Iamgold Enters 'Prepay Agreement,' Meets Output Guidance
The company announced late Wednesday that it will receive $170 million from a syndicate of financial institutions in December in exchange for delivery of 150,000 ounces of gold in 2022. There are provisions for Iamgold to receive additional payments if the gold price is above $1,300 an ounce.
“Entering into the gold prepay provides additional liquidity to Iamgold at attractive terms to support the execution of the company’s growth strategy, while also mitigating any downside price risk below $1,300 an ounce on 150,000 ounces of production,” said Carol Banducci, chief financial officer.
Meanwhile, the company reported early Thursday that it met production and cost guidance for 2018. Output was listed at 882,000 gold ounces, which is near the high end of guidance of 850,000 to 900,000 ounces. Fourth-quarter production totaled 231,000 ounces. All-in sustaining costs are expected to be near the high end of the guidance range of $990 to $1,070 per ounce sold, the company said.
For 2019, Iamgold lists production guidance of between 810,000 and 870,000 ounces, with owner-operator production remaining flat, the planned cessation of Sadiola operations, an ongoing ramp-up at Westwood and increased production at Rosebel. However, following two years of record output at Essakane, Iamgold expects this production to be decline due to less high-grade material, although this will be partially offset by higher recoveries resulting as a result of a newly commissioned oxygen plant. Rosebel production is seen rising due to higher grades, the inclusion of Saramacca ore in the second half of the year and increased recoveries. All-in sustaining costs for 2019 are projected to be between $1,030 and $1,080 per ounce.
The company said an investment decision on the Côté gold project is expected in the first quarter of 2019.
“Iamgold is building a growth pipeline, which is expected to drive production to 1.2 to 1.3 million ounces by 2022, while decreasing all-in sustaining costs below $850 an ounce,” said Steve Letwin, president and chief executive officer.