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| February 24, 2011 |
| IAMGOLD Reports Record Production, Record Net Earnings, Record Operating Cash Flow for the Fourth Quarter |
TORONTO, ONTARIO--(Marketwire - Feb. 24, 2011) �
If you are unable to view this release, visit www.iamgold.com.
All amounts are expressed in US dollars, unless otherwise indicated.
IAMGOLD Corporation (TSX:IMG)(NYSE:IAG)(BOTSWANA:IAMGOLD) ("IAMGOLD" or "the Company") today reported its unaudited consolidated financial and operating results for the fourth quarter ended December 31, 2010. Net earnings were $144.5 million ($0.39 per share), an increase of $191.9 million compared to the fourth quarter of 2009, and operating cash flow was $221.3 million ($0.59 per share(1)), representing an increase of 228% from the fourth quarter of 2009.
"We had an excellent fourth quarter, with a 35% increase in gold production the key driver behind record highs in net earnings and cash flow," said Steve Letwin, IAMGOLD's President and CEO. "Gold production was at the top end of our latest guidance reflecting the hard work and resourcefulness of our employees. These strong financial results, however, were overshadowed by the death earlier this month of an employee of a contractor at our Rosebel mine in Suriname. We are saddened by this tragic accident and extend our deepest sympathies to his family. Safety is, and will continue to be, our top priority."
"Our plan in 2011 is to build on our strong operational competencies to maximize the growth potential of our core gold assets," continued Mr. Letwin. "With our strong performance in 2010 and a 13% increase in gold reserves, we are on track to achieving our production target of 1.1 to 1.2 million ounces of gold for the year. We continue to assess the business alternatives to unlocking the value of our niobium asset, and together with our focus on organic growth, are powerful drivers of future performance and improved shareholder returns."
FOURTH QUARTER 2010 HIGHLIGHTS
-- Net earnings of $144.5 million ($0.39 per share) increased by $191.9
million, compared to a net loss of $47.4 million (loss of $0.13 per
share) in the fourth quarter of 2009.
-- Adjusted net earnings(2) of $144.9 million ($0.39 per share) increased
by 155% from $56.8 million ($0.15 per share) in the fourth quarter of
2009.
-- Operating cash flow of $221.3 million ($0.59 per share(1)) increased by
228% from $67.5 million ($0.18 per share(1)) in the fourth quarter of
2009.
-- Gold production increased by 35% to 315,000 attributable ounces at a
cash cost(3) of $574 per ounce compared to 234,000 attributable ounces
at a cash cost of $488 per ounce during the fourth quarter of 2009. At
IAMGOLD operated sites, the average cash cost per ounce was $508 in the
fourth quarter of 2010.
-- On February 9, 2011, IAMGOLD received $49 million for the sale of its La
Arena project.
-- On February 24, 2011, IAMGOLD entered into an agreement for a private
placement of flow-through shares. The issuance of 1.7 million shares at
a price of $25.48 per share, raised gross proceeds of C$43.3 million.
FULL-YEAR 2010 HIGHLIGHTS
Financial Results and Position
-- Record results for net earnings, adjusted net earnings and operating
cash flow in 2010.
-- Net earnings of $279.8 million ($0.75 per share) increased by 145%
compared to $114.1 million ($0.32 per share) in 2009.
-- Adjusted net earnings(2) of $285.7 million ($0.77 per share(2))
increased by 68% from $170.0 million ($0.48 per share) in 2009.
-- Operating cash flow of $415.1 million ($1.12 per share(1)) increased by
62% compared to $257.0 million ($0.73 per share) in 2009.
-- The Company's financial position has improved with $761.3 million in
available liquidity, reflecting an increase from the previous quarter
due mainly to the impact of the Essakane mine now fully operational.
Cash, cash equivalents and gold bullion (at market value) were $411.3
million and the undrawn credit facility was $350.0 million at December
31, 2010.
-- Tenth straight annual dividend and increased to $0.08 per share with
$29.8 million paid in January 2011.
Production and Cash Costs
Gold Operations
-- Gold production of 967,000 ounces increased by 3% from 939,000 ounces in
2009.
-- Weighted average cash costs(3) were $574 per ounce compared to $461 per
ounce in 2009.
-- Annual average cash costs at IAMGOLD's operating sites (Rosebel,
Essakane, Mupane, and the Doyon division) were $525 per ounce in 2010
compared to $657 per ounce for the Company's joint ventures and working
interests (Sadiola, Yatela, Tarkwa and Damang).
-- Commercial production at Essakane began on July 16, 2010. Total
attributable production in 2010 was 122,000 ounces at a cash cost(3) of
$429 per ounce. Throughput continued to ramp up with over 22,000 tonnes
per day in December 2010, and is in line with its goal of 25,000 tonnes
per day while processing soft rock.
Niobium Operation
-- Strong niobium production of 4.4 million kilograms in 2010, 7% higher
than production in 2009, and an operating margin(4) of $18 per kilogram
compared to $20 per kilogram in 2009.
Exploration
-- Exploration expenditures of $86.3 million in 2010 included accelerating
work on promising results at the Company's joint ventures in West Africa
and the Charmagne discovery in Suriname. These successes supported
supplemental funding approval for both near-mine exploration and
greenfields exploration in 2010 along with aggressive programs planned
for 2011.
Reserves
-- The proactive exploration program at IAMGOLD resulted in increases in
reserves and resources.
-- Gold proven and probable reserves increased by 1.9 million ounces, or
13%, to 16.4 million ounces.
-- Niobium proven and probable reserves increased by 34% to 243.8 million
kilograms of contained niobium pentoxide (Nb2O5).
Development Projects
-- The Westwood project is on track to commence commercial production in
early 2013. Shaft sinking achieved a depth of 1,063 metres at the end of
2010.
-- The Sadiola sulphide project feasibility study was completed and a
construction decision is expected to be made in the first half of 2011.
-- On February 9, 2011, IAMGOLD received $49 million in cash from Rio Alto
Mining Limited ("Rio Alto") for the sale of its La Arena project. In
addition, as part of the option and earn-in agreement in June 2009,
IAMGOLD received 8 million shares of Rio Alto with an approximate market
value of $18 million as of February 23, 2011.
REVIEW OF 2010 RESULTS
Financial Results
-- Revenues were $1,167.2 million in 2010, a 28% increase from 2009
primarily due to higher realized gold prices. The average realized gold
price in 2010 for IAMGOLD's operations and joint ventures rose 31%
compared to 2009 and the number of ounces of gold sold increased by 2%.
-- In 2010, net earnings were $279.8 million ($0.75 per share) compared to
$114.1 million ($0.32 per share) in 2009. Adjusted net earnings(2) of
$285.7 million ($0.77 per share(2)) increased by 68% compared to $170.0
million ($0.48 per share) in 2009. The impact of higher sales and gold
prices was partially offset by increases in mining costs and income and
mining taxes.
-- Operating cash flow was $415.1 million ($1.12 per share(1)) in 2010, an
increase of 62% compared to $257.0 million ($0.73 per share) in 2009.
The increase is mainly due to increased sales partially offset by higher
mining costs and income and mining taxes.
Financial Position
-- The Company's cash, cash equivalents and gold bullion (at market value)
position has improved with $411.3 million available at December 31, 2010
compared to $300.1 million available at December 31, 2009. During 2010,
cash and cash equivalents increased mainly due to record cash flow from
operating activities, partially offset by capital expenditures in mining
assets and exploration and development projects. The Company's financial
position reflects an increase of $167.9 million compared to September
30, 2010 as Essakane ramped up towards its design capacity during the
fourth quarter of 2010. As at December 31, 2010, $350.0 million of
unused credit remained available under the Company's credit facility.
-- On February 9, 2011, IAMGOLD received $49 million for the sale of its La
Arena project. The proceeds add to IAMGOLD's strong financial position.
-- On February 24, 2011, IAMGOLD entered into an agreement for a private
placement of flow-through shares. The issuance of 1.7 million shares at
a price of $25.48 per share raised gross proceeds of C$43.3 million.
-- In 2011, the Company plans to incur $460.0 million in capital
expenditures and approximately $51.0 million in exploration expenses.
With strong cash, cash equivalents and gold bullion positions, the
available credit facility and expected operating cash flows, the Company
has the financial capacity to fund the continuing 2011 requirements of
exploration and development projects and expansion of existing
operations.
Production and Cash Costs
Gold production and cash costs
In 2010, IAMGOLD's attributable gold production increased by 28,000 ounces, or 3%, compared to 2009. The increase in production was a result of:
-- Ramp-up of production at Essakane after achieving commercial production
on July 16, 2010, and
-- Higher throughput at Tarkwa, Rosebel and Mupane,
Partially offset by:
-- Closure of the Doyon mine in December 2009 and mining the Mouska mine at
a reduced rate in 2010, and
-- Lower grades at Sadiola and Yatela.
The 2010 annual average cash cost(3) of $574 per ounce has increased $113 per ounce from $461 per ounce in 2009 mainly due to lower grades, higher energy costs, and higher royalties of $13 per ounce.
Average annual cash costs at IAMGOLD operated sites (Rosebel, Essakane, Mupane and the Doyon division) were $525 per ounce(3) during 2010, an increase of 16% compared to $453 per ounce during 2009. The weighted average cash cost for IAMGOLD's two main operations (Rosebel and Essakane) was $471 per ounce which highlights the strong performance in 2010. Cash costs for the Company's joint ventures and working interests (Sadiola, Yatela, Tarkwa and Damang) were $657 per ounce during 2010, an increase of 39% compared to $473 per ounce during 2009.
As gold prices rise, lower grades of ore become economical to mine. By choosing to mine these lower grade deposits of the ore body and managing the cut-off grade, the Company can mine previously uneconomical portions of its resource base, increase the yield from the ore bodies and extend the life of the mines. Notwithstanding increased costs, this yields positive cash flow for the Company. IAMGOLD's continuous improvement programs and cost control efforts focus on aggressively managing unit operating costs (such as cost per tonne mined and cost per tonne milled) and increasing productivity at the operating sites. Increases in the gold price and increased royalty rates have driven higher royalty amounts.
Niobium production and operating margin
Niobium production increased in 2010 compared to 2009, resulting primarily from higher throughput. The site successfully completed the paste backfill project and the mill expansion project in the second and third quarter of 2010, respectively. The operating margin per kilogram of niobium(4) decreased by $2 per kilogram during 2010 compared to 2009, the result of commissioning the paste backfill process, the strengthening in the Canadian dollar and higher prices and volumes of aluminum used in processing. Paste backfill process will enable near complete extraction of the ore body including areas with lower grades, impacting mining costs and operating margin.
Development Projects
In 2010, the Company's total development project expenditures were $260.7 million, mainly related to Essakane in Burkina Faso and Westwood in Northern Quebec.
Burkina Faso - Essakane mine - Achieved commercial production effective July 16, 2010
Construction of the Essakane mine is completed and commercial production began on July 16, 2010. Final costs for the construction of the project totalled $464.8 million which was on plan.
Canada - Westwood project - On schedule for early 2013
Completion of the Westwood project is on schedule with commercial production planned for early 2013. Project expenditures in 2010 totaled $94.9 million, with significant infrastructure preparation and construction. Shaft sinking has reached 1,063 metres compared to 1,220 metres expected during the year mainly due to the excavation of a loading station at a higher level than originally planned. More excavation has also been completed on level 60-0 and 84-0. The significant exploration and resource delineation programs resulted in over 74,000 metres of drilling in 2010.
In 2011, significant progress will continue, including the following projected activities: completing the construction of the surface waste silo to allow ore development to begin by the end of 2011, achieving the current shaft sinking plan (1,560 metres by end of 2011), and carrying out an 82,000-metre infill and extensions drilling program for resource development.
South America - Ecuador - Quimsacocha project
The Company has obtained the requisite permits to allow the use of reservoir water for exploration and feasibility work. Regular contact and dialogue is maintained with senior government officials in order to obtain clarity on fiscal and other matters. A model mining contract, which is expected to clarify some of these issues, is being developed by the Ecuadorian government.
Exploration
IAMGOLD's exploration efforts remain focused in West Africa, select countries of South America, and the province of Quebec in Canada. With a strategic mandate for organic growth, the Company has numerous projects underway and continues to pursue additional advanced exploration joint ventures and acquisition opportunities that will strengthen the foundation for future growth.
In 2010, IAMGOLD incurred $86.3 million on exploration projects, a 35% increase from $63.8 million in 2009. The 2010 expenditures included:
-- Near-mine exploration and resource development expenditures of $48.7
million, including a resource expansion and delineation drilling program
of more than 94,000 metres at Rosebel in Suriname for $14.7 million, a
drill delineation program of more than 40,000 metres at Essakane in
Burkina Faso for $13.4 million, and an $8.7 million exploration and
resource delineation drilling program of more than 74,000 metres at the
Westwood development project in the province of Quebec; and
-- Greenfield exploration of $37.6 million conducted at 16 projects,
including two advanced exploration sites, in 10 countries in Africa and
the Americas as part of IAMGOLD's long-term commitment to reserves
replenishment and organic growth.
Reserves
In 2010, the proactive exploration program at IAMGOLD resulted in a total proven and probable mineral reserves increase of 1.9 million ounces to 16.4 million ounces of gold, a 13% increase over the previous year.
Total proven and probable mineral reserves of niobium increased by 34% to 243.8 million kilograms of contained Nb2O5.
Commitment to Zero Harm Continues
In 2010, IAMGOLD was awarded the Corporate Social Responsibility award at the Corporate and Community Social Responsibility Conference for its Zero Harm vision of maintaining the highest standards in human health, minimizing the impact on the environment, and working co-operatively with host communities.
The frequency of all types of serious injuries across IAMGOLD during 2010 increased marginally to 0.58 compared to 0.54 in 2009.
The Company is committed to connecting its Zero Harm vision to performance, and regrets the tragic deaths of an employee at the Niobec mine in the province of Quebec in 2010 and, more recently, an employee of a contractor at the Company's Rosebel mine in Suriname.
The importance of continually striving for Zero harm is a core value for IAMGOLD. The Company strives to eliminate all injuries and tragedies through programs that reinforce the importance of constant vigilance in the workplace and the adoption of safe work practices. Recently, IAMGOLD joined the Mining Safety Roundtable, an industry forum for the industry's most safety-focused leaders.
Outlook for Growth
As previously disclosed on January 17, 2011, the following is IAMGOLD's guidance for production for years 2011 through 2013.
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2010 2011 2012 2013
Actual Forecast Forecast Forecast
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Attributable gold production (000 oz)
Mines owned and operated by IAMGOLD
Rosebel 395 360 - 380 390 - 410 360 - 380
Essakane 122 370 - 390 310 - 330 380 - 400
Mouska(a) 33 25 - 30 - 30 - 35
Westwood - - - 130 - 150
Mupane 57 55 - 60 40 - 45 15 - 25
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607 810 - 860 740 - 785 915 - 990
Other - Joint ventures and
working interests in Africa 360 290 - 340 (b) (b)
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Total
attributable
gold production 967 1,100 - 1,200 (b) (b)
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Cash cost ($/oz
of gold)(3) 574 565 - 595 (b) (b)
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Average realized
gold price
($/oz) 1,252 1,300 1,250 1,150
Average foreign
exchange rate
(C$/US$) 1.03 1.00 1.05 1.05
Average foreign
exchange rate
(US$/EUR) 1.33 1.35 1.35 1.30
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Niobium production
Niobec (100%)
(millions of
kg) 4.4 4.5 - 5.0 4.5 - 5.0 4.5 - 5.0
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Operating
margin ($/kg
Nb) (4) 18 15 - 17 16 - 18 16 - 18
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(a) In 2012, the mill will be shut down and refurbished in preparation for
processing ore from Westwood. All ore mined at Mouska in 2012 will be
processed in 2013.
(b) Updated forecasts for 2012 and 2013 are not yet available.
The current financial market volatility may affect future cash costs either positively or negatively through changes in gold price, oil price, overall operating costs and currency rates. Changes in these assumptions may have a material impact on cash cost, results of operations and overall financial position of the Company. Actual results may vary significantly from guidance.
The following table provides estimated sensitivities around certain inputs that can affect the Company's operating results, based on the Company's guidance for 2011.
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Impact on
the Annualized
2011 Cash
Change of cost by $/oz
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Gold price $50/oz $3
Oil price $10/barrel $6
Canadian dollar per US dollar $0.10 $3
Euro per US dollar $0.10 $5
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Capitalized mining assets, exploration and development expenditures
As announced on January 17, 2011, the Company plans to continue making significant investments in mine development and exploration throughout the year. Planned capital expenditures for 2011 assume favourable outcomes for the feasibility studies to expand Essakane and to mine and process the underlying sulphide ore at the Sadiola mine. In addition, IAMGOLD has undertaken a feasibility study to expand the plant capacity at the Rosebel mine in Suriname. It also includes the continued underground expansion of the Niobec niobium mine.
The following table shows the site allocation of IAMGOLD's planned capital expenditures for 2011, 2012 and 2013.
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Planned Capital
Expenditures
($ millions) Details
2011 2012 2013
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Westwood 146 132 54 The mine remains on track for startup
in early 2013. These expenditures will
be for deepening the shaft and
developing drift levels for future
mining.
Essakane 139 191 25 A favourable outcome to the current
feasibility study is assumed for
expansion construction to start in the
second half of 2011.
Rosebel 95 38 23 Primarily for new equipment,
sustaining capital, engineering and
civil work related to an expansion and
resource development.
Niobec 39 20 13 This capital budget is to be allocated
to sustaining capital, underground
development, a pumping station and for
water treatment.
Sadiola (41%) 22 98 92 This assumes a favourable outcome of
the current feasibility study of the
sulphide project.
Mupane 4 5 - For sustaining capital and resource
development.
Other 15 16 13
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Total 460 500 220
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Planned capital expenditures of $460.0 million in 2011 include $41.2 million of capitalized exploration expenditures mainly related to near-mine development sites. In addition, the Company plans to incur $50.9 million of exploration expenses in 2011. Total of near-mine and greenfield exploration planned expenditures in 2011 is $92.1 million with drilling of over 500,000 metres. The Company plans to test more than 18 grassroots projects in Senegal, Mali, Colombia, Peru, Brazil and the Canadian province of Quebec.
Summarized Financial Results
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As at As at
December 31 December 31
(in $ millions) 2010 % Change 2009
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Financial Position $ $
Cash and cash equivalents and
gold bullion
- at market value 411.3 37% 300.1
- at cost 311.2 34% 231.8
Total assets 3,494.9 17% 2,996.8
Shareholders' equity 2,775.8 15% 2,416.7
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(in $ millions, except where Fourth quarter ended Year ended
noted) December 31 December 31
% %
2010 Change 2009 2010 Change 2009
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Results of Operations $ $ $ $
Revenues 459.0 73% 265.3 1,167.2 28% 914.3
Mining costs 216.1 55% 139.2 570.6 28% 446.8
Depreciation, depletion and
amortization 35.3 (18%) 43.3 132.7 (14%) 153.8
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Earnings from mining
operations 207.6 151% 82.8 463.9 48% 313.7
Earnings from working
interests 17.8 48% 12.0 56.5 57% 36.0
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Total earnings from
operations and working
interests(5) 225.4 138% 94.8 520.4 49% 349.7
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Net earnings (loss) 144.5 n/a (47.4) 279.8 145% 114.1
Basic and diluted net
earnings (loss) per share
($/share) 0.39 n/a (0.13) 0.75 134% 0.32
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Adjusted net earnings(2) 144.9 155% 56.8 285.7 68% 170.0
Basic adjusted net earnings
per share (2) ($/share) 0.39 160% 0.15 0.77 60% 0.48
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Cash Flows
Operating cash flow 221.3 228% 67.5 415.1 62% 257.0
Operating cash flow per
share(1) ($/share) 0.59 228% 0.18 1.12 53% 0.73
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Key Operating Statistics
Gold mines (including
working interests)
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Gold sales (000 oz) 347 49% 233 977 3% 944
Average realized gold price
($/oz) 1,379 26% 1,096 1,252 30% 960
Attributable gold
production (000 oz) 315 35% 234 967 3% 939
Cash cost ($/oz)(3) 574 18% 488 574 25% 461
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Niobium mine
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Niobium sales (millions of
kg Nb) 1.0 (29%) 1.4 4.3 (2%) 4.4
Niobium production
(millions of kg Nb) 1.0 (17%) 1.2 4.4 7% 4.1
Operating margin ($/kg Nb)
(4) 17 (15%) 20 18 (10%) 20
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REVENUES
Fourth quarter record revenues of $459.0 million were up 73% over $265.3 million for the same quarter of 2009. This increase was primarily due to an increase in gold sales from IAMGOLD's operations and joint ventures, and an increase in related realized gold prices.
Record revenues for the full year of 2010 were $1,167.2 million, a 28% increase over the previous year mainly resulting from the increase in realized gold prices.
MINING COSTS
Mining costs in the fourth quarter of 2010 were $216.1 million, a 55% increase over $139.2 million for the same quarter of 2009. Mining costs for the full year of 2010 reached $570.6 million, a 28% increase over the previous year.
The increase in mining costs was due to growth in production, higher consumables costs as well as higher labour costs at Rosebel, higher energy costs across all sites, increased royalties from a rise in gold prices, and adjustments to asset retirement obligations at Doyon due to changes to remediation plans.
DEPRECIATION, DEPLETION AND AMORTIZATION
Depreciation, depletion and amortization decreased from $153.8 million in 2009 to $132.7 million in 2010 due mainly to the increase in reserves for gold sites and Niobec. This decrease was partially offset by additional depreciation expenses following the beginning of commercial production at the Essakane mine during the third quarter of 2010.
EARNINGS FROM WORKING INTERESTS
Year over year earnings from working interests increased mainly as a result of higher sales and higher realized gold prices, partially offset by higher mining costs.
CORPORATE ADMINISTRATION
Corporate administration expenses in 2010 were $46.9 million compared to $49.1 million in 2009. The decrease was primarily related to process improvements, costs containment and one-time costs in 2009 related to the Essakane acquisition.
EXPLORATION AND DEVELOPMENT EXPENSES
Exploration and development expenses in 2010 were $46.0 million compared to $39.8 million in 2009. Exploration expenses in 2010 included accelerating work on promising results at the Company's joint ventures in West Africa and the Charmagne discovery in Suriname.
NET INTEREST EXPENSE
Net interest expense in 2010 was $3.6 million compared to $0.7 million in 2009. The increase is mainly due to costs associated with maintaining the increased credit facility.
FOREIGN EXCHANGE GAIN/LOSS
The foreign exchange loss in 2010 was $1.7 million compared to a foreign exchange gain of $27.0 million in 2009. The majority of the foreign exchange loss during 2010 and the gain in 2009 were related to the impact of foreign exchange variation on cash held in Canadian dollars. The amount was larger in 2009 resulting from the equity financing in Canadian dollars during the first quarter of 2009.
DERIVATIVE GAIN/LOSS
The total derivative loss was $13.3 million in 2010 compared to a gain of $7.0 million in 2009. The loss in 2010 was mainly due to the market variation of gold option contracts for the Mupane mine, which were undertaken to support a positive cash flow for the remaining limited life of the operation. In addition, the derivative loss was impacted by foreign exchange and heating oil option contracts, partially offset by the positive change in the fair value of warrants held as investments.
OTHER INCOME/EXPENSE, NET
The total other income, net was $24.4 million in 2010 compared to other expense, net of $1.8 million in 2009. The other income/expense, net in 2010 was mainly related to gains on disposal of marketable securities.
NON-CONTROLLING INTERESTS
The total non-controlling interests charge in 2010 was $18.2 million compared to $8.8 million in 2009. The increase is mainly due to the inclusion of the Essakane operation in 2010.
INCOME AND MINING TAXES
The Company does not recognize tax benefits on losses generated in countries where the recent history of operating losses do not satisfy the "more likely than not" criterion for the recognition of deferred tax assets. Consequently, there are no income tax benefits recognized on the pre-tax losses in these jurisdictions as valuation allowances are recorded to offset the associated benefit.
In 2010, income and mining taxes totaled $135.4 million compared to $108.0 million in 2009. The income tax rate varies from the combined federal and provincial income tax rates of 31% in 2010 and 33% in 2009 primarily due to fluctuations in exchange rates for foreign currency, the geographic distribution of income, non-deductible expenses, withholding taxes related to repatriations of international earnings, and the existence of valuation allowances.
Attributable Gold Production and Cash Cost Per Ounce
The table below presents the gold production attributable to the Company along with the weighted average cash cost(3) per ounce of production.
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Total Cash Total Cash
(Unaudited) Gold Production Cost(3) Gold Production Cost(3)
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Fourth quarter Fourth quarter Year Year
ended ended ended ended
December 31 December 31 December 31 December 31
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2010 2009 2010 2009 2010 2009 2010 2009
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IAMGOLD (000 (000 (000 (000
Operator oz) oz) $/oz $/oz oz) oz) $/oz $/oz
Rosebel (95%) 119 99 449 422 395 392 484 396
Essakane
(90%) 80 - 414 - 122 - 429 -
Doyon
division
(100%) 18 24 843 528 33 109 655 524
Mupane (100%) 15 11 1,062 885 57 51 941 735
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232 134 508 478 607 552 525 453
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Joint
Ventures
and
Working
interests
Sadiola
(41%)(a) 29 32 785 616 118 135 653 483
Yatela (40%) 9 28 1,379 323 60 89 780 339
Tarkwa
(18.9%) 34 32 611 505 139 125 605 513
Damang
(18.9%) 11 8 673 652 43 38 662 619
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83 100 762 502 360 387 657 473
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Total 315 234 574 488 967 939 574 461
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Cash cost excluding
royalties 516 439 519 419
Royalties 58 49 55 42
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Cash cost (3) 574 488 574 461
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(a) On December 29, 2009, the Company purchased an additional 3% interest in
Sadiola resulting in a 41% interest in the Sadiola joint venture.
Attributable Gold Sales volume and Realized Price
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The following table presents the total ounces of gold sold and the realized
gold price per ounce.
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Realized gold Realized gold
Gold sales price Gold sales price
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Fourth quarter Fourth quarter Year Year
ended ended ended ended
December 31 December 31 December 31 December 31
2010 2009 2010 2009 2010 2009 2010 2009
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(000 (000 (000 (000
oz) oz) $/oz $/oz oz) oz) $/oz $/oz
IAMGOLD
Operator 263 131 1,383 1,098 619 557 1,271 951
Joint
ventures 39 62 1,367 1,090 176 224 1,211 973
Working
interests 45 40 1,366 1,101 182 163 1,225 973
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Total(a) 347 233 1,379 1,096 977 944 1,252 960
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(a) Attributable sales volume for the fourth quarters of 2010 and 2009 were
331,000 ounces and 228,000 ounces, respectively, and for the entire years of
2010 and 2009, 945,000 ounces and 925,000 ounces, respectively, after taking
into account 95% of Rosebel sales and 90% of the Essakane sales.
Operations Summary
The Company's 2010 gold operations are summarized below.
ROSEBEL MINE, SURINAME
Rosebel achieved record gold production in the fourth quarter and full year 2010, which was higher than the same periods in the prior year by 20% and 1%, respectively. This strong production level was achieved despite lower grades and a difficult rainy season. The Rosebel site achievement was the result of record throughput levels, higher productivity and operational efficiencies. Moreover, the fourth quarter benefitted from increased recoveries resulting from the commissioning of additional leach tanks.
Cash costs per ounce(3) increased 6% in the fourth quarter of 2010, compared to the same period last year, primarily due to higher energy, labour and consumables costs, and higher royalties due to rising gold prices. Cash costs per ounce have increased by 22% on a full year basis for similar reasons. In addition, grades were lower as the mine was unable to access higher grades in previous quarters of the year due to higher precipitation levels in the rainy season.
In 2011, the Company began another expansion at Rosebel. The expansion will result in additional grinding capacity to allow mill throughput to be maintained between 12 and 14 million tonnes per year offsetting the impact of processing increased hard rock volumes. The expansion essentially brings gold production forward in time and reduces long-term fixed costs by reducing the currently planned mine life.
ESSAKANE MINE, BURKINA FASO
Essakane gold mine achieved commercial production effective July 16, 2010. Attributable production during the fourth quarter and full year 2010 was 80,000 ounces and 122,000 ounces, respectively. Attributable production nearly doubled during the fourth quarter over the third quarter of 2010 despite a two-week shutdown in November caused by an electrical failure at the SAG mill. Cash costs(3) since the beginning of commercial production were $429 per ounce compared to life of mine estimate of between $400 and $410 per ounce.
A feasibility study to expand the mine is currently in progress and is expected to be completed in the third quarter of 2011. The study is expected to demonstrate that the hard rock capacity of the mill could be expanded to process 10.8 million tonnes per year, compared to the current estimate of 5.4 million tonnes per year. The expectation is for life-of-mine average annual gold production between 450,000 and 470,000 ounces (on a 100% basis) compared to the current estimate of 315,000 ounces. The current mine plan includes processing of soft rock for the first three years at a rate of 9.0 million tonnes per year, followed by approximately nine years of processing hard rock.
DOYON DIVISION, CANADA
Gold production at the Doyon division declined in the fourth quarter and for the full year in 2010 compared to 2009. The decline in production reflects the closure of the Doyon mine in December 2009 and reduced production at the Mouska mine nearing the end of its life. As a cost reduction initiative, the ore mined from Mouska during the first eight and a half months of 2010 was stockpiled and batch processed starting mid-September and completed in December.
Cash costs per ounce(3) increased during the fourth quarter and full year of 2010, largely due to lower production, higher royalties due to higher gold prices and the impact of a stronger Canadian dollar on the operation.
MUPANE MINE, BOTSWANA
Gold production at Mupane increased in the fourth quarter and for the full year in 2010 by 36% and 12%, respectively, compared to 2009. The increase was the result of higher throughput levels with improved performance of the ball mill in the current year which was unavailable for the second half of 2009. Cash costs per ounce(3) for the fourth quarter and the full year of 2010 rose mainly due to higher mining and energy costs. This is the result of more volume of material mined coupled with longer hauling distances from more distant pits and higher diesel fuel prices.
SADIOLA MINE, MALI
Attributable gold production for the fourth quarter and for the full year of 2010 were down 9% and 13%, respectively, compared to 2009, mainly due to lower gold grades. The lower grades are the result of satellite pits being mined following the completion of mining at the main Sadiola pit.
Cash costs per ounce(3) of gold were higher in 2010 compared to 2009 due to the lower production from lower grades, higher energy costs, higher labour mining contract, and increased royalties from higher realized gold prices.
The feasibility study on the sulphide project to expand the processing facility to process hard rock in conjunction with soft rock was completed in 2010. A construction decision is expected in the first half of 2011.
YATELA MINE, MALI
Attributable gold production for the fourth quarter and for the full year of 2010 decreased 68% and 33%, respectively, compared to 2009. The reduced production resulted from lower gold grades as mining shifted from the bottom of the main pit in early 2010 to a longer-haul satellite pit.
Cash costs per ounce(3) were sharply higher in 2010 compared to 2009 primarily as a result of lower production, higher waste stripping and material mined, higher energy costs, higher labour mining contract, and higher royalties due to rising gold prices.
TARKWA MINE, GHANA
Attributable gold production for the fourth quarter and for the full year of 2010 increased by 6% and 11%, respectively, compared to 2009. This increase was a result of higher throughput at the CIL plant.
Cash costs per ounce(3) of gold increased in the fourth quarter and for the full year of 2010 by 21% and 18% respectively compared to 2009. Cash costs increased due to higher energy and contractor costs and increased royalties from higher gold prices.
DAMANG MINE, GHANA
Attributable gold production for the fourth quarter and for the full year of 2010 increased by 38% and 13%, respectively, compared with the previous year. This was a result of higher mill throughput due to the commissioning of the secondary crusher and the processing of higher grade ore.
Cash costs per ounce(3) for the fourth quarter and the full year of 2010 were higher by 3% and 7%, respectively, compared to the same period in 2009, due to higher energy costs and increased royalties from higher gold prices.
NIOBIUM PRODUCTION, SALES AND OPERATING MARGIN
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth quarter ended Year ended
December 31 December 31
2010 % change 2009 2010 % change 2009
----------------------------------------------------------------------------
Operating results -
Niobium Mine
----------------------
Niobium production
(millions of kg Nb) 1.0 (17%) 1.2 4.4 7% 4.1
Niobium sales
(millions of kg Nb) 1.0 (29%) 1.4 4.3 (2%) 4.4
Operating margin ($/kg
Nb)(4) 17 (15%) 20 18 (10%) 20
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Niobium production increased for the full year 2010 by 7% as a result of the successful completion of the mill expansion in the third quarter of 2010. Production was lower in the fourth quarter of 2010 by 17% compared to the same period last year as a result of lower grades achieved due to processing of lower grade development ore.
As expected, the inclusion of paste backfill process starting during the second quarter of 2010 lowered operating margin per kilogram of niobium(4) for the fourth quarter and full year. Paste backfill process will enable near complete extraction of the ore body including areas with lower grades, impacting mining costs and operating margin. In addition, the operating margin per kilogram of niobium was adversely impacted by the stronger Canadian dollar and higher aluminum prices and volumes compared to the same periods in 2009.
The 34% increase in niobium reserves in 2010 together with a deposit that remains open at depth, reinforces the Company's strategy to unlock the value of this asset.
(1) 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.
(2) Adjusted net earnings and adjusted net earnings per share are non-GAAP measures. Comparative figures in 2009 of adjusted net earnings have been recalculated to conform to the calculation adopted in 2010. Please refer to Section 3.a. of the Supplemental information attached at the end of this news release for reconciliation to GAAP measures.
(3) Cash cost per ounce of gold is a non-GAAP measure. Please refer to Section 3.b. of the Supplemental information attached at the end of this news release for reconciliation to GAAP measures.
(4) Operating margin per kilogram of niobium at the Niobec mine is a non-GAAP measure. Please refer to Section 3.c. of the Supplemental information attached to the end of this news release for reconciliation to GAAP measures.
(5) The total earnings from operations and working interests is a non-GAAP measure. Refer to the consolidated interim statement of earnings for reconciliation to GAAP measures.
CONFERENCE CALL
A conference call will be held on February 25, 2011 at 11:00 a.m. (Eastern Standard Time) for a discussion with management regarding the Company's operating performance and financial results for the fourth quarter and year-end 2010. A webcast of the conference call will be available through the Company's website - www.iamgold.com.
Conference Call Information: North America Toll-Free: 1-866-551-1530 or 1-212-401-6700 passcode: 1483821#
A replay of this conference call will be available from 6:00 p.m. February 25th to March 25th, 2011. Access this replay by dialling: North America toll-free: 1-866-551-4520 or 1-212-401-6750, passcode: 269990#
Technical Information and Qualified Person/Quality Control Notes
The mineral resource estimates contained in this news release have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"), JORC and/or SAMREC. The "Qualified Person" responsible for the supervision of the preparation and review of all resource estimates for IAMGOLD Corporation is Rejean Sirois, Eng., Manager, Mining Geology. Rejean is considered a "Qualified Person" for the purposes of National Instrument 43-101 with respect to the mineralization being reported on. The technical information has been included herein with the consent and prior review of the above noted Qualified Person. The Qualified Person has verified the data disclosed, and data underlying the information or opinions contained herein.
Cautionary Note to U.S. 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. We use certain terms in this news release, such as "mineral resources", that the SEC guidelines strictly prohibit the Company from including in filings with the SEC. U.S. investors are urged to consider closely the disclosure in the IAMGOLD Annual Report on Form 40-F. A copy of the 2009 Form 40-F is available to shareholders, free of charge, upon written request addressed to the Investor Relations Department.
Forward Looking Statement
This news release contains forward-looking statements. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding the estimation of mineral resources, exploration results, potential mineralization, potential mineral resources and mineral reserves) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, failure to establish estimated mineral resources, the possibility that future exploration results will not be consistent with the Company's expectations, changes in world gold markets and other risks disclosed in IAMGOLD's most recent Form 40-F/Annual Information Form on file with the United States Securities and Exchange Commission and Canadian provincial securities regulatory authorities. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement.
Please note:
This entire news 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.
Si vous desirez obtenir la version francaise de ce communique, veuillez consulter le http://www.iamgold.com/francais/default.asp.
SUPPLEMENTAL INFORMATION
1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (BALANCE SHEETS, STATEMENTS
OF EARNINGS, AND STATEMENTS OF CASH FLOWS)
2. MINING OPERATIONS PRODUCTION DATA (UNAUDITED)
3. NON-GAAP FINANCIAL MEASURES (UNAUDITED)
a. ADJUSTED NET EARNINGS
b. CASH COSTS
c. UNIT OPERATING MARGIN PER KILOGRAM OF NIOBIUM FOR THE NIOBEC MINE
CONSOLIDATED BALANCE SHEETS
(Unaudited; Expressed in thousands of US dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
At December 31 2010 2009
----------------------------------------------------------------------------
Assets $ $
Current assets:
Cash and cash equivalents 270,779 191,374
Gold bullion (market value $140,551; December 31,
2009: $108,749) 40,411 40,408
Receivables and other 81,995 83,082
Inventories 206,276 162,033
----------------------------------------------------------------------------
599,461 476,897
Other long-term assets 185,620 136,122
Working interests 186,962 173,278
Royalty interests 26,514 28,688
Mining assets 1,825,113 1,053,348
Exploration and development 331,171 786,079
Goodwill 334,774 334,004
Other intangible assets 5,332 8,373
----------------------------------------------------------------------------
3,494,947 2,996,789
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities 210,826 175,320
Dividends payable 31,324 24,507
Current portion of long-term liabilities 11,756 12,257
----------------------------------------------------------------------------
253,906 212,084
----------------------------------------------------------------------------
Long-term liabilities:
Future income and mining tax liability 256,054 237,379
Asset retirement obligations 134,747 97,337
Other long-term liabilities 16,563 10,216
----------------------------------------------------------------------------
407,364 344,932
----------------------------------------------------------------------------
Non-controlling interests 57,867 23,112
----------------------------------------------------------------------------
Shareholders' equity:
Common shares 2,255,875 2,203,269
Contributed surplus 38,616 36,693
Warrants - 148
Retained earnings 363,852 113,887
Accumulated other comprehensive income 117,467 62,664
----------------------------------------------------------------------------
2,775,810 2,416,661
----------------------------------------------------------------------------
3,494,947 2,996,789
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, Expressed in thousands of US dollars, except per share amounts)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth quarter
ended Year ended
December 31 December 31
----------------------------------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------------------------------
$ $ $ $
Revenues 459,083 265,287 1,167,245 914,339
----------------------------------------------------------------------------
Expenses:
Mining costs, excluding
depreciation, depletion and
amortization 216,143 139,214 570,593 446,819
Depreciation, depletion and
amortization 35,256 43,347 132,693 153,847
----------------------------------------------------------------------------
251,399 182,561 703,286 600,666
----------------------------------------------------------------------------
207,684 82,726 463,959 313,673
Earnings from working interests 17,777 12,051 56,496 36,036
----------------------------------------------------------------------------
225,461 94,777 520,455 349,709
----------------------------------------------------------------------------
Other:
Corporate administration 13,733 11,894 46,851 49,148
Exploration and development 14,018 11,564 46,025 39,762
Impairment charges - 88,814 - 98,069
Net interest expense 946 34 3,557 680
Foreign exchange loss (gain) (2,787) (2,064) 1,700 (26,967)
Derivative loss (gain) 2,830 (1,642) 13,261 (7,047)
Gain on sale of gold bullion - - - (36,628)
Other expense (income), net (14,555) 2,832 (24,361) 1,804
----------------------------------------------------------------------------
14,185 111,432 87,033 118,821
Non-controlling interests 10,978 2,489 18,222 8,784
----------------------------------------------------------------------------
25,163 113,921 105,255 127,605
----------------------------------------------------------------------------
Earnings (loss) before income and
mining taxes 200,298 (19,144) 415,200 222,104
----------------------------------------------------------------------------
Income and mining taxes:
Current taxes 47,504 26,903 133,646 92,274
Future taxes expenses 8,310 1,318 1,761 15,707
----------------------------------------------------------------------------
55,814 28,221 135,407 107,981
----------------------------------------------------------------------------
Net earnings (loss) 144,484 (47,365) 279,793 114,123
----------------------------------------------------------------------------
Weighted average number of common
shares outstanding
(in thousands)
Basic 372,795 368,384 371,392 352,755
Diluted 374,395 368,384 373,255 354,631
----------------------------------------------------------------------------
Basic and diluted net earnings
(loss) per share 0.39 (0.13) 0.75 0.32
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, Expressed in thousands of US dollars)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Fourth quarter
ended Year ended
December 31 December 31
----------------------------------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------------------------------
$ $ $ $
Operating activities:
Net earnings (loss) 144,484 (47,365) 279,793 114,123
Disbursement to asset retirement
obligations (1,708) (3,019) (3,333) (6,661)
Settlement of derivatives 399 831 (2,025) (4,416)
Items not affecting cash:
Earnings from working interests,
net of dividends received (8,327) (12,051) (31,926) (36,036)
Depreciation, depletion and
amortization 35,256 43,347 132,693 153,847
Impairment charges - 88,814 - 98,069
Amortization of forward sales
liability - - - (10,472)
Future income and mining taxes 8,310 1,318 1,761 15,707
Stock-based compensation 1,545 1,676 7,689 6,080
Unrealized derivative loss
(gain) 1,699 (3,628) 9,499 (6,131)
Gain on sale of gold bullion - - - (36,628)
Gain on sale of assets (3,841) (201) (4,150) (1,878)
Gain on sale of marketable
securities (10,907) (629) (21,042) (2,473)
Asset retirement obligations
adjustments 18,062 17,992 22,630 21,726
Non-controlling interests 10,978 2,489 18,222 8,784
Unrealized foreign exchange gain
on cash and cash equivalents (1,020) (1,366) (686) (27,434)
Other (553) 5,985 4,111 9,331
Change in non-cash working capital 26,941 (26,746) 1,877 (38,580)
----------------------------------------------------------------------------
221,318 67,447 415,113 256,958
----------------------------------------------------------------------------
Investing activities:
Business acquisitions - (4,464) - (7,765)
Investments proceeds
(acquisitions) 8,803 33 23,723 (8,061)
Loan repayments from working
interests 2,881 - 18,242 -
Restricted cash - - - 5,311
Mining assets (34,745) (25,792) (142,177) (105,868)
Exploration and development (29,899) (96,740) (229,949) (346,696)
Long-term ore stockpiles (10,470) (1,999) (25,835) (9,342)
Net proceeds (acquisitions) of
other assets (37) 10 (1,452) (1,032)
Proceeds from sale of gold
bullion - - - 66,411
----------------------------------------------------------------------------
(63,467) (128,952) (357,448) (407,042)
----------------------------------------------------------------------------
Financing activities:
Proceeds from credit facility - - 50,000 72,000
Repayment of long-term
liabilities and credit facility - (560) (50,000) (166,581)
Financing costs - - (2,365) -
Issue of common shares, net of
issue costs 901 7,973 54,652 308,356
Gain on share purchase plan 22 - 451 -
Dividends paid (1,670) - (31,684) (17,740)
----------------------------------------------------------------------------
(747) 7,413 21,054 196,035
----------------------------------------------------------------------------
Impact of foreign exchange on cash
and cash equivalents 1,020 1,366 686 27,434
----------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents 158,124 (52,726) 79,405 73,385
Cash and cash equivalents,
beginning of period 112,655 244,100 191,374 117,989
----------------------------------------------------------------------------
Cash and cash equivalents, end of
period 270,779 191,374 270,779 191,374
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2.0 MINING OPERATIONS PRODUCTION DATA (unaudited)
Tables below show production data for each mining operation for each quarter
of 2010 and 2009.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2010 2009
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
Suriname-Rosebel Mine (IAMGOLD interest-95%)
----------------------------------------------------------------------------
Total operating
material mined
(000t) 13,967 12,364 11,797 14,159 15,541 14,133 12,602 11,127
Strip ratio(a) 2.6 3.0 2.9 3.2 3.5 3.5 3.0 3.2
Ore milled (000t) 3,417 3,112 3,172 3,131 2,759 3,003 2,883 2,448
Head grade (g/t) 1.2 1.1 0.9 1.1 1.3 1.3 1.3 1.2
Recovery (%) 95 94 89 92 93 92 93 93
Gold production -
100% (000 oz) 126 106 86 98 104 111 109 88
Attributable gold
production - 95%
(000 oz) 119 101 82 93 99 106 104 83
Gold sales - 100%
(000 oz) 131 96 87 102 98 107 104 74
Gold revenue
($/oz)(b) 1,378 1,238 1,207 1,111 1,097 969 916 912
Cash cost excluding
royalties ($/oz) 378 421 504 401 369 359 327 353
Royalties ($/oz) 71 63 63 55 53 44 40 40
----------------------------------------------------------------------------
Cash cost ($/oz)(c) 449 484 567 456 422 403 367 393
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Burkina Faso-Essakane Mine (IAMGOLD interest-90%)(d)
----------------------------------------------------------------------------
Total operating
material mined
(000t) 7,454 5,404 - - - - - -
Strip ratio(a) 1.1 1.2 - - - - - -
Ore milled (000t) 1,675 1,298 - - - - - -
Head grade (g/t) 1.7 1.2 - - - - - -
Recovery (%) 96 95 - - - - - -
Gold production -
100% (000 oz) 89 47 - - - - - -
Attributable gold
production - 90%
(000 oz) 80 42 - - - - - -
Gold sales - 100%
(000 oz) 95 18 - - - - - -
Gold revenue
($/oz)(b) 1,386 1,287 - - - - - -
Cash cost excluding
royalties ($/oz) 372 441 - - - - - -
Royalties ($/oz) 42 18 - - - - - -
----------------------------------------------------------------------------
Cash cost ($/oz)(c) 414 459 - - - - - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Canada-Doyon Division (IAMGOLD interest-100%)
----------------------------------------------------------------------------
Total operating
material mined
(000t) 12 13 17 19 60 99 119 107
Ore milled (000t) 44 17 - - 63 104 115 106
Head grade (g/t) 13.1 14.2 - - 10.3 9.5 7.9 8.3
Recovery (%) 96 96 - - 96 96 96 96
Gold production (000
oz) 18 13 2 - 24 30 28 27
Gold sales (000 oz) 24 3 - 6 23 30 25 36
Gold revenue
($/oz)(b) 1,396 1,284 - 1,100 1,094 973 928 916
Cash cost excluding
royalties ($/oz) 812 430 252 - 517 505 514 521
Royalties ($/oz) 31 26 28 - 11 12 9 8
----------------------------------------------------------------------------
Cash cost ($/oz)(c) 843 456 280 - 528 517 523 529
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2010 2009
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
Botswana-Mupane Mine (IAMGOLD interest-100%)
----------------------------------------------------------------------------
Total operating material
mined (000t) 1,967 2,583 1,853 1,954 1,956 2,049 1,817 1,639
Strip ratio(a) 6.9 9.8 5.8 9.5 8.8 7.4 9.2 6.3
Ore milled (000t) 279 315 279 250 203 198 246 252
Head grade (g/t) 1.9 1.8 1.8 1.9 1.8 2.2 2.4 2.2
Recovery (%) 89 86 80 87 89 85 80 76
Gold production (000 oz) 15 16 13 13 11 11 15 14
Gold sales (000 oz) 13 16 13 15 10 11 20 19
Gold revenue ($/oz)(b) 1,382 1,236 1,226 1,115 1,109 838 647 643
Cash cost excluding
royalties ($/oz) 1,001 902 829 775 814 703 644 596
Royalties ($/oz) 61 62 58 51 71 41 53 57
----------------------------------------------------------------------------
Cash cost ($/oz)(c) 1,062 964 887 826 885 744 697 653
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Mali-Sadiola Mine (IAMGOLD interest - 41% in 2010; 38% in 2009)(e)
----------------------------------------------------------------------------
Total operating material
mined (000t) 2,692 1,808 2,486 2,668 2,587 2,072 1,845 2,246
Strip ratio(a) 7.4 8.5 8.2 7.9 7.6 13.4 3.3 4.6
Ore milled (000t) 460 441 448 443 467 421 413 357
Head grade (g/t) 2.1 2.1 2.1 2.1 2.1 2.6 2.8 3.0
Recovery (%) 92 92 95 94 94 86 92 91
Attributable gold production
(000 oz) 29 30 29 30 32 32 35 36
Attributable gold sales (000
oz) 31 28 29 29 33 31 37 34
Gold revenue ($/oz)(b) 1,366 1,222 1,188 1,109 1,089 958 922 898
Cash cost excluding
royalties ($/oz) 696 589 567 473 549 468 366 334
Royalties ($/oz) 89 70 69 65 67 57 58 51
----------------------------------------------------------------------------
Cash cost ($/oz)(c) 785 659 636 538 616 525 424 385
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Mali-Yatela Mine (IAMGOLD interest - 40%)
----------------------------------------------------------------------------
Total operating material
mined (000t) 1,384 1,508 1,364 704 410 535 652 939
Strip ratio(a) 5.5 8.2 7.7 4.3 2.1 8.5 1.4 2.9
Ore crushed (000t) 308 233 328 304 325 220 283 271
Head grade (g/t) 1.0 1.0 1.0 1.9 3.0 3.2 4.4 2.8
Attributable gold stacked
(000 oz) 10 7 11 18 32 23 39 25
Attributable gold production
(000 oz) 9 9 15 27 28 22 26 13
Attributable gold sales (000
oz) 8 10 15 26 29 22 25 13
Gold revenue ($/oz)(b) 1,373 1,233 1,185 1,110 1,091 958 924 909
Cash cost excluding
royalties ($/oz) 1,302 1,169 622 397 256 194 280 471
Royalties ($/oz) 77 74 75 65 67 57 54 55
----------------------------------------------------------------------------
Cash cost ($/oz)(c) 1,379 1,243 697 462 323 251 334 526
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2010 2009
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
Ghana-Tarkwa Mine (IAMGOLD interest - 18.9%)
----------------------------------------------------------------------------
Total operating material
mined (000t) 3,634 3,250 4,194 4,095 3,900 3,983 4,324 4,487
Capitalized waste mined
(000t) 2,582 3,208 2,397 2,660 2,131 1,991 1,650 2,259
Strip ratio(a) 2.4 2.3 2.8 2.9 3.1 3.0 3.3 3.6
Heap Leach:
-----------------------------
Ore crushed (000t) 548 559 608 624 520 428 479 537
Head grade (g/t) 0.7 0.5 0.6 0.6 0.7 0.7 0.9 1.0
Attributable gold production
(000 oz) 10 9 12 12 9 8 11 14
Mill:
-----------------------------
Ore milled (000t) 538 528 562 499 511 541 497 449
Head grade (g/t) 1.4 1.4 1.5 1.3 1.4 1.4 1.3 1.3
Attributable gold production
(000 oz) 24 25 26 21 23 25 20 15
Total attributable gold
production (000 oz) 34 34 38 33 32 33 31 29
Total attributable gold
sales (000 oz) 34 34 38 33 32 33 31 29
Gold revenue ($/oz)(b) 1,366 1,223 1,192 1,110 1,105 964 920 904
Cash cost excluding
royalties ($/oz) 570 582 562 556 475 479 484 500
Royalties ($/oz) 41 8 60 37 30 32 28 27
----------------------------------------------------------------------------
Cash cost ($/oz)(c) 611 590 622 593 505 511 512 527
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Ghana-Damang Mine (IAMGOLD interest - 18.9%)
----------------------------------------------------------------------------
Total operating material
mined (000t) 623 718 640 623 630 475 716 909
Strip ratio(a) 2.0 2.5 2.0 2.6 2.4 2.0 2.4 3.6
Ore milled (000t) 237 234 250 256 213 232 246 252
Head grade (g/t) 1.6 1.5 1.5 1.3 1.3 1.4 1.3 1.3
Recovery (%) 93 93 93 92 93 95 93 93
Attributable gold production
(000 oz) 11 11 11 10 8 10 10 10
Attributable gold sales (000
oz) 11 11 11 10 8 10 10 10
Gold revenue ($/oz)(b) 1,367 1,229 1,194 1,119 1,087 962 921 906
Cash cost excluding
royalties ($/oz) 632 612 615 640 616 546 581 620
Royalties ($/oz) 41 11 60 35 36 26 28 27
----------------------------------------------------------------------------
Cash cost ($/oz)(c) 673 623 675 675 652 572 609 647
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Canada-Niobec Mine (IAMGOLD interest - 100%)
----------------------------------------------------------------------------
Total operating material
mined (000t) 454 427 441 470 474 437 438 424
Ore milled (000t) 502 458 456 448 448 441 453 413
Grade (% Nb205) 0.59 0.62 0.62 0.61 0.64 0.61 0.57 0.63
Niobium production (millions
of kg Nb) 1.0 1.1 1.1 1.2 1.2 1.0 0.9 1.0
Niobium sales (millions of
kg Nb) 1.0 1.1 1.1 1.1 1.4 1.1 1.0 0.9
Operating margin ($/kg
Nb)(f) 17 19 19 19 20 18 19 22
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(a) Strip ratio is calculated as waste mined divided by ore mined.
(b) Gold revenue per ounce is calculated as gold sales divided by ounces of
gold sold.
(c) Cash cost is a non-GAAP measure. Refer to Section 3.b. of the
Supplemental information attached at the end of this news release
for reconciliation to GAAP measures.
(d) Commercial production at Essakane started effective as of July 16, 2010.
(e) On December 29, 2009, the Company purchased an additional 3% interest
in Sadiola which resulted in a 41% interest in the Sadiola joint
venture
(f) Operating margin per kilogram of niobium at the Niobec mine is a
non-GAAP measure. Refer to Section 3.c. of the Supplemental
information attached at the end of this news release for
reconciliation to GAAP measures.
3.A. NON-GAAP FINANCIAL MEASURES - ADJUSTED NET EARNINGS (unaudited)
Adjusted net earnings and adjusted net earnings per share are non-GAAP financial measures. Management believes that these measures better reflect the Company's performance for the current period and are a better indication of its expected performance in future periods. Adjusted net earnings and adjusted net earnings per share are intended to provide additional information, but do not have any standardized meaning prescribed by Canadian generally accepted accounting policies ("GAAP"), are unlikely to be comparable to similar measures presented by other issuers, and should not be considered in isolation or a substitute for measures of performance prepared in accordance with GAAP. Adjusted net earnings represent net earnings excluding certain impacts, net of tax, such as impairment charge, changes in asset retirement obligations for closed properties, unrealized derivative gain or loss on gold Mupane hedging, gain on sale of gold bullion, marketable securities and assets, impairment of marketable securities, foreign exchange gain or loss, and executive severance costs. These measures are not necessarily indicative of net earnings or cash flows as determined under GAAP. The following table provides a reconciliation of net earnings (loss) to adjusted net earnings as per the unaudited interim consolidated statement of earnings.
------------------------------------------------------------------------
------------------------------------------------------------------------
Fourth
quarter
ended Year ended
December 31 December 31
2010 2009 2010 2009
------------------------------------------------------------------------
(in $ millions, except for number of shares
and per share amounts; amounts are net of
tax impact) $ $ $ $
Net earnings (loss) 144.5 (47.4) 279.8 114.1
------------------------------------------------------------------------
Impairment charges - 88.8 - 98.1
Changes in asset retirement obligations for
closed properties 12.0 13.3 12.0 13.3
Unrealized derivative loss on gold Mupane
hedging 3.4 - 11.8 -
Gain on sale of gold bullion - - - (30.7)
Gain on sales of marketable securities (9.5) (0.6) (18.3) (2.6)
Gain on sales of assets (3.3) (0.2) (3.6) (1.9)
Impairment of marketable securities - 3.4 - 3.5
Foreign exchange loss (gain) (2.8) (2.1) 1.7 (27.0)
Executive severance costs 0.6 1.6 2.3 3.2
------------------------------------------------------------------------
0.4 104.2 5.9 55.9
------------------------------------------------------------------------
Adjusted net earnings 144.9 56.8 285.7 170.0
------------------------------------------------------------------------
Weighted average number of common shares
outstanding (in millions)
Basic 372.8 368.4 371.4 352.8
Diluted 374.4 368.4 373.3 354.6
------------------------------------------------------------------------
Basic net earnings (loss) per share 0.39 (0.13) 0.75 0.32
Basic adjusted net earnings per share 0.39 0.15 0.77 0.48
------------------------------------------------------------------------
------------------------------------------------------------------------
Comparative figures in 2009 and in previous quarters of 2010 of adjusted net earnings have been recalculated to conform to the calculation adopted in 2010.
3.b. NON-GAAP FINANCIAL MEASURES - CASH COSTS (unaudited)
The Company's News Release often refers to cash costs per ounce, a non-GAAP performance measure in order to provide investors with information about the measure used by management to monitor performance. This information is used to assess how well the producing gold mines are performing compared to plan and prior periods, and also to assess the overall effectiveness and efficiency of gold mining operations. "Cash cost" figures are calculated in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is still an accepted standard of reporting cash costs of gold production in North America. Adoption of the standard is voluntary and the cost measures presented herein may not be comparable to other similarly titled measures of other companies. Costs include mine site operating costs such as mining, processing, administration, royalties, production taxes, and attributable realized derivative gain or loss, but are exclusive of amortization, reclamation, capital, exploration and development costs. These costs are then divided by the Company's attributable ounces of gold produced to arrive at the total cash costs per ounce. The measure, along with sales, is considered a key indicator of a company's ability to generate operating earnings and cash flow from its mining operations.
These gold cash costs do not have any standardized meaning prescribed by Canadian GAAP and differ from measures determined in accordance with GAAP. They are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. These measures are not necessarily indicative of net earnings or cash flow from operations as determined under GAAP.
The following tables provide a reconciliation of total cash costs per ounce produced for gold mines to the mining costs, excluding depreciation, depletion and amortization as per the unaudited interim consolidated statement of earnings.
Fourth Quarter ended December 31, 2010
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Operating
Gold Mines Other
-----------------------------------------------------------------------
(in $ millions, Do-
except where Essa- yon Sadi- Oth- To-
noted) Rose- kane Divi- Mu- ola Ya- To- er tal
bel (a) sion pane (b) tela tal (c) (d)
-----------------------------------------------------------------------
$ $ $ $ $ $ $ $ $
Mining costs,
excluding
depreciation,
depletion and
amortization 63.6 42.6 36.3 14.3 24.9 11.8 193.5 22.6 216.1
Adjust for:
By-product
credit
(excluded from
mining costs) (0.2) (0.1) (1.3) - (0.1) (0.1) (1.8)
Stock movement (5.3) (5.1) (2.9) 2.1 (1.0) 0.8 (11.4)
Accretion
expense and
other changes
in asset
retirement
obligations (0.4) (0.1) (0.6) (0.2) (0.1) (0.2) (1.6)
Foreign
exchange,
interest and
other (1.1) (0.6) (16.1) (0.8) (1.1) (0.3) (20.0)
Cost attributed
to non-
controlling
interests (2.8) (3.6) - - - - (6.4)
-----------------------------------------------------------------------
(9.8) (9.5) (20.9) 1.1 (2.3) 0.2 (41.2)
-----------------------------------------------------------------------
Cash costs -
operating mines 53.8 33.1 15.4 15.4 22.6 12.0 152.3
Cash costs -
working
interests(e) 28.1
-----------------------------------------------------------------------
Total cash costs
including
working
interests 180.4
-----------------------------------------------------------------------
Attributable gold
production -
operating mines
(000 oz) 119 80 18 15 29 9 270
Attributable gold
production -
working
interests
(000 oz)(e) 45
-----------------------------------------------------------------------
Total
attributable
gold production
(000 oz) 315
-----------------------------------------------------------------------
Total cash costs
($/oz) 449 414 843 1,062 785 1,379 574
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Year ended December 31, 2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating
Gold Mines Other
----------------------------------------------------------------------------
(in $ millions, Do-
except where noted) Essa- yon Sadi- To-
Rose- kane Divi- Mu- ola Ya- To- Oth- tal
bel (a) sion pane (b) tela tal er(c) (d)
----------------------------------------------------------------------------
$ $ $ $ $ $ $ $ $
Mining costs,
excluding
depreciation,
depletion and
amortization 212.8 49.3 47.4 53.7 79.6 46.1 488.9 81.7 570.6
Adjust for:
By-product credit
(excluded from
mining costs) (0.4) (0.1) (2.1) - (0.2) (0.1) (2.9)
Stock movement (6.0) 11.2 (2.5) 0.7 0.6 0.8 4.8
Accretion expense
and other changes
in asset
retirement
obligations (1.7) (0.1) (2.3) (0.4) (0.7) (0.8) (6.0)
Foreign exchange,
interest and other (3.6) (1.9) (18.6) (1.2) (2.4) 0.8 (26.9)
Cost attributed to
non-controlling
interests (10.0) (5.8) - - - - (15.8)
----------------------------------------------------------------------------
(21.7) 3.3 (25.5) (0.9) (2.7) 0.7 (46.8)
----------------------------------------------------------------------------
Cash costs -
operating mines 191.1 52.6 21.9 52.8 76.9 46.8 442.1
Cash costs - working
interests(e) 112.5
----------------------------------------------------------------------------
Total cash costs
including working
interests 554.6
----------------------------------------------------------------------------
Attributable gold
production -
operating mines
(000 oz) 395 122 33 57 118 60 785
Attributable gold
production -
working interests
(000 oz)(e) 182
----------------------------------------------------------------------------
Total attributable
gold production
(000 oz) 967
----------------------------------------------------------------------------
Total cash costs
($/oz) 484 429 655 941 653 780 574
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(a) Commercial production starting July 16, 2010.
(b) On December 29, 2009, the Company purchased an additional 3% interest
increasing the Sadiola joint venture ownership interest to 41%.
(c) Niobium, Exploration and development and Corporate Segments.
(d) As per Consolidated statement of earnings.
(e) Working interests relate to the Tarkwa and Damang mines.
Fourth quarter ended December 31, 2009
-----------------------------------------------------------------------
Operating
Gold Mines Other
-----------------------------------------------------------------------
(in $ millions, except Do-
where noted) yon Sadi- Oth- To-
Rose- Divi- Mu- ola Ya- To- er tal
bel sion pane (a) tela tal (b) (c)
-----------------------------------------------------------------------
$ $ $ $ $ $ $ $
Mining costs, excluding
depreciation,
depletion and
amortization 42.6 29.1 9.2 20.9 10.5 112.3 26.9 139.2
Adjust for:
By-product credit
(excluded from mining
costs) (0.1) (0.6) (0.1) - - (0.8)
Realized loss on non-
hedge derivatives
(excluded from mining
costs) 0.6 (0.5) 0.1 0.3 0.1 0.6
Stock movement 3.6 0.7 0.3 (0.5) (0.3) 3.8
Accretion expense and
other changes in
asset retirement
obligations (0.4) (16.1) (0.1) (0.2) (0.1) (16.9)
Foreign exchange,
interest and other (2.2) (0.1) - (0.9) (1.1) (4.3)
Cost attributed to
non-controlling
interest (2.2) - - - - (2.2)
-----------------------------------------------------------------------
(0.7) (16.6) 0.2 (1.3) (1.4) (19.8)
-----------------------------------------------------------------------
Cash costs - operating
mines 41.9 12.5 9.4 19.6 9.1 92.5
Cash costs - working
interests(d) 21.9
-----------------------------------------------------------------------
Total cash costs
including working
interests 114.4
-----------------------------------------------------------------------
Attributable gold
production - operating
mines (000 oz) 99 24 11 32 28 194
Attributable gold
production - working
interests (000 oz)(d) 40
-----------------------------------------------------------------------
Total attributable gold
production (000 oz) 234
-----------------------------------------------------------------------
Total cash costs ($/oz) 422 528 885 616 323 488
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Year ended December 31, 2009
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Operating
Gold Mines Other
-----------------------------------------------------------------------
(in $ millions, except Do-
where noted) yon Sadi- Oth- To-
Rose- Divi- Mu- ola Ya- er tal
bel sion pane (a) tela Total (b) (c)
-----------------------------------------------------------------------
$ $ $ $ $ $ $ $
Mining costs,
excluding
depreciation,
depletion and
amortization 155.5 77.7 40.0 67.0 30.5 370.7 76.1 446.8
Adjust for:
By-product credit
(excluded from
mining costs) (0.3) (2.4) (0.1) (0.1) - (2.9)
Loss/(Gain) on non-
hedge derivatives
(excluded from
mining costs) 0.6 (0.5) 0.1 0.3 0.1 0.6
Stock movement 14.1 (0.4) (1.1) - - 12.6
Accretion expense and
other changes in
asset retirement
obligations (1.7) (17.2) (0.3) (0.7) (0.5) (20.4)
Foreign exchange,
interest and other (4.7) (0.2) (1.1) (1.5) 0.1 (7.4)
Cost attributed to
non-controlling
interest (8.2) - - - - (8.2)
-----------------------------------------------------------------------
(0.2) (20.7) (2.5) (2.0) (0.3) (25.7)
-----------------------------------------------------------------------
Cash costs - operating
mines 155.3 57.0 37.5 65.0 30.2 345.0
Cash costs - working
interests(d) 88.1
-----------------------------------------------------------------------
Total cash costs
including working
interests 155.3 57.0 37.5 65.0 30.2 433.1
-----------------------------------------------------------------------
Attributable gold
production -
operating mines
(000 oz ) 392 109 51 135 89 776
Attributable gold
production - working
interests (000 oz)(d) 163
-----------------------------------------------------------------------
Total attributable
gold production
(000 oz) 939
-----------------------------------------------------------------------
Total cash costs
($/oz) 396 524 735 483 339 461
-----------------------------------------------------------------------
-----------------------------------------------------------------------
a. On December 29, 2009, the Company purchased an additional 3% interest
increasing the Sadiola joint venture ownership interest to 41%.
b. Niobium, Exploration and development and Corporate Segments.
c. As per Consolidated statement of earnings.
d. Working interests relate to the Tarkwa and Damang mines.
3.c. NON-GAAP FINANCIAL MEASURES - UNIT OPERATING MARGIN PER KILOGRAM OF NIOBIUM FOR THE NIOBEC MINE (unaudited)
The Company's News Release refers to operating margin per kilogram of niobium at the Niobec mine, a non-GAAP performance measure, in order to provide investors with information about the measure used by management to monitor the performance of its non-gold asset, the Niobec mine. The information allows management to assess how well the Niobec mine is performing relative to the plan and to prior periods, as well as, assess the overall effectiveness and efficiency of the operations. The operating margin per kilogram of niobium does not have any standardized meaning prescribed by Canadian GAAP, are unlikely to be comparable to similar measures presented by other issuers, and should not be considered in isolation or a substitute for measures of performance prepared in accordance with GAAP.
The following table provides a reconciliation of operating margin per kilogram of niobium at the Niobec mine to revenues, mining costs and attributable non-hedge derivative gain or loss as per the unaudited interim consolidated statement of earnings.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(unaudited) 2010 2009
(in $ millions,
except where
noted) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
----------------------------------------------------------------------------
$ $ $ $ $ $ $ $
Revenues from the
Niobec mine as
per segmented
information in
consolidated
financial
statements 39.2 40.4 38.9 40.2 52.8 39.7 35.0 31.8
----------------------------------------------------------------------------
Mining costs per
consolidated
statement of
earnings 216.1 128.6 109.5 116.4 139.2 109.9 108.4 89.3
Mining costs from
gold mines as
per cash cost
reconciliation (193.5) (108.3) (90.5) (96.6) (112.3) (90.0) (91.7) (76.7)
Other mining
costs (0.9) (0.4) (0.6) (0.4) (1.9) - - (0.1)
----------------------------------------------------------------------------
21.7 19.9 18.4 19.4 25.0 19.9 16.7 12.5
Non-hedge
derivative gain - - - - (0.6) - - -
----------------------------------------------------------------------------
Mining costs from
the Niobec mine 21.7 19.9 18.4 19.4 24.4 19.9 16.7 12.5
----------------------------------------------------------------------------
Operating margin 17.5 20.5 20.5 20.8 28.4 19.8 18.3 19.3
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Sales volume
(millions of
kg Nb) 1.0 1.1 1.1 1.1 1.4 1.1 1.0 0.9
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating margin
($/kg Nb) 17 19 19 19 20 18 19 22
----------------------------------------------------------------------------
----------------------------------------------------------------------------
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| CONTACT INFORMATION:
IAMGOLD Corporation
Bob Tait, VP Investor Relations
(416) 360-4743 / Mobile: (647) 403-5520
Toll-free: 1 888 464-9999
info@iamgold.com
www.iamgold.com
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| INDUSTRY: Manufacturing and Production - Mining and Metals | |
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