IAMGOLD Announces Q3 Record Revenues of $227 million and an Operating Cash Flow Increase of 141% to $71.7 million
Toronto, ON - November 6, 2008 - IAMGOLD Corporation (TSX: IMG / NYSE: IAG)
For a full explanation of results, the unaudited interim Consolidated Financial Statements, Management Discussion & Analysis, and mine statistics, please see the Company�s website, www.iamgold.com.
�We are pleased to report record revenues and operating cash flow during the current quarter. Gold production and cash costs continued to meet guidance.
With our strong cash and gold bullion holdings, we are well positioned to continue to execute our growth strategy in West Africa and the Americas while applying very stringent criteria to all capital expenditure projects through these tight credit markets,� stated Joseph Conway, President & CEO
All amounts are expressed in US dollars, unless otherwise indicated.
HIGHLIGHTS OF Q3
-
Record quarterly revenues of $227 million increased 33% over $170 million in last year�s third quarter.
-
Net earnings were $18.8 million or $0.06 per share compared to net earnings of $19.5 million or $0.07 per share in Q3 2007. Adjusted net earnings(1), excluding an impairment charge related to capitalized exploration expenditures were $23.4 million or $0.08 per share.
-
Record operating cash flow of $71.7 million or $0.24 per share(2), represents a 141% increase over $29.8 million or $0.10 per share(2) in Q3 2007.
-
Attributable gold production was up 5% from last year�s third quarter to 253,000 ounces. The average cash cost(1) was $481 per ounce compared with $437 per ounce in Q3 2007. Rosebel achieved record mine throughput despite the rainy season, producing 82,000 attributable ounces of gold.
-
IAMGOLD has a strong cash and gold bullion position of $307 million (valuing gold at market as at September 30, 2008). In addition, a $140 million five-year revolving credit facility provides significant financial flexibility for IAMGOLD.
-
IAMGOLD�s 2008 gold production outlook is unchanged at 950,000 ounces. Cash cost guidance is revised down 1% to $480-$490 per ounce. The current financial market volatility may affect future cash costs either positively or negatively through changes in oil price, changes in gold price as it
impacts royalty payments, and currency exchange rates.
-
The Niobec niobium mine demonstrated superior operating performance contributing $16.2 million in operating cash flow in Q3. Unit operating margin (1) increased 57% in Q3 2008 over the same period in 2007.
-
Given the current economic environment, IAMGOLD is reviewing its capital programs as well as the investment opportunities that are becoming more attractive.
____________________________________________________________________________________
(1) Cash cost, Adjusted net earnings and Unit operating margin for the Niobec mine are non-GAAP measures. Please refer to the Supplemental information attached to the MD&A for reconciliation to GAAP.
(2) Operating cash flow per share is a non-GAAP measure and is calculated by dividing the consolidated cash flow from operating activities by the weighted average number of common shares outstanding in the period.
RECENT EVENTS AND INITIATIVES
IAMGOLD announced the filing of a draft tender offer in France on August 29, 2008, that will provide for an all cash offer of �1.20 per share (approximately $1.69 per share using the currency rate as at September 30, 2008) to acquire all of the outstanding shares of Euro Ressources S.A. (�EURO�). EURO currently has a participation right royalty on production from the Rosebel gold mine. The offer is for all outstanding EURO shares and for any shares issuable upon the exercise of options. The offer opened on October 6, 2008 and will close on November 21, 2008. IAMGOLD intends to fund the offer through its existing cash reserves or its credit facility. The Company has agreed to keep �75.0 million (approximately $105.6 million using the currency rate at September 30, 2008) available under the credit facility to fund the acquisition of EURO.
OPERATIONS HIGHLIGHTS
Rosebel Mine, Suriname
During the third quarter of 2008, the Rosebel mine achieved record quarterly mine and mill throughput, producing 82,000 attributable ounces of gold. Improvements in rainy season operating practices have led to significantly higher mine production. Continuous improvement initiatives at the mill have positively impacted throughput.
Rosebel�s $44.4 million mill expansion and optimization projects are well underway with key circuit components to be completed within 2008, to allow for the ramp-up in mill throughput as per schedule. Full completion is now expected during the first quarter of 2009.
Niobec Mine, Canada
The Company continues to increase the contribution of the Niobec mine (a non-gold asset), with the expected completion of a $12.0 million paste backfill plant and underground development by mid 2010. A technical report has been prepared that shows that the paste backfill system will enable the extraction of more ore grade mat erial and result in an immediate 34% increase in the current reserves. As underground development proceeds, current resources are expected to be converted into reserves at a rate of about 2 to 4 million tonnes per year. Pilot plant testing of a Kelsey Jig unit which may allow Niobec to realize a potential recovery improvement of over 2%, is scheduled during the fourth quarter. Results will be used for an economic evaluation on installing a full scale unit in the future.
During the first nine months of 2008, demand for niobium remained strong, while North America and to some extent, the European Union, experienced economic weakness. Asian countries, mainly China, continued to show strong demand. Although, niobium demand closely follows the demand for steel, there is a trend over time to increased usage of niobium per tonne of steel produced. As have most consumables tied to the production of steel, niobium prices have continued to rise by more than 15% during the third quarter of 2008 compared to the second quarter of 2008. Demand and prices are expected to remain stable in the last quarter of 2008.
PROJECT UPDATES
Westwood Project (Doyon Area), Canada
IAMGOLD continued to accelerate evaluation of the Westwood Project. In July 2008, the Company announced a 5% increase to 3.5 million contained gold ounces in an inferred resource of 14.2 million tonnes averaging 7.6 grams of gold per tonne, using a cut-off grade of 3.0 grams per tonne. With nine drill rigs currently on site, the geologic understanding of the deposit and mineralization continuity has increased substantially. Engineering is proceeding on all fronts including mining, metallurgy, and infrastructure design. The results of a revised scoping study will be released in the fourth quarter of 2008.
Quimsacocha, Ecuador
IAMGOLD released its pre-feasibility study in July 2008 for the Quimsacocha project that showed encouraging results. Production is expected to average 202,000 ounces of gold per year at an average cash cost (before royalties and profit sharing) of $272 per ounce over a projected mine life of 7.5 years, with an estimated payback of 3 years.
Work continues on the final feasibility study, including full environmental and social impact assessments. The Company is ready to resume exploration drilling on new targets at Quimsacocha following the approval of the new Mining Law when drilling permits become available.
A constitutional referendum held on September 28, 2008, resulted in a clear mandate for the constitutional reforms proposed by President Correa, including a mining policy that supports responsible mining. The government of Ecuador has stated its intention to complete the new Mining Law before the end of 2008 and the Company is working proactively with the key ministries of Mines, Environment, and Taxation to develop an equitable fiscal and regulatory framework for responsible mining in Ecuador. If the finalization of the Mining Law and receipt of permits occur in 2008, a final feasibility study will be targeted for the second half of 2009. Construction of the Quimsacocha project is targeted to commence in 2010, with commercial production in the second half of 2011.
Camp Caiman, French Guiana
During the third quarter of 2008, the Company continued to meet with stakeholders regarding Camp Caiman and the conceptual Project Harmonie plan to relocate the milling and processing facilities for its project in French Guiana. The economic feasibility of Project Harmonie and the likelihood of a mining permit being granted, can only be assessed after the completion of the new mining framework for French Guiana scheduled to be completed by the end of 2008. In order to protect the interests of the Company�s shareholders for damages incurred to date, the appropriate legal claims have been filed.
EXPLORAT ION UPDATE
Buckreef, Tanzania
A revised measured and indicated resource was reported in July 2008 of 1.0 million ounces of gold within 15.9 million tonnes with an average grade of 2.0 grams gold per tonne, incorporating the new Bukoli-Minzwel trend. Drilling has continued to test additional targets across the property. Results from the metallurgical heap leach test work on the Buckreef and Busolwa-Buziba deposits indicate low to moderate leach recoveries. These results, together with the new drill results, will be incorporated into a revised financial model that will be available in December 2008.
THIS PRESS RELEASE CONTAINS TABLES. CLICK HERE TO VIEW FULL PDF VERSION OF THIS DOCUMENT.
A conference call to review the Company�s third quarter results will take place on Thursday , November 6, 2008 at 11:00 a.m. EST. Local call-in number: 416-915-5761 and N.A. toll-free: 1-800-796-7558. This conference call will also be audiocast on IAMGOLD�s website (www.iamgold.com).
A replay of this conference call will be available from 2:00 p.m. November 6 to November 14, 2008 by dialing local: 416-640-1917 and N.A. toll-free: 1-877-289-8525 passcode: 21286074#.
Forward Looking Statement
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of IAMGOLD, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from IAMGOLD's expectations are disclosed under the heading "Risk Factors" and elsewhere in IAMGOLD documents filed from time-to-time with the Toronto Stock Exchange, the United States Securities and Exchange Commission and other regulatory authorities.
Cautionary Note to US Investors
The United States Securities and Exchange Commission (the "SEC") permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. The Company may use certain terms in this press release such as �measure d�, �indicated� and �inferred� �resources� that are prescribed by Canadian regulatory policy and guidelines but are prohibited by the SEC from use by US registered companies in their filings with the SEC. US investors are urged to consider closely the disclosure in the IAMGOLD Annual Report on Form 40-f. A copy of the 2007 Form 40-F is available to shareholders, free of charge, upon written request addressed to the Investor Relations Department.
For further information please contact:
IAMGOLD Corporation:
Joseph F. Conway
President & CEO
Tel: (416) 360-4712
Toll-free: 1 888 IMG-9999
Carol Banducci
Chief Financial Officer
Tel: (416) 360-4742
Toll-free: 1 888 IMG-9999
Elaine Ellingham
Senior VP, Investor Relations and Communications
Tel: (416) 360-4743
Toll-free: 1 888 IMG-9999
Renmark Financial Communications Inc.
John Boidman: jboidman@renmarkfinancial.com
Henri Perron: hperron@renmarkfinancial.com
Montreal: Tel.: (514) 939-3989 Fax: (514) 939-3717 www.renmarkfinancial.com |
Toronto: Tel.: (416) 644-2020 Fax: (416) 644-2021
|
Please note:
This entire press release may be accessed via fax, e-mail, IAMGOLD's website at www.iamgold.com and through Marketwire�s website at www.marketwire.com. All material information on IAMGOLD can be found at www.sedar.com or at www.sec.gov/edgar.shtml, or www.iamgold.com .
Si vous d�sirez obtenir la version fran�aise de ce communiqu�, veuillez consulter le http://ww w.iamgold.com/fr/accueil.html.