|
|
|
|
|
|
|
Niobium production (millions of kg Nb) |
|
1.2 |
- |
|
1.2 |
|
3.5 |
3% |
|
3.4 |
Niobium sales (millions of kg Nb) |
|
1.2 |
20% |
|
1.0 |
|
3.6 |
9% |
|
3.3 |
Operating margin ($/kg Nb)3 |
$ |
16 |
14% |
$ |
14 |
$ |
15 |
7% |
$ |
14 |
1 |
Amounts represent results from continuing operations and do not
include discontinued operations. |
2 |
Excludes attributable ounces from discontinued operations of
nil for the three months and nine months ended September 30, 2012
(three months ended September 30, 2011: 9,000 ounces, nine months
ended September 30, 2011: 76,000 ounces). Discontinued operations
include Mupane, Tarkwa and Damang, which were sold in 2011. |
3 |
The Company has included the following non-GAAP measures: total
cash cost per ounce, gold margin per ounce, and operating margin
per kilogram of niobium sold at the Niobec mine. Refer to the
Supplemental Information attached to the MD&A for
reconciliation to GAAP measures. |
ATTRIBUTABLE GOLD PRODUCTION AND CASH
COSTS
The table below presents the gold production
attributable to the Company along with the weighted average cash
cost per ounce of production.
|
|
Gold Production (000s oz) |
Total Cash Cost1
($/oz) |
|
Three months ended
September 30, |
Nine months ended
September 30, |
Three months
ended
September 30, |
Nine months ended
September 30, |
|
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
IAMGOLD Operator |
|
|
|
|
|
|
|
|
|
|
|
|
Rosebel (95%) |
95 |
94 |
282 |
281 |
$ |
689 |
$ |
629 |
$ |
674 |
$ |
622 |
Essakane (90%) |
77 |
86 |
238 |
243 |
|
594 |
|
535 |
|
580 |
|
513 |
Doyon division2 (100%) |
- |
5 |
4 |
5 |
|
- |
|
1,203 |
|
137 |
|
1,203 |
|
172 |
185 |
524 |
529 |
$ |
644 |
$ |
602 |
$ |
627 |
$ |
577 |
Joint Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
Sadiola (41%) |
26 |
30 |
73 |
93 |
$ |
978 |
$ |
839 |
$ |
1,059 |
$ |
755 |
Yatela (40%) |
7 |
7 |
19 |
21 |
|
1,324 |
|
1,793 |
|
1,587 |
|
1,510 |
|
33 |
37 |
92 |
114 |
$ |
1,050 |
$ |
1,031 |
$ |
1,169 |
$ |
894 |
Continuing operations |
205 |
222 |
616 |
643 |
$ |
710 |
$ |
674 |
$ |
708 |
$ |
634 |
Discontinued operations3 |
- |
9 |
- |
76 |
$ |
- |
$ |
1,287 |
$ |
- |
$ |
847 |
Total |
205 |
231 |
616 |
719 |
$ |
710 |
$ |
697 |
$ |
708 |
$ |
656 |
Continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost excluding
royalties |
|
|
|
|
$ |
623 |
$ |
584 |
$ |
620 |
$ |
550 |
Royalties |
|
|
|
|
|
87 |
|
90 |
|
88 |
|
84 |
Total cash cost1 |
|
|
|
|
$ |
710 |
$ |
674 |
$ |
708 |
$ |
634 |
1 |
Total cash cost is a non-GAAP measure. Refer to the
Supplemental Information section attached to the MD&A for
reconciliation to GAAP measures. |
2 |
As a cost savings initiative, the ore mined from Mouska was
stockpiled in 2011. In 2012, the mine will not be producing other
than marginal gold derived from the mill clean-up process. |
3 |
Discontinued operations include Mupane, Tarkwa and Damang which
were sold in 2011.
|
OPERATIONS
ROSEBEL MINE, SURINAME
Operating Performance
Attributable gold production of 95,000 ounces for the third quarter
2012 was marginally higher than the same prior year period,
primarily as a result of higher recoveries, partially offset by
lower throughput. Recoveries have improved with the nearly complete
installation of the gravity circuit.
Total cash costs per ounce in the third quarter were higher than
the same period in 2011 mainly due to higher labour, fuel and power
costs. Labour costs were higher due to inflationary factors in the
Surinamese economy and the increase in manpower attributable to a
higher tonnage mined. The processing of a greater proportion
of hard rock drove up power costs.
CAPEX
During the third quarter 2012, Rosebel's capital expenditures were
$27.9 million and included
advancing the third ball mill project ($10.1
million), new mining equipment ($6.6 million) and resource development and
near-mine exploration ($4.7 million).
Exploration
Approximately 34,000 metres of diamond drilling was completed
during the quarter, mainly at the J Zone, Koolhoven, Rosebel, Mayo
and West Pay Caro deposits, to increase the confidence in the
existing resource inventory and target resource expansions.
Intersections were obtained from most targeted zones and results
will be incorporated into updated resource models as they are
received. Targeted geological mapping and geochemical sampling
programs continued elsewhere on the property, as did a mechanical
auger drilling program over domains of thick alluvium that cover
projected extensions of the Rosebel district mineralized
trends.
ESSAKANE MINE, BURKINA
FASO
Operating Performance
Attributable gold production of 77,000 ounces was 11% lower than
the same period in 2011 mainly due to lower recoveries and
processing of lower-grade ore, which offset the increase in ore
milled.
Total cash costs in the third quarter 2012 were
higher compared to the same prior year period mainly due to the
impact of lower grades on gold production and a higher strip
ratio.
CAPEX
During the third quarter 2012, Essakane's capital expenditures were
$85.6 million and included the
expansion project ($62.1 million) and
capitalized stripping costs on the push-back of the pit
($12.2 million).
Exploration
Approximately 28,000 metres of diamond and reverse circulation
drilling was completed during the quarter, including approximately
13,500 metres targeting potential extensions of the Essakane Main
Zone to the north beyond the current life of mine pit and at depth,
within or slightly below the expansion feasibility study pit
design. Drilling programs designed to test for southeast extensions
of the Falagountou satellite deposit and to evaluate the resource
potential of selected target areas along the 10 kilometre long
Gossey - Korizena mineralized trend were concluded due to arrival
of seasonal rains. Integration and interpretation of results is in
progress as assay data comes to hand.
DOYON DIVISION, CANADA
During the third quarter 2012, the site continued to stockpile
ore which will be processed in the refurbished mill in 2013.
SADIOLA MINE, MALI
Operating Performance
Attributable gold production of 26,000 ounces for the third quarter
2012 was 13% lower than the prior year period due to lower
throughput and lower grades.
Total cash costs per ounce were higher in the third quarter than
in the same quarter 2011 due to lower production and the processing
of harder ore which increased the consumption of power and
consumables.
CAPEX
The Company's attributable portion of capital expenditures during
the third quarter 2012 was $11.6 million and included spending on the
Sadiola sulphide project ($8.5
million) and capitalized stripping ($1.6 million).
Sadiola did not distribute a dividend during the third quarter
2012.
YATELA MINE, MALI
Operating Performance
Attributable gold production of 7,000 ounces for the third quarter
2012 was unchanged compared to the prior year period.
Cash costs in the third quarter 2012 were lower
compared to the third quarter 2011 due to the impact of the
impairment to inventories during 2012 which have reduced the net
cost of gold produced. As expected, the short-term non-capitalized
waste stripping activities were completed in the third quarter and
this has resulted in improved access to ore.
There were no significant capital expenditures year-to-date for
both 2012 and 2011.
Yatela did not distribute a dividend during the third quarter
2012.
NIOBEC NIOBIUM MINE, CANADA
Operating Performance
Niobium production of 1.2 million kilograms in the third quarter
2012 was unchanged compared to the same period in 2011 as higher
throughput and recovery was offset by lower
Nb2O5 ore grades.
Niobium revenues increased to $47.7 million in the third quarter 2012
compared to $42.4 million in the
same period in 2011 due to higher realized niobium prices and
higher sales volume. Operating margin during the third quarter 2012
was higher compared to the third quarter 2011 as a result of higher
realized niobium prices partially offset by higher labour costs and
lower grades.
CAPEX
In the third quarter 2012, capital expenditures were $17.1 million and included underground
development ($3.8 million), the
service hoist project ($3.8 million),
and feasibility study ($3.5
million).
ATTRIBUTABLE GOLD SALES VOLUME AND REALIZED
GOLD PRICE
|
|
|
|
Gold sales (000s oz) |
Realized gold price
($/oz) |
|
Three months ended
September 30, |
Nine months ended
September 30, |
Three months
ended
September 30, |
Nine months ended
September 30, |
|
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
Operator |
170 |
193 |
546 |
578 |
$ |
1,674 |
$ |
1,672 |
$ |
1,654 |
$ |
1,523 |
Joint ventures1 |
31 |
38 |
89 |
112 |
$ |
1,645 |
$ |
1,693 |
$ |
1,648 |
$ |
1,528 |
Total sales from continuing
operations 2,3 |
201 |
231 |
635 |
690 |
$ |
1,670 |
$ |
1,675 |
$ |
1,653 |
$ |
1,524 |
1 |
Attributable sales of joint ventures: Sadiola (41%) and Yatela
(40%). |
2 |
Attributable sales volume for the third quarters 2012 and 2011
were 188,000 ounces and 217,000 ounces, respectively, and for the
first nine months 2012 and 2011 were 595,000 ounces and 648,000
ounces respectively after taking into account 95% of the Rosebel
sales and 90% of the Essakane sales. |
3 |
Continuing operations exclude Mupane, Tarkwa and Damang which
were sold in 2011 and are discontinued operations. |
NIOBEC PRODUCTION, SALES AND OPERATING
MARGIN
|
|
|
|
Three months ended
September 30, |
Nine months ended
September 30, |
|
|
2012 |
Change |
|
2011 |
|
2012 |
Change |
|
2011 |
Total operating material mined (000s t) |
|
546 |
12% |
|
487 |
|
1,599 |
2% |
|
1,562 |
Ore milled (000s t) |
|
560 |
7% |
|
524 |
|
1,637 |
4% |
|
1,574 |
Grade (% Nb2O5) |
|
0.54 |
(2%) |
|
0.55 |
|
0.54 |
(5%) |
|
0.57 |
Niobium production (millions of kg Nb) |
|
1.2 |
- |
|
1.2 |
|
3.5 |
3% |
|
3.4 |
Niobium sales (millions of kg Nb) |
|
1.2 |
20% |
|
1.0 |
|
3.6 |
9% |
|
3.3 |
Operating margin ($/kg Nb)1 |
$ |
16 |
14% |
$ |
14 |
$ |
15 |
7% |
$ |
14 |
1 |
Operating margin per kilogram of niobium at the Niobec mine is
a non-GAAP measure. Refer to the Supplemental Information
section attached to the MD&A for reconciliation to GAAP
measures. |
EXPLORATION
IAMGOLD was active at 20 mine sites, near mine and greenfields
exploration projects in eight countries of West Africa and North and South America for the nine months ended
September 30, 2012.
In the third quarter 2012, exploration expenditures totaled
$43.7 million, including $33.6 million for expensed exploration and
$10.1 million for capitalized
exploration, compared to $27.1
million in the same period last year. The third quarter 2012
expenditures of $43.7 million
included near-mine exploration and evaluation expenditures of
$12.1 million, and greenfield
exploration expenditures of $31.6 million.
The outlook for 2012 exploration expenditures is $157.3 million, up $48.7
million from the 2011 full year exploration spend. The
outlook for 2012 is higher due to the expanded exploration program
which is mainly from the Côté Gold project in Ontario ($24.1
million).
2012 OUTLOOK
|
|
IAMGOLD full year 2012
guidance |
|
Attributable gold
production (000s oz) |
840 - 910 |
Cash cost ($/oz)1 |
$670 - $695 |
Niobec production (millions of kg
Nb) |
4.6 - 5.1 |
Niobec operating margin ($/kg
Nb)1 |
$15 - $17 |
Capital expenditures ($ millions) |
$750 - $780 |
1 |
Cash cost per ounce and operating
margin per kilogram of niobium sold at the Niobec mine are non-GAAP
measures. Refer to the Supplemental Information attached to
the MD&A for reconciliation to GAAP measures. |
IAMGOLD expects 2012 gold production at the lower end of the
guidance range due to the underperformance of the Company's joint
venture operations. 2012 cash costs year-to-date for the Company's
owned and operated mines are below the bottom of the guidance
range, and are expected to be within guidance for the full year.
However, consolidated cash costs are expected to be within ± 3% of
the upper end of the $670-$695 per
ounce range, due to lower production at the Company's joint venture
operations. The Company maintains its 2012 guidance for niobium
production and operating margin.
The Company is reducing its 2012 capital expenditure guidance
from a range of $800 to $840 million
to a range of $750 to $780 million.
The lower expenditure is primarily due to timing assumptions with
respect to the Sadiola and Essakane expansion projects. Further
delays are expected with the Sadiola sulphide project, and the
agreement on fiscal terms related to the Essakane expansion was
concluded later than originally anticipated.
The effective tax rate for the third quarter 2012 was 35.0%
compared to 54.0% for the same period in the prior year. The
decrease in the effective tax rate is primarily attributable to
unrealized foreign exchange gains and losses on the translation of
inter-company loans and non-monetary assets from their tax currency
(i.e., Canadian dollar, CFA, etc.) to their functional currency
(i.e., the U.S. dollar). In 2011, the translation resulted in a net
unrealized foreign exchange gain and a tax expense, whereas in
2012, the translation resulted in a net unrealized foreign exchange
loss and a tax benefit.
The effective tax rate for the first nine months 2012 was 34.7%
compared to 36.3% for the same period in the prior year. The
decrease in the year to date effective rate is attributable to
unrealized foreign exchange gains and losses, changes in enacted
tax rates and the geographical mix of income.
The Company maintains its guidance for the effective tax rate to
be in the range of 35% to 37% as previously disclosed.
The outlook is based on 2012 full year assumptions for average
realized gold price of $1,700 per
ounce, $C/$US exchange rate of 1.00, $US/€ exchange rate of 1.40
and average crude oil price of $90
per barrel.
2013 Outlook
The Company is reducing its capital expenditure forecast for
2013, with details to be communicated at a later date. This is
mainly due to delayed approval of the Sadiola sulphide project and
the deferral of capital spending at Niobec. Rather than accelerate
capital expenditures related to the Niobec expansion, as was
contemplated initially, the timing of capital spending will be
aligned with the advancement of permitting and the completion of
the feasibility study.
As a result of the revised capital expenditure forecast for the
gold business, continued poor performance at Sadiola and a slower
ramp-up in production at Westwood,
which will commence in the first quarter 2013, the Company is
revising its 2013 production forecast. For 2013, gold
production is expected to range between 875,000 and 950,000
ounces.
NON-GAAP5 PERFORMANCE
MEASURES
Adjusted net earnings from continuing
operations attributable to equity holders of IAMGOLD
Adjusted net earnings from continuing operations attributable to
equity holders of IAMGOLD and adjusted net earnings from continuing
operations attributable to equity holders of IAMGOLD per share are
non-GAAP financial measures. Management believes that these
measures better reflect the Company's performance for the current
period and are a better indication of its expected performance in
future periods. Adjusted net earnings from continuing
operations attributable to equity holders of IAMGOLD and adjusted
net earnings from continuing operations attributable to equity
holders per share are intended to provide additional information,
but do not have any standardized meaning prescribed by IFRS, are
unlikely to be comparable to similar measures presented by other
issuers, and should not be considered in isolation or a substitute
for measures of performance prepared in accordance with IFRS.
Adjusted net earnings from continuing operations attributable to
equity holders represent net earnings from continuing operations
attributable to equity holders excluding certain impacts, net of
tax, such as changes in asset retirement obligations at closed
sites, unrealized derivative gain or loss, gain/loss on sale of
marketable securities and assets, impairment of marketable
securities, foreign exchange gain or loss, executive severance
costs, as well as the impact of significant change in tax laws for
mining taxes, and unrealized gain/loss on foreign exchange
translation of deferred income tax liabilities. These
measures are not necessarily indicative of net earnings or cash
flows as determined under IFRS.
|
|
|
($ millions, except for number of shares and per
share
amounts) |
Three months
ended
September 30, |
Nine months ended
September 30, |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Earnings from continuing operations
before income
taxes and non-controlling interests |
$ |
133.4 |
$ |
130.3 |
$ |
423.6 |
$ |
443.3 |
Adjusted items: |
|
|
|
|
|
|
|
|
|
- Foreign exchange loss / (gain) |
|
2.5 |
|
11.9 |
|
(8.5) |
|
12.1 |
|
- Unrealized loss / (gain) on derivative
instruments |
|
(17.5) |
|
23.3 |
|
(21.3) |
|
19.0 |
|
- Gain on sale of marketable securities |
|
(7.2) |
|
(7.2) |
|
(16.5) |
|
(8.1) |
|
- Impairment of marketable securities |
|
1.2 |
|
- |
|
20.7 |
|
- |
|
- Loss / (gain) on sale of assets |
|
0.9 |
|
0.1 |
|
(1.3) |
|
(11.7) |
|
- Changes in estimates of asset
retirement obligations at closed sites |
|
- |
|
12.3 |
|
0.5 |
|
12.3 |
|
|
(20.1) |
|
40.4 |
|
(26.4) |
|
23.6 |
Adjusted earnings from continuing
operations before
income mining taxes and non-controlling interests |
$ |
113.3 |
$ |
170.7 |
$ |
397.2 |
$ |
466.9 |
|
- Income tax expenses |
|
(46.7) |
|
(70.3) |
|
(147.0) |
|
(161.1) |
|
- Tax impact of adjusted
items |
|
2.3 |
|
22.0 |
|
2.9 |
|
16.6 |
|
- Non-controlling interests |
|
(8.7) |
|
(10.0) |
|
(26.5) |
|
(24.5) |
Adjusted net
earnings from continuing operations
attributable to equity holders of IAMGOLD |
$ |
60.2 |
$ |
112.4 |
$ |
226.6 |
$ |
297.9 |
Basic weighted
average number of common shares
outstanding (in millions) |
|
376.2 |
|
375.4 |
|
376.1 |
|
374.6 |
Basic adjusted net
earnings from continuing operations
attributable to equity holders of IAMGOLD per share
($/share) |
$ |
0.16 |
$ |
0.30 |
$ |
0.60 |
$ |
0.80 |
Operating cash flow from continuing operations
before changes in working capital
The Company makes reference to a non-GAAP measure for operating
cash flow from continuing operations before changes in working
capital and operating cash flow from continuing operations before
changes in working capital per share. This measure is defined
as cash generated from continuing operations excluding changes in
working capital. Working capital can be volatile due to numerous
factors including build-up of inventories. Management
believes that, by excluding these items from continuing operations,
this non-GAAP measure provides investors with the ability to better
evaluate the cash flow performance of the Company.
The following table provides a reconciliation of operating cash
flow from continuing operations before changes in working
capital:
|
|
|
($ millions, except for number of shares and per
share
amounts) |
Three months
ended
September 30, |
Nine months ended
September 30, |
|
2012 |
|
2011 |
|
2012 |
|
2011 |
Cash flow generated
from continuing operating activities per
the unaudited consolidated interim financial statements |
$ |
97.6 |
$ |
174.5 |
$ |
322.1 |
$ |
387.3 |
Adjusting items from non-cash working
capital items and
long-term ore stockpiles |
|
|
|
|
|
|
|
|
|
- Receivables and other current
assets |
|
6.2 |
|
5.0 |
|
(1.7) |
|
14.9 |
|
- Inventories and long-term
stockpiles |
|
32.0 |
|
21.0 |
|
69.7 |
|
84.1 |
|
- Accounts payable and accrued
liabilities |
|
(21.5) |
|
(26.4) |
|
(16.2) |
|
(19.7) |
Operating cash flow
from continuing operations before
changes in working capital |
$ |
114.3 |
$ |
174.1 |
$ |
373.9 |
$ |
466.6 |
Basic weighted average
number of common shares
outstanding (in millions) |
|
376.2 |
|
375.4 |
|
376.1 |
|
374.6 |
Basic operating cash
flow from continuing operations before
changes in working capital per share ($/share) |
$ |
0.30 |
$ |
0.46 |
$ |
0.99 |
$ |
1.25 |
END NOTES (excluding tables)
(1) |
Adjusted net earnings attributable to equity holders of
IAMGOLD, adjusted net earnings attributable to equity holders of
IAMGOLD per share, operating cash flow from continuing operations
before changes in working capital and operating cash flow from
continuing operations before changes in working capital per share
are non-GAAP financial measures. Please refer to the
reconciliation to GAAP measures above in this news release. |
(2) |
Cash cost per ounce, gold margin per ounce, operating margin
per kilogram of niobium at the Niobec mine are non-GAAP
measures. Please refer to the Supplemental Information
section attached to the MD&A for reconciliation to GAAP
measures. |
(3) |
The DART rate refers to the number of days away, restricted
duty or job transfer incidents that occur per 100 employees. |
(4) |
Working capital is defined as current assets less current
liabilities and excludes long-term stockpiles. |
(5) |
GAAP - Generally Accepted Accounting Principles.
|
CONFERENCE CALL
A conference call will be held on Wednesday, November 14, 2012 at 8:30 a.m. (Eastern Standard Time) for a
discussion with management regarding the Company's 2012 third
quarter operating performance and financial results. A
webcast of the conference call will be available through the
Company's website - www.iamgold.com.
Conference Call Information: North America Toll-Free:
1-866-206-0240 or 1-646-216-7111, passcode: 12024706#
A replay of this conference call will be available from
5:00 p.m. November 14th to December 14th, 2012. Access this
replay by dialling: North America
toll-free: 1-866-206-0173 or 1-646-216-7204, passcode: 276570#
Forward Looking Statement
This news release contains forward-looking statements. All
statements, other than of historical fact, that address activities,
events or developments that the Company believes, expects or
anticipates will or may occur in the future (including, without
limitation, statements regarding expected, estimated or planned
gold and niobium production, cash costs, margin expansion, capital
expenditures and exploration expenditures and statements regarding
the estimation of mineral resources, exploration results, potential
mineralization, potential mineral resources and mineral reserves)
are forward-looking statements. Forward-looking statements are
generally identifiable by use of the words "may", "will", "should",
"continue", "expect", "anticipate", "outlook", "guidance",
"estimate", "believe", "intend", "plan" or "project" or the
negative of these words or other variations on these words or
comparable terminology. Forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond the
Company's ability to control or predict, that may cause the actual
results of the Company to differ materially from those discussed in
the forward-looking statements. Factors that could cause
actual results or events to differ materially from current
expectations include, among other things, without limitation:
changes in the global prices for gold, niobium, copper, silver or
certain other commodities (such as diesel, aluminum and
electricity); changes in U.S. dollar and other currency exchange
rates, interest rates or gold lease rates; risks arising from
holding derivative instruments; the level of liquidity and capital
resources; access to capital markets, financing and interest rates;
mining tax regimes; ability to successfully integrate acquired
assets; legislative, political or economic developments in the
jurisdictions in which the Company carries on business; operating
or technical difficulties in connection with mining or development
activities; laws and regulations governing the protection of the
environment; employee relations; availability and increasing costs
associated with mining inputs and labour; the speculative nature of
exploration and development, including the risks of diminishing
quantities or grades of reserves; adverse changes in the Company's
credit rating; contests over title to properties, particularly
title to undeveloped properties; and the risks involved in the
exploration, development and mining business. With respect to
development projects, IAMGOLD's ability to sustain or increase its
present levels of gold production is dependent in part on the
success of its projects. Risks and unknowns inherent in all
projects include the inaccuracy of estimated reserves and
resources, metallurgical recoveries, capital and operating costs of
such projects, and the future prices for the relevant
minerals. Development projects have no operating history upon
which to base estimates of future cash flows. The capital
expenditures and time required to develop new mines or other
projects are considerable, and changes in costs or construction
schedules can affect project economics. Actual costs and
economic returns may differ materially from IAMGOLD's estimates or
IAMGOLD could fail to obtain the governmental approvals necessary
for the operation of a project; in either case, the project may not
proceed, either on its original timing or at all.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission limits
disclosure for U.S. reporting purposes to mineral deposits that a
company can economically and legally extract or produce.
IAMGOLD uses certain terms in this presentation, such as
"measured," "indicated," or "inferred," which may not be consistent
with the reserve definitions established by the SEC. U.S.
investors are urged to consider closely the disclosure in the
IAMGOLD Annual Reports on Forms 40-F. You can review and
obtain copies of these filings from the SEC's website at
http://www.sec.gov/edgar.shtml or by contacting the Investor
Relations department.
.
About IAMGOLD
IAMGOLD (www.iamgold.com) is a leading mid-tier
gold mining company producing approximately one million ounces
annually from five gold mines (including current joint ventures) on
three continents. In the Canadian province of Québec, the Company
also operates Niobec Inc., which produces more than 4.5 million
kilograms of niobium annually, and owns a rare earth element
resource close to its niobium mine. IAMGOLD is uniquely positioned
with a strong financial position and extensive management and
operational expertise. To grow from this strong base, IAMGOLD
has a pipeline of development and exploration projects and
continues to assess accretive acquisition opportunities.
IAMGOLD's growth plans are strategically focused in certain regions
in Canada, select countries in
South America and Africa.
Please note:
This entire news release may be accessed via
fax, e-mail, IAMGOLD's website at www.iamgold.com and through CNW
Group's website at www.newswire.ca. All material information on
IAMGOLD can be found at www.sedar.com or at www.sec.gov.
Si vous désirez obtenir la version française de ce
communiqué, veuillez consulter le
http://www.iamgold.com/French/Home/default.aspx.
SOURCE IAMGOLD Corporation