Iamgold Corporation · TSX:IMG
Iamgold — Q3 2020 Earnings Presentation
41 slides from Iamgold's earnings presentation, Nov 5, 2020
Slide 1: Third Quarter 2020 Results
Third Quarter 2020 Results November 5, 2020 – Conference Call TSX: IMG l NYSE: IAG
Slide 2: Management Participants
Management Participants • Gordon Stothart President & Chief Executive Officer • Carol Banducci Executive Vice President & Chief Financial Officer • Bruno Lemelin Senior Vice President, Operations & Projects • Craig MacDougall Senior Vice President, Exploration • Tim Bradburn Vice President, Legal an
Slide 3: Cautionary Statement
Cautionary Statement All information included in this presentation whether in narrative or chart form, including any information as to the Company’s future financial or operating performance, and other statements that express management’s expectations or estimates of future performance, other than s
Slide 4: Technical Information and Qualified Persons
Technical Information and Qualified Persons The Mineral Resource and Reserve Estimates contained in this presentation have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). The Qualified Person (“QP”) responsible for the review an
Slide 5: Highlights of the Quarter
Highlights of the Quarter Adapting to Our New Normal with COVID-19 Solid Operating Cash Flow / Free Cash Flow Strong Balance Sheet Supplemented by Enhanced Flexibility from Debt Refinancing to 2028 Transformational Growth Anticipated with Côté Gold Project 5
Slide 6: Adapting to Our New Normal: COVID-19 Response
Adapting to Our New Normal: COVID-19 Response Zero Harm© is our commitment to continually strive to reach the highest standards in human health & safety, minimize our environmental footprint, and work co-operatively with our host communities. • COVID-19 in Q3 2020: Health & Safety Protocols Embedded
Slide 7: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) Strong ESG Recent highlights: In place since 2007 practices • Moody’s1 ESG ranks IAMGOLD 4th out of 45 sector peers • Donations to local communities in response to the global COVID-19 crisis, allocating US$1.5M Zero Harm thus far in 2020, including: • Clean
Slide 8: 2020 Production and Cost Guidance – revised
2020 Production and Cost Guidance – revised REVISED GUIDANCE1 PREVIOUS GUIDANCE2 Essakane (000s oz) 350 – 370 350 – 370 Rosebel (000s oz) 210 – 230 210 – 230 Westwood (000s oz) 70 – 80 85 – 100 Total attributable production (000s oz) 630 – 680 645 – 700 Cost of sales 3 ($/oz) $1,045 – $1,075 $990 –
Slide 9: 2020 Capex Outlook – revised
2020 Capex Outlook – revised CAPITAL COST REDUCED BY $25 MILLION ADJUSTING FOR WW AND SCHEDULING OF CAPITAL PROGRAMS REVISED PREVIOUS GUIDANCE Non- Non- $millions Sustaining1 Sustaining2 Total3 Sustaining1 Sustaining2 Total3 Essakane $40 $70 $110 $40 $65 $105 Rosebel $50 $40 $90 $50 $40 $90 Westwood
Slide 10: Upcoming Catalysts
Upcoming Catalysts 2020 2021* Westwood NI 43-101 o Westwood Expands Production** Côté Construction Go-ahead o Rosebel Ramp-up with Saramacca o Saramacca Full Production o Essakane Optimized Mill o Essakane CIL Plant Optimization o Advancing Growth Projects o De-risking of Boto with investment in
Slide 11: Financial Review
Financial Review Photo: Wärtsilä 11
Slide 12: Overview
Overview KEY NOTES • Highlights from the Quarter: • Strong mine site free cash flows – up 245% from Q3-2019, with YTD September up >3,800% compared to 2019 • Refinanced old bond with $450 million new bond issue with lower 5.75% interest rate and extended maturity to 2028 • S&P and Moody’s credit rat
Slide 13: Summary of Third Quarter 2020 Financial Results
Summary of Third Quarter 2020 Financial Results Q3 Q2 Q1 Q3 (In $ Millions, unless otherwise stated) 2020 2020 2020 2019 Revenues1 $335.1 $284.6 $274.5 $274.4 Cost of Sales $257.0 $228.3 $242.6 $251.6 Gross Profit $78.1 $56.3 $31.9 $22.8 Gross Profit Margin (%) 23.3% 19.8% 11.6% 8.3% Adjusted Net Ea
Slide 14: Mine Site Free Cash Flow
Mine Site Free Cash Flow2 Q3 Q3 YTD YTD (In $ Millions) 2020 2019 2020 2019 Net Cash from Operating Activities 1 $105.1 $51.8 $218.9 $100.5 Adjusting: Operating Cash Flow used by non-mine site activity $16.8 $17.3 $67.5 $66.1 Cash Flow from Operating Mine-Sites $121.9 $69.1 $286.4 $166.6 Capital Exp
Slide 15: Strong Financial Position & Expected FCF from Operations
Strong Financial Position & Expected FCF from Operations IAMGOLD is well positioned to execute on Côté given existing liquidity and expected free cash flow from operations Senior Notes Outstanding $1.4B2 EXPECTED Total Liquidity FREE CASH FLOW ($450 M) FROM EXISTING OPERATIONS Coupon: 5.75%; Maturit
Slide 16: Leader Among Peers: Leverage and Liquidity
Leader Among Peers: Leverage and Liquidity DISCIPLINED APPROACH FAVOURABLY POSITIONS COMPANY AMONG PRODUCER PEER GROUP 2.2x Debt / 2021E EBITDA1,2 Net Debt / 2021E EBITDA1,2 1.2x 1.0x 1.0x 1.0x 0.9x 0.8x 0.7x 0.7x 0.6x 0.6x 0.6x 0.5x 0.4x 0.4x 0.3x 0.3x 0.2x 0.1x Net Net Net Net <0.1x Cash Cash Cash
Slide 17: Operations
Operations 17
Slide 18: Focus on Safety
Focus on Safety HISTORICAL GLOBAL DART & TRI RATES PER 200,000 HOURS WORKED DART: 2020 TARGET – 0.57 2.40 TRI: 2020 TARGET – 0.94 1.98 1.81* 1.76* 1.53* 1.56 1.44* 1.44 1.18 1.13 1.06 1.06 1.00 0.87 0.93 0.85 0.68 0.59 0.66 0.53 0.53 0.51 0.38 0.30 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2
Slide 19: Q3 2020 Production & Cost Summary
Q3 2020 Production & Cost Summary EMBEDDED COVID-19 PROTOCOLS; CONTINUED FOCUS ON SAFE OPERATING LEVELS FOLLOWING SUCCESSFUL RESTART OF ROSEBEL Attributable Production Cost of Sales1 Total Cash Costs2 AISC2 (000s oz) ($/oz sold) ($/oz produced) ($/oz sold) Essakane (90%) 94 $1,050 $954 $1,054 Rosebe
Slide 20: Essakane: Sales Catch-up; High Grades Provide Production Offset
Essakane: Sales Catch-up; High Grades Provide Production Offset Burkina Faso (90%) Q3 NOTES Q3/20 Q2/20 Q1/20 • In line with expectations, lower recoveries and throughput due to graphitic ore Gold Production (attributable, oz) 94,000 83,000 84,000 and maintenance activities; partly offset by higher
Slide 21: Rosebel: Further Along the Road to Saramacca…
Rosebel: Further Along the Road to Saramacca… Suriname (95% Rosebel | 66.5% Saramacca1) Q3 NOTES Q3/20 Q2/20 Q1/20 • Lower Rosebel production due to suspension and subsequent ramp-up partly Gold Production (attributable, oz) 42,000 52,000 64,000 offset by higher grades from Saramacca ore TCC2 (US$/o
Slide 22: Saramacca Update
Saramacca Update ABOVE: ROM FACILITY PAD TRUCK SHOP RIGHT: FORMWORKS & CONCRETE AT FACILITY PAD 22
Slide 23: Westwood: Record Throughput in Q3 with Supplemental Ore Feed
Westwood: Record Throughput in Q3 with Supplemental Ore Feed Canada (100%) Q3/20 Q2/20 Q1/20 Q3 NOTES • Achieved target production blending O/P Grand Duc ore with Westwood U/G ore Gold Production (oz) 23,000 20,000 22,000 • Achieved record throughput rates in August and September TCC1 (US$/oz) $1,25
Slide 24: Westwood – “Hub-and-Spoke” Model
Westwood – “Hub-and-Spoke” Model ATTRACTIVE DISTRICT EXPLORATION POTENTIAL1 THAT COULD SUPPLEMENT EXCESS MILL CAPACITY FAYOLLE PROPERTY (OP) A B ROUYN GOLD PROJECT (UG) 100% ACQUIRED FROM MONARCH GOLD IN JUNE 2020 OPTION TO ACQUIRE 100% FROM YORBEAU RESOURCES A Fayolle • ~35 km northeast of Rouyn-No
Slide 25: Construction Review
Construction Review This is the master for a divider page. In order to use a different photo in you presentation, copy all the elements from this page (except the logo, date and page number) and paste it onto a new “Blank” slide in your document. Insert your new picture, crop it to the same side as
Slide 26: Côté Gold – Potential Global Tier I Gold Asset
Côté Gold – Potential Global Tier I Gold Asset CÔTÉ HAS SIGNIFICANT DISTRICT SCALE POTENTIAL IN MINING-FRIENDLY CANADA Tier I Asset Criteria* I Mine Life >10 Years I 18+ Year Mine Life with district expansion potential • Based on only current mineral reserves of 7.3Moz1, with 10.2Moz in M&I2 and 3
Slide 27: Project Timeline – Key Milestones
Project Timeline – Key Milestones EXECUTION PLAN • Construction commenced at Côté in early September following ground-breaking ceremony • Fish salvage, construction camp preparation and road access development • Activities ramp-up into Q4 2020 with ~66% project engineering now complete TIMELINE Cons
Slide 28: Permitting Update
Permitting Update Previously Received / Approved Required for Construction Required for Operation Federal / Provincial Environmental Assessment Approval Lakes and Rivers Improvement Act (Scientific Fish Collection) Environmental Compliance Approval (Air and Noise) Environmental Compliance Ap
Slide 29: Ground-breaking & Site Preparation
Ground-breaking & Site Preparation CHESTER CAMP – 264 MAN CAMP GROUND-BREAKING CEREMONY TREE CLEARING – 456 HECTARES COMPLETED FISH RELOCATION IN TMF AREA 29
Slide 30: Sensitivity to Gold Price – Project Economics
Sensitivity to Gold Price – Project Economics SIGNIFICANT LEVERAGE TO THE GOLD PRICE After-Tax Net Present Value (NPV5%) – 100% Basis1 After-Tax Internal Rate of Return (IRR) – 100% Basis1 (US$Bn) (%) Spot Spot Gold2 Gold2 $2.8 27.6% Base 25.9% $2.5 Case 24.2% $2.3 22.4% Base Case $2.0 20.5% $1.8 18
Slide 31: Development and Exploration Projects
Development and Exploration Projects 31
Slide 32: Q3 2020 Exploration Update
Q3 2020 Exploration Update KEY HIGHLIGHTS (US$ millions) Q3/20 YTD Exploration – Greenfield • Q3 exploration expenditures totaled $7.5 million $4.0 $13.7 Exploration – Brownfield $3.5 $11.4 • Reduced 2020 exploration expenditures guidance to $41 million1 (previously Feasibility & Other studies – – $
Slide 33: Industry Leading Reserve Growth
Industry Leading Reserve Growth 17.9Moz 18 16.7Moz IAMGOLD P&P Reserves 14.5Moz 13 11.3Moz 10.1Moz 8.6Moz +101% Growth in Reserve Base 7.7Moz 7.8Moz 8 512Moz 87 3 422Moz (18%) Decline in Reserve Base 24 395Moz 19 78 365Moz -2 349Moz 60 75 328Moz 23 69 314Moz 17 26 65 286Moz 62 43 20 22 54 -7 19 23 3
Slide 34: Exploration Potential at Côté
Exploration Potential at Côté GOSSELIN, YOUNG-SHANNON 1.5 KM NORTHEAST OF CÔTÉ Gosselin Drill Hole Highlights1 • GOS19-17: 342.5 metres grading 0.98 g/t Au • includes: 225.0 metres grading 1.34 g/t Au • GOS19-24: 412.0 metres grading 1.28 g/t Au • includes: 221.4 metres grading 1.47 g/t Au CONCEPTUA
Slide 35: Boto Gold – High Margin Investment in Prospective District
Boto Gold – High Margin Investment in Prospective District OVERVIEW RESERVE AND RESOURCE1 OPTIMIZATION STUDY HIGHLIGHTS1 (100% Basis) (100% Basis) Location • Senegal, West Africa Contained Mine Capacity: Tonnes Grade Mining: open pit Ounces 38 Mtpa Ownership • 90% IAMGOLD / 10% Gov’t of Senegal (000
Slide 36: Bambouk District: Boto – Karita – Diakha-Siribaya
Bambouk District: Boto – Karita – Diakha-Siribaya BOTO GOLD PROJECT, SENEGAL Gold Price After-tax NPV6%1 After-tax IRR1 Yatela Deposit Operation (US$/oz) (US$M) (%) • Announced the receipt of the exploitation permit $2,000 $732 55% Sadiola for an initial period of 20 years $1,900 $652 50% • De-riski
Slide 37: Robust Exploration Pipeline
Robust Exploration Pipeline West Africa North America South America Fala/Fala E Grand Duc Saramacca >5 Moz Au Production >2 Moz Au <2 Moz Au Côté Construction Brownfield Advanced Greenfield Greenfield Boto Fayolle Feasibility Study Diakha-Siribaya Monster Lake Saõ Sebastiaõ Initial Resource / Gossey
Slide 38: IAMGOLD – Positioned for Profitable Growth
IAMGOLD – Positioned for Profitable Growth Diversified Operating Compelling Value & I Portfolio II Production Growth Robust Pipeline Strong Strong Financial V of Projects ESG III practices Position Culture of IV Accountable Mining 38
Slide 39: Appendix
Appendix # IAMGOLD 39
Slide 40: Reducing Input Exposure Through Hedging
Reducing Input Exposure Through Hedging 2020 2021 2022 2023 Foreign Currency1 Canadian dollar contracts (millions of C$) 68 252 210 185 Rate range2 ($/C$) 1.30 – 1.40 1.30 – 1.47 1.30 – 1.48 1.30 – 1.46 Hedge ratio 95% 81% 65% 34% Commodities1,3,4 Brent oil contracts (barrels) 144 588 520 170 Contra
Slide 41: Indi Gopinathan, VP, Investor Relations & Corporate Communications
Indi Gopinathan, VP, Investor Relations & Corporate Communications 416-388-6883 Philip Rabenok, Senior Analyst, Investor Relations 647-967-9942