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TORONTO,
ONTARIO--(Marketwire - May 11, 2011) -
All amounts are expressed in US dollars, unless otherwise indicated.
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IAMGOLD Corporation ("IAMGOLD" or "the Company")
TSX:IMG)(NYSE:IAG)(BOTSWANA:IAMGOLD) today reported its unaudited
consolidated financial and operating results for the first quarter
ended March 31, 2011. Net earnings were $162.3 million ($0.41 per
share), an increase of $102.1 million compared to the first quarter of
2010, and operating cash flow was $205.8 million ($0.55 per share(1)),
representing an increase of 177% from the first quarter of 2010.
"Our strong first quarter results reflect our focused strategy to
maximize the value of mines that we own and operate," said Steve
Letwin, IAMGOLD's President and CEO. "Attributable gold production
was up 41% year-over-year driven chiefly by the inclusion of Essakane
along with higher recoveries at Rosebel. We continue to benefit from
higher gold prices and are implementing various initiatives to reduce
our cash costs."
Mr. Letwin further commented: "On our strategic agenda, we have
also taken the first two steps to enhance shareholder value. The sale
of our minority interests in Ghana for $667 million, as announced in
April, is aligned with our overarching financial objective to invest in
assets where we can maximize return on capital. The second step is to
execute our recently announced plan to realize the value of Niobec and
examine opportunities to monetize the value of the asset."
FIRST QUARTER 2011 HIGHLIGHTS
-- Revenues of $432.5 million were up 80% from $240.1 million in the first quarter of 2010. -- The attributable gold production of 290,000 ounces was up 41% from 206,000 ounces in the first quarter of 2010 mainly due to the commencement of production at Essakane in the third quarter of 2010. -- Record net earnings of $162.3 million ($0.41 per share) increased by 170% from $60.2 million ($0.15 per share) in the first quarter of 2010. -- Strong adjusted net earnings(2) of $144.9 million ($0.36 per share(2)) increased by 163% from $55.0 million ($0.14 per share) in the first quarter of 2010. -- Strong operating cash flow of $205.8 million ($0.55 per share(1)) increased by 177% compared to $74.3 million ($0.20 per share) in the first quarter of 2010. -- Financial position strengthened with cash, cash equivalents and gold bullion (at market) of $621.4 million and availability under the credit facility of $350.0 million at March 31, 2011. -- Proceeds of $48.8 million received on the sale of the La Arena project resulting in a pre-tax gain of $10.5 million. In addition, as part of the option and earn-in agreement in June 2009, IAMGOLD received 8 million shares and 1.5 million warrants of Rio Alto Mining Limited for a total value of $1.4 million at inception. These shares and warrants had a market value of $21.2 million as at the end of March 2011. -- Raised gross proceeds of $43.3 million through a private placement of flow-through shares, with 1.7 million shares issued at a price of C$25.48 per share. -- On April 15th, IAMGOLD announced the agreement to sell its 18.9% interest in the Tarkwa and Damang gold mines in Ghana, West Africa to Gold Fields Limited for $667 million in cash. The deal is expected to close no later than July 31, 2011. -- On May 4, 2011, IAMGOLD announced the result of an independent technical report confirming the potential to increase measured and indicated resources at its niobium mine by 691% to 1.93 billion kilograms of contained niobium pentoxide with an after-tax net asset value in the range of $1.6 billion to $2.0 billion. -- IAMGOLD commenced reporting its unaudited consolidated financial statements for the first quarter of 2011 in accordance with International Financial Reporting Standards ("IFRS") with comparative information for 2010 restated under IFRS. -- On March 7, 2011, IAMGOLD signed a Memorandum of Understanding ("MOU") with the China National Gold Group Corporation ("China Gold"). This MOU confirms the mutual intention of IAMGOLD and China Gold to cooperate in the pursuit and development of mineral deposits in the regions of IAMGOLD's focus.
REVIEW
OF FIRST QUARTER 2011 RESULTS
Production and Cash Costs
Gold Operations
-- Attributable gold production of 290,000 ounces at an average cash cost(3) of $575 an ounce compared to 206,000 attributable ounces at an average cash cost of $524 per ounce in the first quarter of 2010.
Niobium
Operation
-- Niobium production of 1.1 million kilograms in the first quarter of 2011, down from 1.2 million kilograms in the first quarter of 2010. Operating margin(4) of $16 per kilogram compared to $19 per kilogram in the first quarter of 2010.
Financial
Results
Revenues in the first quarter of 2011 reached $432.5 million, an 80%
increase from $240.1 million in the first quarter of 2010, primarily
due to the addition of production from the Essakane mine and higher
gold prices. For IAMGOLD's operations and joint ventures, the number of
ounces of gold sold increased by 57% while the average realized gold
price rose by 26% compared to the first quarter of 2010.
In the first quarter of 2011, net earnings increased by 170% to $162.3
million ($0.41 per share), compared to $60.2 million ($0.15 per share)
in the first quarter of 2010. Adjusted net earnings(2) of $144.9
million ($0.36 per share(2)) increased by 163% compared to $55.0
million ($0.14 per share) in the first quarter of 2010. The impact of
higher sales and gold prices was partially offset by increases in
mining costs and income and mining taxes.
Operating cash flow in the first quarter of 2011 was $205.8 million
($0.55 per share(1)), an increase of 177% compared to $74.3 million
($0.20 per share(1)) in the first quarter of 2010. The increase is
mainly due to increased sales partially offset by higher mining costs
and income and mining taxes.
Financial Position
Cash, cash equivalents and gold bullion (at market value) increased to
$621.4 million as at March 31, 2011, compared to $411.3 million at the
end of 2010. The increase in cash and cash equivalents is mainly due to
cash flow from operating activities, the issuance of flow-through
shares and the proceeds received from the disposal of the La Arena
project, partially offset by capital expenditures in mining assets and
exploration and evaluation projects.
In the first quarter of 2011, the Company issued 1.7 million
flow-through shares at a price of C$25.48 per share with gross proceeds
of $43.3 million to fund prescribed resource expenditures on the
Westwood project. On February 9, 2011, IAMGOLD received $48.8 million
for the sale of its La Arena project.
As at March 31, 2011, $350.0 million of unused credit remained
available under the Company's credit facility. In addition, the Company
had $31.2 million available from the $50.0 million revolving facility
for the issuance of letters of credit.
On April 15, 2011, IAMGOLD announced that it has reached an agreement
to sell its 18.9% interest in the Tarkwa and Damang gold mines in
Ghana, West Africa to Gold Fields Limited ("Gold Fields") for
$667 million in cash. This transaction is subject to the approval of
Gold Fields' shareholders and is expected to close no later than July
31, 2011. The Company expects to record an after-tax gain on this sale
of approximately $400 million. Including the funds from the disposition
of Tarkwa and Damang, IAMGOLD's projected liquidity position would be
over $1.6 billion.
Development and Expansion Projects
Canada - Westwood Project
The Westwood project expenditures in the first quarter of 2011 totaled
$27.5 million (before tax credit) with significant infrastructure
preparation and construction, including the completion of a number of
hoist elements, the fire detection system with the new pump house,
final breakthrough of the six-metre diameter ventilation shaft
completed and the installation of ground support infrastructure. Shaft
sinking reaching 1,157 metres at the end of the first quarter of 2011,
with the excavation of a spill pocket and the safety bulkhead, and
underground development work including 2,106 metres of lateral and
vertical excavation achieved.
Ecuador - Quimsacocha
The Company has obtained the requisite permits and authorization to
advance feasibility work. The Company maintains regular contact and
dialogue with senior government officials in order to obtain needed
clarity on fiscal and other matters, including the analysis of the
model mining contracts recently released by the Ecuadorian government.
Mali - Sadiola Sulphide Project
The feasibility study on the Sadiola sulphide initiative was completed
in 2010 and progress continues towards a construction decision in 2011.
Suriname - Rosebel Mine
The Company is reviewing steps to expand the capacity at the Rosebel
mine.
Burkina Faso - Essakane Feasibility Study to Expand the Mine
A feasibility study to expand the mine is currently in progress and is
expected to be completed in the third quarter of 2011. The current mine
plan includes processing soft rock for the first three years at a rate
of 9.0 million tonnes per year starting in 2011, followed by
approximately nine years of processing hard rock. The study is expected
to demonstrate that the hard rock capacity of the mine could be
expanded to process approximately 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 of
between 450,000 and 470,000 ounces (on a 100% basis), compared to the
current estimate of 315,000 ounces. Assuming a positive outcome of the
study, construction could commence in the fourth quarter of 2011.
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 already underway and continues to pursue additional advanced
exploration joint venture or acquisition opportunities that will
provide the foundation for future growth.
In the first quarter of 2011, IAMGOLD incurred $18.9 million on
exploration projects, a 17% increase from $16.2 million in the first
quarter of 2010. The 2011 expenditures included:
-- near-mine exploration and resource development expenditures of $9.8 million including the initial stages of a planned resource expansion and delineation drilling program of more than 95,000 metres at Rosebel in Suriname for $2.3 million, a drill delineation program of more than 72,000 metres at Essakane in Burkina Faso for $1.3 million, and $2.6 million directed at an exploration and resource delineation drilling program of more than 82,000 metres at the Westwood development project in Quebec; and -- greenfield exploration of $9.1 million conducted at 16 projects, including two advanced exploration sites, in 8 countries in Africa and the Americas as part of IAMGOLD's long-term commitment to reserves replenishment and organic growth.
Commitment
to Zero Harm Continues
The frequency of all types of serious injuries (measured as DART
rate(5)) across IAMGOLD during the first quarter of 2011 decreased
marginally to 0.52 compared to 0.63 in the first quarter of 2010.
A fatality occurred at the Rosebel operation on February 4, 2011,
involving an employee of a drilling contractor. The single vehicle
accident occurred at night when the vehicle rolled over on its side,
resulting in a fatal injury to the operator. A full accident
investigation was conducted to determine the root causes and
contributing factors in the accident. The site management have
developed and implemented mitigation strategies based on the
investigation results. Both the drilling contractor and IAMGOLD have
been providing continued support to the employees and families affected
by this tragedy.
Mr. Letwin commented, "This incident only serves to strengthen our
commitment to strive for Zero Harm and to increase our attention to
preventative safety practices throughout our operations. Operating
safely is our most important priority."
Summarized Financial Results --------------------------------------------------------------------------- --------------------------------------------------------------------------- March 31 December 31 (in $ millions) 2011 Change 2010 --------------------------------------------------------------------------- Financial Position $ $ Cash and cash equivalents and gold bullion - at market value 621.4 51 % 411.3 - at cost 517.9 66 % 311.2 Total assets 3,631.5 6 % 3,431.1 Equity 2,941.1 7 % 2,758.1 --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- First quarter First quarter ended ended (in $ millions, except where March 31 March 31 noted) 2011 Change 2010 --------------------------------------------------------------------------- Results of Operations $ $ Revenues 432.5 80 % 240.1 Mining costs including depreciation, depletion and amortization 230.4 57 % 146.4 --------------------------------------------------------------------------- Earnings from mining operations 202.1 116 % 93.7 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Net earnings 162.3 170 % 60.2 Basic and diluted net earnings attributable to equity shareholders per share ($/share) 0.41 173 % 0.15 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Adjusted net earnings(2) 144.9 163 % 55.0 Basic adjusted net earnings attributable to equity shareholders per share ($/share)(2) 0.36 157 % 0.14 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Cash Flows Operating cash flow 205.8 177 % 74.3 Operating cash flow per share ($/share)(1) 0.55 175 % 0.20 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Key Operating Statistics Gold mines ---------------------------- Gold sales (000 oz)(a) 325 47 % 221 Average realized gold price ($/oz) 1,396 26 % 1,111 Attributable gold production (000 oz) 290 41 % 206 Cash cost ($/oz)(3) 575 10 % 524 --------------------------------------------------------------------------- Operating results - Niobium mine ---------------------------- Niobium sales (millions of kg Nb) 1.0 (9%) 1.1 Niobium production (millions of kg Nb) 1.1 (8%) 1.2 Operating margin ($/kg Nb)(4) 16 (16%) 19 --------------------------------------------------------------------------- --------------------------------------------------------------------------- (a) Gold sales include 100% sales of Rosebel, Essakane, Doyon division and Mupane, 41% of sales from Sadiola, 40% of sales from Yatela, and 18.9% of sales from Tarkwa and Damang.
2011
Outlook
IAMGOLD revised its guidance for production for 2011 as follows:
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- 2011 2011 Revised Guidance Original Guidance Issued in Issued in January May 2011 2011 ---------------------------------------------------------------------------- Attributable gold production (000 oz) Mines owned and operated by IAMGOLD Rosebel 360-380 360-380 Essakane 370-390 370-390 Mouska 25-30 25-30 Mupane 55-60 55-60 ---------------------------------------------------------------------------- 810-860 810-860 Sadiola and Yatela mines 145-160 145-160 Tarkwa and Damang mines 46 145-180 ---------------------------------------------------------------------------- Total attributable production 950-1,050 1,100-1,200 ---------------------------------------------------------------------------- Cash cost ($/oz of gold)(3) 590-620 565-595 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Average gold price ($/oz) 1,400 1,300 Average crude oil price ($/barrel) 100 85 Average foreign exchange rate (C$/US$) 1.00 1.00 Average foreign exchange rate (US$/EUR)(a) 1.40 1.35 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Niobium production Niobec (millions of kilograms) 4.5-5.0 4.5-5.0 Operating margin ($/kg Nb)(4) 15-17 15-17 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (a) Applies to the Essakane mine.
The
production guidance for 2011 was revised downwards to reflect the
proposed sale of the 18.9% interest in the Tarkwa and Damang gold mines
in Ghana, West Africa to Gold Fields Limited. There were no other
changes to production outlook. The revised guidance includes only three
months' production from the Tarkwa and Damang mines in Africa.
Cash Cost per Ounce of Gold
The Company revised its guidance for its cash cost per ounce of gold in
2011 to between $590 and $620 per ounce, $25 per ounce higher than the
original cash cost guidance issued in January 2011. This increase
primarily reflects the update in production and in the business
environment assumptions on royalty rates, royalty costs driven by the
price for gold, price of oil, and foreign exchange rates.
Substantial Change in Outlook for Niobec
Throughout the first quarter of 2011, the Company has been executing on
its strategic initiative to unlock the value of Niobec. On May 4, 2011,
the Company announced the results of an independently prepared NI
43-101 compliant preliminary economic assessment ("PEA") in
conjunction with a study conducted by the Company's technical team. The
PEA examined the impact of changing the existing underground mine to an
alternative bulk mining method. The study compared the economics of the
open pit scenario and a block caving scenario. The results indicate
potential for a 691% increase in measured and indicated resources at
Niobec to 1.93 billion kilograms of contained niobium pentoxide. There
is potential for a threefold increase in production to 15 million
kilograms per year. Based on higher metal prices and lower operating
costs, the operating margin is estimated to increase from $18 per
kilogram to $28 per kilogram. The after-tax net asset value is expected
to range between $1.6 billion and $2.0 billion. In addition, the
Company has identified an underexplored Rare Earth Element (REE) zone
at the Niobec site and exploration and metallurgical testwork has been
initiated. The work done on the PEA and the study will be advanced in a
2011 pre-feasibility study to confirm the potential upside of Niobec.
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 per ounce of
production.
-------------------------------------------------------------------------- -------------------------------------------------------------------------- (Unaudited) Total Cash Gold Production Cost(3) -------------------------------------------------------------------------- First quarter ended First quarter ended March 31 March 31 -------------------------------------------------------------------------- 2011 2010 2011 2010 -------------------------------------------------------------------------- IAMGOLD Operator (000 oz) (000 oz) $/oz $/oz Rosebel (95%) 100 93 544 456 Essakane (90%) 95 - 428 - Doyon division (100%)(a) - - - - Mupane (100%) 11 13 1,379 826 -------------------------------------------------------------------------- 206 106 534 501 -------------------------------------------------------------------------- Joint Ventures Sadiola (41%) 30 30 724 538 Yatela (40%) 8 27 1,312 462 -------------------------------------------------------------------------- 38 57 840 502 -------------------------------------------------------------------------- Tarkwa and Damang (18.9%) 46 43 542 612 -------------------------------------------------------------------------- Total 290 206 575 524 -------------------------------------------------------------------------- -------------------------------------------------------------------------- Cash cost excluding royalties 506 470 Royalties 69 54 -------------------------------------------------------------------------- Cash cost 575 524 -------------------------------------------------------------------------- --------------------------------------------------------------------------
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(a) As a cost savings initiative, the ore mined from Mouska has been stockpiled and will be batch processed later in 2011.
In
the first quarter of 2011, IAMGOLD's attributable gold production
increased by 84,000 ounces, or 41%, compared to the first quarter of
2010.
The increase in production was a result of:
-- inclusion of production from Essakane which commenced production in the third quarter of 2010, and -- higher recoveries at Rosebel resulting from the construction of additional CIL tanks in 2010,
partially
offset by:
-- lower ore availability at Yatela.
The
consolidated average cash cost of $575 per ounce during the first
quarter of 2011 has increased by $51 per ounce from $524 per ounce in
the first quarter of 2010 mainly due to lower grades, higher energy
costs, and higher royalties of $15 per ounce. Increases in the gold
price resulted in increased price-driven royalty amounts.
Attributable Gold Sales Volume and Realized Gold Price
The following table presents the total ounces of gold sold and the
realized gold price per ounce.
-------------------------------------------------------------------------- -------------------------------------------------------------------------- Gold sales Realized gold price -------------------------------------------------------------------------- First quarter First quarter ended ended March 31 March 31 2011 2010 2011 2010 -------------------------------------------------------------------------- (000 oz) (000 oz) $/oz $/oz Operator (Rosebel, Essakane, Doyon 242 123 1,400 1,111 division, Mupane) Joint ventures (Sadiola and 37 55 1,387 1,110 Yatela) Tarkwa and Damang 46 43 1,382 1,112 -------------------------------------------------------------------------- Total(a) 325 221 1,396 1,111 -------------------------------------------------------------------------- -------------------------------------------------------------------------- (a) Attributable sales volume for the first quarters of 2011 and 2010 were 309,000 ounces and 216,000 ounces, respectively, after taking into account 95% of Rosebel sales and 90% of the Essakane sales.
Gold
sales volumes increased in the first quarter of 2011 compared to the
first quarter of 2010, mainly due to higher sales at Rosebel,
commencement of commercial production at Essakane and higher production
and sales at Tarkwa and Damang. The average spot gold price on the
London Bullion Market Association ("LBMA") for the first
quarter of 2011 was $1,386 per ounce, versus $1,109 per ounce in the
same period in 2010.
Operations Summary
The Company's first quarter of 2011 gold operations are summarized
below.
Rosebel Mine, Suriname
Gold production during the first quarter of 2011 was 7% higher compared
to the first quarter of 2010, primarily as a result of improved gold
recoveries from the installation of additional leach tanks in the early
part of the fourth quarter of 2010.
Cash costs per ounce were up in the first quarter of 2011 due to higher
fuel and power prices, higher consumables, and higher royalties due to
rising gold prices.
Essakane Mine, Burkina Faso
Attributable production during the first quarter of 2011 was 95,000
ounces, compared to 80,000 ounces during the fourth quarter of 2010
mostly due to higher throughput. During the quarter, the mill achieved
its target throughput rate and processed 25,000 tonnes per day.
Cash costs excluding royalties were lower compared to the fourth
quarter of 2010 despite lower grades, higher energy prices and upward
pressure on consumable prices. The positive results are attributable to
efficiencies in equipment utilization throughout the operation. During
the first quarter of 2011, cash costs after royalties were $428 per
ounce compared to $414 per ounce during the fourth quarter of 2010 as a
result of higher royalties which result from an increase of 2% in the
average royalty rates and higher realized gold prices.
Doyon Division, Canada
As a cost savings initiative, the ore mined from Mouska has been
stockpiled and will be batch processed later in 2011.
Mupane mine, Botswana
In the first quarter of 2011, gold production declined by 15% compared
to the same quarter in the prior year as a result of lower gold grades.
Cash cost per ounce of gold was higher in the first quarter of 2011
compared to 2010, primarily as a result of higher tonnage mined at a
higher strip ratio and the impact of higher diesel fuel prices. In
addition, higher royalties resulted from increased gold prices.
Sadiola mine, Mali
The attributable gold production was consistent in the first quarter of
2011 compared to the same period in 2010 as higher throughput and
recoveries offset lower gold grades. As expected, gold grades have
decreased from mining satellite pits following the completion of mining
at the main Sadiola pit.
Cash cost per ounce of gold rose during the first quarter of 2011
compared to the first quarter of 2010, primarily as a result of lower
production from lower grades, higher energy costs, higher labour costs
from a revised mining contract finalized in the fourth quarter of 2010,
and increased royalties from higher realized gold prices.
The Company's attributable portion of capital expenditures during the
first quarter of 2011 was $0.9 million, mainly related to the Sadiola
sulphide project and capitalized exploration expenditures.
Yatela mine, Mali
Attributable gold production was sharply lower in the first quarter of
2011 compared to the same period in 2010 as a result of lower volumes
of ore crushed and significantly lower gold grades. After the
completion of mining the bottom of the main pit in early 2010, mine
production has shifted to a longer-haul satellite pit, which resulted
in lower grades and higher waste stripping.
Cash costs per ounce were significantly higher during the first quarter
of 2011 compared to the first quarter of 2010, primarily as a result of
lower production mainly attributable to lower gold grades, higher waste
stripping, higher energy costs, and higher royalties from higher
realized gold prices.
Tarkwa and Damang mines, Ghana
On April 15, 2011, IAMGOLD announced that it had reached an agreement
to sell its 18.9% interests in the Tarkwa and Damang gold mines in
Ghana, West Africa to Gold Fields Limited ("Gold Fields") for
gross proceeds of $667 million. This transaction is subject to the
approval of Gold Fields' shareholders and is expected to close no later
than July 31, 2011.
The production guidance for 2011 was revised downwards to reflect the
proposed sale of the 18.9% interest in the Tarkwa and Damang gold
mines. The Company's updated guidance excludes Tarkwa and Damang
results from production and cash costs effective April 1, 2011.
Interests in Tarkwa and Damang were accounted for using the equity
method and were disclosed in the condensed consolidated interim balance
sheet as investments in associates. The carrying value of investments
in associates as at March 31, 2011 was $261.5 million.
Niobium Operation
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- First quarter ended March 31 2011 change 2010 ---------------------------------------------------------------------------- Operating results - Niobium Mine ---------------------------------------------- Niobium production (millions of kg Nb) 1.1 (8%) 1.2 Niobium sales (millions of kg Nb) 1.0 (9%) 1.1 Operating margin ($/kg Nb)(4) 16 (16%) 19 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Niobium
production during the first quarter of 2011 was 8% lower compared to
the first quarter of 2010 primarily as a result of lower Nb2O5 ore
grade.
Niobium revenues were $39.6 million in the first quarter of 2011
compared to $40.2 million in the same period in 2010, due a decrease in
sales volumes as a result of lower production, partially offset by
higher realized niobium prices during the quarter.
The operating margin per kilogram of niobium decreased by $3 per
kilogram during the first quarter of 2011 compared to the same period
in 2010. As expected, the inclusion of the paste backfill process
starting the second quarter of 2010 lowered operating margin per
kilogram of niobium. Paste backfill enables 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 2010.
Adjusted net earnings
Adjusted net earnings and adjusted net earnings attributable to equity
shareholders 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 attributable to equity shareholders per share are intended to
provide additional information, but do not have any standardized
meaning prescribed by IFRS, 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 IFRS. 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 Mupane gold hedging and warrants held as
investments, marketable securities and assets, foreign exchange gain or
loss, and executive severance costs, as well as unrealized gain on
foreign exchange translation of deferred income and mining tax
liabilities. These measures are not necessarily indicative of net
earnings or cash flows as determined under IFRS. The following table
provides a reconciliation of net earnings to adjusted net earnings as
per the unaudited condensed consolidated interim statement of earnings.
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- First quarter ended First quarter ended March 31 March 31 2011 2010 ---------------------------------------------------------------------------- (in $ millions, except for number of shares and per share amounts) $ $ Net earnings 162.3 60.2 ---------------------------------------------------------------------------- Executive severance costs - 0.8 Foreign exchange loss 5.2 1.7 Unrealized derivative gain on Mupane gold hedging and warrants held as investments (4.9) (1.0) Gain on sales of marketable securities (0.2) (7.0) Gain on sales of assets (including a positive tax impact in Q1-2011) (14.9) (0.1) Unrealized gain on foreign exchange translation of deferred income and mining tax liabilities (2.6) 0.4 ---------------------------------------------------------------------------- (17.4) (5.2) ---------------------------------------------------------------------------- Adjusted net earnings 144.9 55.0 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Adjusted net earnings attributable to: Equity shareholders of the Company 136.0 51.9 Non-controlling interests 8.9 3.1 ---------------------------------------------------------------------------- 144.9 55.0 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Basic weighted average number of common shares outstanding (in millions) 373.6 369.4 ---------------------------------------------------------------------------- Basic and diluted earnings attributable to equity shareholders of the Company per share ($/share) 0.41 0.15 Basic adjusted net earnings attributable to equity shareholders of the Company per share ($/share) 0.36 0.14 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
(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 attributable to
equity shareholders per share are non-GAAP measures. Refer to the
Supplemental Information above for reconciliation to GAAP measures.
(3) Cash cost per ounce of gold is a non-GAAP measure. Refer to the
Supplemental Information attached to the MD&A for reconciliation to
GAAP measures.
(4) Operating margin per kilogram of niobium at the Niobec mine is a
non-GAAP measure. Refer to the Supplemental Information attached to the
MD&A for reconciliation to GAAP measures.
(5) The DART rate refers to the number of Days Away, Restricted Duty or
Job Transfer incidents that occur per 100 employees.
Conference Call
A conference call will be held on May 12, 2011 at 9:00 a.m. (Eastern
Daylight Time) for a discussion with management regarding the Company's
operating performance and financial results for the first quarter. 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: 8309812#
A replay of this conference call will be available from 6:00 p.m. May
12th to June 12th, 2011. Access this replay by dialling: North America
toll-free: 1-866-551-4520 or 1-212-401-6750, passcode: 272015#
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 2010 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.
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