Iamgold Corporation · TSX:IMG
Iamgold — Debt Investor Presentation (October 2013)
44 slides from Iamgold's debt investor presentation, Oct 7, 2013
Slide 1: Fixed Income Investor Update
Cost Reduction Disciplined Capital Allocation Cash Preservation Carol Banducci Executive Vice President and CFO Alberto Nunez Treasurer TSX: IMG NYSE: IAG Fixed Income Investor Update October 7-9, 2013
Slide 2: Cautionary Statement
Cautionary Statement This presentation 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 rega
Slide 3: Agenda
Agenda Company Update Key Priorities Cost Reduction Disciplined Capital Allocation Cash Preservation Risk Management Update on Key Assets Financial Overview 3
Slide 4: Company Overview
Company Overview LTM LTM Proven & Measured & Est. Mine Production Cash Costs Probable (2P) Indicated (M&I) Mine Life Production (koz) ($/oz) Reserves Resources (years) Start Year IAMGOLD is a mid-tier mining company with (koz) (koz) six operating gold mines on three continents Rosebel 366 $701 5,445
Slide 5: Asset Summary – High Quality, Long-Life Assets
Asset Summary – High Quality, Long-Life Assets Mineral Reserves & Resources (Attributable) Proven and Probable (2P) Reserves (Moz) 13.3 11.3 1 2 2011 2012 YATELA Tonnes (mmt) 328.7 308.9 Senegal SADIOLA ESSAKANE Grade (g / t) 1.3 1.1 Mali Measured & Indicated (M&I) Boto WESTWOOD Siribaya Resources3
Slide 6: Asset Summary – Balanced Geographic Portfolio
Asset Summary – Balanced Geographic Portfolio Gold Mineral Resources1 (Attributable Ounces) 41% 18% North North America 40% America 33% Africa Africa 42% 26% South South America America 20112 20123 1 Mineral resources include mineral reserves. 2 Based on IAMGOLD attributable mineral resources as at
Slide 7: Return on Capital
Return on Capital 40% 34% 35% 30% IAMGOLD 25% 23% Peers 20% 18% 21% Including: Agnico Eagle Eldorado 15% Goldcorp 13% Kinross 14% Yamana 10% 10% 8% 5% 0% 2009 2010 2011 2012 Source: Internal Return on Capital Calculation: Pre-Tax Earnings from Operations / Capital. Pre-tax Earnings* from O
Slide 8: Q2 Update: Executing on All Fronts
Q2 Update: Executing on All Fronts 55% of cost reduction target achieved and on track to reaching $100M target by year-end Total cash costs of $787/oz1,2 YTD, below the bottom range of guidance Lowering 2013 total cash costs guidance to $790-$840/oz from $850- $925/oz1,2 Lowering 2013 all-in
Slide 9: Key Priorities
Key Priorities Cost Reduction Disciplined Capital Allocation Cash Preservation 9
Slide 10: Key Priorities – Cost Reduction
Key Priorities – Cost Reduction $54 Operations $22 $40 Exploration $30 $6 Corporate $3 0 10 20 30 40 50 60 Target Achieved to Date1 1 As at June 30, 2013. Achieved 55% of $100M target 10
Slide 11: Key Priorities – Examples of 2013 Ongoing Cost Reduction Initiatives
Key Priorities – Examples of 2013 Ongoing Cost Reduction Initiatives Rosebel › Reduced: › Equipment standby time through better management of shift changes › Staffing requirements through business process and operating efficiency improvements › Frequency and cost of preventative truck maintenance ›
Slide 12: Key Priorities – 2013 Capital Program
Key Priorities – 2013 Capital Program1 Development/ ($ millions) Sustaining Expansion Total Rosebel $108 $222 $130 Essakane 100 200 300 Westwood $20 80 100 Total Gold Segments $228 $302 $530 Niobec 31 49 80 Corporate and Other 5 - 5 Total Consolidated $264 $351 $615 Joint Ventures3 30 45 75 Total $2
Slide 13: Total Cash Costs and All-In Sustaining Costs
Total Cash Costs and All-In Sustaining Costs* Revised 2013 Previous $/oz. Q2’13 Q2’12 Variance Guidance Guidance Total Cash Costs1 787 737 7% $790-$840/oz. $850-$925 – Gold Mines All-In Sustaining $1,100- Costs 1,2 – 1,133 1,002 13% $1,150-$1,250 $1,200/oz. Owner-Operator All-In Sustaining $1,150- 1
Slide 14: Key Priorities – Disciplined Capital Allocation Strategy
Key Priorities – Disciplined Capital Allocation Strategy Niobec Expansion Expansion decision to be made when feasibility study and permits are in place NIOBEC WILL NOT MOVE FORWARD WITHOUT A PARTNER TO JOINTLY FUND THE PROJECT Sadiola Waiting for JV partner to decide to proceed WE WILL NOT PROCEED A
Slide 15: Key Priorities – Cash Preservation
Key Priorities – Cash Preservation Capitalization and Credit Metrics Liquidity As at $1,358 ($ millions) June 30, 2013 Cash and cash equivalents $447 Gold bullion (at market value) 161 250 Debt $500M 4-year Revolving Credit Facility 1 -- $250M Niobec 4-year Revolving Credit Facility 2 -- $millions $
Slide 16: Enterprise Risk Management - Assessment
Enterprise Risk Management - Assessment Risks assessment Process Step1: For each risk, Executive Leadership Team uses impact and likelihood criteria to assess inherent risk Step 2: Assess management controls and actions per the control assessment criteria and determine residual risk Step 3: Establis
Slide 17: Enterprise Risk Management - Risk Universe
Enterprise Risk Management - Risk Universe Organization Strategic Compliance Leadership Merger / Acquisition / Dispositions Reserves and resources Talent management Rising cost Legal Succession planning Operations in foreign jurisdictions Title Compensation & benefits Joint ven
Slide 18: Inherent Risk Exposure
Residual risk heatmap • Inherent risk rating and the management control rating for each of the top 10 risks • Each risk has a potential course of improvement action indicated and opportunities for improvement. High 25.0 Key Risks 1. Commodity - Gold Price 20.0 Monitor Improve 8 2. Resource Nationali
Slide 19: Rosebel – Suriname
Rosebel – Suriname Overview Acquired through Cambior acquisition in 2006 Initiated production in 2004 Location Suriname, South America Produced >3.6 Moz (100% basis) since initial Ownership 95% IAMGOLD(1), 5% Government of Suriname production Mine Type Open Pit LTM Revenue: $585M Estimated Mine Life
Slide 20: Rosebel - A New Power Agreement
Rosebel - A New Power Agreement Rosebel resources Old Agreement New Agreement ~20¢/kWh power Reduced power rate Areas being considered for next expansion: 5% gov’t carried For current and Charmagne equity future operations West Charmagne 170 km2 5% gov’t carried Headley’s Reef Taxes & royalties equi
Slide 21: Suriname – Country/Political Environment
Suriname – Country/Political Environment April 13, 2013 - joint venture agreement with Government of Suriname approved by National Assembly. Newmont’s mining agreement for the Merian approved separately on June 7, 2013. August 7, 2013 - new agreements with Government of Suriname for reduced power ra
Slide 22: Essakane – Burkina Faso
Essakane – Burkina Faso Overview Acquired through Orezone Resources acquisition in 2009 Brought into production in 2010 by IAMGOLD Location Burkina Faso, West Africa development team Ownership 90% IAMGOLD(1), 10% Government of Burkina Faso Mine Type Open Pit LTM Revenue: $507M Estimated Mine Life [1
Slide 23: Essakane Exploration Focus
Essakane Exploration Focus Falagountou satellite resource 1,383 km2 • >200,000 ounces land • Community Relocation Action Plan approved in position March • Site evaluation drilling commenced in Q2 23
Slide 24: Burkina Faso – Country/Political Environment
Burkina Faso – Country/Political Environment August 12, 2013 - President Compaoré suspended implementation of a proposal to establish a national Senate, as contemplated in the existing Constitution. This decision responded to criticism by some of the proposal and underscores the Government’s focus o
Slide 25: Westwood / Mouska – Quebec
Westwood / Mouska – Quebec Overview Acquired through 2006 Cambior transaction Westwood deposit discovered in 2004 Mouska Mine began production in 1991 and will close at end of 2013 Location Abitibi region, Québec, Canada LTM Revenue: $47M Ownership 100% IAMGOLD LTM Adjusted Mine-Level EBITDA: $19M M
Slide 26: Sadiola / Yatela – Joint Venture in Mali
Sadiola / Yatela – Joint Venture in Mali Overview Sadiola JV commenced in 1994 Produced >7.0 Moz (100% basis) since initial production in 1996 Yatela JV began in 1997 Produced >2.0 Moz (100% basis) since initial production in 2001 Sadiola Only (all data shown on an attributable basis) Suspended mini
Slide 27: Mali – Country/Political Environment
Mali – Country/Political Environment July 28, 2013 - Despite numerous technical and logistical challenges, Mali successfully held the first democratic presidential election following the March 2012 coup. Official results following a second round of voting on August 11, 2013 declared Ibrahim Boubacar
Slide 28: Côté Gold – Well Established Infrastructure
Côté Gold – Well Established Infrastructure Mineral Resource Estimate Effective December 31, 2012 Rail Timmins Au Roads Tonnes Au Grade Power lines Contained (millions) (g/t) (million oz) 500 kV Indicated 101 CN Rail Power line 0.25 g/t Au cut-off 278 0.86 7.68 Côté Gold 144 Chapleau Property 115 kV
Slide 29: Niobec – Quebec
Niobec – Quebec Overview Niobium is a scarce metal that strengthens and lightens Acquired through Cambior transaction in 2006 the weight of steel Initiated production in 1976 Niobec is one of only three major producers in the world Location Quebec, Canada Saguenay region has strong industrial base,
Slide 30: 2013 Exploration Program - $99.0 Million
2013 Exploration Program - $99.0 Million* Continued focus on: Near-mine development and select greenfields projects in South America and Canada Greenfield Senegal Brazil Côté Gold Brownfield Essakane Targeted reduction in exploration spending for 2013: $40M Rosebel Realized Q2 YTD: $30M $13M green
Slide 31: Advancing Select Greenfield Projects
Advancing Select Greenfield Projects Boto Gold Project - Senegal Maiden resource announced Q2/13 Indicated resource of 1.1M oz. at 1.62 g/t Au Scoping study expected 2014 Pitangui Project - Brazil Plan to complete a mineral resource estimate in Q4/13 subject to the continuation of encouraging infill
Slide 32: Summary Historical Financials
Summary Historical Financials Gold Production Total Revenue 1,200 $1,800 997 972 $2,000 939 967 $1,673 $1,670 830 831* $1,548 900 $1,350 $178 $191 $1,500 $193 ($ / oz) $1,097 (koz) ($M) 600 $900 $914 $1,000 $870 $159 $143 $159 $1,495 $1,479 $1,355 300 $450 $500 $938 $727 $755 0 $0 $0 2008 2009 2010
Slide 33: Historical Credit Profile
Historical Credit Profile Cash Flow Profile Liquidity Profile $1,600 $1,787 $1,800 $1,398 $1,400 $1,612 $1,186 $1,200 $1,500 $1,125 $1,358 $1,032 $1,000 $1,200 ($M) ($M) $800 $810 $704 $804 $900 $701 $761 $600 $482 $460 $600 $400 $323 $453 $396 $423 $369 $359 $268 $300 $200 $169 $0 $0 3 2 2008 2009
Slide 34: Strong Credit Metrics
Strong Credit Metrics 2012 Adjusted Leverage1 $1,200 / oz $1,625 / oz 14.2x 6.0x 5.0x 3.8x 4.0x 3.2x 3.2x 3.5x 2.1x 2.4x 2.3x 2.0x 1.9x 1.5x 1.2x 1.3x 1.4x 1.5x 0.8x 0.9x 1.0x 1.1x Kinross New Gold Eldorado Newcrest Goldcorp IAMGOLD Newmont Barrick AngloGold Nevada Gold Fields Allied 2012 Interest C
Slide 35: 2013 Guidance
2013 Guidance 2013 Guidance Previous Guidance gold production Rosebel (000s oz.) 365 - 385 Attributable Essakane (000s oz.) 255 - 275 Doyon division - Westwood & Mouska (000s oz.)1 130 - 150 Total owner-operated production (000s oz.) 750 - 810 Joint ventures (000s oz.) 125 - 140 Total attributable p
Slide 36: Key Priorities
Key Priorities Cost Reduction Disciplined Capital Allocation Cash Preservation 36
Slide 37: Appendices
Appendices TSX: IMG NYSE: IAG
Slide 38: Key Milestones
Key Milestones Essakane Q2 ’12: Commenced construction of expanded plant Q4 ’13: Complete expansion Q1 ’14: Plant commissioning Rosebel Q2 ’13: JV agreement with Gov’t. of Suriname to access new concessions at lower power rates Q3 ’13: New agreement with Gov’t. of Suriname for reduced power rate for
Slide 39: Historical Financial Summary
Historical Financial Summary Twelve Months Years Ended December 31, Ended June 30, ($ in Millions) 2009 2010 2011 2012 LTM Income Statement Revenue $914 $1,097 $1,673 $1,670 $1,558 Operating Costs $538 $626 $888 $960 $957 Mining Costs 447 534 738 786 $801 General & Administrative 49 47 51 56 $56 Exp
Slide 40: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Twelve Months Years Ended December 31, Ended June 30, ($ millions) 2009 2010 2011 2012 LTM Net Earnings (Loss) from Continuing Operations $114 $233 $428 $371 $173 Adjustments for: Depreciation $108 $117 $157 $164 $157 Income Taxes 154 138 221 199 161 Finance Costs 2 6
Slide 41: 2012 Reserves and Resources – Gold
2012 Reserves and Resources – Gold Attributable Attributable Grade GOLD OPERATIONS Tonnes Contained Ounces (g/t) (000) (000) As at December 31, 20121 Proven & Probable Reserves 308,945 1.1 11,327 Measured & Indicated Resources 712,657 1.0 23,745 Inferred Resources 100,553 1.9 6,174 1 Based on minera
Slide 42: 2012 Reserves and Resources – Niobium
2012 Reserves and Resources – Niobium Tonnes Grade Nb2O5 Contained Nb2O5 NIOBIUM RESERVES & RESOURCES1,2,3,4,5,6 (000s) (%) (million kg) As at December 31, 2012 (100%) Probable Reserves 422,900 0.42 1,768 Measured Resources 291,631 0.44 1,271 Indicated Resources 344,158 0.38 1,292 Inferred Resources
Slide 43: 2012 Resources – Rare Earth Elements
2012 Resources – Rare Earth Elements Tonnes Grade TREO Contained TREO RARE EARTH RESOURCES1,2,3 (000s) (%) (million kg) As at December 31, 2012 (100%) Indicated Resources 531,000 1.64 8,730 Inferred Resources 527,000 1.83 9,652 1 In mining operations, measured and indicated resources that are not mi
Slide 44: Investor Presentation – October 2013
Investor Presentation – October 2013 Bob Tait Laura Young VP, Investor Relations Director, Investor Relations T: 416-360-4743 T: 416-933-4952 E: info@iamgold.com E: info@iamgold.com TSX: IMG NYSE: IAG