IAMGOLD Corp (IAG) 2020 Q2 法說會逐字稿

Thank you for standing by.

This is the conference operator.

Welcome to the IAMGOLD Second Quarter 2020 Operating and Financial Results Conference Call and Webcast.

As a reminder, all participants are in listen-only mode 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, Claudia.

And welcome everyone to the IAMGOLD second quarter conference call for 2020.

Joining me today on the call are Gordon Stothart, President and Chief Executive Officer; Carol Banducci, Executive Vice President and Chief Financial Officer; Bruno Lemelin, Senior Vice President, Operations and Projects; Craig MacDougall, Senior Vice President, Exploration; and Jeffery Snow, Senior Vice President, Business Development and General Counsel.

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

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

With respect to the technical information to be discussed, please refer to the technical information and qualified persons slide.

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

I will now turn the call over to our President and CEO, Gordon Stothart.

Well, thank you, Indi and good morning, everyone, and thank you for joining us.

So last night, we issued solid operating results for the second quarter of 2020 demonstrating strong operating cash flows on increased margins, and further improvement to our already strong balance sheet.

Subsequent to the quarter, we announced our decision to go forward with the construction of Cote, a transformational growth project.

And like all of you, we've been adapting to our new normal with COVID-19 changing the way we work and for some, where we work.

We will provide an update on our activities with respect to COVID-19 in a minute.

Finally, we are providing updated guidance for the year taking into account the suspension of operations at Rosebel, and the resumption of capital sustaining expenditures.

Before I move on to the next slide, I wanted to note here that last night we also announced the retirement of 2 key members of our executive leadership team.

After 13 years with the company, Carol Banducci has advised us of her intention to retire from IAMGOLD on March 31, 2021.

Carol has steadfastly seen the company through a bull market, a bear market, and several transitions.

Her disciplined approach to financial management is the reason we have the balance sheet we have today.

And her success in building an outstanding finance and accounting team has positioned the company exceptionally well today through both challenges and opportunities.

I certainly wish her all the best in retirement and look forward to our continued work together over the next several months.

In addition, Jeff Snow will be retiring from the company, effective August 31, 2020.

Jeff has had a storied 39-year career at the intersection of law and mining, and we will miss his wise counsel and wish him all the best in his well-deserved retirement.

These are both big changes for the company.

And certainly, personally, I certainly enjoyed working with Carol since I came to IAMGOLD 12 years ago.

And we've gone through a lot of battles together and she's been a great teammate.

I started working with Jeff, I think in the early 1990s at Noranda head office in Toronto, and he's a -- I count him certainly amongst my friends and certainly a valued colleague.

The second quarter was really about learning to live in a time of COVID-19.

At the end of the first quarter, we proactively implemented a multifaceted response, including screening, physical distancing, and personal protective equipment and professional personnel policies.

In the second quarter, we were able to re-change shifts at Essakane flowing the lifting of the local administrative quarantine.

Westwood came back online in mid-April, following a placement in care and maintenance in accordance with provincial directors.

And as you know, we experienced COVID-19 cases at the Rosebel site, as we saw outbreaks in the region and notably Brazil.

Fortunately, the cases at Rosebel are now largely resolved.

We'll continue to work to enhance protocols and further expand camp facilities to support social distancing, as is the case at Rosebel.

One of the more unique approaches at Essakane, where we’ve been using drones, equipped with loudspeakers, to raise awareness of the coronavirus and our protocols to help ensure compliance, and of course, we have also considered COVID-19 protocols in planning our construction activities for Cote.

From a community engagement perspective, I'd like to share a couple of stories.

In May, the female employees of Essakane made a symbolic in-kind donation to the vulnerable communities surrounding Ouagadougou, the capital city of Burkina Faso, worth 2 million French francs or West African francs approximately CAD 4,700.

This contribution was the result of a fundraiser they initiated at the mine.

The donation was made through the Association Femme en Marche, FEM and included 50 bags of rice, 50 cans of oil, sugar, and soap for 55 households in the Ouagadougou region.

In Suriname, entrepreneurs from the community of Marshall Creek, located near the mine site, have been engaged to supply 1,000 non-medical mouth caps or masks for Rosebel.

This follows on 2019 community initiative led by the Community Relations Department to help develop marketable skills and experience.

IAMGOLD is committed to achieving high standards in environmental, social and governance practices with -- which reflect our long held zero-harm vision.

IAMGOLD donations to local communities in response to the global COVID-19 crisis include cleaning equipment and supplies, hand washing stands, and hand sanitizing gel for the communities, medical protection equipment including masks, gloves, et cetera, as well as life support equipment such as ventilators and hospital beds.

As we know, this equipment is essential in the fight against COVID-19 and is in very short supply in all countries, and especially in developing nations.

IAMGOLD and our employees across the globe are proud to highlight, through these donations, our true and lasting partnerships with the governments, as well as our deep commitment to these countries and their populations.

Following the suspension of operations at Rosebel, we reviewed our 2020 guidance.

As a result of this view, we've lowered our 2020 guidance for Rosebel to the range of 210,000 to 230,000 ounces.

This change shifts attributable guidance for the company down to the range of 645,000 to 700,000 ounces for 2020.

With this change to attributable reduction, we have adjusted cost guidance as follows: Cost of sales between $900 and $1,030 per ounce sold.

Total cash costs of $940 to $980 per ounce produced, and all-in sustaining costs of between $1,195 and $1,245 per ounce sold.

I would note here that all-in sustaining costs in the third quarter of this year are expected to be higher than the second quarter due to the resumption of sustaining capital programs with similar production levels.

In addition, costs are expected to be higher in the third quarter as compared to the second quarter due to additional COVID-19 related expenditures.

Our outlook for capital expenditures has also been adjusted.

At Essakane, a reduction of non-sustaining capital to $65 million from an original $80 million due to lower level of capitalized stripping and timing of spends.

At Rosebel, a decrease of $10 million of sustaining capital, which reflects the delay caused by the suspension, as well as a $15 million decrease in non-sustaining capital due to the delay of capitalized stripping work, again due to the suspension.

At Westwood, an adjustment in non-sustaining capital to $18 million from $15 million on additional development work.

At Cote, our development capital expenditures for 2020 are $77 million, increased from $45 million earlier and reflecting early works on construction.

At Boto, planned expenditures in 2020 remain the same $25 million.

In total, these adjustments comprise a net decrease of $10 million in sustaining capital, and a net increase of $5 million in non-sustaining capital.

Total capital spend in 2020 is planned at $340 million, a net decrease of $5 million.

While our 2021 guidance remains unchanged, we note that this continues to be under review, given the current global uncertainty with respect to the spread of COVID-19 and the effect it may have on the company's operations.

Following the major significant catalyst, which was our decision to proceed with Cote construction, in addition to the recent filing of an NI 43-101 report for Westwood, along with reaffirmed production guidance, originally released in 2019, we see the following catalysts for the balance of 2020.

At Rosebel, we resumed long hauling Saramacca ore, and worked to complete the road.

We expect to be at the target run rate for Saramacca later in the year.

The mill optimization project at Essakane, aimed at increasing throughput by about 10%, is ongoing.

And we hope to get that online towards the end of the year or in early 2021.

We continue to de-risk Boto with investment in local infrastructure.

And in exploration, we are working on further resource delineation at various projects, including Nelligan, the Rouyn project, and the recently acquired sale property in Quebec, Gosselin at Cote, and the new Karita discovery in Guinea.

2021, we expect to see Westwood continue to expand production with supplemental feed from the Grand Duc open pit.

We also see Rosebel production ramping up with Saramacca online for the full-year and for an optimized Essakane mill to demonstrate increased throughput.

In addition, the Cote work plan is focused on major earthworks, while we continue to de-risk Boto.

And on that note, I will now pass it on to -- over to Carol, to review our financial results.

Carol, I think you’re on mute.

Thanks, Gord.

Listen, I’m going to go off script a little bit here.

And I just want to thank Gord for those kind words he said earlier.

I think it's very much a personal decision to retire.

And I'm confident that under Gord’s strong leadership that we have a strong path to transforming this company.

We have a great company, we have great people, and we have a great future.

So, with that, again, good morning, everybody.

And turning to the second quarter, the company continues the trend of strong gold margins in the second quarter, with strong operating cash flows.

The quarter also presented opportunities to execute favorable input cost hedges on both currency and fuel exposures for Cote.

With the development of Cote, IAMGOLD will become a growing diversified Canadian company generating superior returns, while prudently managing risk.

To achieve this transformational strategy, and in order to mitigate gold price exposure and revenue risks over the construction periods, the company intends, under appropriate conditions, to hedge 15% to 20% of its total gold production between 2021 and mid-2023 through a combination of options and our callers.

Following our construction decision announcement on Cote, credit agencies, S&P and Moody's reaffirmed IAMGOLD’s stable outlook.

We continue to prudently manage our balance sheet with cash, cash equivalents, short-term investments and restricted cash of $866 million at the end of the quarter and our virtually undrawn credit facility of $500 million.

As Gord mentioned, COVID-19 did impact us in different ways in the quarter.

Working capital was higher due to our intentional increase in supplies inventory, as well as the buildup of finished goods due to timing of shipments and the higher cost of inventory.

We expect depreciation expense in 2020 to be in the range of $245 million to $255 million, down $5 million from the previous guidance.

Our cash taxes guidance remains unchanged at $30 million to $45 million.

Revenues in the second quarter were $284.6 million due to strong gold prices, while cost of sales were lower compared to the same prior year period in the prior quarter.

The adjusted net earnings for the quarter was $20.1 million or $0.04 per share.

Net cash from operating activities before changes in working capital totaled $79 million.

Following the strength in gold prices, our prudent management of the balance sheet; our liquidity, excluding restricted cash and including $500 million credit facility, totals over $1.3 billion.

Our $400 million in senior notes are not due until 2025.

The next slide highlights the strength of our financial position relative to our peer group of gold producers.

And as you can see, we continue to be in a net cash position with peer-leading liquidity.

I will now pass the call over to Bruno, to discuss operations.

Thank you, Carol.

On Slide 17, we are committed to the health and safety of our employees and especially so during this time of the global COVID-19 crisis.

In the second quarter of 2020, we achieved not only better than target on the DART rate, which stands for days a week restricted or transfer duties of 0.11.

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

This slide summarizes our results for the quarter, with total consolidated attributable production of 155,000 ounces.

Cost of sales of $1,030 per ounce sold; total cash costs of $935, an ounce produced; and all-in sustaining costs were $1,189 per ounce sold for the second quarter.

I will now review each operation in turn.

At Essakane, attributable gold production for the second quarter was 83,000 ounces.

We mined higher grade zones in the quarter, but also completed less capitalized waste stripping.

All-in sustaining costs were $1,123 for the quarter.

By the lifting of the local administrative quarantine during the quarter, we experienced improved productivity.

We were able to proceed with a crew change.

The prior shift was particularly long, as some employees were on-site for almost 2 months.

For the balance of 2020, we are expecting some graphitic ore, which typically negatively impacts recoveries.

We anticipate, as well, the mill optimization project to be delivered late this year or early next.

In addition, on the exploration front, drilling at Tassiri is completed, and we are compiling these results to assess resource potential.

We continue to be vigilant with respect to COVID-19, with enhanced protocols in place to protect our workforce from the coronavirus.

In these pictures, we highlight some of the sanitation measures implemented at site, including frequent cleaning and disinfection, convenient hand washing stations, set up of isolation zones, and a drone equipped with speakers to communicate awareness of protocols.

At Rosebel, attributable gold production for the second quarter was 52,000 ounces, largely impacted by the mid-June suspension of operations.

All-in sustaining costs were $1,150 for the quarter.

The COVID-19 cases we experience on site are largely resolved, with a limited number of active cases remaining, which are quarantined off site.

Operations resumed on July 24, and we are processing stockpiles and high grade materials from Saramacca.

Going forward, we expect slightly weaker third quarter production output for Rosebel, mainly due to the suspension of the operation on -- until July 24.

We have moved to 1 person only per room that is the same person day and night, which constrains the number of employees we can have on site.

This in turns means that we will need to expand facilities to attain our pre-suspension run rate, which we hope to achieve by the fourth quarter.

Q4 is further expected to be supported by higher grade ore coming from Saramacca.

From a health and safety perspective, we included a couple of pictures from Rosebel highlighting our enhanced physical distancing protocols in the lunchrooms and maintenance shop configuration.

Slide 21 highlights a number of pictures showing our progress at Saramacca.

On the left is the Mindrinetti Bridge, which is now complete.

On the right is the infrastructure in progress at the Saramacca site.

Westwood resumed mining in mid-April, producing 20,000 ounces in the second quarter of 2020, at all-in sustaining costs of $1,133 per ounce sold.

We just filed our National Instrument 43-101 Technical Report for Westwood, which outlines a safe, profitable and long-life mine, and we reaffirm longer-term production guidance originally disclosed in December 2019.

While reserve ounces declined by 48%, overall resources, including reserves increased slightly, as it is typical for under underground mines, our guidance includes resource ounces conducted during our planned development, and it is based on our historic operational experience.

We've included a few pictures here of our general manager meetings at this one, reflecting physical distancing protocols.

Just a couple of weeks ago, we made a momentous decision to proceed with the construction of the Cote Gold Project.

We believe in Cote because of the transformational value it brings to IAMGOLD and to all of our stakeholders.

This Canadian project expands our production profile, brings greater geographic diversity to the company, and lowers our overall cost profile.

Cote is well advanced even as we made the decision to construct.

With key permits and approvals in hand, strong stakeholder relationships with our joint venture partner Sumitomo, as well as indigenous communities Flying Post in Mattagami and of course, our Northern communities, but Cote has significant district potential with the Gosselin and Young Shannon discoveries.

We note here Cote is highly levered to the gold price.

In fact, at today's gold price of $2,000 per ounce, the project's net present value at a 5% discount rate is $2.8 billion, with an internal rate of return of 27.6%.

On this slide, we include pictures we shared a couple of weeks ago, our Chester construction camps, which can house 264 people, and a view of the tree clearing completed earlier this year.

I will now turn the call over to Craig, to discuss exploration.

Thanks, Bruno and good morning, everyone.

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

In 2020, our planned exploration spend was $52 million excluding project development activities and studies, and will involve the completion of approximately 190,000 to 210,000 meters of diamond and reverse circulation drilling to support resource development programs and exploration target evaluation.

Although we are maintaining our outlook on our exploration program, we continue to reassess the impacts of the COVID-19 crisis going forward, and we'll adjust accordingly.

As we have said before, industry reserves have been on a steady decline since 2012.

IAMGOLD has been working hard to differentiate ourselves from this industry trend.

Beyond just replacing reserve balances depleted from mine production, we have also achieved a significant increase in reserves over that time.

In 2016, we have not only replaced every ounce mined, but also added over 8 million ounces; more than doubling our reserve base.

This is the result of a sustained commitment to exploration through the cycle, and the tireless efforts of our exploration and mine geology teams.

We believe this is a significant competitive advantage for IAMGOLD and for our future.

During the quarter, we announced further infill diamond drilling results from the Rouyn Gold Project as we work to delineate maiden resources at the Lac Gamble zone, which we feel may have potential to provide satellite feed to our Westwood operation.

Highlights include 9.8 meters, grading 27.8 grams per tonne gold, which included 4.4 meters grading 58.4 grams per tonne gold, and another hole with 9.8 meters grading 10.4 grams per tonne gold, which included a 3 meter interval grading 22.8 grams per tonne gold.

This; along with the announced acquisition of the Fayolle project, some 35 kilometers from Westwood; continues to build on our Hub-and-Spoke model in the region, centered on the Westwood operation.

Still in Quebec you will remember we announced a maiden mineral resource estimate that the Nelligan Gold Project in the fourth quarter of 2019 with resources on 100% basis totaling 3.2 million ounces in an inferred category at a grade of 1.02 grams per tonne gold.

In 2020, we completed nearly 5,000 meters of diamond drilling before activities were temporarily suspended due to the COVID-19 crisis.

This program was designed to infill the deposits to improve confidence in the resource model, as well as tests for extensions of mineralization beyond the existing resources.

Initial results reported during the quarter include 27 meters grading 2.86 grams per tonne gold and 25 meters grading 1.87 grams per tonne gold, both from infill intersections.

As well, we reported a 10.5 meter intersection grading 10.5 grams per tonne gold, which included 1.5 meters grading 69.1 grams per tonne gold, and this from a step up [hole]outside of the existing resources.

Although we no longer have the advantage of the winter access for which this property is well suited, the summer drilling program has been designed and has commenced, which will continue to advance the objectives of this program.

At the nearby Monster Lake Project, located 15 kilometers north of the Nelligan Project drilling activities also resumed during the quarter, completing an additional 1,400 meters of diamond drilling.

The program focused on testing the Annie Shear Zone in an effort to extend the mineralization intersected during 2019.

Assay results from this work will be reported once received, validated, and compiled.

Although our drilling program to evaluate the resource potential at our new Gosselin discovery, located 1.5 kilometers northeast of the Cote gold deposit, was also suspended before completion, as a result of the COVID crisis, ore logging and sampling on the holes that were completed is well advanced, and we expect new results shortly.

Remainder of this program is being redesigned utilizing a [bird] supported drilling program, which should commence in August.

In West Africa, exploration activities continued during the quarter, focused on resource conversion and refinement of the reserve model at the Boto Gold Projects in Senegal, as well as testing for extensions to the Diakha deposit located to the south in Mali, and exploring selected high priority targets within 20 kilometer radius of that deposit.

Taking into consideration the current favorable gold price environment, you can certainly see the meaningful impact it has on Boto Project economics on a standalone basis.

Building on our exploration success along this portion of the Senegal-Mali Shear Zone, with several discoveries located within 15 kilometers of the Boto Gold Project in adjacent countries.

The company has initiated a strategic concept study referred to as the Bambouk Gold Complex to advance resource evaluation and delineation programs at Diakha and the Karita projects, which will support the evaluation of various potential development scenarios and identify regional synergies.

Driven by increase in gold prices, competition for, and access to quality exploration projects is challenging for the industry.

IAMGOLD has developed and continues to invest in a healthy pipeline of early, to advanced greenfield exploration projects to support our future growth, as well as support near mine brownfield exploration with a view to lengthen mine life, leverage our existing infrastructure.

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

Thanks very much Craig.

So, from a strategic perspective, Q2 2020 was really a milestone quarter for the company with the announcement of Cote moving forward.

We remain focused on lowering our consolidated cost profile to improve margins and cash flow, increasing our gold production, increasing our operational flexibility, enhancing the geographic diversity of our overall portfolio, and of course, improving returns to shareholders.

To best achieve this, we believe we need to achieve self-funding at each of our existing operations to ensure exploration activities, corporate functions and financing obligations in aggregate are not a burden on our balance sheet; sequence development of our organic growth pipeline starting with the construction of Cote and continued de-risking of Boto.

We will also be planning for an exciting future with the advanced of our rich district brownfield and greenfield operation exploration prospects, which include Gosselin, Karita and Diakha-Siribaya along with Boto in the Bambouk district in West Africa, Nelligan, Monster Lake in Northeastern Quebec, along the Saramacca Brokolonko trend in Suriname, and our Westwood Hub-and-Spoke model in the Abitibi.

Importantly, this all needs to be accomplished while continuing to be leaders in ESG performance, through relentless pursuit of our zero harm vision.

We continue to guide our efforts in accordance with our vision to be the global leader in creating superior value for our stakeholders through accountable mining, supported by our experienced team of technical, operational and financial professionals.

Thank you for joining us today and I will now pass the call over to the operator.

Thank you.

We will now begin the question-and-answer session.

(Operator Instructions) Our first question is from Fahad Tariq with Credit Suisse.

Maybe first on Saramacca, can you remind us what construction is left for this year and whether the lower growth CapEx guidance for this year, does that mean there's some spillover of CapEx into 2021?

Maybe if you can just give some context on what's left to do at Saramacca and what the CapEx could look like for next year?

Bruno, can you address that, please?

Yes, certainly.

Hello, Fahad.

So, the infrastructure that remains to be built is a water tank, a maintenance shop, and some offices and the rest is just finalizing the paving of the road with the final framework and that's it.

So, we don't expect to have much capital to be expended into 2021, as we speak right now.

And just 1 other question on Westwood, I know you reaffirmed the longer-term guidance, but the reserves decline, and how should we be thinking about the mine life now, at Westwood?

So, we still expect mine life beyond 2030, and as we guided on December 2019, we’re doing a slow ramp-up from 100,000 ounces to 125,000 and then to try to get to a run rate 130,000 to 145,000 gold ounces.

And we're pretty confident the target is to try to convert back resources and to resolve by adding a building in at Westwood in the North Corridor and in the zone 2 over the next few years.

And so, we can upgrade and improve resources to indicated measures and then finalizing the mining plan so they can be put into reserve.

And also, we have adjusted our reserve according to our ground condition by adding geotechnical risk adjustment factor and also in changing the dilution and recovery factors associated to our new, let's say, mining philosophy.

However, we're going to continue to work around these sectors to improve our extraction strategy.

So we can put some of those answers back into the reserves.

So, when you look at it, all-in-all, with the resource base that we have and the conversion factor that we've had in the past, also looking also at the reconciliation history that we had from reserves to the mill, we are quite confident about our guidance that I just described and to go beyond 2030.

Our next question is from Josh Wilson with RBC Capital Markets.

First question on Westwood, just trying to understand what mining cost assumptions we should be incorporating longer-term?

I did notice that the technical report had a mining cost for the mine plan of around CAD 224, but the cut-off for reserves was about $50 lower in the 170 range?

Bruno, can you speak to that?

Yes.

So, for the -- we made -- I'm just trying to find the difference between, just give me 1 second.

Sure.

I can then give you back the answer you (inaudible) grade calculation, and then maybe what I'll do is, I'll come back with you with extra mining costs and because we have to transform the projects in Westwood.

And also we have to cut-off grade mining cost, so I want to make sure that the difference between the 2. So I’ll come back with you when I have it.

Okay.

And on the capital side, so the CapEx is $200 million-ish is for the current reserve base.

Should we be assuming a similar amount of capital for reserves that will be added?

Or is there a lot more development that's required for the current reserve base that's been defined?

That's for --

For Westwood.

Okay, sorry.

Yes.

So in fact, we’re going to continue to keep developing Westwood so associated to it, you have the lateral development recall and other mining infrastructure that needs to be associated to this when you want to model the additional answers for that.

And then, last question is related to Westwood, the shaft at one point that has been discussed historically, I don't believe that's incorporated for the current reserves.

Is that still part of the plan longer-term?

Or is that needed to access reserves that you would project out to that 2020 - 2030 plus timeline?

Right now, we believe that the main access is sufficient as we speak, and again, we -- what we need to do, as we speak, is to further investigate the lower and the eastern side of the mine.

And then, we'll be able to develop a mine plan and access associated with.

Okay.

And then…

Sorry, Josh.

As we've looked at it, because of the depth of the deposit, the shaft is starting to become a long ways at the bottom end from the deposit.

So we've evaluated putting a wins in, we've looked at some declines.

And we're sort of going through that analysis now.

Either one of those solutions still supports the declaration of resources.

Obviously, as we get into reserves, we'll need to crystallize the current plan, the final plan, sorry.

And then 1 final question.

Sorry, I'm plugging a lot of air time here.

For Saramacca, at one point there was a discussion about coming out with an underground study, which would have been, I guess, most beneficial early in the mine life to reduce some of the upfront stripping.

Is that currently the plan?

Or should we expect the study on that, upcoming?

Right now, we're still figuring out the best option whether to pursue with the open pits at the current price environmental versus the underground.

We keep -- we still have some investigation to do for the underground to further understand the true value of this option.

So, right now as we speak, it's still conceptual and we're still assessing our options that we have and whether to continue thinking with the open pit or converting it to the underground potential.

But as we speak right now, it's too soon to tell.

Our next question is from Jackie Przybylowski with BMO Capital Markets.

I guess I'll start off, I noticed in the release last night; you didn't talk too much about the Sadiola sale.

It was previously forecasted, I guess, to be completed around the end of April.

So, I was wondering if you could give us an update on that.

I'm guessing there's some delays due to COVID.

Do you have any idea when that might close?

So Jackie, yes, you're entirely correct.

We have seen some delays due to COVID.

Most, if everything, has been inked up.

There is a little bit of political machinations going on in Mali right now, not with respect to Sadiola, but more just with respect to the overall politics in Mali and figuring out the path forward for the government.

Everything is signed up and ready to go.

We're just -- really just waiting for a new cabinet to be formed and a new mines minister and finance minister to be put in place.

We anticipate that, that may add a little bit of additional time as the new ministers familiarize themselves with the file.

But from a bureaucratic point of view, and certainly from a business point of view, between ourselves and AngloGold Ashanti and Allied, everything is ready to go.

So, we're just waiting on finalization right now.

And maybe if I could just ask a different question on Rosebel, you lowered the guidance and a lot of that looks like it's due to Rosebel.

I understand that there is a strike and that you've got productivity hits from the social distancing.

Can you quantify how much of the guidance revision, so 40,000 ounce guidance revision, how much of that is due to the strike, and how much of that is due to the going forward productivity hitch?

And I guess the question being like, would you expect some productivity hits similarly to affect 2021 as well?

I mean, I'll let Bruno answer.

I've been -- from my perspective about 80% to 90% of it is due to the suspension.

There are some productivity hits in the near term, although we are seeing better grades for the remainder of the year.

So, we are able to compensate some of that.

But it's almost a direct one-to-one, the change in guidance with respect to Rosebel being the suspension period.

That's the amount of production we would have had out of Rosebel.

As we look to 2021, we're not anticipating any further productivity impacts.

We have a plan in place to get back to our full complement of manpower through some additional camp construction.

And once we're at full manpower, we'll see full productivity.

I don't know if you'd want to add anything else, Bruno?

That's correct, Gord.

About 90% of the answers are coming from the suspension of the operation and the rest is just the ramp up to our original run rate.

Our next question is from Michael Parkin with National Bank.

Most of my questions were answered, just 1 housekeeping one.

The cash taxes guidance, what gold price is that based off of?

It’s 1,500 Mike.

And just a little bit on Westwood, with the change here, is there any additional labor changes?

Like I know, you've made some changes recently, and we're seeing U.S. dollar operating costs come down.

Just trying to get a sense of like, what we could expect going forward with the lower mining rates?

Is that going to call for, you know, further reduction in manpower?

Bruno?

Yes.

So, we don't expect any further decrease in the workforce.

We did an adjustment a year ago to that end.

However, for now, we believe we have the workforce to complete the life of mine that we have designed, but a little bit more personnel needed for the underground operation.

But right now as we speak, we believe that the workforce is going to be quite stable, if not just increase a little bit.

To come back to the mine operating costs, for mining at (inaudible) Westwood, those are CAD 224 per tonne.

And then, will milling costs and site G&A costs be up?

Yes.

Just because of the lower throughput?

Yes.

So CAD 26.09 for milling and CAD 42.95 for administration and G&A.

So, it's all Canadian dollars.

What we're seeing, Mike, is actually with the additional rock that we're putting through from Grand Duc and we anticipate to put through from sale and so forth, the administrative and milling costs actually are lower for the complex as we move forward on a per tonne basis, it's assigned to Westwood.

Are you guys doing owner operated for the open pits or are those contracts?

Contracts.

And is that getting reported through OpEx or is that…

Yes.

Yes, it's getting -- it's coming through OpEx.

Our next question is from Carey MacRury with Canaccord Genuity.

Just had a question on 2021 CapEx the press release notes, around $250 million for 2021, which isn't too far off from the 2020 guidance once you strip out Cote and Boto.

So, I'm just wondering, if Saramacca spending expected to be down, and I know the press release talks of lower stripping into 2021.

Just how should we think about capital, that number relative to this year's number?

Bruno, do you have a thought on that?

Can you repeat the question, please, sorry, just to make sure?

The question is around, what's our capital expectation for 2021 given the shifts that we've made for 2020.

Yes, I guess it’s…

(inaudible) 2021 versus 2020.

But again, we would assume that current market should be down a bit, and then it notes that capital stripping should be lower in 2020, so I am just trying to understand the 2021 numbers?

Yes, that assumption of our sustaining CapEx for the remainder of 2020 is taking place in Q3 and Q4 and some of the capital project in Q4, and some of the capitalized stripping also will take place in 2021.

Right now, it’s a little bit early to see the full impact of the overall envelope.

We don't believe that's going to be that material.

We believe that we can keep having same production level with a reasonable capital envelope, so.

And maybe I can add that, I mean, again, the 2021 is under review just given, what transpired with COVID this year, and we did redo some of our capitalized stripping this year, so we'll have to look at the new mine plans as Bruno has alluded to.

And so, we'll have to look at updating that, perhaps in Q3, but it is under review and just, it's something that we're looking at.

And maybe just on the mill de-bottlenecking at Essakane, just what the status of that is and if that can also flow over into 2021?

So, I mean, the current schedule we have right now, Carey, is to complete by the end of the year.

There is a possibility it gets pushed a little bit into Q1, mostly on delivery of some of the supplies, again, related to COVID.

Our capital assumptions that we put in place assume that we run it out and it's up and running by the end of the year versus -- I mean, our original intention was to have it up and running in Q3.

But that was one of the areas where we -- when we went into reduced or COVID impacted activities that we did reduce the level of work on that project.

Our next question is from Tanya Jakusconek from Scotiabank.

First of all, just I want to say congrats to Carol and Jeff on their retirement.

Well done.

Maybe I have 3 questions and I wanted to talk about, a couple of quite easy, maybe for you, Carol.

Just on the incremental COVID-19 expenses, those are going to be included in other expenses, going forward and excluded from your total cash costs and all-in sustaining costs.

Yes.

And again, we do a very detailed review of all the COVID costs, Tanya.

So, anything that we think is going to continue will fit in cost of sales, but it's those costs that we think are one-time like for instance premiums that we've paid to employees when we're going through the transition and introducing all the protocols, or if we’ve brought in some additional housing in order to accommodate the employees and do the spacing distancing.

So, anything that we've done on a one-time basis has gone through other expenses.

So, anything to do with, obviously, productivity levels, because of all the protocols we have put in place that we're not excluding that.

So, that's the way that you should be looking at it.

It's the one-time costs that we're putting through other expenses.

And as you said, they'll be, they will not be included in cash costs or all-in sustaining costs.

And so Carol, what should we expect going forward on these costs for, let's say, the rest of this year?

Right, I mean, I think we're hoping that the worst of it is over, and so, we had obviously, Westwood in care and maintenance has ramped up really quite nicely, and the same with Essakane, we have very specific administrative sort of quarantines that went in place in the country, and again, we're operating Essakane, it's been able to operate without any significant interruption.

And we've had obviously -- we've just come out of this, the suspended operation at Rosebel.

So, we're hoping that the worst of it is behind us, and so, we're not expecting the same level of cost going forward into the rest of the year.

We are expecting some costs, but not to the degree that we experienced in Q2.

But like, like you -- I don't think anybody really knows what might happen with COVID and whether we see another, sort of, outbreak.

I think we've put all the measures in place, and we've been very, very diligent in all the things that we've done.

And we've worked with the various health officials in country.

So, like I said, we're hoping that the worst is over, and we won't see the same thing that we experienced in Q2.

And then maybe on capital allocation board, Carol, you just said that current gold prices, obviously, you're going to be generating a lot more cash flow than you budgeted.

Clearly the construction of Cote, will get some, the -- quite a bit of that.

But what are you thinking about in terms of allocation on any incremental cash flow that you generate due to the higher gold prices?

For right now -- I'll let Carol chime in, but our expectations will continue to conservatively manage the balance sheet.

As we look strategically out with the Cote construction, we're very, very comfortable with the level of cash flow we have.

And our internal models are using much, much lower gold prices to ensure that we get through, while maintaining the required cash balances and our leverage ratios hit below the targets that we've set for ourselves.

If we generate additional, obviously that helps us work through.

We are considering, obviously, the development of Boto at a later date.

So that is also being factored into our analysis where we go.

And obviously, if prices continue to go up and cash continues to be generated, we'll look at a little bit of redistribution.

Certainly at some point in the future, I'd love to be able to get back to paying some dividends back to shareholders, and help everybody sort of share in the higher gold price.

Beyond that, we're happy with where we're at and we'd like to get sort of a year of Cote behind us and really understand that everything is truly solid for us.

Carol, would you add anything else?

Yes, just, as Gord said, like, we expect this company to generate superior returns, and Cote is so transformational for us.

We've done a significant spend there and with the guidance we provided is $875 million to $925 million.

And so, our first priority is making sure that we bought sufficient capital to get this project built and running.

And once that occurs, we're expecting to be significantly generating, I mean, significantly generating cash flow.

So, I think in the end-term, I think, all of us can appreciate, everybody on the call, I'm sure can appreciate just the significant volatility around the gold price.

And so, continues to stay at these levels or continues to rise, definitely, it'll cause us to take a look at, sort of, what kind of optionality that we have.

But, it's 3.5 years, and we just need to make sure that we protect the balance sheet in the interim.

But our goal is absolutely to generate superior returns and provide returns to our shareholders.

And what's the minimum cash balance that you're going to keep on the balance sheet over the next couple of years?

$200 million.

And my final question, just, for Gord, Bruno, just on the Westwood, I just thought we had moved out 550,000 ounces of reserves into resources, what do you need to see to bring those back into reserves?

Hello Tanya, this is Bruno.

So, again like I explained it is -- we were very conservative in our assumptions.

We want to offer a safe, sustainable, and profitable mine.

So, we need to increase our knowledge on those specific zones in terms of the extraction strategy.

So, just at this moment, we prefer to risk adjust those projects.

So, they are not accounted for in the plan as we speak.

However, we are doing many activities to be able to put them back in.

So, we need more geotech drilling, and modeling on those zones.

And also to look at the extraction of other stocks and to see the behavior of the ground to see the confidence that we have to extract the others after that.

It's just on this specific zone, (inaudible) seismicity is not applied to all the zones at Westwood, it's only -- it is distributed on (inaudible), but the main, the central corridor it was impacted.

We have a lot of work to do to further understand how some of the -- some attributes that we want to be comfortable with before we put those ounces back in.

Our last question is from Anita Soni with CIBC World Markets.

So first off, congratulations, Jeffery and Carol on your impending retirement.

And then a second question, Carol, could you just go over -- I think you mentioned that you have a policy of hedging going forward, can you just mention those parameters again?

Sure.

I mean, in terms of, so, there’s a couple of things, Anita.

So in terms of the inputs, we've already hedged all the field exposure for Cote over the construction period.

And so, we’ve hedged that with an upper limit of $50.

So, we're protected at $50.

And on the bottom side, it's, I think it's around $38.50.

And then what we've done is, we're also looking to hedge the Canadian dollar, so we've hedged about CAD 65 million of it in 2023 at $1.36.

And we'll continue to watch the Canadian dollar.

It's obviously much stronger relative to the U.S. dollar.

So our intent is, we've got some internal thresholds that we're focused on, and so we'll continue to watch it.

And then what we announced this quarter is that, just given the Cote project and wanting to make sure that we can execute on this transformational project, and really minimize the revenue risk, what we said is, under the right circumstances, we may hedge or we will -- we actually intend to hedge gold production.

We haven't done anything yet.

I'm just watching the gold price and it's sitting at $2060, right now.

So, we would look at doing that and no more than -- and I should say, in the range of 15% to 20% over the next, like I said, 3 years.

It's really focused on 2021, 2022 and half of 2023.

And so, we will look at doing it through a combination of options and collars.

And as we look at the collars, what we would want to do, our strategy would be to ensure that we still provided a substantial amount of upside to our shareholders.

And so, we would look at -- we're looking at the ranges right now, and then possibly find some options, which again, out of the money, but creating that floor price on the gold price just because, we just feel that it would -- might be prudent to do that to protect the balance sheet.

So, that's our thinking, Anita.

Second question, more for Gord, I guess is, so Saramacca, it's been a while since you’ve really delved in depth into that, it’s kind of supposed to have started about this time last year.

And I'm just trying to get a rough idea of, what the overall parameters were for the Saramacca, in terms of tonnage and grade and what we should have been setting our goal posts forward.

It's been a while since we talked about that?

Yes.

I think probably Bruno is more familiar with the current plan.

We do expect to get up to pretty much run rate by Q4.

And run rate for Saramacca is in the neighborhood of about -- I think its 2.5 million to 3 million tonnes annually coming into the plant.

Can you fill that in a little bit more for me, Bruno?

Exactly.

So, we expect to have close to in between 0.75 million to 1 million tonnes of ore per quarter.

And this year, it was about 2.5 million, like Gord is alluding to.

Again, the ramp up is going to depend on the situation at Rosebel, like I mentioned.

We are a bit constrained by the number of employees that we can have on the camp.

And also, we have to add new facilities to increase the workforce on site, so some activities are going to be delayed.

Again, we're going to prioritize the treatment of the stockpile, the Saramacca ore.

So we should see a fair ramp up for the Saramacca mining into Q3 and Q4 and getting to a natural run rate of that sense, around 0.75 million tonnes, sorry per quarter.

So that's again for 2021, like Carol alluded, we’re going to reaffirm our guidance associated to the other years later.

And then, in terms of the ore, sorry, the stockpile level, like was that direct ore feed from Saramacca?

Or was that ore that you had stockpiled from Saramacca?

Yes, we stockpile ore from Saramacca and then get transferred the ore to the mill actually.

Again, it's every month since January we've been adding on the stockpile.

And as we have just started the -- restarted the operation, now we are taking that -- part of that stockpile to be processed at the mill and then the mining will resume as well.

So what's the level that stockpile right now at Saramacca?

About 0.5 million tonnes.

In terms of tonnage, yes.

Sorry, how much?

0.5 million tonnes.

0.5 million tonnes.

Okay.

And then, just in terms of the grade going forward at Rosebel, it was low because you're processing stockpiles out or is that kind of -- is that -- you know once you get through COVID?

Yes, that’s correct.

So, we should resume sort of more closer to the reserve grades or what you've been doing previously, once sort of physical distancing issues are resolved?

Exactly.

And so that's the plan.

Stockpile in Saramacca and then we're going to start mining the start (inaudible) and then the other pits.

So, the grade should be improving.

And then, the overall tonnage at the -- at Rosebel is that it can process going forward given that you've got, say 2.5 million to 3 million from Saramacca, what would Rosebel proper be delivering there?

Probably around 3,000 tonnes per day.

It’s a good number as we speak now.

It depends on the hardness of the material that we're adding.

So, again (inaudible).

We’re talking sort of 12 million to 13 million tonnes annually, including Saramacca.

And then last question, so switching gears to Cote, just as we start to focus on -- I mean, you're going to (inaudible) ahead and you're going to be, sort of kind of break ground on this in Q4.

I mean, is it -- can you just talk about sort of the construction build-out like EPCM, like, are you guys managing the 2, who's involved, what's going on?

I mean, we're seeing a few build-outs in the last few years.

But that we've -- given the size of the capital that’s going to be spent, I'd appreciate a few more details on how this is going to unfold.

So, in our release in July, we sort of laid out the spend on an annual basis or at least the percentage spend of the total on an annual basis.

We are using an EPCM contractor.

We're using Wood.

Formerly the guy is from AMEC, who helped us prepare the feasibility study, and have been involved in the detailed engineering that we've been doing as part of the de-risking exercise.

So right now, the model is EPCM.

Given the fact that we've advanced a lot of the engineering to such a high level compared to most projects, we are currently evaluating the opportunity to maybe do some of the package as EPC and lock in the fixed price so that we can execute those projects with even lower risk.

So, they are the main driver of the project per se.

We do have a full owner’s team that is looking after all of the main activities.

We will transition as well to an operational readiness team that's being built.

We are eager to really start our owner mining towards the end of 2021 as the initial couple of benches and the overburden will be stripped by contractor, but once we get down to hard rock, we'll start with our own mining fleet towards the end of next year.

And the roll-out is, as you said, sort of, breaking ground in Q4.

We are doing a few activities through the summer here, specifically, some -- we're looking to do some fish salvage of a couple the lakes in the tailings dam area that would allow us to get into tailings dam construction early next year.

And I’d sort of leave it like that.

I mean, I can -- we can certainly elaborate a little bit more one-on-one, if you like, Anita.

This concludes time allocated for questions.

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

Thank you very much, Claudia.

And thanks 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 third quarter 2020 conference call in early November.

Goodbye.

This concludes today's conference call.

You may disconnect your lines.

Thank you for participating and have a pleasant day.