IAMGOLD Corporation

This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

CFO of I Am Gold, Martin. Hey guys, it's good to see you as well. thank you. OK. Good morning, everyone. thank you very much for hosting us and it's good to see everybody here. For those of you who don't know Imgold, we have 3 operating mines. 2 of them are in Canada and 1 of them is in West Africa, in Burkina Faso. And then we also have one of the largest undeveloped gold projects in in Canada, the Neigin Project. Starting at Kote Gold, our newest mine, over the last 4 years, we went through the journey of building and then ramping up Kote Gold, and last year was the first full year of operations. And Kote got up to 400,000 ounces in that first year of operations. it's an open pit mine. This year we expect to produce between 3 and 90,000 to 400,000 ounces at ordinances standing cost of 1,775 to about 1925. What's important to note is that Cota has a royalty on it. So in this high gold price environment we of course are seeing much higher margins, but that also increases the royalty. So that is included in our cost at Cota, and that's about $300 per ounce that you see. In that project. So For Co this year, the plan is to kind of give the teams a chance to breathe after we went through the ramp up and look at how are we going to make this operation more efficient and and and get into a routine of operating the mine really well, as we also need to look at our cost structure because during the ramp up we made some decisions that added some cost and now this year it is implementing measures to remove those costs from the cost structure. But also at the end of the year. We plan to release an expansion study that I'll discuss a bit more later. Stay in Canada, looking at Westwood. Westwood is producing about 110 to 130,000 ounces a year. It's got a reserve of 1.1 million ounces, but its resource is close to 4 million ounces. So for Westwood, We have an underground mine at 1000 tons a day and then we supplement the feed with an additional 25,000 tons a day with a small satellite open pit. That satellite open pit is expected to be there for the next 2 to 3 years. And then looking at what's next for Westwood, the next big catalyst is When we're moving to the eastern side of the deposit. So at the moment we're mining the central zone and, and the western part, which is where the reserve mostly is. There's a great opportunity on the eastern side of, of the deposit where it's more amenable to bulk mining. So we see in the future that that could then replace that additional supplement fee to keep the mill full. And we are excited to working on that study, and we will be issuing that next year. Staying in Canada, also in Quebec is the Elegan project. started off as an exploration project for iron gold, and over the years we've been drilling it out. End of last year, we announced an acquisition where we merged or brought two companies into the family, and that is now a large area with lots of potential where there's almost 12 million ounces of resource available, and we are planning to issue a PEA next year for Niligen to illustrate what that area can do. And then last but not least is Essakan. Essakan has been producing more than 400,000 ounces for over 12 years now. It's in Burkina Faso, so there is, Some other challenges that the mine has to deal with, but our team has been very resilient to continue to predictably produce answers from that area. IsseanS M Life. 1.2 million ounces reserve takes it to 2028. What we are working on now is converting some of that resource that's almost 5 million ounces into extending that mine life, and we plan to also issue a study next year for ISACA to illustrate how we believe we can add another 5 years to the mine life, taking us to to 2033. ICANN's cost structure also includes a royalty that's $400 an ounce. So if you look at the cost structure, although it is on the higher end of the scale, it does include that royalty, but it also includes other costs that we need to incur to ensure that we can continue to operate that mine safely and continue to have a predictable operation, and our team has been very successful in doing that. So with Cote now in operation and adding Nelligin, we've, the end of our journey is where we've now landed, with a company where 87% of our resource is situated in, in Canada. So although from a production perspective, it's, it's just over 50%. We do have that resource because of the, the life of mine that Cote brings as well as, the potential expansion of Westwood and Eligan. And then from a net asset perspective, you can also see that the value is really concentrated in Canada. So, with those 3 minds. Our attributable production for the year is gonna be about 800,000 ounces. That in this gold price environment allows us to generate significant cash flow, and the reason for that is if you look at the the EBITDA margin, we've really ramped up EBITDA as the mine ramped up and the gold price increased at the same time. It really helped us to to get to the end of Q4 last year where we generated a record EBITDA in that quarter of $710 million for the year. It was $1.55 billion. What's also important is our conversion of EBITDin to free cash flow is, is really good, where our EBITDA of $710 million converted into $700 million of operating cash flow. The mine site cash flow, which is all of the operating cash flows from the mine site less their capex, was $600 million in Q4 and $1.2 billion for last year. So there's a significant amount of cash flow coming out of the mine now with the margins, and part of the reason is As we were ramping up cocaine, as we were. transforming the company, we were also fixing our balance sheet and we were removing a lot of the structures in our balance sheet that sometimes use some of your cash, including completing the delivery of the prepaid. We finished that in the middle of last year and that's why you see the cash flow generation really ramping up because now all of those answers are truly generated or exposed to the higher gold price and the higher margin. So with that cash flow in Q4 that we generated, we paid down $468 million of debt. So we completely removed the second lean notes that we put in place to fund CoA. so $400 million paid down in, in 4 months. And then we also started our share buyback program. So that was started in December and we bought back our 1st $50 million of shares in, in that month. Looking at this year, and, and, and specifically at SACA, we are generating a lot of free cash flow in Burkina Faso and we put a structure in place that allows us to move cash out of the country every month, so all the cash that's being generated in excess of working capital requirements are being repatriated and by the middle of February we already repatriated $170 million from Burkina Faso into Canada. Now. In our share buyback program, we are mainly using the funds coming from his account to fund that program almost on a 1 to $1 basis. So this year alone, starting in January, we've already purchased $260 million worth of shares up to the end of March. And we'll continue to, to use the cash flow from Burkina Faso to fund our share buyback program. We're also going to then, when we look at our Canadian operations, the free cash flow that's coming from there, we're going to repay the remaining drawn amount on our credit facility, and we will be done with that by Q2 as well. And then looking forward, we still have $450 million of high yield notes. We are seeing that as part of our permanent capital structure at this point that only matures in the end of 2028. And we don't intend to use any of our capital allocation for that for this year. So this year, the focus for capital allocation really is using SAA funds for share buybacks and then continuing to build our financial capacity using funds in Canada and and building that in Canada. So A bit more about Core Gold and the plans for this year. As I mentioned earlier, we have now got ramped up the mine. It did 36,000 tons a day, nameplate capacity last year. Our intent this year is not to increase that. Our intent is to run at that level, but to do that really well. You can see in the bottom right corner, the ramp up that the mine has occurred and now the idea is to, to keep that stable. But to achieve that. Production levels, there was a couple of bottlenecks that we needed to deal with. One of that was on our secondary crushing, so we identified that quite early in the process. So during the course of last year, we doubled our secondary crushing capacity by installing an additional cone crusher. That was installed and implemented by December. We then To achieve our throughput we had to supplement that throughput with contractor crushing on site, so we had a contractor bringing equipment and we did that during the course of last year. Now that we are busy commissioning that additional crushing capacity that's installed, we will be phasing out this contractor crushing, and that's really important because that is actually the main driver of our unit costs being higher than expected. So if we look at our cost at Cotey. The areas of focus for us really is our per ton metrics because we see that as one of the biggest value drivers for this mine. At the moment, the mine is, is, Operating above $4 a ton, we believe that there's a clear path to get the mine in the low to mid $3 a ton. Why is that important? As I'll show you in a bit, there's a huge deposit now at Go, which means we have to move over 4 or 2 billion tons of material. So really over the life of mine, the biggest driver, one of the biggest value drivers is getting that cost per ton as low as we can because moving that amount of tons really then reduces the cost of doing that. How are we going to get the cost down? Well, at the moment there's a lot of rehandling that we have to do because the mine needs to feed the additional contractor crushing, so there's a lot of in pit rehandling. We also need to open up the pit, so we're going to continue working on that. And this year we actually have some expansion capital where we're going to really enlarge the size of the pit. That allows us to have more mining phases then to move more into bulk mining. And, and that will then really help us drive that cost down. And during ramp up, there's still some other areas where we need to focus on. Increasing the lifespan of the tires is one of them. And, and we see a clear path to get that down to the mid to low $3 a ton. On the mill. Our cost is more than $20 a ton, which our target is closer to $12 a ton, and, and a good 4 to $5 of that is because of this additional crushing and all the work that's going along with that. So by just phasing that out, we already get those those costs down. Then we also have some additional capex this year of about $50 million that we are improving infrastructure and although it doesn't increase capacity, what's important about that, it will reduce the cost of operations. So again, If you look at the amount of tons that need to be processed over the life of mine, getting that cost down is really important, and that is continuing to be the focus for us this year. Why such a big focus on those two cost metrics? it's because the second and even more valuable driver for Cota is the expansion potential and incorporating gasoline into the deposit. So by the end of this year, we will be issuing a new study or an updated study, and in that study, we will be showing. How we are planning to take the, mine from 36,000 tons a day to 50 or 55,000 tons a day. So increasing throughput. But also, there's, the, the grassland zone, but also now an expanded COTA that will be included in that study. So at the moment, COTA has 7 million ounces in reserve. If you look on the Cote pit shell, that yellow line, that's basically the pit shell for the 7 million ounces of reserve. If we then go and we start and we look at the larger cote and we incorporate gasoline, that brings our total measured, indicated and inferred resource to over 20 million ounces. Once we put that in our plan, we expect to double at least our reserve to 14 million ounces or more. This then allows us with that increased capacity to have an operation of 45,000 to 500,000 ounces a year, and with this magnitude you can see that it's showing a mine life of more than 35 years, which for a mine of this size in this in this region is really a unique opportunity for us and we see this as a significant catalyst for our company. Included in that study is gonna be those unit costs, and we want to prove this year that we can do that so that the, the cost is believable and that will then be, be included in there as well as we show this expansion study. From a phasing perspective, we'll continue to mine Cote first. So that's for more than 10 years. And then only then do we need to, to bring in Goslin. As part of that project, we do have to do a lot of stripping and, and, and water management at Gosselin. Which includes capital or is capital and we also need to install our training capacity. But the way that this project is phased, it means a lot of that capital is only really far out in the future once you have actually mined out a lot of, of Cote and then we are expanding the mill. So from 28 to 2030 is when we will be expanding the mill to get to that higher throughput capacity. And then Neiligen, which is now our new consolidated map. So you can see I'm Gold previously owned the Neiligin project and Monster Lake. Neiligin is an open pit, kind of seeing that as the, the standard these days for Canadian projects at that great profile. And Monster Lake is an underground mine, potentially that would then supplement the the mill feed with high grade material. With the acquisitions we did end of last year, we've included Felibeer and Sevier, but also we've consolidated that whole land package. So now that allows us to go and look at what is the future of these projects. We are looking at this as having a central processing facility and then trucking the different ore sources to the mine. and this could be a Large scale mine as well, and we own 100% of it after the acquisitions we did. And we've also eliminated most of the royalties on this property. So if you look at this project and the potential that's coming out, owning 100% of it, we are quite excited to see this. Now. Next year, we'll be issuing a PA and then that will show in the next, early in the next decade when we will start developing this project. So that is the The future, our future of Quebec and how we're gonna continue to, to grow and invest in, in Canada and, and create a center of gravity for our company. So, We're quite excited. There's quite a few catalysts this year coming up, the COTA study at the end of the year and then next year we've got the Ian expansion, adding 5 years to the mine life, adding in the bulk mining at Westwood in that eastern zone, and then also the PA for Nelligen all coming next year. So, thank you very much for your time. Thanks, Martin. Any questions coming from the audience? Over there. thank you, Martin. just a quick question on, the, the Cote expansion. Are you still looking at 50,000 tons per day or is it, is it potentially higher? When, when we look at the expansion and what is the most effective level of capital and also the least disruptive for the project, we are still believing that it's gonna be 500,000 to 55,000 tons a day. To kind of hit that, sweet spot on capital, but also, from a, a value perspective, yes. And then in terms of the cap exp, I think you mentioned that a lot of it would be far out with the tailings management and the water, bringing Gosselin in later once most of Cote is mined out. How much of it would be upfront as say as a percentage if we were looking at. We, we, it's mostly around the mill and, and looking at, preliminary numbers, we see about $400 to $500 of capital that needs to be spent in that 2028 to 2030 period to get the mill up to that level. We are also spending some capital upfront for the mine. So $85 million this year to do the additional pioneering for that pushback, remove and change our infrastructure so that we are effectively de-risking the project by moving some of the work earlier and that we don't try to do everything at once when we are upgrading the mill. Thank you. We have one other quick question to gotta talk fast, Martin. sorry, thank you. maybe just coming back on your costs, do you think Martin, that we will get that mining cost and processing costs that cotate down to those levels by the time you do your study because that's gonna be by year end. That's a great question and we've been getting some external views on, on our costs as well, and we do believe there's a clear path to get down to those costs, but it won't be completely done by the end of this year. So we do see mining costs reducing, but probably be below $4 but not in that mid $3 range yet by the end of the year. And the milling cost is probably, we expect that to exit still about 14 to $15 a ton. So not getting there yet this year, but when we get there, we will have a clear path and and be able to illustrate what will reduce the cost to the levels we expect it to be. And if I can just add the little question on, just the oil sensitivity, if you can remind us your oil sensitivity on your fuel and power costs and then just if you are able to get all supplies to your mine sites and no shortage there. Thank you. So that very summarized. At Sakan, $30 per barrel is about $55 in all in sustaining cost. It's a much lesser impact at CoA because we only the trucks use that. And then yes, we are not seeing any issues in bringing up supplies to SACA at this point. Thanks, Mark. Thank you.