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Iamgold Reports 3Q Loss As Production Slips

Kitco News

(Kitco News) - Iamgold Corp. (TSX: IMG; NYSE: IAG) late Tuesday reported a loss for the third quarter as revenues came in lower than in the same period a year ago, with both production and gold prices weaker but costs higher.

The company listed an adjusted net loss $6.9 million, or a penny per share, compared to adjusted net earnings of $33.7 million, or 7 cents, in the same period of 2017. The net loss was $9.5 million, or 2 cents, compared to net earnings of $30.8 million, or 7 cents, a year ago.

Revenues of $244.8 million were a year-on-year decline of $24 million. Gold production fell by 9,000 ounces to 208,000, with lower head grades reported at the Rosebel and Westwood mines, along with joint ventures.  Meanwhile, the average realized price of gold fell to $1,207 from $1,284 in the same quarter a year ago.

All-in sustaining costs rose by $117 to $1,086 an ounce. The company said it had higher depreciation expenses, plus operating costs rose due to factors such as increased maintenance and contractor costs resulting from higher mine production at Essakane, increased preventative maintenance at Rosebel, lump-sum payments at Rosebel and Westwood as a result of a new labor agreement, and higher energy costs.

“As anticipated, the third quarter was weaker than the first half of the year with the gold margin under pressure and production at Rosebel on the lighter side,” said Steve Letwin, president and chief executive officer.

He was upbeat about the company’s project pipeline, however, including the 51% increase in reserves at Saramacca, which the company announced in late September.

Iamgold maintained 2018 production guidance at 850,000 to 900,000 gold ounces but revised the allocation.

Essakane's guidance was revised to 390,000 to 405,000 ounces, compared to the previous 380,000 to 395,000, reflecting higher throughput benefiting from increased mill availability.

Rosebel's production guidance was revised to 280,000 to 295,000 ounces from the previous range of 295,000 to 310,000 ounces, reflecting lower mining tonnages and head grades in the third quarter.
Guidance for Sadiola was revised to 55,000 to 65,000 ounces from the previously 50,000 to 60,000. The company maintained guidance for all-in sustaining costs of $990 to $1,070 per ounce for the full year.

Iamgold said it is advanced discussions with lenders to increase the existing credit facility from $250 million to $500 million to “provide additional financial flexibility as it executes its growth strategy.” Officials said the facility is expected to close before year-end.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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