Canadian miner Iamgold 2019 gold output down 13.6% on year

London — Canadian miner Iamgold's attributable 2019 gold production fell 13.6% year on year to 762,000 oz, missing its low end of guidance of 765,000-810,000 oz, with total cash costs at $907/oz produced and all-in sustaining costs at $1,124/oz sold.

The Toronto-listed company said late Wednesday fourth-quarter gold production decreased 16.9% year on year to 192,000 oz, with total cash costs at $947/oz produced and all-in sustaining costs $1,161/oz sold.

The company said output at the Essakane mine in Burkina Faso was 368,000 oz, 12,000 oz below guidance, due to several factors, including: an extended maintenance shutdown in Q4, higher grades not realized in a satellite pit, mine sequencing, and slightly lower recoveries due to graphitic ore content.

Project development activities advanced at Boto Gold in Senegal and Côté Gold in Canada within budget, it said.

Gold sold in 2019 decreased 13% year on year to 759,000 oz, at an average realized gold price of $1,396/oz, the company said.

"2019 was a year of significant challenges for Iamgold," Iamgold's President and COO, Gordon Stothart, said in a statement. "We are committed to becoming a lower cost and more geographically balanced producer within the next five years, while maintaining our culture of accountable mining through high standards of ESG practices."

"With these goals in mind, we continue to optimize and de-risk our development projects, with Boto Gold's exploitation permit in hand and almost 50% of Côté Gold's detailed engineering now complete," Stothart said.

PRODUCTION GUIDANCE

The company's 2020 gold production guidance is set at between 700,000-760,000 oz, with total cash costs between $840-$890/oz produced and all-in sustaining costs between $1,100-$1,150/oz sold, the company said.

"We forecast 2020 production of 733,000 oz at $889/oz cash costs," Canaccord Genuity mining analysts said in a research note Thursday. "2020 capex is now forecast at $370 million ($315 million previously) with an incremental $35 million to be spent on early works at Cote and an incremental $30 million to be spent on de-risking activities at Boto in advance of a construction decision."

"Total capex is higher than the ~$251 million spent in 2019 and our $315 million estimate," Canaccord said. "We had forecast Iamgold generating $18 million of free cash flow in 2020 at $1,542/oz gold."

The miner said it expects 2021 gold production guidance to be around 10% higher than 2020 production levels at 760,000-840,000 oz, ounces, with lower all-in sustaining costs.

"Iamgold expects 2021 production of 760,000-840,000 oz with capex of $250 million," Canaccord said. "We note 2021 capital guidance only includes current operations and any spending on Iamgold's greenfield projects may result in higher capex in 2021."

Iamgold said CEO Stephen Letwin will retire at the end of February, with Gordon Stothart taking over the post.