Iamgold Corporation Ordinary Shares

Thank you for standing by. This is the conference operator. Welcome to the I Am Gold third quarter 2021 operating and financial results conference call. As a reminder, all participants are in listening 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 one on your telephone keypad. Should anyone need assistance during the conference call, You may signal an operator by pressing star and zero. I would now like to turn the conference over to Graham Jennings, Vice President, Investor Relations and Corporate Communications for IAM Gold. Please go ahead, Mr. Jennings.

Thank you, operator, and welcome everyone to the IAM Gold Third Quarter 2021 Operating and Financial Results Conference Call. I'm pleased to have joined the IAM Gold team this week and to host this call today. Joining me on the call are Gordon Stothert, President and Chief Executive Officer, Daniela Dimitrov, Executive Vice President and Chief Financial Officer, Craig McDougall, Executive Vice President Growth, and Tim Bradburn, Senior Vice President, General Counsel and Corporate Secretary. Our remarks on this call will include forward-looking statements. Please refer to the cautionary statement included in the presentation under the heading Cautionary Statement Regarding Forward-Looking Information and be advised that the same cautionary language applies to our remarks during the call. Non-GAAP measures will also be referenced on the call, and we direct you to review the cautionary statement included in the presentation and the reconciliation of these measures, including our most recent MD&A, each under the heading Non-GAAP Performance Measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information. 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, Graham. Good morning, everyone. And thank you for joining us. And for those of you that joined us on the Cote Tour, thanks again for that. That was great. So in the third quarter of 2021, we saw an improvement in our operating performance. We produced 153,000 ounces of gold on an attributable basis, supported by the continuing strong results at ESSECAN. Roosevelt performed in line with the revised plan and year-to-date attributable gold production of 448,000 ounces. and our updated full-year guidance remains at 565,000 to 605,000 ounces. Cash costs and AISC are expected within guidance, although certain cost pressures continue, including higher logistics and consumables costs, including fuel. We continue to monitor and opportunistically execute on various hedging transactions, including currency in line with our input cost risk management practices. Year-to-date, operating capital expenditures were $166 million and are expected to be below guidance of $260 million, primarily related to timing of spending on capital improvement projects. At Cote, while we expended $72 million in the quarter, we actually incurred approximately $123 million with the Delta sitting in working capital. Capital expenditures at Cote in 2021 are expected to be approximately $350 million. At a corporate and strategic level, we have approximately $748 million in cash, cash equivalents, and short-term investments, and approximately $1.2 billion in total liquidity. IAM Gold generated $31.9 million in mine site free cash flow during the quarter, with an adjusted loss of $20.1 million, or $0.04 per share. We are very pleased to have announced our inaugural greenhouse gas initiative as part of our zero harm vision with a commitment to achieve net negative emissions by no later than 2050. And in line with our board renewal strategy outlined earlier this year, we have strengthened our board with two very experienced professionals with extensive technical operations and sustainability experience. From a growth perspective, as indicated in our October Q3 update, and Cote quarterly update news releases, construction activities at Cote continue to progress per schedule, reaching 36% project completion and 85% detailed engineering complete at quarter end. We were pleased to host an investor and analyst site tour in mid-October, just as the first steel installation of the process building commenced. And you can find the presentation from our site visit on our website at gosselin.ca. we achieved a significant milestone with the release of an initial mineral resource estimate totaling 3.4 million ounces of gold in the indicated category and another 1.7 million ounces of gold in the inferred resource category. I Am Gold continues with its commitment to achieving high standards in environmental, social, and governance practices, which are reflected in our long-held zero harm vision. As noted earlier, We announced our inaugural greenhouse gas initiative with a commitment to achieve net negative emissions by no later than 2050, and we expect to provide a more detailed roadmap and interim targets as we go into 2022. In partnership with Giants of Africa, a four-year program aimed at youth development in West Africa, we were very pleased to jointly complete and unveil a new basketball court at the City Youth Centre in Ouagadougou, Burkina Faso this past month. During the quarter, we also published our 2020 sustainability report in accordance with GRA and SASB reporting standards. We have committed to also report in accordance with TCFD guidelines by the end of 2022. And I have already mentioned the strengthening of our board with two new additions, Dr. Anne Massey and Kevin O'Kane. For each of our sites, We have continued with our proactive management of COVID-19 and implementation of established protocols. At ESSECAN COVID management remains stable with 60% of the workforce fully vaccinated. The COVID-19 situation in Suriname and its site remains fragile. Mandatory antigen testing continues to be in place among other mitigating controls and approximately 24% of the workforce is fully vaccinated. At Westwood, the COVID-19 situation remains stable. And at Cote, some cases were experienced by a small number of workers during the quarter, resulting in a heightened testing and implementation of additional constraints on site circulation, which limited the number of cases and had no material impact on project activities. At Bodo, testing and contact tracing protocols remain in place with no material impact on project activities. We continue to be proactively focused on safety, implementing a number of initiatives to promote a safe working environment. At Cote Gold, we had achieved another milestone with over 2.9 million hours and 1,100 days without a lost time injury since October of 2018. Our year-to-date DART, which stands for Days Away Restricted and Transferred Duty, frequency rate of 0.38 and the TRI or total recordable injuries frequency rate of 0.74 respectively per 200,000 man hours worked. Continue to outperform our consolidated annual targets of 0.51 and 0.85 respectively. I will now review our operating performance in more detail. So Essicant continued to perform strongly in the quarter with attributable gold production of 106,000 ounces at cash costs of $878 per ounce sold and all in sustaining costs of $1,033 per ounce sold. Production benefited from an increase in mill throughput and improved gold recoveries as positive impacts of the mill debottlenecking project are being realized. As noted in prior quarters, the improvement in capacity from the mill optimization project is important as Essacan moves to greater volumes of transition in hard rock versus softer rock in the coming years. As reported on Friday last week, a security incident involving shuttle buses carrying personnel took place en route to the Essacan mine. We are very pleased that all of the personnel involved in the incident are secure and safe. We continue to assess the security situation and make appropriate precautionary adaptations. Engagement with relevant authorities and partners continues. With no material impacts to date, I Am Gold remains strongly committed to ensuring the health, safety and security of our personnel and operations. Looking forward to the balance of the year, year to date attributable gold production was 314,000 ounces, trending towards the upper range of our production guidance of 390 to 400,000 ounces for us again. Certain cost pressures are expected to persist, including transportation, security, and consumables. At Roosevelt, following a very challenging second quarter, attributable gold production improved by 60% to 40,000 ounces as the operation achieved its highest mill throughput since the pandemic and was supported by higher grade as pit conditions and access after the rainy season improved. The COVID-19 situation remains fragile and continues to impact workforce productivity. We continue to monitor and implement mitigating measures to reduce the impact on operations. To date, since the start of the pandemic, close to a third of our workforce has tested positive for COVID-19 at one point or another, although the large majority of those individuals have subsequently recovered. This has required significant flexibility of our operating teams to manage productively with our COVID-19 protocols to ensure the safety of our workers and of our communities. The mechanical condition of the gravity and leach CIP circuits has been negatively impacting recoveries and is resulting in higher than normal levels of in-circuit gold inventory, in turn impacting gold sales. The ongoing project to improve the efficiency of our ADR circuit is expected to be completed by year-end, with improvements in both recovery and reduced in-process inventories expected to be realized starting next year. The maintenance backlog of mining and mill equipment continues to impact availability. Deliveries of new equipment aimed at improving availability have commenced. Recurrent pit intrusions by illegal miners continue to impact production at Royal Hill. Collaboration with the government task force and local communities is ongoing in an effort to reduce intrusions and implement long-term and sustainable solutions. Cash costs of $1,796 per ounce sold and all-in sustaining costs of $2,156 per ounce sold were impacted by higher costs and a net realizable value of gold inventory stockpile write-down, which accounted for approximately $300 per ounce increase to both cash costs and AISC for the quarter and lower gold sales. At Saramaca... Construction of required infrastructure is continuing at the facility pad, the sedimentation dams, haul road and public road crossings and works on the west dump drain, all to be completed in Q4. We expect certain cost pressures including higher logistics and energy costs to persist. In addition, we have been working on a new geological model to form the basis of an updated mineral inventory estimate to be released in the first quarter of 2022. Based on currently available information and given the negative impact of certain factors including higher costs, we expect that mineral resources will likely decrease and mineral reserves may decrease by more than depletion. Westwood produced 7,000 ounces in the third quarter with the mill processing mainly Grand Duke open pit ore supplemented with underground ore from the east zone where mining restarted in June. Mill throughput was impacted by lower availability due to an increase in the ratio of Grand Duke hard rock. Solutions to improve processing of Grand Duke hard rock are being investigated. Although underground mining productivity is improving, production continues to be impacted by labor shortages as well as the impact of implementing additional safety measures. The company is using additional training, schedule changes, and focused hiring activities to mitigate the challenging labor market conditions. and productivity rates. We do expect to provide a three-year operating plan update with the release of 2022 guidance and continue to evaluate the optimal path forward for the company and our site workforce. I will now provide an update on the construction progress at our Cote Gold project. As of September 30th, the project was 36% complete with detailed engineering reaching 85%. The project expended $71.6 million in the quarter and $264.6 million since July 1st, 2020 when the project was announced. While incurred costs for the quarter were $122.7 million and $368 million since July 1st, 2020. Remaining project costs from October 1st onwards are estimated at between $860 million and $910 million. Progression of earthworks activities, including ongoing haul roads construction, water realignment channels work, and construction of dams occurred during the quarter. We completed the 2021 fish relocation program within the open pit footprint, which was very critical for mining sequencing. The TMF water management infrastructure is currently being installed, including cofferdams and pumping stations. Pre-stripping work continued with open pit drilling, blasting and crushing, and mining reached the key elevation of 382 meters above sea level, which had originally been targeted for year-end 2021. Plant civil works progressed with the combined placement of precast and cast-in-place concrete. Most of the process building structural steel is on-site and pre-assembly started in Q3. First steel installation of the plant building shell commenced in mid-October and is progressing well. The permanent camp has also progressed with commissioning now at 95%, currently accommodating over 800 workers at site at the end of the quarter. Operational readiness advanced, focusing on a number of areas, including organizational design, hiring strategy, and technology, as well as spare parts for critical equipment and training plans for autonomous haul trucks, among other elements. For the balance of the year, the work plan will continue to focus on earthworks, including the first ore excavation, and concrete works, progressing with the installation of the process plant building, initiation of mine facilities construction, and completion of the remaining works for the camp while switching the camp to grid power. Remaining capital costs in 2021 are expected to be approximately $150 million. As previously disclosed on October 18th, Operating metrics for the Cote Gold project, as outlined in a technical report that will be published by December 2nd, reconfirm Cote as a robust tier one low cost and long life asset. At a $1,600 gold price, the project has an NPV of $1.6 billion with a 19% IRR on 100% basis. Life of mine production is expected to remain at an average of 367,000 ounces on 100% basis and is expected to average 489,000 ounces per year over the first five years. ASC is expected to average approximately $802 per gold ounce sold. We remain on track for reaching commercial production in the second half of 2023. And this slide shows a number of pictures illustrating the progress achieved at site. You may also access a virtual 360 degree tour of the site by following the link at the top right corner of this slide, and that is accessible on our website. I will now turn the call over to Craig to discuss development and exploration.