Iamgold Corporation Ordinary Shares

Thank you for standing by. This is the conference operator. Welcome to IM Gold third quarter 2020 operating and financial results conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero. At this time, I would like to turn the conference over to Indi Gopinathan, Vice President, Investor Relations and Corporate Communications for IAM Gold. Please go ahead, Ms. Gopinathan.

Thank you very much, and welcome everyone to the IAM Gold Third Quarter 2020 Conference Call. Joining me today on the call are Gordon Stauffert, President and Chief Executive Officer of Carol Banducci, Executive Vice President and Chief Financial Officer, Bruno Lamelin, Senior Vice President, Operations and Projects, Craig McDougall, Senior Vice President, Exploration, and Tim Bradburn, Vice President, Legal and Corporate Secretary. Our remarks on this call will include forward-looking statements. Please refer to the cautionary language regarding forward-looking information in our disclosure documents and be advised that the same cautionary language applies to our remarks during the call. With respect to the technical information to be discussed, please refer to the technical information and qualified person slide. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and CEO, Gordon Stothert.

Well, thank you, Indy. Good morning, everyone, and thank you for joining us. Last night, we issued our third quarter 2020 operating results reflecting how we've adapted to our new normal with COVID-19, solid operating cash flows of $105 million on increased margins and solid mine site free cash flows of $80 million, underpinned by production of 159,000 ounces of gold despite the challenges of the quarter. Our strong balance sheet, supplemented by the enhanced flexibility from our debt refinancing, wherein we issued new bonds and retired the old bonds, extending the maturity date by three years to 2028 and lowering our annual interest rate costs and the transformational growth we anticipate with the Cote Gold project following the formal construction announcement in July. As reported on Monday, we had a seismic event at Westwood, with all employees safely brought above ground. I would like to recognize our Westwood team for their safe and successful response to this event. The Westwood mill restarted yesterday evening on stockpiles and open pit ore from Grand Duke, while the underground operation remains suspended as we assess our business continuity plan. We are now in our eighth month of adapting to a new normal of COVID like most of the world. A rapid crisis response at the end of the first quarter through extended rotations at ESSACAN, a shutdown and restart at Westwood, suspension and restart at Roosevelt. We have come full circle with embedded protocols, operations at full capacity or close to normal, zero COVID cases and ongoing vigilance. At ESSACAN, we completed the expansion of the sleeping quarters, adding 200 beds. Operations are substantially back to normal capacity. At Westwood, following Quebec government's COVID-19 care and maintenance directive, we were back online as of mid-April. At Roosevelt, we continue to expand our camp capacity to facilitate social distancing, adding 300 beds. And we expect to be back to our full workforce complement in Q1 2021. For our construction project COTE, we have taken our learnings from our operating sites and instituted protocols, including screenings, assessments, mandatory protective wear, social distancing, and temperature tests. Our response to COVID-19 also has an important community support and engagement perspective. A few examples from the quarter include in Burkina Faso, where we donated 10 respirators worth $100,000 to the Ministry of Health and the Regional Health Directorate of the Centre Region to support its COVID-19 efforts. ESECAN further donated medical equipment to the Dory Hospital. And in Colombia, we provided financial support and technical training to 23 families in the beekeeping sector of the Antioquia municipality with expected production of 100 kilos of pollen and one ton of honey in 2020. This project comes as an economic alternative to improve the quality of life of these families. I Am Gold is committed to achieving high standards in environmental, social, and governance practices, which reflected our long-held zero-harm vision. Highlights from the quarter include recognition in rankings by Moody's affiliate, Vigio Iris, as fourth out of 45 sector peers, including senior producers. on its assessment of environmental, social, and governance practices. IM Gold's assessment reflected notable strengths in community involvement, environmental strategy, health and safety, and governance. Donations to local communities totaled $1.5 million year-to-date, including cleaning equipment and supplies such as hand-washing stands and hand-sanitizing gel, protective medical equipment including masks, gloves, and face shields, and life support equipment in the nature of ventilators and hospital beds. SACAN's respirator donations, as mentioned on the prior slide, and our Rosabelle operation has partnered with Global Impex, a global personal protective equipment supplier, to provide previously trained women in the community with internship opportunities at one of Global Impex's local factories. We are also lobbying our partners and other stakeholders for the second phase of the Trierengogo project in Burkina Faso, now that phase one has been completed, with the goal of extending water infrastructure to two other communities nearby our Essacan mine. Looking at 2020, we have further refined our guidance. We are lowering our 2020 production guidance range to 630,000 to 680,000 ounces for 2020, due to the suspension of operations at Westwood Underground, resulting from the seismic event reported earlier this week. We are adjusting upward our cost of sales guidance by approximately 5% to between $1,045 and $1,075 per ounce sold. Total cash cost guidance is adjusted upward by approximately 4% to between $980 and $1,010 per ounce sold. and all in sustaining costs are adjusted upward by approximately 3% to between $1,240 and $1,270 per ounce sold. The revisions to cost of sales and total cash costs reflect higher costs incurred from processing lower-grade stockpiles to compensate for lower levels of production as a result of the COVID-19 crisis. All in sustaining costs were adjusted to reflect higher operating costs incurred to date lower Westwood production and higher royalties. I would note here that we are withdrawing our 2021 production guidance, which had been under review and expect to provide a regular annual guidance in early 2021. Our outlook for capital expenditures was modestly adjusted. At ESSECAN, the non-sustaining capital expenditures forecast was increased by $5 million to $70 million. At Westwood, Sustaining and non-sustaining capital expenditures have been decreased by $10 million and $8 million, respectively. At Cote, our development capital expenditures for 2020 were revised down to $66 million from $77 million, reflecting a timing difference for expenditures. At Bodo, planned capital expenditures were lowered by $1 million to $24 million for 2020. These adjustments reflect a net decrease of $10 million in our sustaining capital and a net decrease of $15 million in our non-sustaining capital guidance. Our resulting updated total capital spend for 2020 is expected to be $325 million for a net decrease of $25 million versus prior guidance. In the quarter, we have progressed in a number of areas. At Rosabelle, we continue to ramp up Saramaca production with an aim to complete the road by year end. We continue to expect to be at the target run rate for mining at Saramaca later in the year. We advanced the mill optimization project at Essacan and adjusted the startup date to the first quarter of 2021. Again, in the quarter, Westwood continued to deliver steady production, with Grand Duke Open Pit providing supplemental ore. We also continued de-risking Bodo with investment in local infrastructure and advancement of detail engineering. In exploration, we continued our resource delineation work at various projects, including Nelligan, the Rouen project, and the recently acquired Fayol property in Quebec. as well as Gosselin near Côté and the new Carita discovery in Guinea. As we have indicated before for 2021, Westwood has potential to expand production with supplemental feed from the Grand Duke open pit, subject to the assessment of our business continuity plan. We also see Rosabelle production ramping up with Saramaca Online and an optimized Essican mill to demonstrate increased throughput. For our growth projects, the Cote work plan will be focused on major earthworks during 2021, while we continue to de-risk the Bodo project. And for Gosselin, we are targeting a maiden resource. On that note, I will pass the call over to Carol to review our financial results.

Thank you, Gord, and good morning, everyone. We are pleased to say that the company continued its trend of robust gold margins in the third quarter, demonstrating both strong operating cash flows and strong mine site pre-cash flows. We completed a bond refinancing for $450 million, lowering the interest rate to 5.75% from 7%, and importantly, extending the maturity of the senior notes to 2028. Following this, credit agencies S&P and Moody's reaffirmed IMGOOL's stable outlook. We continue our well-established approach of prudently managing our balance sheet with cash, cash equivalents, and short-term investments of $897 million, excluding restricted cash of $30.8 million at the end of the quarter, and our largely undrawn credit facility of $500 million. We implemented a gold hedging strategy to mitigate gold price exposure and to further de-risk the balance sheet during the co-take gold project construction period. The company intends, under appropriate conditions, to hedge 15% to 20% of the total production between 2021 and mid-2023 through a combination of options and or collars. During the quarter, we executed gold bullion collar option contracts with a minimum floor price of $1,800 per ounce and a ceiling of $3,000 per ounce, on 114,000 ounces for 2021 and 18,000 ounces for 2022. Subsequent to the end of the third quarter, we added to our gold hedge position for 2021 using a zero-cost collar of $1,600 to $2,505 per ounce on 28,000 ounces, as well as a collar of $1,700 to $2,800 per ounce on 50,040 ounces. In the third quarter, we also executed hedges for the Coté Gold project, including Canadian dollar forwards for approximately 6% of our exposure at a blended exchange rate of 1.3604 and zero-cost fuel collars for 90% of our exposure, with floors starting at $33.80 per barrel and a ceiling of $50 per barrel. Our earnings before adjusting items were impacted by the redemption of the redemption premium paid on the early redemption of our 7% senior notes, a non-cash loss on the embedded derivative related to the 7% senior notes, the time value of our input cost derivative, in addition to COVID-19 expenses. We continue to expect depreciation expense in 2020 to be in the range of $245 million to $255 million, with our cash taxes guidance remaining unchanged at $30 million to $45 million. Turning to the third quarter results, revenues were $335.1 million supported by strong gold prices when cost of sales were up compared to the same prior year period and the prior quarter. Adjusted net earnings for the quarter were $52.1 million or 11 cents per share. Net cash from operating activities before changes in working capital totaled $108.4 million. Our gross profit margin has steadily improved quarter over quarter, with the third quarter at 23%. Starting this quarter, we are presenting mine site free cash flows, which reflect free cash flows from our operating mine sites with development capital and non-mine site activities adjusted out. We believe this measure demonstrates how far we have come in the past year with $80 million in mine site free cash flow up almost four times from the third quarter of 2019. On a year-to-date basis, we have generated $145.5 million in mine site free cash flows up dramatically from just $3.7 million year-to-date last year. Following the strength in gold prices and our prudent management of the balance sheet, Our liquidity excluding restricted cash and including our largely undrawn $500 million credit facility totals $1.4 billion. Again, our 5.75% bond for $450 million is not due until 2028. Therefore, we are well positioned financially for the construction of the Coating Gold project. Finally, our disciplined approach enables us to continue to be a leader among our peers with a net cash position and leading liquidity. Our liquidity, combined with anticipated free cash flows from our existing operations, together with our risk management measures, is expected to enable us to cover the construction of our transformational Cote Gold project. I will now pass the call to Bruno to discuss operations.

Thank you, Carol. IAMD is committed to the health and safety of our employees, and we are pleased to say that our statistics from the quarter continue to reflect this commitment. In the third quarter of 2020, we again achieved better-than-target rates for BAT darts, which stands for Days Away Restricted or Transfer Duty, and TRI, which stands for Total Recordable Injuries, recording 0.36 and 0.48, respectively, for 200,000 hours worked. At the end of last week, we were tested on our connectivity to act as needed and when needed to ensure the safety of our colleagues. I applaud our colleagues at Westwood for their success in ensuring the safety of our workforce. Our goal every day is to meet or exceed our safety targets, implementing and refreshing a number of initiatives to ensure a safer work environment including a comprehensive leisure-based safety program. For the quarter, we are reporting total consolidated attributable production of 159,000 ounces, cost of sales of $1,098 per ounce sold, total cash costs of $1,006 per ounce produced, and out-and-sustaining costs of $1,206 per ounce sold. I will now review each operation in turn. At the second, attributable gold production for the third quarter 2020 was 94,000 ounces compared to 83,000 ounces in the second quarter, reflecting a material increase in third quarter production. Higher grades in the quarter relative to the second quarter were offset by the impact of galactic ore on recovery, in line with expectations and by the impact of maintenance on throughput. We did have a slightly higher capitalized tripping in the third quarter compared to the second quarter, with total cash costs impacted by higher royalties, while audience sustaining costs were impacted by maintenance, higher input costs and royalties. All in sustaining costs were $1,044.54 for the quarter, compared to $1,123 in the second quarter. COVID-19 protocols are now embedded at ESACAN with zero cases and operations effectively back to normal. For the balance of 2020, we continue to expect geographic or with the attendant negative impact on recovery. But despite this, we expect a solid finish to the year. As Gord noted earlier, we now expect the mill optimization project to be delivered in the first quarter of next year due to equipment fabrication and delivery timing delays. At Roswell, attributable gold production for the third quarter was 42,000 ounces. impacted by the suspension which ended on July 24 and processing of low-grade stockpiles mixed with ore material from Saramaca. At Saramaca, we resumed activity to complete the final construction touches on the old road targeted for the fourth quarter. I will remind you that we have been utilizing the whole road since the first quarter while this work was being completed. Total cash costs were impacted by lower production volumes and royalties with audit and sustaining costs lower due to lower milling costs and sustaining capital. Audit and sustaining costs were $1,164 per ounce for the quarter. Our COVID-19 protocols have been updated with the camp extension underway. We expect to reach our normal workforce capacity in the first quarter of 2021. with our mining complement ramping up over the fourth quarter. The fourth quarter is expected to be a full quarter of continuous mill operations. We expect to complete non-critical PEP infrastructure for Saramaca in the first half of 2021. We are also in the preparatory stage of our upcoming collective labor agreement discussion. You can see our progress in this picture of the truck shop, the run-of-mine facility pad, and the formworks and concrete at the facility pad. Westwood produced 23,000 ounces in the third quarter 2020. In August and September, we achieved record throughput rates. We achieved our target production by blending open-pit geologic ore with Westwood underground ore. The increase of proportion of GANZIC ore relative to the second quarter was due to the timing of stope sequencing along with higher GANZIC contribution. The higher GANZIC proportion contributed to higher total cash costs with audience sustaining costs also impacted by equipment replacement and deferred development. As a result, audience sustaining costs were high at $1,515 per ounce sold. To provide an update from our news release on Monday, the Westwood restarted yesterday evening while the underground operation remained suspended. You would have seen this slide before, but I wanted to remind you that the hub and spoke model we have for Westwood is based on the excess capacity we have at the narrow, which acts as a hub with regional targets acting as spokes. This model would see Granduc ore field eventually followed by Fayolle ore field pending permitting with target production for Fayolle commencing at the end of 2022 and running for two years. I will now provide an update on our construction project Côté Gold. We believe the Côté Gold project needs the criteria of a Tier 1 asset boasting a long life potentially In excess of 18 years, 493,000 gold ounce annually in the first five years on a 100% attributable basis. Second quarter, total cash cost of $600 per ounce. Second quarter, all in sustaining cost of $771 per ounce. And location in a mining-friendly jurisdiction with further potential upside from exploration. We expect the Côté Gold project to provide tremendous value to Ion Gold with a net present value of $2.5 billion on a 100-person basis and a gold price of $1,900 per ounce and internal rate of return of 25.9%. We are proud to have strong stakeholder relationships with our joint venture partners, Sumitomo, as well as indigenous communities, Flying Pulse and Metagini, and of course, our northern communities. Today, detail engineering for COTI has advanced to approximately 66%, and we expect to ramp up activities in Q4. These include early works, activities such as levelling of the Kampan fish salvage operation in the future tailings area, expansion of the site access road network, and aggregate production. In the fourth quarter, we plan to focus on camp construction to increase the accommodation capacity on site ahead of the imminent manpower ramp-up. Other construction work will also include site preparation and the finalization of the fish salvage activities. Detail engineering will continue to advance, and procurement will focus on the fabrication phase for critical equipment. Major earthworks are on track to start in the second quarter of 2021. We have continued to advance our permitting for construction. We received two key permits under the Lakes and Rivers Improvement Act. We received just yesterday the TMF Starter Dam approval under that Act for the key priority structures under that application for construction. We received relevant environmental approval for dewatering activities within the tailings management or TMF footprint to support construction of the TMF starter dam structure. We also received a permit to take water. We have a few pictures here from our official groundbreaking ceremony in September, which was attended by the Prime Minister of Canada, Premier of Ontario, First Nation and other dignitaries and stakeholders. There are also some pictures of fish relocation programs underway. This slide really highlights COTE's sensitivity to the gold price, with both after-tax net present value and internal rates of return shifting dramatically up in the current gold price environment. While we are pleased to see this potential, Our internal modeling for COTI is based on conservative prices and assumptions so that this project is defensively positioned for gold price volatility. I will now turn the call over to Craig to discuss development and exploration.

Thanks, Bruno, and good morning, everyone. As usual, please note that the results I talked about today have been previously disclosed in accordance with securities regulations and signed off by the qualified persons within the company reporting them. In 2020, our planned exploration spend has been reduced to $41 million from $52 million, excluding project development activities and studies. The main drivers of these adjustments were the various regional restrictions caused by COVID-19 during key program activity windows, followed by the usual work reductions from seasonal impacts such as the rainy season in West Africa. I have included here a few updates from the quarter. In Quebec, drilling activities resumed at the Nelligan project with 2,600 meters of diamond drilling completed from both infill and step-out holes. Recall that resources on a 100% basis for the project totaled 3.2 million ounces in an inferred category at a grade of 1.02 grams per tonne gold. We also reported assay results from the winter drilling program with highlights of 39.1 metres at 2.14 grams per tonne gold and 34.5 metres at 1.85 grams per tonne gold. At the Monster Lake project located 15 kilometres north of the Nelligan project, We reported drilling results from the anti-shear zone target, including 3.8 meters at 16.9 grams per tonne gold, 2.8 meters at 5.63 grams per tonne gold, and 12.3 meters at 2.09 grams per tonne gold. Also during the quarter, our joint venture partner at Monster Lake, Tomagold, announced that both companies had signed an asset purchase agreement under which IAMGOLD would acquire the remaining 25% interest in the project held by Tomagold. Upon closing, this will increase IAMGOLD's ownership to an undivided 100% interest in the project. The completion of the sale is subject to usual shareholder and regulatory approvals for Tomagold, which are expected in the fourth quarter. We announced further results at the Ruan Gold project from our infill diamond drilling program to support the completion of a maiden resource estimate for the Lac Gamble zone, which we feel may have potential to provide future satellite feed to our Westwood operation. Highlights include 4.1 meters at 10.4 grams per tonne gold, 8.9 meters at 4.3 grams per tonne gold, and 7.4 meters at 8.3 grams per tonne gold. During the quarter, we also completed some 5,600 meters of additional diamond drilling to evaluate the resource potential of the nearby historic Astoria deposit, located several kilometers to the east of the Lac Gamble area. As we have shown before, industry reserves have been on a steady decline since 2012, representing a significant challenge to the future of our industry. IAMGOLD has worked hard to differentiate ourselves from this industry trend. Our objective is more than just replacing reserves at the rate of annual mine depletion, but also to grow and expand our reserves. Because mine sites constantly deplete reserves and eventually mature, reserve replacement becomes increasingly difficult over time. To counter this, resource and reserve growth must also be achieved through exploration success at greenfield development and early stage projects. As shown on the slide, our success to date has been commendable. Besides our continued efforts at our mine sites and development projects, our greenfield exploration program has delivered a number of important exploration discoveries that will continue to supply the building blocks necessary to not only sustain reserves, but to provide opportunities for further reserve growth in the years ahead. As I have said many times, this can only be achieved through a sustained commitment to exploration through the cycle and, of course, the tireless dedication of our mine geology and exploration teams. At the Cote Gold project, we were able to advance our work relating to assessing the resource potential of our new gosling discovery located 1.5 kilometers northeast of the Cote Gold deposit. Drilling activities resumed during the third quarter and we completed approximately 3,000 meters of diamond drilling from a barge-supported program. Drilling continues to focus on infill and step-out drilling to support an initial resource estimate expected in 2021. Switching gears a little bit to talk about development at Bodo, we continue de-risking activities in the quarter, with detailed engineering advancing to approximately 50% complete. Activities included engineering and preparations for the access road construction and upgrades to the installation of a camp. We also awarded engineering contracts related to plant equipment design, as well as for the start of construction of the access road site. Restrictions related to COVID-19 crisis have delayed the advancement of certain local site initiatives, such as community engagement in environmental activities. We expect to reschedule these as local conditions allow. In West Africa, exploration activities were restricted during the third quarter due to the rainy season. Efforts focused on data compilation of exploration results and target generation to guide future programs across our portfolio. At the Bodo Gold Project in Senegal, drilling data obtained in the previous quarters is being incorporated to refine the resource and reserve models. Again, highlighting our exploration success along this portion of the San Miguel Mali shear zone, with several discoveries located within 15 kilometers of the Bodo Gold Project in adjacent countries, we are working to advance a strategic development concept we refer to as the Bamboo Gold Complex, which will prioritize and advance resource development and delineation programs at the Diakosirabaya and Karida Projects, to support the evaluation of potential development scenarios and identify regional synergies. Finally, I will finish with our project pipeline. A robust and balanced project pipeline, strategically assembled and advanced, is a fundamental asset to the future viability of any mining company. And this is even more important in the current environment of bullish gold prices and declining global resources. Competition for and access to quality exploration projects at acceptable entry costs remains challenging for the industry. IAM Gold has developed and continues to invest in a healthy pipeline of early to advanced greenfield exploration projects to support our future growth, as well as support near-mine brownfield exploration with a view to extend mine lives and leverage our existing infrastructure. With that, I will now pass the call back over to Gord to conclude.

Well, thanks, Craig. So IAMGOLD's transformational strategy centers on delivering the top-tier Cote Gold project, de-risking the Bodo Gold project, optimizing our current operations, and continuing to invest in our pipeline of brownfield and greenfield exploration. Together with our financial strategy of maintaining a strong balance sheet, opportunistically securing favorable hedges on cost inputs and protective hedges on a portion of gold production during Cote construction. We believe IAM Gold is positioned to deliver on its goal of superior returns to shareholders. In this context, we look forward to updating you on our ongoing progress at our operations and at Cote. I would like to close by acknowledging the hard work and dedication of our teams across the globe in these particularly challenging and unusual times. And thanks to everyone for joining our call today. And I'll now pass the call back over to the operator.

Thank you. We'll now begin the question and answer session. To join the question queue, press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using the speakerphone, please ensure you lift up the handset before pressing any keys. If you wish to remove yourself from the question queue, you may press star, then two. Anyone who has a question may press star, then one at this time. Our first question is from Fahad Tariq from Credit Suisse. Please go ahead.

Hi, good morning. Thanks for taking my two questions. First on Westwood. Look, I think there's been a history of seismic events at the mine, and you've revised the mine plan already and tried to accommodate or deal with it a little bit. What more can be done that is in the company's control? And is there an increased focus now on brownfield exploration near Westwoods, perhaps recognizing that the seismic events at the underground mine might be just a reality going forward. So maybe there's other deposits that need to be brought forward. Thanks.

Yeah, I'll take that one, Fahad. Look, obviously, we're still investigating what happened with this specific incident. It was in an area distinct from earlier incidents, and it's also in an area in a different rock unit than the prior incidents. But it was an area that was developed before the last round of engineering that was done, and the work we're looking at going forward is focusing on a different type of development sequencing. So we'll continue to look at it. We are aggressively looking at the hub and spoke model and what the regional opportunities are. And some of that is in hand, and we're just in the process of permitting or developing it, including Grand Duke and Fayol. Obviously, the opportunity at Rouen Gold continues to improve for us the more we drill it out. And as we complete our business recovery plan at Westwood Underground, we'll assess what that opportunity is. At the end of the day, our goal is to have a safe, profitable operation, and that will be first and foremost in our minds. If we're not able to achieve that safety, we'll have to adapt the plan going forward to get us there.

OK, great and my only other question on the cost guidance that's higher now. How much of that is Westwood related, meaning lower production? How much of it is something else? Because I'm trying to bridge that with I think in another slide you said that the COVID incremental COVID costs are not being included in the unit costs, so it sounds like the higher cost guidance is not necessarily COVID related. Maybe just some color on the components of the higher cost guidance. That would be helpful. Thanks.

Yeah, I don't have a detailed breakdown of the components of the cost, but the adaptation in the cost is related to the incident at Westwood and us taking a conservative view of what the rest of the fourth quarter is going to look like at Westwood and what the impacts then were on our consolidated costs. We looked at it fairly closely. There are some impacts with lower production in Q3 from Roosevelt, although that certainly is wrapping up nicely and seeing some nice production out of Essex as well. In the absence of the event at Westwood, I don't believe we would have adjusted all of the cost parameters. We may have adjusted one of them. just to adapt to the actuals from Q3. But it certainly was a significant driver for the decision to modestly change our cost guidance.

And, Gord, maybe I could add to that. And what we are also seeing is higher royalties as a result of the higher gold price. And we had to push off some of our sustaining capital during COVID occurrences at the mine site. You'll see more of that coming into the fourth quarter.

Okay, that's clear. That's it for me. Thank you very much.

The next question is from Jackie Przybylowski from BMO Capital Markets. Please go ahead.

Thanks very much. I guess my first question, I just want to follow up with Fahad's first question on Westwood. The guidance revision you gave for 2020, specifically the production guidance at Westwood, do you assume in that production guidance that Westwood restarts in Q4 2020? Or is the guidance reflecting processing of lower-grade stockpiled ore through the entire quarter?

so jackie yeah we we took a very conservative uh view we we uh we have you know we've obviously started our investigation um but we don't want to be pressuring uh the operation to restart until we're ready to restart the guidance is based as you as you as you sort of stated on the production up until the actual incident, so basically through the end of November, sorry, the end of October, and then two months of processing from the open pit and from stockpile. That's what that guidance analysis is based on.

So, yeah, I guess that's helpful because we can't read into your guidance that you're expecting 2021 to be back up and running at full run rate or anything like that, it's still open-ended in terms of when the restart will happen and what it would look like.

As we said, I think starting with the Q1 and Q2 results, we have been reviewing the 2021 guidance and not obviously just for Westwood, but also the larger picture. At this point in time, we're withdrawing that guidance and we'll be working really diligently over the next couple of months to firm up what the picture looks like going forward. And as of right now, you know, pending the outcome from this investigation, we're not comfortable saying anything about Westwood until we understand it. We will be updating in early in 2021 with 2021 guidance for the larger picture as well.

Okay, that's helpful. Thank you. And my second question would be on the hedge program that you've reported for 2021, I guess, specifically. So you've said that you're aiming for about 15% to 20% of total production. I mean, I'm assuming that's attributable production to IAM Gold. And based on that and based on the information that you gave It looks like you're kind of there for 2021 already with the hedges that you've disclosed. Is that fair? Or do you expect that you'll be adding additional hedges for 2021? Or do you think that you're sort of at your target already for next year?

Hi, Jackie, it's Carol. Yeah, you're spot on. So we have, you know, we don't expect to add anything further for 2021. We're there. And if you take a look at the weighted average on the floor, we're looking at $1,747. And on the ceiling, it's a weighted average of close to $2,900. So, yeah, we're pretty comfortable with where we're sitting with 2021.

Perfect. That was actually going to be my last little tiny question. So, thanks very much for that, Carol. And that's it for me.

Thanks. Thanks, everybody. The next question is from Anita Soni with CIBC World Markets. Please go ahead. Hi. Good morning, everyone.

Just a little further on Westwood. Gord, you mentioned it was in a different zone separate from where the previous issues have occurred. Can you just remind me which zone that was?

I'm just trying to think of what information is out there.

I think you had labeled them zones one through six.

Yeah, I'm just trying to remember by sequencing that. What it is, it's the zone that's on the hanging wall side of Corridor 2, whereas the prior incidents had been on the footwall side of Zone 2.

Okay, but how close is it to the main infrastructure?

Oh, it's quite distal from the main infrastructure. This was This was a set of workings to recover a zone that was a little bit further to the west. We actually have about 90%, 95% of that panel completely removed so far.

Okay. And relative to the average grade of the asset there, what was the average grade in that zone?

You've got me there. I don't have it. My understanding was it was a reasonable grade. It was probably close to average grade. It wasn't the best material, but it certainly wasn't low grade.

All right. And then just moving to 2021, I mean, I think within by Q1 or Q2, you had already started to talk about 2021 guidance, you know, not yet revoked, but definitely being under review. And this is, you know, obviously prior to anything that was happening with Westwood, but more, you know, COVID-related impacts. So outside of the Westwood impacts, can you talk about some of the other moving parts that might be impacting 2021 guidance? Like I think one thing that I would be thinking about would be just the slower ramp up at Roosevelt this quarter post the COVID-related shutdowns and how that kind of winds its way into 2021.

Yeah, I mean, you know us quite well, Anita. That is part of it. Obviously, with the impacts of COVID, we have resequenced some of our zones and probably more at Roosevelt, but at all the operations, there has been some resequencing. So part of the guidance adjustment is to do with will be, or once we have it in hand, we'll be really looking at those timing impacts and how that sequencing now falls in 2021. And, you know, just regular ongoing geologic assessments as to how the different deposits are performing. You know, it's part of the regular operation, and we continue to look at it. The timing sequences due to COVID, I think, is probably the bigger impact, and obviously now understanding Westwood is also a significant impact.

Okay. And then my last question is back to Roosevelt again. Just on the back of the – I was just looking at the operations. It looked like Saramaca delivered some good grade and pretty good tonnage, but – I guess the Roosevelt proper was delivering a little bit more stockpile than I had anticipated. So can you just give us an idea of what the rest of, like outside of Saramaca, what the ore split was in terms of stockpile and ore source from the Roosevelt pit?

I'm going to have to turn that one over to Bruno. I mean, the impact really has to do with the ramp up of the workforce following the suspension and our work on the camp. So I know we got Saramaca back up and running relatively quickly. On the main Roosevelt section, we were mining. We certainly were mining some priority pits. But given the reduction in the number of people that could stay in camp while we expand the camp, we were focusing on, or weren't focusing, but we were actually exploiting some of the on-site stockpiles, the lower-grade on-site stockpiles to keep the mill full. But I'll just let Bruno sort of expand on that.

In Q3, we were able to ramp up our activities in America close to 8,000 tons per day after the resumption of our activities. Actually, we have close to 600,000 tons of stockpile at Saramaca, so we'll continue to ramp up for Q4. That's what is planned.

Bruno, the question was for the Roosevelt proper contribution, do we understand the tonnage split between stockpiles and direct pit feed in Q3?

I would like to come back to the number.

Yeah, I just want to get an idea of what the actual run rate is relative to full throttle production at the Roosevelt pit.

Yeah, understood. Okay.

Thank you.

That's it for my question.

Thanks.

The next question is from Josh Wilson with RBC. Please go ahead.

Thanks. Another question on Westwood. Is there any sort of context you could provide as to what the damage is right now or maybe how it would compare to the prior sort of incidents on the 104 level?

Bruno?

Sir, can you repeat the question, please?

Is there any ability to characterize or quantify the level of damage as it would have compared to prior seismic events? I guess the closest one would be the 104-level incident a number of years ago.

Yeah, well, as we mentioned, we need to assess what caused the seismic event, okay, and like what you're saying is the impact on the production schedule right now. In that zone, we were about to finish and complete the mining of this zone. I would say we'll have to be giving you more details after the investigation and looking after that what is the consequence of event on future production. We'll provide an update on these in due course.

Okay, and is there any ability to maybe quantify the reserve volume that would be in that area?

Like I mentioned, so far we were almost done with the zone, so at this moment we're looking at the impact on the mine plan, but In terms of valuation or reserve, that's not necessarily what we at this stage are evaluating. It's more on the mining plan side. The impact is less since it is in the far west of the mine, to be exact.

Okay. And then for Saramaca, you mentioned the stockpile that was in place. If I recall looking at the old tech report mine plan, there was about a two-ish year ramp up, including, I guess, 2021, which would have been in there, where the mine or Saramaca's contribution would be below its steady state. So when you say, or the guidance for full throughput is expected at year end, Is that rate expected to be in line with what the old mine plan was, or should that be close to that 6,700, 6,800 tons per day processing from Saramaca?

Yeah, actually we see a stronger ramp up in Q4, definitely with a great impact at the mill. So the contribution for Sarmaca for Q4 is expected to be stronger. As we speak right now, we are finalizing the loan for 2021, so we will be able to guide on this with regard to what Sarmaca is expected to give versus the original plan.

Okay, and then last question, just in terms of gold price assumptions for year-end reserves and resources. Any thoughts on that?

Yeah, Josh, we're not planning on moving our gold price assumptions on reserves or resources this year. As part of the overall strategy, and we've said a bunch of times, We really are focused on generating cash flow out of the existing operations, at least through the construction period for Cote. At this point in time, we're not looking to modify cut-off grades and move away from that plan. In the medium term, higher gold prices persist. I hope and pray they do on a daily basis. At some point in the future, we will start to consider looking at it. Specifically, most importantly, I think, in reference to Essican, which has the shorter mine life and understanding what the impacts are. That being said, the long-term planning group is evaluating on a regular basis what those impacts are. might be, but for corporate disclosure, we're not going to be moving our numbers.

Great. That's all my questions. Thank you very much. Thanks.

The next question is from Don McLean with Paradigm Capital. Please go ahead.

Well, good morning. Most of my questions on Westwood were answered. I guess, you know, it's unfortunate that a relatively small contributor to the production and cash flow is occupying so much intellectual horsepower at the company. I mean, Gordon, I guess the underlying question here is at what point do you throw in the towel on this thing? Do you get to that point? Is it sufficiently profitable if you look at it from a macro perspective to be worth all this effort?

It's a great question, Dodd, and certainly the conversation we've been having internally. I think for us right now, we're going to wait for the analysis of the incident and what the business recovery plan is. I think our assessment will be like any assessment around any asset. Where are we best providing returns for our shareholders today? through our allocation of capital. And that'll be the question that our efforts at Westwood will have to answer in comparison to our other opportunities. It's too early to talk to that now. As I think I said and Bruno said as well, the incident really hasn't impacted our reserve ounces in a big way in any way shape or form however as we look at you know do we if we ask ourselves the question do we need to modify anything else with respect to how we're mining this deposit to maximize you know hazard abatement does that require a different capital profile than we had laid out through our prior plan we haven't we haven't got up to that point but it It's a question of capital allocation, obviously following our ability to mine safely.

It's a tough one if we just stand back and look at it from a market perspective when you're being held or judged operationally on something that is really totally out of your control. The ESICAN and Rosebell are challenging in their own rights, but it's something you can manage. But Westwood is just you get these situations that are totally outside of all your best efforts that really throw your whole sort of operational perception of the market off kilter. So it's most unfortunate. It would be nice if you could somehow isolate it in some way that people could – Judge Essican and Roosevelt, the real backbone of the company on a fair basis, without it being colored by Westwood.

Those are the questions we're asking ourselves here now.

Yeah. And can Grand Duke and Fayol and possibly Rouen, could they actually sustain the mill as a profitable entity without the undergrounds?

Yeah, again, that's a question. You know, none of them were intended to be 100% producers. So, you know, we'll have to look at it. Maybe there are other opportunities as well. And it really is a holistic picture. I mean, the hub and spoke concept that Bruno described very well really – The underlying assumption there was that Westwood was profitable in and of itself in providing a base load fill of the mill. If that sequencing is different, then we need to evaluate sort of the overall picture. As you pointed out earlier, on most models, the proportion of value that's assigned to Westwood within our portfolio is relatively small. The whole hub and spoke concept that Bruno and the team at CITE and the team at Lange have been driving towards was to provide a longer term valuation superior to sort of the Westwood base case. And we'll need to understand it all sort of in a holistic way.

And then just, you know, you may not be able to answer this, but have you ever had expressions of interest from potential buyers for Westwood?

Yeah, like you say, Don, that's something we really, we don't typically answer publicly until things get a little further along, if that were to ever happen.

Okay, just thought I'd ask that question. And then lastly, Gord, any kind of colour questions? on 2021 compared to what we've seen in Q3? If we, you know, cross out Westwood, how Roosevelt and Essican will look, you know, in a broad sense, will they look better or pretty much the same?

You know, at a high level, my, my expectation is, is Essican will, FCAN is a fairly steady producer along the lines. Yes, we had some COVID impacts this year. If you remove those COVID impacts, I think you'll see Westwood next year something comparable to the steady state without those impacts, obviously assuming that there's no further future impacts. And Roosevelt, as Sarah Macca starts to deliver a bigger component of of production on a sustained basis for a full year, we do start to see some improvement with Roosevelt. We're just in the process of dimensioning exactly how much that improvement is. And as I spoke to Anita's question earlier, at the same time, we're trying to understand what has the COVID impact done to our sequencing plan at Roosevelt proper and how does that impact 2021. So we're right in the midst of putting all that together. Okay.

This concludes the question and answer session. I'll now turn the call back over to Indi Gopinathan for closing remarks.

Thank you very much. And thanks to everyone for joining us this morning and for your continued interest in I Am Gold. We look forward to having you join us again for our fourth quarter and four-year 2020 conference call in February. Goodbye.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.