IAMGOLD Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
February 21, 2025

There are 7 speakers on the call.

Operator

Thank you for standing by. This is the conference operator. Welcome to the I'm Gold Fourth Quarter and Year End twenty twenty four Operating and Financial Results Conference Call and Webcast. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

Operator

At this time, I would like to turn the conference over to Graham Jennings, Vice President, Investor Relations and Corporate Communications for I'm Gold. Please go ahead, Mr. Jennings.

Speaker 1

Thank you, operator, and welcome everyone to our conference call today. Joining us on the call are Renaud Adams, President and Chief Executive Officer Barton Tennyson, Chief Financial Officer Bruno Lemelin, Chief Operating Officer Dorinda Quinn, Chief People Officer and Annie Torquille Lagasse, Chief Legal and Strategy Officer. We're calling today from Iron Gold's Toronto office in Canada, which is located on twenty thirteen territory on the traditional lands of the many nations, including the Mississaugas of the Credit, the Anishinabek, the Chippewa, Haudenosaunee and the Wendat peoples. At Hyangold, we believe respecting and upholding indigenous rights is founded upon relationships that foster trust, transparency and mutual respect. Please note that our remarks on this call will include forward looking statements and refer to non IFRS measures.

Speaker 1

We encourage you to refer to the cautionary statements and disclosures on non IFRS measures, including the presentation and the reconciliations of these measures in our most recent MD and A, each under the heading Non GAAP Financial Measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and CEO, Renaud Adams.

Speaker 2

Thank you, Graham, and good morning, everyone, and thank you for joining us. Last year was a monumental year for Aimco as the company achieved critical milestone that have positioned the company as a dynamic, modern, multi asset, mid tier gold producer with significant potential for free cash flow growth and expansion. IAMGOLD finished 2024 with total attributable gold production of 667,000 gold ounces, a 43% increase from the prior year and in line with our previously raised guidance estimates. This performance was driven by the successful startup of Codigol as well as exceptional operational and output from Nestacan and Westwood. Financially, the company took significant steps to improve its financial position and capitalize on the strong operating results and robust gold market.

Speaker 2

Highlights in the year include the completion of the repurchase agreement to return to the 70% interest level at Cote Gold, the successful net delivery and completion of half the legacy gold prepayment arrangement, all while still generating a total adjusted EBITDA for the year of approximately $781,000,000 and further strengthening our balance sheet and financial flexibility with the bolster credit facility, resulting in us ending the year with total liquidity of approximately $767,000,000 and the expectation of increasing free cash flow this year. Additionally, last night alongside our financial results, we disclosed our updated mineral resources and reserve estimates. The highlights of which were a significant increase in ounces and grades at our Nelligan project located in the Shibuya Moore region. With the update, Nelligan is now among the top largest gold deposits in Canada and is expected to continue to grow all while being located top tier mining jurisdiction. Another highlight from the mineral resources update was at Esa Cano, where the teams were able to increase the mineral reserves after accounting for depletion, suggesting another potential year of mine life for the strong cash flowing asset.

Speaker 2

Over the last few years, IAMGOL has seen a rapid growth of value, production and mineral resources within Canada. Where now today approximately 80% of our measured and indicated ounces and 90% of global inferred ounces are located in Canada in well established mining jurisdictions. In the near term, our goal is clear, to ramp up Cote Gold to a steady, sustainable state operating at the nameplate throughput level of 36,000 tons per day in the fourth quarter over this year, while maximizing our mineral measure and dedicated resources at Cote and Gosselin in support of a technical report in 2026 that would outline a unified mine plan based on Cote and Gosselin. Meanwhile, we will continue safe mining activities at Esakane in Westwood to maximize production while managing our cost drivers with a focus on cash flow margin preservation. Should the current gold price environment remain in place, by the middle of this year, we anticipate we will have our gold prepayment facility behind us with Cote, Esakane and Westwood capable of generating record cash flow and conceptually well positioning Ayumgold to begin the process of delivering its balance sheet starting with our high cost debt vehicles to further refine our capital structure and moving closer to our goal of becoming a leading modern Canadian gold producer with a strong balance sheet and assets that are poised to generate significant value for our stakeholders, partner and investor.

Speaker 2

Looking at the highlights from the year and the fourth quarter, at I Am GO we strive to be amongst the leaders in health and safety, talent development and SSG, ESG including tailings management, water stewardship and community well-being. Looking at last year as a whole, our total recordable injury frequency rate was zero point six three, an improvement from the prior year. Ensuring all of our employees and contractors go home safely would always be the primary focus for IAMGOL and to succeed every GOLANS produced has to be done safely. On production, in the fourth quarter, the company produced 177,000 ounces, bringing total annual production to 667,000 ounces on an attributable basis, in line with our guidance, which was raised mid year to 625,000 to 715,000 ounces. Total annual productions in 2024 was 43% higher than 23% driven by a strong first half at Esakane, a near record year at Westwood and the start up of Cote Gold, which produced 124,000 ounces to our account in the first nine months of operation.

Speaker 2

Cash cost per ounce sold excluding Cote was $11.76 dollars for the year at the low end of our guidance range of $11.75 dollars to $275 and $13.93 dollars per ounce for the first quarter. All in sustaining cost per ounceal excluding Cote was $17.25 dollars for the year, trending towards the low end of our guidance range of $1,700 to $18.25 dollars and $2,071 for the fourth quarter. Cash cost in ASEK increased quarter over quarter through 2024. This was primarily associated to rising waste stripping and lower relative grades at Esakane as the mine opened up and started mining of new phase as per the mine plan. On an annual basis, while costs are in line with the prior year, they remain relatively high due to continued pressure on supply chains within Burkina Faso, as well as sustain elevated price on certain consumables and labor.

Speaker 2

With that, I will pass the call over to our CFO to walk us through our financial results and position. Martin?

Speaker 3

Thank you, Renaud, and good morning, everyone. In terms of our financial position, at the end of the year, OnGold had $347,500,000 in cash and cash equivalents and net debt of $859,300,000 dollars The company has $220,000,000 drawn on the credit facility and approximately $418,500,000 remains available, resulting in liquidity at December 2024 of approximately $767,000,000 We note that within cash and cash equivalents, $46,000,000 was held by the Kokotay Gold UJV, one hundred and thirty point two million dollars was held by Sakan and $160,000,000 was held in the corporate treasury. As we highlighted last quarter, but we're reiterating, it's a candidate dividend during the second quarter of '1 hundred and '80 million dollars for which the minority interest portion and withholding taxes were paid during the second quarter and the company received a total dividend of $151,900,000 On 11/30/2024, the company issued a payment of $377,700,000 to complete the repurchase of the $9,700,000 interest of the Cote gold mine that was transferred to Sumitomo through the Cote gold joint venture amending and funding agreement, returning on gold to its full 70% interest in Cote. The repurchase payment was funded through available cash balances and amounts available under the credit facility.

Speaker 3

On 12/23/2024, the company announced that it closed sale of its 100% interest in the Carita gold project, associated exploration assets in Guinea for gross proceeds of $35,500,000 The definitive agreement to sell the Diaco Surabaya Gold Project in Mali expired on 12/31/2024, and was not extended. The company is pursuing alternative options for the sale of this asset. Finally, as of today, the company has completed over half of its gold prepay obligations, having delivered 75,000 ounces into the 2022 gold prepay arrangements, of which 37,500 ounces were delivered in the fourth quarter and a further 12,500 ounces during January 2025, reducing the outstanding balance of all prepaying arrangements to 62,500 ounces as of 01/31/2025. The company received $10,000,000 in cash in the fourth quarter and $38,900,000 for the year as part of the delivery of the obligation. Please refer to the liquidity outlook section of the MD and A for further details.

Speaker 3

Looking at our annual financial results for 2024, we saw the impact of strong gold production at record reloads gold prices, resulting in the company realizing higher margins and generating higher operating cash flows during a critical year for the company. Revenues from operations started with $1,600,000,000 for the year from sales of 699,000 ounces at a record average gold price of $2,330 per ounce after accounting for the impact of the gold prepays. The strong operating results and gold price resulted in another year of increased adjusted EBITDA, which totaled $780,600,000 in 2024, double the 2023 value while COTA is still in the early stages of ramp up. Net earnings were $819,600,000 for the year and includes a reversal of prior impairment on Westwood of $455,500,000 as a result of the improvement of the value of the operation compounded by an update to the long term gold price assumptions. Adjusted earnings were $296,000,000 On a per share basis, adjusted earnings per share for the year totaled $0.55 a notable increase from the prior year of $0.09 Looking at the cash flow reconciliation for the year offers a good visualization of the major drivers of our available liquidity to the end of twenty twenty four.

Speaker 3

Operating activities fueled by strong operations at Essakane, Westwood and the start of the production of Kotai were adjusted for the impact of the gold prepay deferred revenues and prepay proceeds in the first half of the year. Investing activities in 2024 were primarily driven by the completion of construction of Cote and sustaining capital spend in our projects. Financing activities resulted by the share issuance in May 2024 at a price of $4.17 per share combined with a drawdown on the credit facility to fund the repurchase of the 10% interest in Cote from Sumitomo and working capital requirements. As we look to 2025, we believe we have a good opportunity to further improve the strength of our balance sheet should the gold market remain strong. As we saw on the prior page, the current company currently has a $400,000,000 term loan, which carries relatively higher interest.

Speaker 3

This year offers an important milestone as a term loan can be repaid in $20,000,000 tranches at any time and after May 2025 at 104% repayment premium, followed by 101% premium if repaid after May 2026 and at 100% thereafter. Once the gold prepayments are behind us, the strong expected cash flows could well position the company to reduce our debt carrying costs and levels. And with that, I will pass the call back to you, Renan. Thank you.

Speaker 2

Thank you, Martin, and congratulations again on your team's achievement last year. Starting with Cote Gol, I want to congratulate the team for their commitment and dedication to the safe ramp up of Cote Gol. Also and since first gold, the mine has shown a systematic increase quarter over quarter in throughput in gold production. In the first year of operation, Cote gold produced 199,000 ounces on a 100% basis. Looking at the fourth quarter, Cody produced 96,000 ounces on a 100% basis, which was a 41% increase from the prior quarter.

Speaker 2

A year ago on this call, we called for an initial gold production in late first quarter. Commercial production achieved in the third quarter twenty twenty four and set the target for Cody to exit the year at a throughput rate of approximately 90% of nameplate. We were able to achieve the first two of this milestone with the mine achieving amongst the quickest ramps up to commercial production for a large scale open pit gold mine in Canada. Despite these successes, Cody was on the ball to sustainably exit the year at 90% throughput and narrowly missed production guidance of 220,000 ounces due to lower tons processed during the fourth quarter as a result of higher than expected downtime in order to conduct unplanned repair. Mining activity totaled 10,800,000 tons in the fourth quarter of twenty twenty four, modestly higher than the prior quarter and bringing the total tons mined for the year to 39,300,000 tons with an average trip ratio of 2.6:one, resulting in our tons mined for the year of 10,800,000 tons.

Speaker 2

The average grade of mine ore was 0.97 grams a ton with the reconciliations between the grade control and reserve models in line with expected tolerances. Within the pit, the mine currently has two Cat six thousand and 60 electric shovel and 21 Cat seven 90 three autonomous haul truck now commissioned. Utilization rates of the primary mining equipment has been improving with the mine achieving a weekly average high operating rate of 150,000 tons per day in December. The current mine plan is using multiple stockpile segregated by grade as made evidenced by the head grade of tons processed in the fourth quarter of 1.34 grams a tonne gold substantially higher than the mine grade. As we discussed last quarter, this strategy is proving to require higher than expected amounts of rehandling which are flowing through our mining cost.

Speaker 2

Last year, mining costs averaged $3.9 per ton. This is higher than expectation due to the rehandling and additions to higher contractor costs to support the ramp up of the mine. We expect to see unit mining costs decline as we operate with the full haulage fleet for 2025 coupled with the implementation of an optimized bulk mine plan and a reduced need for external support. Mill throughput in the fourth quarter totaled 2,400,000 tons. This is a 50% increase from Q3 as the plant continued to see improvement quarter over quarter.

Speaker 2

As the mine transitions from commissioning to production at the end of Q1 of last year, our teams took the strategy of first testing the capacity of the main equipment at a plant to handle the diesel and grid loss, followed by building availability and stability as the ramp up progressed. From early on, the primary components of the processing circuit, primary secondary crushing, HPGR conveyors, ball mill leaching, etcetera proved their capability to operate at or above design load when provided with stable condition. Further, we saw the recoveries of the plant come in line with expectation of ranging 92% for the first year of operation, a critical achievement for a new mine. As Cody continued to ramp up through the year, we were able to deploy key optimizations to stabilize the crushing circuit through the replacement of wear parts with higher razor resistant material to reduce the level of wear and using new type and sizes of screens in the coarse core screening area. These improvements allow for further improvement in availability and performance of the secondary crusher and screening circuit, allowing for the plant to achieve multi day performance above 40,000 tons per day in the fourth quarter.

Speaker 2

As the operating rate of the plant increases over longer periods of time, we require unscheduled yet not entirely unexpected equipment maintenance. For example, in December, the plant was operated at an average of 87% of design throughput level over a two weeks period prior to an unscheduled shutdown to split the conveyor belt associated with design issue. Repair were made to the belt and replacement with the modified design was completed in January 2025. Subsequent to the quarter end, the HPGR rollers demonstrated accelerated work necessitating a changeover ahead of schedule and limiting the crushing, the secondary crushing capacity in January. The changeover of the HPGRO was completed in February 2025 with operating and maintenance procedures adjusted to maximize lifespan and optimize future changeover windows.

Speaker 2

Inside the plan, the grinding circuit was also impacted early in the quarter due to repair required to one of the verti mill following a faulty start of post maintenance. Prevention and mitigation procedures have been put in place and the second Verde Mill is expected to be online later this month. Taken together at a higher level, it is not unusual or uncommon to encounter these types of equipment issues during the first day of the ramp up of the large scale mining operations, where the equipment is operated at an efficient level at the firing rates and stress, all while maintenance schedules are being adjusted to real well conditions. What is important is that we are seeing continuous improvement at Cote with increasing stability, availability and operating milestones quarter over quarter. In 2025, we are forecasting production of 360,000 to 400,000 ounces of gold on a 100% basis, which means that Cote D'Gor would essentially double its ounces this year.

Speaker 2

Cash costs are expected to be between $950 to $1,100 per ounce and all in sustaining costs to be between $13.50 to 1,500 per ounce. The cash cost guidance reflect the cost experienced in the first year of operations, including higher levels of maintenance, contractor support and continued improvement consultant. Costs are expected to lower in the second half of the year as targeted improvements are deployed and as production increases. The operating guidance assumes plant throughput of approximately 12,000,000 tons in 2025, equating to an average of 3,000,000 tons per quarter, comparing well with the Q4 throughput of 2,400,000 tons, which was 50% above Q3. So yes, we are confident in the next step and the next step up after the first quarter which we have advised will be lower after which we'll step up into Q4.

Speaker 2

The end goal for CODI this year is to achieve nameplate throughput of 36,000 today in the fourth quarter. This target will be aided by the installation of the second cone crusher, which will provide additional capacity and redundancy to the primary crushing circuit, removing the bottleneck from this area. Longer term, we will continue to pursue improvement in mining and processing activities, looking for low capital intensive opportunity to increase processing plant capacity. As we have noted in the past, several components of the plant have been designed for 42,000 tons per day, and we have seen multiple days above 40,000 tons per day early on in the life cycle of the project. The addition of the second compressor later this year is aligned with our strategy of unlocking maximum value by monetizing the maximum number of tons of ore mined as they become available for processing.

Speaker 2

This strategy includes evaluating the potential to address certain aspects of our mining plan at Cote to shift over time from selective blasting and separation to a more bulk mining approach as the mill throughput capacity is unlocked. As currently designed, coating over the life of mine is expected to average an annual ore mining rate of approximately 50,000 tons per day versus our current nameplate processing rate of 36,000 tons per day. So if we are able to find the right balance of increased processing rates and minimize stockpiles, we expect numerous efficiencies advantages, including reduced rehandling, improved bit sequencing and less reliance on segregation for the mine plan and more on maximizing mill throughput and monetization of gold mine. Optimizing the processing and mining balance at Cote D'Ivoire is even more important as we investigate the potential options to bring into the mine plan the full resource base estimate of the Cote And Gosling zone, which combine for over 16,200,000 ounces of measured and indicated resources and 4,200,000 ounces of inferred resources to define Cote goals amongst Canada's largest gold mine in operation. Our exploration program on Cote And Gosselin are ramping up this year, targeting resource conversion at Gosselin in support of our technical report in 2026 that outline and unify mine plan base on Cote And Gosselin.

Speaker 2

Turning to Quebec. The transformation of Westwood has been among the best mining success story in 2024, as the last few years of redevelopment and rehabilitation resulted in a successful turnaround of the mine, building safe and stable production and culminating in the generations of $94,400,000 dollars in mine site free cash flow for the year. Looking at operation, Westwood produced 134,000 ounces in 2024 above the top end of its increased revised production target of 115,000 to 130,000 ounces. Production in the fourth quarter of twenty twenty four was 35,000 ounces higher by 7,000 or 25% compared with the same prior year period primarily due to higher grades and an increased proportion of ore feet from the underground mine. Mining activity for the year totaled 1,020,000 tons of ore in line with the prior year.

Speaker 2

In the fourth quarter, the underground mine averaged 98,000 tons or just over 1,000 tons per day, a record volume from underground since the mine restart at an average underground mine grade of 9.65 grams a tonne. The improved volume from underground are result of the completion of the underground rehabilitation and development work program, which has provided increased operational flexibility with multiple stop sequences available to mine concurrently at different level in sector of the mine. Mill throughput in the fourth quarter twenty twenty four was 267,000 tons at an average grade of 4.34 grams a ton and an average recovery of 93% with grades 11% higher than the prior year period due to the higher proportion of underground material. Plant availability in the quarter was 88%, a 10% higher than the same prior year period with the successful completion of the annual O'Neil shutdown in November. The margins for Westwood continue to improve with a strong gold price and stabilizing costs.

Speaker 2

Cash costs averaged $11.48 dollars an ounce and all in sustaining costs averaged $16.88 dollars an ounce in the fourth quarter positioning the mine in the middle of our asset cost curve. Looking ahead to this year, Westwood production is expected to be in the range of 125,000 to 140,000 ounces in 2025. As mining activities continue the underground ramp up towards achieving 1,000 tons per day at a stable, steady state while targeting multiple active mining areas and minimizing dilution. Open pit activity from the Grand Duke are currently planned to be completed by the fourth quarter of twenty twenty four 'twenty five, though Grand Duke stockpile material would continue to be melted into 2027. However, should the Gulf Coast remain where they are, I believe there is a strong potential for further expansion and extension of the Grande Du Pet, which will be investigated this year.

Speaker 2

Costs this year are expected to be generally flat with cash cost guidance for Westwood of $11.75 to $13.25 per ounce. So an asset of $16.75 dollars to $18.25 dollars per ounce. Capital expenditure guidance is for approximately $70,000,000 mainly consisting of underground development and rehabilitation in support of the 2020 plan. The continued renewal of the mobile fleet and equipment overhauls and certain asset integrity projects at the Westwood Mill. Finally, looking at Esakane, it was a lighter quarter at the mine with production of 80,000 ounces in Q4.

Speaker 2

Yet Esakane still achieved the top end of its guidance range, which was increased mid year, with the mine producing total annual productions of 409,000 ounces versus our guidance of 380,000 to 410,000 ounces. Mining activities totaled 12,400,000 tons in the quarter with 2,200,000 tons of ore mined resulting in a strip ratio of 4.7, which is relatively high versus recent history as the mine fleet targeted capital stripping activity intended to secure access to ore on deeper benches of Phase seven in support of the 2025 and 2026 mine plan. Mill throughput in the quarter was 2,900,000 tons at an average head grade of 1.07 grams a ton. Turquoise was slightly lower in Q4 due to the scheduled maintenance during December. Average head grade decreased in the fourth quarter compared to the first half of the year, in line with the mine plan as mining activity prioritized waste stripping sequence resulting in increased supplementation of the mill feed from available ore stockpile.

Speaker 2

On a cost basis, Esacana reported relatively high Q4 costs with cash costs of $15.00 $1 per ounce and ASEK of $2,118 per ounce. These came in relatively high due to the planned lower quarterly production and well scheduled maintenance activity, higher realized fuel price and higher supply chain and transportation costs impacted by the security situation. Despite this, total annual cash costs were $11.79 dollars and ASEQ were $16.25 dollars both within guidance range of $12.75 dollars to $12.75 dollars per ounce and $15.75 dollars to $16.75 dollars per ounce, which were lowered in the mid year. Looking ahead, Essakane is expected to produce 360,000 to 400,000 ounces on an attributable basis at a cash cost of $1,400 to $15.50 dollars per ounce and an ASIC of $16.75 dollars to $18.25 dollars per ounce. Mining activities are expected to complete mining in Phase five in the first half of the year with the bulk of the mine material coming from Phase six and Phase seven.

Speaker 2

With mining moving into the primary zones of Phase six and seven, capitalized waste stripping is expected to be relatively lower in 2025 with a total capital expenditure guidance this year of $115,000,000 The plant is expected to operate at throughput and head grade in line with the current life of mine plan as per the December '1 technical report. While the cost of operations in country have risen over the last two years, Ethacan is positioned to generate strong cash flow with an expected decrease in waste stripping expenditure year over year. I also want to congratulate the exploration team as we announced an updated mineral reserve and resources estimate yesterday in which the Fakana Morten replaced its reserve depletion with current estimated reserve of 2,300,000 ounces and managed to grow major and indicated ounces by 15% to nearly 100,000,000 tons grading 1.24 grams a ton for a total of nearly 4,000,000 ounces. Taken together, this strong result from the drill bit suggests the potential for further mine life expansion within the secured perimeter of our operation at Essakane. Finally, and on the topic of notable mineral resources change, yesterday we also announced an updated mineral resources estimate for our 100% -on Nelligan project located approximately 45 kilometers southwest of Chabougamau, Quebec.

Speaker 2

The updated mineral resource of 3,100,000 indicated gold ounces in 103,000,000 tons rating 0.5 grams per ton and 5,200,000 inferred ounces within 166,000,000 tons rating 0.6 grams per ton. This represents a 56% increase in indicated resources or 1,100,000 ounces with an increase in grade of 13 as well as a 13% increase in inferred resources or 1,300,000 ounces with a similar 14% increase in grade. This update demonstrates a remarkable prospectivity of this asset, demonstrating rapid growth in ounces and an improvement in grades from a relatively conservative drill program that totaled only 23,400 meter over the last two years. When combining Nelligan with a high grade satellite Monster Lake deposit, there are nearing 9,000,000 ounces of resources in this mining camp already positioning Nelligan at a relatively early stage among the largest gold projects in Canada with significant potential for further growth. This year, we are increasing the scope of our Shabugan module program with a plan for 30,000 meter of diamond drilling, testing the extension of mineralization at Nelligan as mineralization remains open to non strike and at depth.

Speaker 2

Further, a drill program will be conducted targeting high grade structures underground at Monster Lake, which has seen minimal modern exploration in the last few years. It is definitely early stage, but there is no question the value that Nelligan can offer as a growing large scale gold asset in a very mining friendly jurisdiction in Canada. So thank you all and I look forward to an exciting year ahead. With that, I would like to pass the call back to the operators for the Q and A portion of the call. Operator?

Operator

The first question comes from Anita Soni with CIBC World Markets. Please go ahead.

Speaker 4

Good morning, Renaud and team. A question on the some of the challenges that you've had in January with the HPGR and some of the other crushers. You did issue guidance in January. Can you let us know whether or not your January guidance would have encompassed some of the issues you're encountering? I'm just trying to understand the timing of these issues and whether or not we should be a little bit more conservative than what you had previously put out?

Speaker 2

No. I mean, like when we issued our guidance, we were absolutely in possession of all the information. We knew that about the repair on the bell. We knew the repair of the Evagarda Mill. So that was all accounted for.

Speaker 2

We knew that we will change. It was already planned in the way to do a changeover of the rolls on the HPGR. So it was just advanced, but it's the same. So as a result, and as I just mentioned, we see Q1 a little lower than the rest, but we're going to pick up and increase with more tons processed in the second half. But no change and we remain very confident about our guidance.

Speaker 4

Okay, that's good to hear. I did have the Q1 lower with the changeovers happening. Yes. And then in terms of the sorry, the oh, what was my question? Oh, sorry, the mining rates.

Speaker 4

How do you see that evolving over the course of the year?

Speaker 2

We're actually very pleased. As I mentioned, we were roughly in the $40,000,000 mark for the 2024, it's the first year successfully commissioned through the three additional. We've already seen a pickup in the time lines, had a wonderful week in December at 150,000 tonnes. And so to achieve $48,100,000 this year is like moving from the previous average, it's about $10,000,000 to about $12,000,000 per quarter. We absolutely see this achievable.

Speaker 2

So we'll see in the Q1 because it's still like in a ramp up in the commissioning of the full commissioning of the extractor truck. But definitely we see we have the capacity and the equipment of course to achieve our 48,000,000 tonnes this year.

Speaker 4

Okay. That's it for my questions. Thank you.

Operator

The next question comes from Tanya Jakoskonen with Scotiabank. Please go ahead.

Speaker 5

Good morning, everybody. Thank you for taking my questions. And I'm just going to follow-up from Anita's question on Cote. So just wanted to circle back, Renaud, just as we think about and maybe just a bit more detail as we go through the quarter. So Q1 is weaker because of these changeovers that happened at the mill.

Speaker 5

Was anything else planned or is planned for downtime in Q2, Q3, Q4 as you do some additional repairs and or turnovers? I think there was something being coming in later in the year as well that may have some downtime. So I'm just trying to understand should I be thinking you had mentioned 3,000,000 tons per quarter, but how should I be thinking of each quarter and some of the critical aspects that we move in this ramp up during the year?

Speaker 2

Yes. I'll ask you, Bruno, to add a bit of color to this. But obviously, like as per the HVGR per se, that was an advanced maintenance from Q2 to Q1. So no real difference. But Bruno, you could add to this.

Speaker 6

Thank you, Renaud. Good morning, Tania. Exactly what Renaud just mentioned, the hose replacement for the HPGR was scheduled to be taking place in May. It's been evidenced. Like now, we are understanding the wear pattern better.

Speaker 6

The other major shutdown is going to be the one in August, the annual shutdown. But with the wear pattern that we're seeing at the ball mill, it very likely it's going to be shorter than expected also because we have we're seeing a wear pattern that is less of a reserve than expected. So this is where we are right now, Tania, like we are wear patterns at all our primary components. So the HPGR was a little bit faster and the bar mill seems to be holding very well right now. Other than that

Speaker 5

So if you were to think about the quarters, would so Q1 is the weakest, Q4 is going to be the strongest and do we see a progression upward? Or is Q3 and Q2 equal? I'm just trying to understand with this downtime in August.

Speaker 6

Yes. Because in Q2, you won't have to do the HPGR rolls replacement. So definitely, Q2 is going to be higher than Q2 after Q1 and after that Q3 will also pick up in speed.

Speaker 5

Okay. So you will are going despite all of these changes and things, you will see quarter over quarter improvements is what you're saying?

Speaker 2

That's correct. Probably Q2, Q3 closer to each dollar for different, but definitely Q1 the lowest and Q4 the best. And as you say like Q2, Q3, hopefully Q3 a little bit more than Q2. We'll be starting installations of the second crusher by mid Q3 mid to late Q2, early Q3. So should be minimal disruptions, but there is always some time to be done.

Speaker 2

So on that basis, you could argue that Q2, Q3 should be very similar or close to, but Q4 definitely should be our strong.

Speaker 5

Okay. And anything else on the critical path that we need to be aware of as we go through the year besides these changes that you've mentioned? Anything else? I mean, the mining, we've got the two the three new trucks or there about coming in. That's going to help on the mining front.

Speaker 5

But anything else that we should be aware of?

Speaker 2

It's really all about the stability, Tanya, and I appreciate you know like during the commissioning, you know every quarter, you know, unfortunately this happened and so forth. But as Bruno mentioned, I think we've learned enormously from this. And basically it's all about, okay, of course, you have a design criteria of how many hours you should do and so far and the wear pattern and so and you need to adjust. Some equipment of course may be less familiar with some operators and more training. But globally, I think we've gone through the whole cycle from the crushing to the grinding, to the leaching and rewind.

Speaker 2

I think we've gone through the whole cycle. We have a much better understanding of each of the equipment. So it's all about stability. So to answer your questions, we feel strong about the 48,000,000 tonnes. We're already seeing improvement in the pit.

Speaker 2

And as I've discussed, we'll be less skewed and superset gradations and allow for more performance and productivity of the pit. So we feel very strong with the mining. And when it comes to the mill, it's really all about stability at this stage. And so we're really looking forward now with the last repair of the Verde mill to really push the gas and crank up the tonnage and go for more stability and higher availability. And with that, you know the capacity is there.

Speaker 2

So as you approach a 90% plus availability, you will be there. There is no capacity issues. It's just the stability matters. So I've got a long answer, but I thought I would clarify.

Speaker 5

Okay. No, thank you for that. And then I'm just wondering on Essakane as well as you moved from this Phase five into six and seven this year and yet there's less stripping. How does the profile look for the year there? I'm just trying to understand overall for the company, how does the year progress?

Speaker 5

Is it that we start with a lower Q1 overall for the company and get to a higher Q4? I'm just trying to get an understanding if there's any variability in Essa Can and Westwood as well?

Speaker 2

Yes. Thanks for that questions and the opportunity to clarify a bit because absolutely. So unfortunately, at the same time, Q1 is a bit of the quarter for the Fort Gold, a bit of repair, the first half and so forth. At the same time, we're entering Phase six and seven. And we have more than one discussed the performance on the great reconciliation as you enter new phases at a very early stage versus when you're well established.

Speaker 2

And we've seen that in 2023, '20 '20 '4 with the Phase five. We still have Phase five on sale probably mid year, but we're entering Phase six, Phase seven with a little bit slower and less productive in grade. So as a result, we see EsaKane potentially on target, but because of the 6.7% it could be that EsaKane is slightly lower in the Q1 and the pickup after that for the rest of the year. But originally we were seeing about same, but it could be possible that Q1 is slightly lower than the rest of the year.

Speaker 5

Okay. That's helpful as well. So it kind of looks that you probably are seeing that quarter over quarter improvement for the company overall in 2025.

Speaker 2

Okay. It's a fair comment.

Speaker 5

Okay. And if I could just squeeze one more in and it just is more a strategic question for you. You mentioned over 90% of your M and I and inferred resources all sitting in Canada. And as we get Gosselin mine drill program study and then a better understanding of the mine plan for the whole Kotay complex, Do you think it makes sense to keep Essakane within I Am Gold? You then have your cash flow coming and do you think that by selling Essakane, remaining a totally Canadian company, you'd get a better valuation?

Speaker 2

I think you're talking about something that belongs to the more like looking forward type of thing and we're very pleased with Sakani. The truth is that we've discussed numerous times the strategic approach with Issacane and they're really looking at delivering in our balance sheet in 2025, '20 '20 '6, the strong free cash flow. Well, it's all about all the stability, right? And we had a very strong 2024. We had no interruptions in our productions and that we've delivered in all metrics.

Speaker 2

To be very frank, you could argue that we've seen more stability than a lot of North American guys, if you want my take of it. So I won't really comment on the details of our plan. What I know is that we have strong belief that this account will be a strong free cash flow producing on generators and will make a huge difference for us for 2025 and 2026 as we significantly improve our balance sheet. The rest belongs to stability, how things evolve and so forth. So there is a lot at stake here, but we feel very confident to deliver another strong '25.

Speaker 5

Okay. That's fair comment. Thank you very much for taking my questions.

Speaker 2

Thanks.

Operator

There are no further questions. I will now hand the call back over to Graham Jennings for closing remarks.

Speaker 1

Thank Thank you very much, operator, and thanks everyone for joining us this morning. As always, should you have any additional questions, please reach out to Renoir or myself. Thank you all. Be safe and have a great day.

Operator

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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Earnings Conference Call
IAMGOLD Q4 2024
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