IAMGOLD Corp (IAG) 2019 Q4 法說會逐字稿

Thank you for standing by.

This is the conference operator.

Welcome to the IAMGOLD 2019 Fourth Quarter and Full Year Operating and Financial Results Conference Call and Webcast.

(Operator Instructions) And the conference is being recorded.

(Operator Instructions)

At this time, I would like to turn the conference over to Indi Gopinathan, Vice President, Investor Relations and Corporate Communications for IAMGOLD.

Please go ahead.

Thank you very much, and welcome to the IAMGOLD Fourth Quarter and Full Year Conference Call for 2019.

Joining me on the call today are Gord Stothart, President and Chief Operating Officer; Effie Simanikas, Vice President of Operations, Finance and Information Technology, who is covering the finance section for our EVP and CFO, Carol Banducci; Craig MacDougall, Senior Vice President, Exploration; and Jeff Snow, Senior Vice President, Business Development and General Counsel.

We also have Oumar Toguyeni, our regional Vice President in West Africa, is joining us here in the room.

Our remarks on this call will include forward-looking statements.

Please refer to the cautionary language regarding forward-looking information in our disclosure documents and be advised that same cautionary language applies to our remarks during the call.

The slides referenced on this call can be viewed on our website.

I will now turn the call over to our President and Chief Operating Officer, Gordon Stothart.

Well, thank you, Indi.

Good morning, everyone, and thank you for joining us.

So last night, we issued our fourth quarter and 2019 full year results, which reflect a year of successfully overcoming the strong headwinds faced by the company.

I'd like to note a few highlights from 2019.

In response to a challenging gold price environment at this time last year, we implemented a self-funding strategy where each site is mandated with covering their own operating costs, sustaining and site expansionary and capital as well as corporate G&A, exploration and financing costs.

We've achieved this goal on a consolidated basis, with Essakane and Westwood already self-funding its sites and all sites looking to self-fund for 2020.

In addition, we reduced the exploration budget by 22%.

At Westwood, we aligned our cost structure with production levels early in the year, reducing our workforce by 1/3.

With ongoing work on the Westwood mine plan, we were able to provide updated guidance at year-end outlining our vision for a safe, profitable and long-life mine.

At the Rosebel site, the team acted quickly in response to the unauthorized pit intrusion incident over the summer, working with all stakeholders to return the operation to regular mining activities once the situation was judged sufficiently safe to do so.

We delivered first ore from the Saramacca deposit to the Rosebel mill at the end of October.

We bolstered our pipeline with a significant maiden resource at Nelligan, which also won the prestigious AEMQ Discovery of the Year Award.

We continue to de-risk our development projects, Cote and Boto, within budget.

Finally, we maintained our strong balance sheet.

IAMGOLD's ethos is one of zero harm, and we aim to achieve high standards in environmental, social and governance practices.

And this zero harm vision has been fully integrated in our organization for over a dozen years.

In 2019, we were ranked as one of the top 50 sustainable companies in Canada by Corporate Knights.

Additionally, we were included in 2019 Bloomberg Gender Equality Index.

IAMGOLD has also achieved the highest possible rating category and were up second best in absolute scoring of the 31 companies profiled in Moody's Corporate Governance in Metals and Mining Report.

IAMGOLD has implemented the Mine Association of Canada's Towards Sustainable Mining, TSM framework, not just in our Canadian operation but at our global operations as well.

And we are implementing the World Gold Council's responsible gold mining principles.

Our ongoing ESG efforts include commitment to education, health and safety, access to medical care, [fit] water and are continuing work building relationships with our many stakeholders.

As noted in 2019, we achieved a number of our targets.

And looking forward to 2020, our next catalyst include completion of the construction of the Saramacca main haul road, which is well positioned to occur by the end of Q1; setting Saramacca up for a ramp-up in the last 3 quarters of 2020.

The mill debottlenecking project at Essakane is underway with minimal capital and anticipated improvements in the range of 10% increased throughput while also improving recoveries.

Expected completion is Q3.

Westwood guidance was provided in December, and we are working on the NI 43-101 report for mid-2020, which will provide added details demonstrating a safe, profitable and long-life mine.

All of the work I have described is intended to improve our operating cash flows and margins, with the ultimate goal of significantly achieving and maintaining our self-funding strategy.

On the exploration front, we are working on further resource delineation programs at Nelligan and the Rouyn project in Quebec, Gosselin at Cote and the new Karita discovery in Guinea, and we're conducting a growth project strategy review.

On that note, I will now pass the call over to Effie to review our financial results.

Thank you, Gord.

Revenues improved in Q4 from Q3 by 7% on stronger gold prices, while costs remained flat quarter-over-quarter.

As a result, gross profit improved approximately 80% quarter-over-quarter.

The adjusted net loss for the quarter was $0.6 million or $0 per share.

Net cash from operating activities before changes in working capital totaled $226.2 million, reflecting the receipt of the gold prepayment in December.

In addition, we reported a net $275.3 million impairment charge primarily consisting of a $395 million charge on the Westwood mine as well as the reversal of impairment charges on the Essakane mine of $122 million.

Year-over-year, revenues were down 4% as higher gold prices were offset by lower production levels, while cost of sales increased by 2% primarily as a result of lower capitalized stripping being now accounted.

We ended the year with gross profit of $69.6 million, down from the previous year due to lower sales ounces and slightly higher costs due to lower capitalized stripping.

Adjusted net loss for the year was $18.3 million or $0.04 per share.

Net cash from operating activities before changes in working capital totaled $367.5 million, including the gold prepayment.

IAMGOLD remains in a strong financial position with $864.8 million in cash, cash equivalents, short-term investments and restricted cash as of December 31, 2019.

This figure reflects further strengthening of the balance sheet with the additional funds from the gold prepay.

Overall, we were cash flow positive in Q4, with Essakane and Westwood generating positive cash flows on a site basis, demonstrating progress on our self-funding strategy.

In 2020, we expect a capital-intensive year with significant waste stripping required at both Essakane and Rosebel.

At a gold price of $1,500 per ounce or better, we would expect to see meaningful cash flow expansion.

As you can see on this slide, excluding restricted cash and including our $500 million credit facility, which remains virtually undrawn, our year-end liquidity stood at $1.3 billion.

The $400 million senior notes are not due until 2025.

We continue to work on improving cash flows and making prudent capital allocation decisions.

I will now pass the call back over to Gord to discuss operations.

Well, thanks, Effie.

So our top priority is the health and safety of our employees.

In Q4, we continued to achieve or better our targets.

On a full year basis, we achieved a DART rate, which stands for days away, restricted or transferred duty, of 0.51 per 200,000 manhours, which is our best in a decade.

We work every day to meet or exceed our safety goals, implementing and refreshing a number of initiatives to ensure a safer working environment, including a comprehensive behavior-based safety program.

Our reserve and resource base remains strong, with total proven and probable reserves of 16.7 million ounces based on a $1,200 per ounce gold price assumption.

The total decreased by 6% in 2019 compared to 2018 primarily due to mine depletion.

Measured and indicated resources, inclusive of reserves, decreased by 2% year-over-year to 27.2 million ounces, while inferred resources increased by 38% to 12 million ounces with the addition of the Nelligan gold project and updated resources at the Cote gold project.

Our gold price assumption for resources for most of our operations and projects remains at $1,500 per ounce, with Westwood assessed at $1,200 per ounce for resources.

As mentioned, total consolidated attributable production for the quarter was 192,000 ounces.

All-in sustaining costs were $1,161 an ounce for Q4.

And note that all-in sustaining costs at the consolidated level includes corporate G&A costs.

I'll review each operation in turn, starting with Essakane.

Attributable gold production for the fourth quarter of 2019 was 94,000 ounces, and for the full year, 368,000 ounces.

Production was lower than the prior year, which was a record year for Essakane, primarily due to mine sequencing through lower-grade zones, partially offset by higher throughput.

The fourth quarter was impacted by a number of factors, including lower grades in the Falagountou satellite pits, mine sequencing and the presence of graphitic ore.

Despite this, Essakane was cash flow positive throughout the year.

All-in sustaining costs were $1,006 for the quarter, lower than the prior year, primarily due to the down payments for fleet additions that had occurred in 2018.

Full year AISC was $1,028, marginally higher than the prior year, primarily due to the higher cost of sales per ounce, partially offset by lower sustaining capital.

In 2020, full year guidance is 365,000 to 385,000 ounces.

Our focus is on mill optimization, which targets improvements in throughput and recovery with about a 10% throughput improvement targeted.

Completion of this work is expected in the third quarter.

Sustaining capital for 2020 is $40 million.

It is a highway stripping year for Essakane as we're beginning some new pushbacks, with about $80 million of the $100 million in nonsustaining capital planned for those pushbacks.

In 2021, Essakane is expected to have another high stripping year with slightly lower production but with better grades.

Guidance for Essakane in 2021 is between 355,000 and 385,000 ounces of gold production.

On the exploration front, drilling and evaluation of the nearby Tassiri, GEM and Sokadie targets continues.

At Rosebel, attributable gold production for the fourth quarter was 56,000 ounces and 251,000 ounces for the year.

Production was lower primarily due to the temporary suspension of mining activities following the security incident in the third quarter, which resulted in the mill primarily processing lower-grade stockpiles.

The Carbon-in-Column, CIC plant, continue to operate as expected, recovering 2,000 ounces from tailings in the fourth quarter and bringing total tailings recoveries in 2019 to 7,600 ounces.

All-in sustaining costs were $1,307 for the quarter and $1,165 for the year.

As you know, the biggest impact to Rosebel in the year was the incident involving unauthorized miners in our pits.

We were able to address this issue by working with our community and government stakeholders toward developing a long-term solution.

In 2020, full year guidance for Rosebel is 245,000 to 265,000 ounces.

Following the milestone of delivering first ore from Saramacca, the Rosebel mill in Q4 of last year, we anticipate the main ore road development to be completed by the end of Q1 2020 with ramp-up of Saramacca production in subsequent quarters.

2020 CapEx is expected to be $55 million in sustaining and $60 million for nonsustaining.

Similar to Essakane, Rosebel has also a high waste stripping year ahead, with $15 million of the sustaining capital and $35 million of the nonsustaining capital related to pushbacks.

These strategic expansionary pushbacks are expected to position Rosebel for a very strong 2021 and beyond as the mine is expected to have higher ore availability and higher grades.

In 2021, we have guided to 305,000 to 335,000 ounces of gold production, representing a significant future increase in gold.

Development work at Saramacca continues on plan and is expected to be completed in the first half of 2020.

I would add that we are continuing diamond drilling at Saramacca to assess its underground potential.

Production at Westwood was 29,000 ounces for the fourth quarter and 91,000 ounces for the full year.

Fourth quarter production was slightly higher than the prior year period due to increased throughput, partially offset by lower head grades, while the full year was lower primarily due to lower throughput and grades.

All-in sustaining costs were $1,117 for the quarter and $1,079 for the year.

AISC was lower for the fourth quarter primarily due to lower cost of sales per ounce and lower sustaining capital due to less development work.

AISC was relatively flat year-over-year due to a reduction in the operating costs following the Q1 labor force reduction.

Earlier in the year, we normalized fixed overhead costs to accommodate the unusually low production in Q1.

And by the end of the year, we were able to share forward production guidance, reflecting a safe and profitable long-life mine.

The updated production profile has, in turn, impacted carrying value for Westwood, as discussed earlier.

In spite of the challenging year, Westwood was cash flow positive in the fourth quarter.

And in 2020, full year guidance is 9,000 to 110,000 ounces.

We have allocated $25 million for each of sustaining and nonsustaining capital.

And our next milestone for Westwood is the completion of the life of mine plan and accompanying NI 43-101 technical report in the first half of 2020.

We will also provide an updated resource and reserve statement at that time.

In 2021, Westwood continues to advance on its ramp-up plan with guidance provided at 100,000 to 120,000 ounces.

At Boto -- I'm looking at our projects.

So at Boto, in 2019, we continue to maintain our relationship with stakeholders and as announced in January, we have received the exploitation permit for Boto from the government of Senegal.

Early this year, we provided metrics of the optimized design of the project as well and have now filed the associated NI 43-101 report.

At Cote, in 2019, we continue to de-risk the project within our capital expenditures guidance.

We have completed more than 50% of the detailed project engineering to date, signed an impact and benefit agreement with our First Nations partners, reviewed and updated the resource estimate confirming the robustness of that resource, reviewed and adjusted our cost models and advanced the permitting process.

We have also partnered with our First Nations firm for tree clearing work.

Following these advancements, we are reviewing the 5- to 10-year strategy for IAMGOLD.

Looking at our reserve profile.

We're including this chart to show what the reserve base looks like compared to our peers.

As you can see, industry reserves have been on a steady decline since 2012 while IAMGOLD has been working hard to reverse from this industry trend, generating a 48% increase in reserves over that same time frame.

Since 2016, we have added 8.99 million ounces, over double the ounces to our reserve base.

We believe this is a significant competitive advantage for IAMGOLD.

So I've walked through the site by site expectations for the year, and I will comment here that the full year attributable guide for 2020 is 700,000 to 760,000 ounces, with AISC guidance of $1,100 to $1,150 per ounce.

The key contributing factors to this guidance are the high stripping work planned for -- at both Essakane and Rosebel, and that's for the Westwood development work, and the end of production at Sadiola as we anticipate completion of the sale process in April.

As noted, in 2021, Rosebel is anticipated to have higher ore availability and higher grades, while Westwood continues to advance.

Westwood -- excuse me, Essakane is expected to have another high stripping year in 2021, with slightly lower production but slightly better grades.

Overall, for 2021, we anticipate increased attributable gold production, expected to be approximately 10% higher than the 2020 guidance levels at 760,000 to 840,000 ounces of gold and with lower all-in sustaining costs.

For capital expenditures, the 2020 spend on a consolidated basis of $370 million includes $65 million for our development projects, Boto and Cote.

At Cote, $35 million is budgeted for site tree clearing, access road development and detailed engineering.

While at Boto, $30 million is budgeted for road and camp construction and advancing project engineering.

In 2021, we expect lower capital expenditures of approximately $250 million with the completion of development at Saramacca in 2020 and lower capitalized stripping.

I'll now turn the call over to Craig to discuss exploration.

Thanks, Gord, and good morning, everyone.

Before I begin, please note that the results I talk about today have been previously disclosed in accordance with security regulations and signed off by the qualified persons within the company reporting them.

In 2020, our planned exploration spend is $47 million, comprising both near-mine brownfield and greenfield exploration programs.

The brownfield program will continue its focus on discovering and delineating resources along the Saramacca-Brokolonko trend near Rosebel as well as that identified target near our Essakane operation.

We will also focus our drilling efforts on continuing to convert resources at Westwood and delineating resources at the nearby Rouyn gold project.

The greenfield program continues to target resource expansions and evaluating priority targets on our advanced resource and discovery stage projects, including the Cote Gold Project in Ontario, the Nelligan and Monster Lake projects in Quebec, the Boto project in Senegal, Diakha-Siribaya project in Mali, the Pitangui project in Brazil and the Karita gold project in Guinea.

In the next few slides, I will highlight some of our accomplishments from last year.

In 2019, we continued to make progress advancing the resource stage projects in our pipeline with prioritizing projects near existing IAMGOLD deposits and infrastructure.

At Nelligan, the exploration team delivered an initial resource estimate comprising approximately 97 million tonnes averaging 1 gram per tonne of gold for 3.2 million ounces on a 100% basis.

The new reserve Renard Zone contributed positively to the resource, which was intersected for over 1 kilometer along strike with true thickness locally exceeding 100 meters.

Following the delivery of the NI 43-101 technical report, we exercised our option to increase our undivided interest by 25% to now hold a 75% interest in the project.

Nelligan is located 15 kilometers south of Monster Lake, which hosts an inferred resource of 1.1 million tonnes grading 12.1 grams for 433,000 contained ounces on a 100% basis.

During the year, we met our expenditure commitments under the terms of the earn-in agreement to vest to a 75% interest in this project.

From this work, we announced further positive drill results from our winter drilling program, which was targeting additional zones of mineralization.

Results included 0.8 meters grading 357 grams per tonne gold and 6.8 meters grading 3.9 grams per tonne gold, which included 1.67 meters grading 6.4 grams per tonne gold, and we also had a 0.5-meter intersection grading 133 grams per tonne gold.

Throughout 2020, we expect to drill approximately 8,000 meters at Nelligan, focusing on infill drilling to improve resource classification and step-out drilling to evaluate resource extensions at depth and along strike.

At nearby Monster Lake, we will continue to evaluate the plus 4-kilometer long corridor, which hosts the 325-Megane Zone, and we look to extend mineralization intersected during the 2019 program at the Annie Shear Zone.

During the year, we also announced a new discovery of the Cote project referred to as the Gosselin Zone located approximately 1.5 kilometers northeast of the Cote deposit.

The Gosselin Zone has the potential to host a significant sized resource with an exploration target potential of between 3 million to 5 million ounces grading between 0.7 and 1.2 grams per tonne gold.

Please note the cautionary language on the slide relating to exploration targets.

Drill result highlights from the drilling program completed at Gosselin announced during the year included 342.5 meters grading 1.0 grams per tonne gold and 412 meters grading 1.3 grams per tonne gold.

In 2020, we expect to complete approximately 14,000 meters of drilling to continue to evaluate the resource potential of this new zone and evaluate other targets on the property.

One of our shovel-ready development projects, Boto, falls in the highly prospective Boto-Karita-Diakha gold district, which is on trend from B2Gold's Fekola mine in Mali.

Throughout 2019, we announced results from various properties, which continue to highlight our exploration success and demonstrate the exploration upside of our properties in this region.

Early in 2019, we announced an updated Diakha-Siribaya resource estimate comprising 18 million ounces of indicated resources averaging 1.3 grams per tonne gold for 744,000 contained ounces and a further 23.2 million tonnes of inferred resources averaging 1.6 grams per tonne gold for 1.2 million ounces.

This represents a 57% increase in the resource total of the project.

At Karita, a wholly owned project in Northeastern Guinea and immediately contiguous with the Boto project, we reported results from 16 RC holes holding 1,800 meters completed as part of the 2019 program, which confirmed a new discovery.

Highlights include 29 meters grading 3 grams per tonne gold, 16 meters grading 3.2 grams per tonne gold and 21 meters grading 9.0 grams per tonne gold.

Overall, we have developed a robust and balanced pipeline of early to advanced greenfield exploration projects in geographically diverse locations while continuing to support our near-mine brownfield exploration to leverage our existing infrastructure.

With that, I will now pass the call back to Gord to conclude.

Thank you, Craig.

You guys get me once again.

Anyways, I want to reiterate that we are focused on improving our cash flow outlook while executing on plan and doing that safely.

Our goal over the next few months is to provide clarity regarding our company strategy, and we look forward to speaking with you again at that time.

Thanks for joining us.

I'll now turn it back to the moderator.

(Operator Instructions) Our first question comes from Fahad Tariq of Credit Suisse.

Just maybe some clarity on the thought process behind Cote and Boto.

I know that there's another $65 million that will be spent on basically getting these projects shovel-ready?

I mean any color on how you're thinking about kind of the priority between the 2?

How much more CapEx that may be required even before an investment decision?

And when you expect to make an investment decision on either project?

That's a -- so I mean, obviously, with the imminent sort of leadership change, with changing gold price and I think some of the change in sentiment, plus all of the work that we've been doing on de-risking this project, we are coming to a decision point with our Board and really sort of going through that strategic exercise right now.

As we look at our company going forward, our existing assets, I love them to death.

But they are getting older and will start to head into decline at some point in time.

So we have a benefit -- an incredible benefit compared to our peers of some great growth projects, each of them do different things for our company strategically.

Boto is a nice tuck-in project, relatively straightforward to execute and has a very nice quick payback to it, but on a consolidated basis, has less of a total impact on the company.

Cote is a somewhat larger project.

It's still -- it's not a massive project by any means.

In fact, when you look at Cote, it's a smaller operation than Essakane, and it's a similar-sized operation to Rosebel.

So it's sort of in our stack bracket in terms of operating, but the capital build is higher.

We have a strong balance sheet, and we manage it quite nicely actually.

And we do recognize there was some negative sentiment around some aspects of Cote in the marketplace.

So on the positive side, it is a -- on a consolidated basis, it really does transform our company.

We love both of those assets.

It's just, it's a matter right now of reaching a decision as to which one makes the most sense.

I've been on the road with Indi pretty extensively the last month and have even more visits coming up with the investment community over the next couple of weeks to really help -- do some talking, obviously.

But also do a lot of listening to the shareholders and understand how they see the decision and how they see the priorities so that we don't end up surprising anybody with whichever decision we take going forward.

Time frame, personally, I'm restless.

I'd like to see something decided here in the next 2, 3, 4 months.

And at that point in time, then we'll -- we can -- we'll come forward.

I wouldn't expect -- other than the numbers we talked about here for capital, I wouldn't expect that either of those require any additional capital.

And please note that the capital we're spending now is serving to reduce the post-decision capital.

So this is money being spent towards an objective of achieving those projects.

It's not just moving sideways with the project still being pushed out.

That's how I'd sort of leave it with that for [now], Fahad.

Okay.

Great.

That's really helpful.

And just on the reserves and resources -- so I can appreciate the resources growing specifically Nelligan and Gosselin, but as you look at the portfolio, where do you see reserve growth over the next, call it, several years similar to the trajectory that you had prior to this year with the reserve growth?

I'm just trying to get a sense of -- I can see where the resource growth is coming from, but [not that, I'm unsure...]

Yes, yes.

That's a good question.

And actually, I'm going to sort of let Craig have a whack at it, and I'll step in afterwards.

But...

Well, I'll start with maybe the exploration things.

I mean, obviously, these are sequential programs that we have to run.

You get your first inferred resources, you increase the classification to something that the engineers can then study through more detailed feasibility studies, pre-feasibility studies, those things.

So certainly, we have a number of resource-stage projects.

Some of them are still growing.

Many of them have inferred resources that can be converted.

And once converted, then used to backstop studies that can lead to reserves.

So on an exploration front, I think we do have quite a lot of opportunities to continue to increase our reserves, albeit at projects that still have to be developed.

I'll dabble a little bit on Gord's side here on the operations.

As you know, we're working very hard to continue to expand resources proximal to these infrastructures.

Saramacca was obviously a big success for us.

Prior to that, Falagountou was a big success for us at Essakane.

And we do continue to put time and effort into understanding the satellite targets, and when strategically they're viable for the operations, which ones can extend the reserve base and which ones can help top it up.

And that's an ongoing process, and it's iterative.

And we continue to invest seriously to extend our operations as long as we can.

I don't know if Gord if you wanted to say...

Yes.

I mean, yes, at a high level, I can see incremental reserve growth at the mature assets.

I don't have any huge targets that are going to jump out there.

Westwood will continue to convert over time.

Programs we have for 2020 specifically designed to increase reserves would be extensions to Saramacca along strike, work we're doing on infill on an ongoing basis at Westwood at least to cover depletion and a little bit better.

We are also looking at a few small surface showings we have in and around Thion that are -- that can make it into reserves this year.

Essakane, we -- I talked earlier about some of the satellite targets.

I would expect Tassiri and potentially Sokadie to hit the reserve table this year.

We'll be looking at some extensions to the Essakane Main Zone itself.

We have stuff that's ongoing at the brownfield sites, but it is more marginal.

The lumpy growth you're going to see in the future is really going to come again from the exploration targets, whether it's Nelligan coming to the reserve, Gosselin -- that one is going to be a really straightforward one to march towards reserves given everything we understand there.

There are some permitting steps that are required there.

But other than that, it's a pretty straightforward line of sight to getting some nice increases in reserves.

I guess at a higher level, there is still a large gap at Rosebel between the reserves and the resources at Rosebel proper.

That requires ongoing work on our costs.

Those ounces are available to us if we can get our costs in the right spot.

And we do have a couple of things we're working on there that could potentially change and actually produce a material change in Rosebel, but I'm going to sort of leave you hanging on that one because we need to do a little more work in-house first.

And just a point of clarification, Fahad.

Gosselin, itself is not at a resource stage just yet.

It's still discovery stage.

We are implementing a winter drilling program this winter that if the ice cooperates, and ice is ice, it does melt, we are hoping to bring that to a first resource as part of our program this year, but that's not included in the upgrade that happened at Cote this year.

Our next question comes from Anita Soni of CIBC.

I just wanted to ask on Cote.

Would you be updating the reserve -- sorry, the 43-101 that was put out on -- in November of 2018?

Or do you think that's sufficient?

And secondly, if not, then can you talk about what kind of de-risking you've done at the project since that time?

Yes.

We're not looking to issue a new 43-101 on Cote at this point in time, but -- and I am happy to talk about the de-risking we've done.

As I said in my talk, we're over 50% detailed engineered now, which has added -- it's really, I guess, I describe it as it's really tightened up the goalpost around our capital estimates and allowed us to understand that better.

We've done a little bit of rescoping.

As we look at the project, you always want to know what's your potential downstream opportunities are for expansion.

So we've done a little bit of rescoping on the project to facilitate a potential future expansion once it gets developed.

On the reserve and resource side, and we did upgrade the resource.

The reserve, we kept flat.

We are in the process of reworking that reserve.

The changes aren't material enough, really, to prompt us to want to put out a new 43-101, but there will be a reserve update coming out of here probably in the next quarter for Cote.

What we've done is we brought in a different modeler, specifically a modeler that we know approaches things more conservatively than the earlier model, and it provided a lot of validation for us because it's just demonstrated the robustness of the Cote resource.

So from a resource risk point of view, I'm really comfortable with where Cote is at.

We mentioned the IBA we signed with the First Nation partners, and that, again, removes one other opportunity for issues.

We've advanced a lot of the permitting work, and we've really gone back -- we listened to some of the commentary based on the original feasibility study.

We've gone back and validated a lot of our cost models, both for the plant, mill operating costs, mine operating costs, G&A and completely revalidated them and checked them and explained -- internally, we've explained what we see as differences from maybe some other peer projects.

And we're very, very comfortable with the numbers that we have in our pocket right now.

So we've been paddling pretty hard below the surface over the past year with the engineering team there.

And the best description for me is we've just really narrowed the goalposts, which reduces the opportunity for extreme variability as we go forward with the project.

Okay.

So you're still planning to use HPGRs and then also selective -- like stockpiling lower-grade material and processing that later in the mine life?

Yes.

And to test that, we've done some really tight space drilling in a few areas and done a lot of conditional simulation as to how that will work and what our opportunities for success are to do that engineered cutoff grade sort of plan going forward.

If you have about 5 days, I can go through it with you.

But the upshot of it is we're very comfortable that we'll be able to achieve the higher grades at the higher cutoffs in the earlier years given the geometry and the grade distribution in that deposit.

All right.

And then the other question I had was -- I'm just flicking through this report right now, and I'm noticing, though, use the phrase upstream slopes on the dams.

And so that's not an upstream dam or a tailings dam, is it?

That is -- it's still all downstream, right?

It's all downstream.

Yes.

And then are you comfortable with -- one of the things that I was looking at with Cote, when -- before this technical part came out was that the total capital for the tailings dam, it seems a little on the light side.

Is that something that you've also taken a look at it?

And what's your initial opinions on it?

Yes.

I mean we've completely reviewed all of those costs, and we're not uncomfortable with the cost on the tailings dam.

We have modified -- in our early internal models, we've modified the mining cost upward.

So that does have some sort of -- some knock-on effects on the cost of [dams] because a lot of the sources, the bulk fill is coming out of the pit.

So you do get a bit of a knock on there.

But they're not significant numbers, and we like where we're at.

We've also done a lot of work -- and I probably should have mentioned it earlier.

We did some pretty comprehensive geotechnical studies in and around the tailing storage facility to make sure that we understand the foundation conditions there, and likewise, a lot of geotechnical work at the plant site.

Again, just trying to confirm where we're at and also groundwater inflow and wall stability studies in the pits.

So quite a bit of geotechnical work has advanced our understanding there.

All right.

And then, I guess, one last question on that.

So if -- in your mind, if you get the Board's approval on the construction time frame that you would like, where -- when would you see Cote potentially being put into production?

We're currently working with about a 34-month construction and commissioning schedule.

Our next question comes from Mike Jalonen of Bank of America.

Just had a question on your strategy.

You mentioned you'll have clarity on the company's strategy in the next few months.

But as you know, there's been a lot of CEO transition in the sector recently.

And it's always interesting to see what new CEOs, what their strategy going forward is.

Like for example, Paul Brink of Franco-Nevada, says there'll be no change in the Franco-Nevada strategy given that it has worked, and as evidenced by the share price.

Keeps hitting new highs every day.

And IAMGOLD share price the past year despite hitting many milestones has been flat.

So if you're going to BMO next week, you probably have 40 one-on-one meetings.

Investors are going to want to know what steps you're going to take to get a higher share price at IAMGOLD, which has lagged the peers.

So just wondering if you can give me any guidance there.

Well, I think the first one is to pick a step strategy, be very transparent as to what our rationale is behind that strategy and what we're looking to achieve.

On an operational level, we're going to continue to make sure that the operations execute.

We've been very conservative in our guidance numbers on purpose, and that's the strategy that I want to pursue going forward.

At the operations themselves, there are opportunities.

But as I said earlier, they are getting older.

But we need those operations to perform very well.

We continue to do a lot of work with our communities and making sure that the operating environment we're working in at all of our operations is conducive to those operations, having the space to produce what they need to produce.

So it's making sure those operations are doing well.

And then, as I said, speaking with Anita is, let's find out which horse we're going to pick here.

And whichever one we pick, we're going to be very, very focused on making sure we execute that as we've been able to do with our other development projects.

We did it with Essakane.

We did it with the Essakane expansion.

We've had 4 expansions at Rosebel.

These open pit projects are really in our wheelhouse, and we want to continue to demonstrate that we know how to build projects.

We've done it in the past, and we'll do it well in the future.

But that will be the focus.

When you talk at a high level, what I'm -- the message to the shareholders, we're building long-term value.

We've done such a good job, Craig and his team of bringing additional reserves and resources into the portfolio here that as I look at ourselves compared to maybe some of the peers, we have a huge opportunity to be a truly long life company at a -- I don't want to say an enormous production level, but certainly a higher production level than we're at now and sustain that into the future.

And we don't have enough time here for Craig to go into all the other stuff that's coming in behind the ones he's already been talking about.

Okay.

I guess one thing you haven't mentioned at all is M&A.

It's just, a number of your peers were the same production size as yourself and now they're over 1 million ounces, and I wonder if small or mid-tier is kind of getting left behind.

So just wondering what you thought of that.

You always keep an eye on it.

And when talking with Steve, there is an issue of relevance.

Obviously, M&A has to be done at the right price with the right partner.

You don't stop looking at it.

I think if we execute on our growth projects here in the next 2 or 3 years, and we're in a strong -- much stronger position than we are now, it positions us on the other side of the table in M&A discussions, moving out from there.

When we build Cote and Boto, and we see some of the expansion at Saramacca, we ramp up Westwood, we've got a lot of really nice long life cash flowing projects into the future that really sets us up, I think, in somewhat of a distinct position versus a number of our peers.

It's going to be a great place to be talking about M&A.

The other thing we keep having the discussions at is gold price is up.

We need to start looking at other ways to generate some returns for the shareholders.

Our next question comes from Mike Parkin of National Bank Financial.

Back on Cote.

I was kind of wondering where we could expect the advancement on the engineered rate over the course of this year.

Where would you kind of expect it to kind of be at the end of Q1 and Q2?

And if you were to make a decision on it, what would you kind of want to see that rate at, a percent completion that is, before moving ahead?

Yes.

Yes.

No.

Great question, Mike.

We actually had a meeting last week with the project team.

The actual number currently, I think, is 51.2%.

We're adding about 2.2% per month right now.

Most projects that you execute on when you launch your construction decision, you're at about 10% detailed engineering.

So we're well, well beyond that, and we'd be comfortable going forward at any time based on where we're at.

One of our challenges is without actually kicking off the project and entering into final contracts on some of the equipment, it will get to a point where we can't actually advance it without actually getting the field information.

That last bit of detailed information actually really depends on information coming back from the field during the construction process.

So it's tough to get more than about, I don't know, 60%, 65% without actually starting construction.

Our next question comes from Tanya Jakusconek of Scotiabank.

Gord, maybe just coming back on your strategic outlook.

Is it safe to assume that both of these projects, Cote and Boto, are shovel-ready to go?

They meet your internal rates of returns from an economic standpoint?

When you do make that decision 3 to 4 months out, is it safe to assume that it's one or the other?

Or is -- or are you thinking maybe to pull the trigger on both?

I mean everybody who knows me, I'm a huge optimist, and I would love to do both.

But I know I would be the shortest-lived tenure as a CEO, I think, if I tried to do that.

So it will be one or the other in staged format with the second one nominally scheduled to start as the first one is getting well up the completion curve.

I would love to be tossing them both together, but we're not going to do that.

It will be one or the other.

Okay.

And then maybe what we haven't touched on is the Saramacca underground.

Can you talk a little bit about where that study is?

And conceptually, as we -- as you look at this underground, any information or insights you can give on sort of what you reported in the reserve base, I think, it's about 1 million ounces?

Like, how much of that is the underground?

Where do you conceptually see the strip ratio going?

So any information you can give on timing and more details on that.

So it's a good question, and I want to avoid getting too offsite on disclosure.

So I would describe the study right now as being completed through conceptual design, and in some ways, getting close to the sort of pre-feasibility level of design.

We've done a lot of work on portal and ramp access and how much that would cost.

We've got budgetary quotes from contractors because we really understand that first part is important.

As we looked at it within our production and as we looked at it within our self-funding envelope and using a conservative gold price for Rosebel in our planning exercise, we planned this year at $1350 for the 5-year plan.

Under those conditions and staying true to our mantra of self-funding, although the project is good from an overall return point of view, it did impair our near-term self-funding because we would be spending some additional capital in the near term to execute on that underground concept.

To my eye, it's something that should happen.

We will be revisiting that now, obviously, looking at current gold prices and what our cash flow looks like and what we're able to achieve.

It gives us an opportunity to relook at it.

You're talking probably a 2.5-, 3-year development period before you could deliver.

The current reserve does not assume any underground ore.

We would need to relook at our reserves.

It would allow you, on the current pit design, probably to take your stripping rate, I think the stripping rate in the 43-101 was around 11:1.

When you do the trade-off, you'd probably come back somewhere on an overall basis around 7 -- 6 or 7:1 for that pit.

So you remove the pit-able reserves.

You take out some of the lower-grade stuff below that smaller pit, now doesn't make reserve grade using underground costs.

But quite nicely, you can extend, obviously, underground to much greater depth so you can access parts of the ore body that the pit would never access.

So there's some trade-offs there.

We have really nice coherent zones.

I want to say 20, in some areas, even 30 meters width of plus 3-gram material over strike lengths of 200 meters, in a few areas, 200, 300 meters.

So it's a very attractive block.

We are -- we have hit a few small graphitic zones as we've gone down.

So we're -- we want to circle back with the metallurgists -- we're in the process of going back through the metallurgical work just to make sure we don't get under there and find something that doesn't actually work.

But that's -- in my mind right now, that's moved into the lower risk category.

So I'm less worried about that.

The next steps for us, at some point, this is probably -- it's an investment decision you'd make before at least to drive the access portal.

That's something you do as part of the study work.

It's so much easier to drill this deposit off from underground, and hitting those kind of targets from surface is a pain in the ass and costs a lot of money, and it's slow.

So I think once we get to a threshold point on rate of return, we can show a 20%-plus rate of return, something of that nature.

If we're comfortable with our cash flow -- with our cash position and our balance sheet strength and our self-funding model, we could move -- we could start to move towards executing on that project sooner rather than later.

So when is the study going to come out for us in terms of public information?

I need to revisit that.

I'll come back.

And I think at the next meeting, we will make a bit of a declaration.

We originally were hoping to get something out this year.

As we pulled back from a project to satisfy our self-funding requirements.

We had pushed that out.

But obviously, it's worthwhile revisiting here as part of our overall strategic review.

Okay.

So is it safe to assume that this has sort of pulled back versus Cote and Boto being more advanced and more ready to make a decision on those?

Yes.

Yes.

I mean it really is a different class of project.

You're talking around a much more modest level of investment required, and it really would be a completely different group that would be involved with it.

So they're not mutually exclusive.

That being said, obviously, if we move to one of these big projects, or if and when we move to one of those big projects, the corporate focus will be on that.

Our next question comes from Carey MacRury of Canaccord Genuity.

I just had a question on -- in the release, it talks about the guidance incorporating factors related to negative grade reconciliation at Rosebel and Saramacca.

Just wondering if you could provide a little bit of color on that.

So Rosebel, we haven't seen negative reconciliation issues at Saramacca at all.

Saramacca is, geologically, is quite a bit of a different beast, and we're not expecting to see those issues.

At Rosebel itself, certainly, in the past year and as the mine gets more mature and we get into deeper and deeper pushbacks.

And accessing more distal parts of the orebodies, it's a little more challenging to drill off and model and understand.

Rosebel historically has been a real bugger to model, and reconciliation is perennially a challenge.

Historically, we see somewhat modest negative grade reconciliation but a huge positive tonnage reconciliation at Rosebel.

The past couple of quarters, we've seen some -- a little higher negative grade reconciliation than we've seen historically.

We put a SWAT team on it.

We're going back and looking at our mining practices and trying to understand exactly what the best way to approach it.

So in my mind, it's a combination of, one, just the challenge to model this deposit at any kind of drill spacing.

We're -- we've approved for the budget this year an enhanced RC drilling program that will really help us with modeling in the -- sort of in the midterm and help us sort of maybe smooth over some of those challenges along the way.

None of this is nothing we haven't seen before, but we're jumping on it now.

I mean, anecdotally, I saw positive grade reconciliation for January.

So Rosebel is one where you can never let off -- never let the hammer off.

What sort of magnitude would you be seeing on the grade, just for the curiosity?

We don't -- normally, I think the negative reconciliation for Q4 was in the neighborhood of minus 15% on grade and plus 25%, something like that, on tonnes.

Total gold is there, but obviously, it creates a different cost model for you if it's at those kind of lower grades.

This concludes time allocated for questions on today's call.

I will now hand the call back over to Indi Gopinathan for any closing remarks.

Thank you very much and thanks very much for -- to everyone for joining us this morning and for your continued interest in IAMGOLD.

We look forward to having you join us again for our first quarter 2020 conference call in May.

Goodbye.

This concludes today's conference call.

You may disconnect your lines.

Thank you for participating, and have a pleasant day.