IAMGOLD reports gold output decline in Q2, reduces production guidance for 2021
(Kitco News) - IAMGOLD (TSX: IMG) (NYSE: IAG) announced today that its attributable production of 139 koz of gold in Q2 2021 was 10% lower compared to Q2 2020 (155 koz), primarily due to lower production from the Westwood and Rosebel mines, partially offset by higher production at the Essakane mine.
Additionally, the company said that it has reduced its production guidance and increased its per-ounce costs guidance for 2021 to reflect lower actual production in the first half of 2021 from the Westwood and Rosebel mines and their anticipated output for the remainder of 2021.
The company said that Essakane delivered strong second quarter results with higher gold production, despite ongoing challenges in processing ore with high graphitic content, through operational efficiencies and the completion of the mill upgrade. Essakane 2021 production guidance has been increased to reflect the higher production in the first half of 2021.
Westwood 2021 production guidance has been reduced primarily to reflect additional safety measures through the implementation of further ground support and egresses required in the East Zone and in preparation for mining the Central and West Zone as well as slower-than-expected ramp-up of personnel. The company said it is also assessing the impact of these factors on 2022 planning.
Mining activities at Rosebel were primarily impacted in the second quarter by difficult operating conditions caused by continuing unusually heavy rains and by challenging industrial relations up until the resolution of the collective bargaining agreement in May. In addition, there was a significant increase in COVID-19 cases due to the emergence of a new variant in Suriname during the second quarter. Therefore, Rosebel's 2021 guidance has been adjusted downward, IAMGOLD said in a press-release.
The company noted that the Côté project in Canada is currently on schedule and is 27% complete as of June 30, 2021. The project schedule remains on track for commercial production in H2 2023.
However, the company said it has identified certain estimated project costs increases from a project review. The company's 70% share of updated estimated project costs from July 1, 2020, net of leasing, is now estimated at $1,125 million to $1,175 million compared to the previous estimate of $875 million to $925 million.
IAMGOLD explained that this change was primarily driven by increased structural, mechanical, piping, electrical and concrete estimates for the process facility; increases to mine facilities costs; increases in earthworks materials and manpower estimates; certain scope changes; inflation; changes in the currency exchange rate; and costs related to COVID-19.