Canadian Mining Journal


GOLD: Iamgold posts loss for challenging year

At Iamgold's Essakane gold mine, in Burkina Faso. Credit: Iamgold

At Iamgold’s Essakane gold mine, in Burkina Faso. Credit: Iamgold

TORONTO – Iamgold posted a net loss from continuing operations of US$373.3 million on revenues of US$1.1 billion after recording a US$395-million impairment charge related to its Westwood mine in Quebec.

Westwood experienced increased seismic activity in the fourth quarter and the company has had to adjust mining methods and the mine plan at the operation, 40 km east of Rouyn-Noranda.

Across all its operations in 2019, Iamgold produced 762,000 oz. gold at total cash costs of US$907 per oz. or all-in sustaining costs (AISC) of US$1,124 per oz. That compares with 882,000 oz. at total cash costs of US$793 per oz. or AISC of US$1,057 per oz. in 2018.

“2019 was a year of significant challenges for Iamgold,” said president and COO Gordon Stothart in a release. “I would like to acknowledge the entire Iamgold team for how it addressed these challenges, including: realigning Westwood to suit its operating levels, working with our local stakeholders at Rosebel to address unauthorized mining and ensuring the safety of our team at Essakane.”

The company expects the second half of 2020 to be stronger, as mill upgrades at its Essakane mine in Burkina Faso should be completed in the first half. Grades at its Rosebel mine in Suriname are also expected to rise with the ramp-up of the Saramacca open pit about 25 km to the southwest.

For 2020, Iamgold expects to produce 700,000 to 760,000 oz. gold at AISC of US$1,100-1,150 per oz.

“We are committed to becoming a lower cost and more geographically balanced producer within the next five years, while maintaining our culture of accountable mining through high standards of ESG practices,” Stothart said.

In December, the company agreed to sell its 41% interest in the Sadiola gold mine in Mali.

Jackie Przybylowski, a mining analyst at BMO Capital Markets, noted that moving forward with new greenfield projects, such as Côté in Ontario (where detailed engineering is 50% complete) and the Boto gold project in Senegal, will improve Iamgold’s geographical diversification and could reduce overall average operating costs.

“Iamgold’s Q4 earnings release and yesterday’s reserve and resource update underscored that Iamgold is not only motivated to grow, but that growth is necessary for the company,” Przybylowski said in a note, adding that investors currently want to see higher dividends returned to shareholders rather than investment in production growth.

“Iamgold is currently swimming against the tide of current public opinion, but we expect that the advancing project pipeline will be attractive to investors seeking operating leverage to gold prices.”

BMO has a market perform rating on the stock and a one-year target of $4 per share.

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