IAMGOLD third quarter financial results
------------------------------------------ TSX Trading Symbol: IMG AMEX Trading Symbol: IAG Fully Diluted Shares Outstanding: 151.7MM ------------------------------------------
TORONTO, Oct. 31 /PRNewswire-FirstCall/ -
HIGHLIGHTS:
- Net earnings for the third quarter of 2005 were $4.2 million compared
to $0.9 million for the third quarter of 2004.
- Attributable gold production for the quarter was 109,000 ounces at a
cash cost, as defined by the Gold Institute, of US$281/oz.
- Operating cash flow for the quarter was US$1.8 million.
- Exploration drilling at the Company's Quimsacocha project in Ecuador
continues to extend the gold mineralization to the south. Exploration
spending has been increased by 36% for 2005 as a result of the
positive drilling results.
- Quimsacocha resource estimate released on October 28, 2005 of
2.8 million ounces indicated gold, increases IAMGOLD's total resources
by 38%.
CONSOLIDATED FINANCIAL RESULTS SUMMARY (US$000's):
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
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Net earnings $ 4,198 $ 908 $ 14,316 $ 8,712
Operating cash flow $ 1,828 $ 18,886 $ 16,041 $ 18,396
Net earnings
per share
- basic and
diluted $ 0.03 $ 0.01 $ 0.10 $ 0.06
Operating cash flow
per share
- basic and
diluted $ 0.01 $ 0.13 $ 0.11 $ 0.13
Gold produced (oz)
IMG share 109,294 98,844 330,032 312,685
GI cash cost
(US$/oz)(x) $ 281 $ 255 $ 277 $ 246
Average realized
gold price
(US$/oz) $ 438 $ 404 $ 432 $ 406
(x) GI cash cost per ounce is a non-GAAP measure. Please refer to the
Supplemental Information attached to the Management's Discussion and
Analysis for a reconciliation to GAAP.
CONFERENCE CALL
A conference call to review the Corporation's third quarter results will take place on Monday, October 31, 2005 at 3:00 p.m. EST. Local call-in number: 416-640-4127 and N.A. toll-free: 1-800-814-4857. This conference call will also be audiocast on our website (www.iamgold.com).
A replay of this conference call will be available from approximately 5:00 pm October 31 to November 7, 2005 by dialing local: 416-640-1917, passcode: 21158764(followed by the number sign) and N.A. toll-free: 1-877-289-8525, passcode: 21158764(followed by the number sign). A replay will also be available on IAMGOLD's website.
MANAGEMENT'S DISCUSSION AND ANALYSIS
(The following report dated October 31, 2005, should be read in conjunction with the Consolidated Financial Statements for September 30, 2005 and related notes thereto which appear elsewhere in this report. All monetary amounts in this MD&A are expressed in US$ unless otherwise indicated)
OVERVIEW
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Net earnings for the third quarter of 2005 were $4.2 million or $0.03 per share compared to $0.9 million or $0.01 per share for the third quarter of 2004. Year-to-date net earnings in 2005 were $14.3 million or $0.10 per share compared to $8.7 million or $0.06 per share for the same period of 2004. The increase in earnings is mainly a result of corporate transaction costs incurred in 2004 that were not incurred in 2005.
Operating cash flow for the third quarter of 2005 was $1.8 million or $0.01 per share compared to $18.9 million or $0.13 per share for the third quarter of 2004. Year-to-date operating cash flow in 2005 was $16.0 million or $0.11 per share compared to $18.4 million or $0.13 per share for the same period in 2004. The low level of operating cash flow for the third quarter is a result of increases in working capital for the Sadiola and Yatela operations and nil distributions from the Tarkwa and Damang operations during the quarter.
Summarized Financial Results
(in $000's except where noted)
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2005
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3rd Qtr 2nd Qtr 1st Qtr
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Net earnings $ 4,198 $ 2,375 $ 7,743
Net earnings per share
- basic and diluted 0.03 0.02 0.05
Operating cash flow (deficiency) 1,828 5,680 8,533
Operating cash flow (deficiency)
per share
- basic and diluted 0.01 0.04 0.06
Cash and bullion balance
(at cost) 90,799 88,572 84,361
(at market) 112,204 104,626 98,998
Gold produced (000 oz - IMG share) 109 114 106
Weighted average GI cash cost
($/oz - IMG share)(x) 281 275 273
Gold spot price ($/oz)(xx) 439 427 427
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2004
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4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
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Net earnings $ 2,897 $ 908 $ 622 $ 7,182
Net earnings per share
- basic and diluted 0.02 0.01 0.00 0.05
Operating cash flow (deficiency) (4,713) 18,886 (6,263) 5,773
Operating cash flow (deficiency)
per share
- basic and diluted (0.03) 0.13 (0.04) 0.04
Cash and bullion balance
(at cost) 85,436 93,017 94,900 113,190
(at market) 101,260 105,920 104,904 127,244
Gold produced (000 oz - IMG share) 119 99 108 106
Weighted average GI cash cost
($/oz - IMG share)(x) 253 255 243 239
Gold spot price ($/oz)(xx) 434 401 393 408
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2003
---------------------------------------------
4th Qtr
---------------------------------------------
Net earnings 6,977
Net earnings per share
- basic and diluted 0.04
Operating cash flow (deficiency) 4,011
Operating cash flow (deficiency)
per share
- basic and diluted 0.03
Cash and bullion balance
(at cost) 113,958
(at market) 127,413
Gold produced (000 oz - IMG share) 108
Weighted average GI cash cost
($/oz - IMG share)(x) 246
Gold spot price ($/oz)(xx) 391
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(x) Weighted average Gold Institute cash cost per ounce is a non-GAAP
measure. Please refer to the Supplemental Information to the
Management's Discussion and Analysis for reconciliations to GAAP.
(xx) Average gold price as per the London pm fix.
IAMGOLD Attributable Production and Costs
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2005 2004
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3rd 2nd 1st 4th 3rd 2nd 1st
Qtr Qtr Qtr Qtr Qtr Qtr Qtr
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Production
(000 oz)
Sadiola - 38% 44 43 38 47 38 44 45
Yatela - 40% 21 23 23 28 24 25 20
Tarkwa - 18.9% 33 37 35 32 24 23 26
Damang - 18.9% 11 11 10 12 13 16 15
Total production 109 114 106 119 99 108 106
Total cash cost
($/oz - IMG share)
(x) 299 292 283 266 264 268 262
GI cash cost
($/oz -IMG share)
(x) 281 275 273 253 255 243 239
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(x) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion and
Analysis for a reconciliation to GAAP.
Gold production at the four operating mines was 10% ahead of production from the third quarter of 2004 as all operations performed reasonably well throughout this year's rainy season in West Africa.
IAMGOLD's attributable share of gold production in 2005 from the above four operating mines remains forecast at 450,000 ounces for the full year, with estimated total cash cost per ounce, as defined by the Gold Institute, of $280 per ounce for the year.
RESULTS OF OPERATIONS
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Mining Interests
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
($ 000's) 2005 2004 2005 2004
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Gold sales $ 27,904 $ 25,637 $ 82,399 $ 81,070
Mining costs 16,593 15,918 54,144 49,906
Depreciation and
depletion 4,790 4,416 14,411 14,625
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Earnings from mining
interests $ 6,521 $ 5,303 $ 13,844 $ 16,539
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The Company records its proportionate share of assets, liabilities and results of operations from its joint venture interests in the Sadiola and Yatela mines.
The Company's share of Sadiola and Yatela revenue in 2005 was 9% higher than the third quarter of 2004 and 2% higher on a year-to-date basis due to a higher gold price in 2005. The average gold revenue at Sadiola and Yatela was $439 per ounce in the third quarter of 2005 and $432 per ounce year-to-date 2005 compared to $407 per ounce and $408 per ounce for the same periods in 2004. Average gold spot price for the third quarter in 2005 was $439 per ounce and $431 per ounce year-to-date in comparison to $401 per ounce for the respective periods in 2004.
The Company's share of Sadiola and Yatela operating expenses in 2005 was 4% higher than the third quarter of 2004 and 8% on a year-to-date basis. Consolidated Gold Institute cash costs at Sadiola and Yatela were steady at $262 per ounce in the third quarter of 2005 versus $264 per ounce for the same period in 2004.
Sadiola Mine (IAMGOLD interest - 38%)
Summarized Results
100% Basis
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2005 2004
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3rd 2nd 1st 4th 3rd 2nd 1st
Qtr Qtr Qtr Qtr Qtr Qtr Qtr
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Tonnes mined
(000t) 3,720 5,710 4,600 4,770 3,050 3,650 4,070
Ore milled (000t) 1,360 1,170 1,180 1,360 1,330 1,300 1,160
Head grade (g/t)(x) 2.9 3.7 3.4 3.8 3.5 3.8 3.9
Recovery (%) 92 82 80 77 70 74 80
Gold production -
100% (000 oz) 116 113 101 123 101 117 117
Gold sales - 100%
(000 oz) 117 110 102 121 103 116 118
Gold revenue
($/oz)(xx) 439 427 429 440 410 411 418
Direct cash costs
($/oz)(xxx) 244 282 295 245 248 234 210
Production taxes
($/oz)(xxx) 26 25 26 25 24 23 25
Total cash costs
($/oz)(xxx) 270 307 321 270 272 257 235
Stockpile
adjustments
($/oz)(xxx) (26) (46) (33) (15) (4) (15) (15)
GI cash cost
($/oz)(xxx) 244 261 288 255 268 242 220
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(x) First and second quarter 2005 restated.
(xx) Gold revenue is calculated as gold sales divided by ounces of gold
sold.
(xxx) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion
and Analysis for a reconciliation to GAAP.
Mining operations at Sadiola performed well during the quarter despite a higher than normal rainfall in the rainy season with total tonnes mined exceeding 3.7 million. Tonnages mined through the nine months year-to-date are 30% higher than achieved through the first nine months of 2004. Tonnages milled during the third quarter were mainly derived from oxide material which resulted in higher recoveries of gold and lower reagent costs. Sulphide material will recommence being fed into the circuit in the fourth quarter.
Direct cash costs, at $28.3 million, were lower than the $31.9 million recorded during the second quarter due to the lower level of tonnes mined and the lower reagent costs. Gold Institute cash costs at $244 per ounce were the lowest since the second quarter of 2004. These cash costs were achieved despite higher costs for fuel, labour and supplies. However, unit costs will increase in the fourth quarter due to the processing of sulphide ores.
Studies continue on the economics of paste tailings, gravity recovery, and the feasibility of recovering and recyclying the cyanide used in the process leach circuit. Decisions will be made by year end on which processes to proceed with. The pre-feasibility on the deep sulphides continues with results expected during the fourth quarter.
Additions to capital assets at Sadiola amounted to $4.2 million for the third quarter of 2005 and $14.1 million year-to-date. $3.8 million of the year-to-date amount was spent on the purchase of mining equipment, $6.9 million for the 115 house extension of the mine village, $0.4 million on the cyanide recovery project and the remainder was spent on a variety of smaller capital projects. Exploration expenditures for the third quarter amounted to $0.9 million and $3.2 million year-to-date, of which $1.5 million was spent on FE3 and FE4 drilling and $0.3 million was spent on the deep sulphides project.
During the quarter, Sadiola made a profit distribution of $10.0 million, with IAMGOLD's share being $3.8 million. Year-to-date, Sadiola has made total profit distributions of $21.0 million, with IAMGOLD's share being $7.9 million. An additional profit distribution of $10.0 million with IAMGOLD's share being $3.8 million, is also expected to be received in the fourth quarter. Operating cash flow at Sadiola for the third quarter was $6.0 million and $31.1 million year-to-date.
Yatela Mine (IAMGOLD interest - 40%)
Summarized Results
100% Basis
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2005 2004
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3rd 2nd 1st 4th 3rd 2nd 1st
Qtr Qtr Qtr Qtr Qtr Qtr Qtr
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Tonnes mined
(000t) 2,780 4,250 4,200 5,470 3,270 4,960 7,420
Ore crushed (000t) 720 800 810 830 640 760 640
Head grade (g/t) 2.8 2.5 2.6 3.2 3.6 3.4 3.6
Gold stacked (oz) 65 64 68 86 73 81 74
Gold production -
100%
(000 oz) 54 57 58 70 59 62 51
Gold sales - 100%
(000 oz) 48 55 62 65 59 71 46
Gold revenue
($/oz)(x) 438 428 428 438 402 395 405
Direct cash costs
($/oz)(xx) 328 283 248 286 225 283 335
Production taxes
($/oz)(xx) 24 26 29 25 25 28 22
Total cash costs
($/oz)(xx) 352 309 277 311 250 311 357
Cash cost
adjustments
($/oz)(xx) (52) (3) (9) (32) (11) (61) (72)
GI cash cost
($/oz)(xx) 300 306 268 279 239 250 285
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(x) Gold revenue is calculated as gold sales divided by ounces of
gold sold.
(xx) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's
Discussion and Analysis for a reconciliation to GAAP.
Gold production for the third quarter was slightly lower than production in the first and second quarters. Gold production for 2005 has been negatively impacted by lower grades as mining has progressed through a lower grade portion of the orebody. The lower grades mined and crushed have been offset somewhat by higher tonnes crushed. Tonnes crushed year-to-date are 14% higher than for the first nine months of 2004. Ore grades have now improved at Yatela and these higher grades will report to the leach pads for the remainder of the year.
Direct cash costs for the quarter were $17.5 million, which is higher than the $16.0 million recorded in the second quarter. This increase is primarily a result of higher mining contractor costs and fuel costs. Gold Institute cash costs of $300 per ounce were 2% lower than the second quarter of 2005.
Capital expenditures at Yatela totaled $1.3 million for the third quarter of 2005 and $5.9 million year-to-date. Of the year-to-date amount, $5.1 million was spent on the expansion of the leach pads.
During the year, Yatela made loan repayments of $10.3 million, with IAMGOLD's share being $3.3 million. Additional loan repayments are expected to be made in the fourth quarter. Operating cash flow at Yatela for the second quarter was $3.3 million and $14.6 million year-to-date.
Working Interests
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
($ 000's) 2005 2004 2005 2004
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Tarkwa $ 2,259 $ 1,304 $ 10,909 $ 4,997
Damang $ 292 $ 927 $ 899 $ 4,298
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Earnings from working
interests $ 2,551 $ 2,231 $ 11,808 $ 9,295
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The Company records on its consolidated statement of earnings, the proportionate share of the profits from its working interests in the Tarkwa mine and the Damang mine.
Earnings improved 14% in the third quarter of 2005 and 27% year-to-date over the same periods in 2004 as a result of higher gold prices, increased production at Tarkwa due to the new mill and a non-cash and non-recurring increase to earnings in the first quarter relating to future taxes at Tarkwa and Damang of $2.1 million (IMG share) as a result of a general reduction of effective tax rates in Ghana from 35% to 29%. This improvement is offset by a reduction in production at Damang as the ore grade at Damang has reduced as was expected.
Tarkwa Mine (IAMGOLD interest - 18.9%)
Summarized Results
100% Basis
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2005 2004
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3rd 2nd 1st 4th 3rd 2nd 1st
Qtr Qtr Qtr Qtr Qtr Qtr Qtr
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Tonnes mined
(000t) 24,060 21,870 21,120 18,690 20,780 18,520 16,270
Heap Leach:
-----------
Ore crushed
(000t) 4,140 4,220 4,070 4,910 4,090 3,840 4,160
Head grade (g/t) 1.2 1.3 1.2 1.2 1.3 1.4 1.4
Gold stacked
(000 oz) 157 175 150 158 175 179 193
Recovery (%) 76 77 80 82 81 74 73
Gold production
(000 oz) 120 136 126 140 125 123 137
CIL:
----
Ore milled
(000t) 1,140 1,180 1,160 850 - - -
Head grade (g/t) 1.5 1.7 1.8 1.7 - - -
Recovery (%) 97 98 97 96 - - -
Gold production
(000 oz) 54 63 59 28 - - -
Total gold
production &
sales - 100%
(000 oz) 174 199 185 168 125 123 137
Gold revenue
($/oz)(x) 437 429 428 434 401 395 407
Direct cash costs
($/oz)(xx) 280 237 223 220 274 269 244
Production taxes
($/oz)(xx) 13 13 13 13 12 12 12
Total cash costs
($/oz)(xx) 293 250 236 233 286 281 256
Gold-in-process
adjustments
($/oz)(xx) (3) 5 2 3 (25) (20) (8)
GI cash cost
($/oz)(xx) 290 254 238 236 261 261 248
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(x) Gold revenue is calculated as gold sales divided by ounces of gold
sold.
(xx) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion and
Analysis for a reconciliation to GAAP.
Gold production in the third quarter was 13% below production for the second quarter. As a result of a 3 month delay in the completion of new leach pads in the South area, ore had to be loaded onto higher existing lifts which results in a longer leach cycle. In addition, feed grade to the mill was lower as some harder, medium-grade ore had to be processed to increase the loading to the SAG mill. Tonnes mined continued at high levels and year-to-date figures are 21% ahead of tonnages mined in the comparable 2004 period.
Direct cash costs for the quarter were $48.8 million, which is higher than the $47.1 million recorded in the second quarter as a result of an increase in tonnages mined. Gold Institute cash costs of $290 per ounce were 14% higher than the second quarter due to the lower ounces of gold produced.
Capital expenditures were $7.2 million during the second quarter and $33.2 million year-to-date. $17.1 million of the year-to-date amount was spent on new heap leach facilities, $2.6 million was spent on the mill, $2.3 million was spent on the purchase of haul trucks and the remaining was spent on other smaller capital projects.
During the second quarter, Tarkwa made a profit distribution of $25.0 million, with IAMGOLD's share being $4.7 million. Cash balances at Tarkwa as at September 30, 2005 were $89.2 million and a further cash distribution is expected prior to year-end.
Damang Mine (IAMGOLD interest - 18.9%)
Summarized Results
100% Basis
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2005 2004
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3rd 2nd 1st 4th 3rd 2nd 1st
Qtr Qtr Qtr Qtr Qtr Qtr Qtr
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Tonnes mined
(000t) 3,731 3,810 3,120 1,910 2,750 3,630 3,980
Tonnes mined
(000t) -
Pit cut back 9,720 - - - - -
Ore milled
(000t) 1,327 1,260 1,260 1,350 1,340 1,390 1,300
Head grade (g/t) 1.5 1.5 1.4 1.7 1.8 2.1 2.0
Recovery (%) 93 92 91 91 90 90 90
Gold production &
sales - 100%
(000 oz) 57 58 54 66 69 83 78
Gold revenue
($/oz)(x) 438 428 429 432 399 395 406
Direct cash costs
($/oz)(xx) 322 330 302 218 212 200 210
Production taxes
($/oz)(xx) 13 13 13 13 12 12 12
Total cash costs
($/oz)(xx) 335 343 315 231 224 212 222
Gold-in-process
adjustments
($/oz)(xx) 36 0 30 (3) 13 (6) (5)
GI cash cost
($/oz)(xx) 371 343 345 228 237 206 217
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(x) Gold revenue is calculated as gold sales divided by ounces of gold
sold.
(xx) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion and
Analysis for a reconciliation to GAAP.
Operations at Damang continued to perform at or above budget with gold production for the quarter at 57,000 ounces. The satellite pits continue to provide more ore than anticipated but at lower grade levels.
During the quarter, the project to deepen the main pit was initiated. The total budget for the cut back is $44 million, primarily for waste stripping. The deepening of the pit will access approximately 700,000 ounces of additional gold and will extend the mine life to 2011.
Direct cash costs for the quarter were $18.4 million, which is lower than the $19.2 million spent during the second quarter. Gold Institute cash costs were $371 per ounce, which is 8% higher than the second quarter as a result of a decrease in gold-in-process.
Capital expenditures were $3.8 million for the quarter and $9.7 million year-to-date, of which $2.7 million was spent on the pit cut back and the remainder was spent on a variety of small capital projects.
Cash balances at Damang as of September 30, 2005 were $36.2 million. Cash balances are being retained at Damang to fund the deepening of the pit and no distributions are expected until the additional ore is accessed.
Royalty Interests
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
($ 000's) 2005 2004 2005 2004
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Gold Royalties
Revenue $ 742 $ 651 $ 2,265 $ 1,852
Amortization 488 449 1,376 1,199
Diamond Royalties
Revenue 2670 1,788 5,684 4,296
Amortization 1,411 944 3,011 2,270
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Earnings from Royalty
Interests $ 1,513 $ 1,046 $ 3,562 $ 2,679
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Earnings from royalty interests in the third quarter of 2005 are 54% higher than the third quarter of 2004 and are 33% higher year-to-date as a result of increased gold prices and increased production at Diavik. Revenue was recorded from the following gold royalty interests for the second quarter of 2005: the Williams mine in northern Ontario; the Limon mine in Nicaragua; the Don Mario mine in Bolivia; and the Magistral mine in Mexico.
Corporate Administration and Other
Corporate administration, excluding corporate transaction costs, at $2.0 million for the quarter and $5.9 million year-to-date, were comparable to the same periods in 2004. Corporate transaction costs were $0.03 million in the third quarter and $0.2 million year-to-date in comparison to $3.3 million and $9.5 million for the same periods in 2004. Corporate transaction costs represent costs associated with proposed business combinations in 2004.
In 2004, earnings were augmented by the sale of a loan for proceeds of $1.8 million, resulting in a gain of $1.1 million which was included in investment income.
Exploration expenditures were $2.3 million in the third quarter, somewhat below the $3.5 million expended in the second quarter as some programs paused to consider results achieved in the first half of the year. Year-to-date expenditures total $6.9 million compared to $5.4 million for the first nine months of 2004. The exploration budget for the full year has been increased to $10.6 million as a result of the continuing success at the Company's Quimsacocha project in Ecuador.
Cash Flow
Operating cash flow was $1.8 million for the third quarter of 2005 and $16.0 million year-to-date compared to $18.9 million and $18.4 million for the same periods in 2004. The low level of operating cash flow for the third quarter is a result of increases in working capital for the Sadiola and Yatela operations and nil distributions from the Tarkwa and Damang operations during the quarter. A cash distribution from Tarkwa is expected in the fourth quarter.
In respect of investing activities, $2.4 million was invested in the Sadiola and Yatela operations during the quarter and $8.6 million year-to-date.
LIQUIDITY AND CAPITAL RESOURCES
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The Company maintains a strong balance sheet and has sufficient liquidity and capital resources to fund its known commitments.
Working Capital
The Company's consolidated working capital position is set out below (in
$ millions):
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September 30, December 31,
2005 2004
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Working Capital $ 119.6 $ 102.6
Current Ratio 8.9 5.7
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Cash
Consolidated cash balances totaled $42.2 million at September 30, 2005
compared to $37.4 million at year-end 2004, and can be segmented as
follows (in $ millions):
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September 30, December 31
2005 2004
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Corporate cash $ 34.3 $ 26.3
Joint venture cash 7.9 11.7
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Total $ 42.2 $ 37.4
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Joint venture cash represents the Company's proportionate share of cash at the Sadiola and Yatela mines and forms part of the working capital at those operations. Cash balances exclude the Company's proportionate share of cash balances held at the Tarkwa and Damang mines which equate to $16.9 million and $6.8 million respectively as at September 30, 2005 and $9.4 million and $4.9 million respectively as at September 30, 2004.
Corporate cash increased by $4.7 million in the third quarter of 2005 and $8.0 million year-to-date compared to a decrease of $10.8 million and $27.1 million in the same periods of 2004. Cash flows that determined this decrease are shown below (in $ millions):
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Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
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Inflows
Sadiola cash receipts $ 3.8 $ 4.9 $ 8.0 $ 9.1
Royalties received,
net of withholding
taxes and gold
bullion receipts 3.1 2.2 7.0 5.5
Share issuances,
net of share
issue costs 2.9 0.4 6.4 0.9
Tarkwa cash receipts - 4.0 4.7 4.0
Yatela cash receipts - - 3.3 -
Interest income 0.3 0.1 0.7 0.7
Foreign exchange gain
on cash balances 0.1 0.2 0.2 -
Damang cash receipts - 4.7 - 4.7
Proceeds from sale of
marketable securities
and loans receivable - - - 1.8
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$ 10.2 $ 16.5 $ 30.3 $ 26.7
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Outflows
Dividends $ - $ - $ 7.3 $ 6.7
Exploration 2.3 2.3 7.0 5.4
Corporate
administration
and taxes 2.2 1.9 5.7 5.8
Working capital
and other 0.8 - 1.5 0.2
Kinbauri settlement - - 0.4 -
Other assets 0.2 - 0.2 -
Corporate transaction
costs - 3.9 0.2 7.2
Investment in Tarkwa - 19.2 - 28.2
Foreign exchange loss
on cash balances - - - 0.3
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$ 5.5 $ 27.3 $ 22.3 $ 53.8
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Net inflow (outflow) $ 4.7 $ (10.8) $ 8.0 $ (27.1)
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Gold Bullion
At September 30, 2005, the accumulated gold bullion balance was 148,009 ounces at an average cost of $329 per ounce. The market value of the bullion was $70.0 million using a September 30, 2005 gold price of $473 per ounce.
Some of the disclosures included in this interim report for the third quarter of 2005 represent forward-looking statements (as defined in the US Securities Exchange Act of 1934). Such statements are based on assumptions and estimates related to future economic and market conditions. While management reviews the reasonableness of such assumptions and estimates, unusual or unanticipated events may occur which render them inaccurate. Under such circumstances, future performances may differ materially from projections.
The Corporation's auditors have not reviewed the contents of this MD&A or the accompanying financial statements.
As at October 31, 2005, the number of shares issued and outstanding of the Corporation was 147.6 million.
Please note:
This entire press release may be accessed via fax, email, IAMGOLD's
website at www.iamgold.com and through Canada Newswire's website at
www.newswire.ca. All material information on IAMGOLD can be found at
www.sedar.com or at www.sec.gov. If you wish to be placed on IAMGOLD's
email press release list, please contact us at info@iamgold.com.
SUPPLEMENTAL INFORMATION TO THE MANAGEMENT'S DISCUSSION AND ANALYSIS
NON-GAAP PERFORMANCE MEASURES
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The Company has included cash cost per ounce data, which are non-GAAP performance measures, in order to provide investors with information about the cash generating capabilities and profitability of the Company's mining operations and comparability to other gold producers. The Company reports total cash cost per ounce wherein the cash cost equals the sum of operating costs inclusive of production-based taxes and management fees. The Company also reports Gold Institute cash cost per ounce data in accordance with the Gold Institute Standard, which the Company believes most gold producers follow. GI cash cost equals total cash cost, as described previously, adjusted for the inclusion of certain cash costs incurred in prior periods or the exclusion of certain cash costs incurred in the current period related to future production such as stockpiling, gold in process and stripping costs. These measures differ from measures determined in accordance with GAAP and should not be considered in isolation or as a substitute for measures of performance or liquidity prepared in accordance with GAAP. These measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.
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(in $000's except
where noted) 2005 2004
Q3 Q2 Q1 Q4 Q3 Q2 Q1
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Net earnings
from joint
ventures
and working
interests:
Sadiola $ 3,328 $ 1,633 $ 1,428 $ 3,154 $ 2,332 $ 3,137 $ 3,847
Yatela 1,427 869 1,789 1,980 2,009 1,240 (110)
Tarkwa 2,259 3,372 5,278 2,744 1,304 1,506 2,187
Damang 292 163 444 1,110 927 1,442 1,929
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As per
segmented
information
note to
financial
state
-ments $ 7,306 $ 6,037 $ 8,939 $ 8,988 $ 6,572 $ 7,325 $ 7,853
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-------------------------------------------------------------------------
Sadiola
(38% proportionate
share):
Gold
revenue 19,464 $17,855 $16,597 $20,193 $16,084 $18,173 $18,728
Mining costs:
Total cash
costs (11,918) (13,201) (12,260) (12,606) (10,468) (11,475) (10,449)
Stockpile
movement 1,135 1,987 1,273 678 168 693 652
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Gold
Institute
cash
costs (10,783) (11,214) (10,987) (11,928) (10,300) (10,782) (9,797)
Change in
bullion
inventory (20) 147 (38) 127 (16) 1 71
Exploration
expensed (76) (182) (62) (10) (5) (27) (43)
Foreign
exchange
and
interest (311) (1,157) (774) (1,399) (107) (267) (692)
Other
non-cash
adjustments 132 132 342 99 98 99 99
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(275) (1,060) (532) (1,183) (30) (194) (565)
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Mining
costs (11,058) (12,274) (11,519) (13,111) (10,330) (10,976) (10,362)
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8,406 5,581 5,078 7,082 5,754 7,197 8,366
Depre-
ciation (3,312) (3,094) (2,900) (2,863) (2,455) (2,770) (2,694)
Income
taxes (1,766) (854) (750) (1,065) (967) (1,290) (1,825)
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Net
earnings
from
Sadiola $ 3,328 $ 1,633 $ 1,428 $ 3,154 $ 2,332 $ 3,137 $ 3,847
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gold
production -
100%
(000 oz) 116 113 101 123 101 117 117
Gold
production -
38%
(000 oz) 44 43 38 47 38 44 45
Total cash
costs per
ounce
($/oz) $ 270 $ 307 $ 321 $ 270 $ 272 $ 257 $ 235
Gold
Institute
cash costs
per ounce
($/oz) $ 244 $ 261 $ 288 $ 255 $ 268 $ 242 $ 220
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(in $000's except
where noted) 2005 2004
Q3 Q2 Q1 Q4 Q3 Q2 Q1
-------------------------------------------------------------------------
Yatela (40%
proportionate
share):
Gold
revenue $ 8,440 $ 9,410 $10,633 $11,400 $ 9,553 $11,155 $ 7,377
Mining costs:
Total cash
costs (7,541) (6,998) (6,374) (8,669) (5,949) (7,696) (7,292)
Cash cost
adjustments:
Stockpile
movement (1,879) (1,741) (429) 1,731 695 455 1,173
Deferred
strip-
ping 3,198 1,766 249 (1,253) (600) 508 54
Gold in
process (194) 49 382 415 166 538 250
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1,125 74 202 893 261 1,501 1,477
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Gold
Institute
cash costs (6,416) (6,924) (6,172) (7,776) (5,688) (6,195) (5,815)
Change in
bullion
inventory 748 255 (611) 612 - (1,228) 572
Exploration
expensed - - - 10 (5) (51) -
Foreign
exchange and
interest 58 (222) (214) 34 (37) (166) (131)
Othe non-cash
adjustments 75 150 (20) 804 147 179 178
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881 183 (845) 1,460 105 (1,266) 619
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Mining
costs (5,535) (6,741) (7,017) (6,316) (5,583) (7,461) (5,196)
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2,905 2,669 3,616 5,084 3,970 3,694 2,181
Depre-
ciation (1,478) (1,800) (1,827) (3,104) (1,961) (2,454) (2,291)
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Net earnings
(loss) from
Yatela $ 1,427 $ 869 $ 1,789 $ 1,980 $ 2,009 $ 1,240 $ (110)
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Gold
production -
100%
(000 oz) 54 57 58 70 59 62 51
Gold
production -
40%
(000 oz) 21 23 23 28 24 25 20
Total cash
costs per
ounce
($/oz) $ 352 $ 309 $ 277 $ 311 $ 250 $ 311 $ 357
Gold
Institute
cash costs
per ounce
($/oz) $ 300 $ 306 $ 268 $ 279 $ 239 $ 250 $ 285
Tarkwa
(18.9%
proportionate
share):
Gold
revenue $14,387 $16,154 $14,954 $13,780 $ 9,452 $ 9,182 $10,557
Mining
costs:
Total cash
costs (9,654) (9,384) (8,253) (7,395) (6,745) (6,532) (6,659)
Gold in
process 102 (182) (76) (101) 594 455 207
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Gold
Institute
cash
costs (9,552) (9,566) (8,329) (7,496) (6,151) (6,077) (6,452)
Interest
income
(expense) 287 136 129 77 76 (12) 75
Exploration
expensed (39) - - - - - -
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Mining
costs (9,304) (9,430) (8,200) (7,419) (6,075) (6,089) (6,377)
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5,083 6,724 6,754 6,361 3,377 3,093 4,180
Depre-
ciation (1,837) (1,898) (2,201) (2,072) (1,330) (812) (759)
Income taxes (987) (1,454) 725 (1,545) (743) (775) (1,234)
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Net earnings
from
Tarkwa $ 2,259 $ 3,372 $ 5,278 $ 2,744 $ 1,304 $ 1,506 $ 2,187
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-------------------------------------------------------------------------
Gold
production -
100%
(000 oz) 174 199 185 168 125 123 137
Gold
production -
18.9%
(000 oz) 33 37 35 32 24 23 26
Total cash
costs per
ounce
($/oz) $ 293 $ 250 $ 236 $ 233 $ 286 $ 281 $ 256
Gold
Institute
cash costs
per ounce
($/oz) $ 290 $ 254 $ 238 $ 236 $ 261 $ 261 $ 248
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(in $000's except
where noted) 2005 2004
Q3 Q2 Q1 Q4 Q3 Q2 Q1
-------------------------------------------------------------------------
Damang
(18.9%
proportionate
share):
Gold
revenue $ 4,733 $ 4,713 $ 4,367 $ 5,431 $ 5,205 $ 6,162 $ 6,002
Mining costs:
Total cash
costs (3,620) (3,779) (3,209) (2,906) (2,929) (3,308) (3,287)
Gold in
process (388) (4) (311) 40 (169) 89 75
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Gold
Institute
cash
costs (4,008) (3,783) (3,520) (2,866) (3,098) (3,219) (3,212)
Exploration
expensed (119) (63) (74) (69) (106) (95) (105)
Interest
income
(expense) 138 110 48 9 3 11 4
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Mining
costs (3,989) (3,736) (3,546) (2,926) (3,201) (3,303) (3,313)
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744 977 821 2,505 2,004 2,859 2,689
Depre-
ciation (295) (481) (381) (466) (483) (644) (606)
Income
taxes (157) (333) 4 (929) (594) (773) (154)
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Net earnings
from
Damang $ 292 $ 163 $ 444 $ 1,110 $ 927 $ 1,442 $ 1,929
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Gold
production -
100%
(000 oz) 57 58 54 66 69 83 78
Gold
production -
18.9%
(000 oz) 11 11 10 12 13 16 15
Total cash
costs per
ounce
($/oz) $ 335 $ 343 $ 315 $ 231 $ 224 $ 212 $ 222
Gold
Institute
cash costs
per ounce
($/oz) $ 371 $ 343 $ 345 $ 228 $ 237 $ 206 $ 217
Weighted
Average
Cash Costs
Total cash
costs - IMG
share $32,733 $33,362 $30,096 $31,576 $26,091 $29,011 $27,687
Gold
Institute
cash costs,
total - IMG
share $30,759 $31,487 $29,008 $30,066 $25,237 $26,273 $25,276
Attributable
production
(000 oz) 109 114 106 119 99 108 106
Total cash
costs per
ounce
($/oz) $ 299 $ 292 $ 283 $ 266 $ 264 $ 268 $ 262
Gold
Institute
cash costs
per ounce
($/oz) $ 281 $ 275 $ 273 $ 253 $ 255 $ 243 $ 239
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
(unaudited)
(United States Dollars in 000's, except per share data)
For the period ended September 30, 2005
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Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
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Revenue:
Gold sales $ 27,904 $ 25,637 $ 82,399 $ 81,070
Royalties 3,412 2,439 7,949 6,148
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31,316 28,076 90,348 87,218
Expenses:
Mining costs 16,593 15,918 54,144 49,906
Depreciation and
depletion 4,790 4,416 14,411 14,625
Amortization of
royalty interests 1,899 1,393 4,387 3,469
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23,282 21,727 72,942 68,000
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8,034 6,349 17,406 19,218
Earnings from working
interests 2,551 2,231 11,808 9,295
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10,585 8,580 29,214 28,513
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Other expenses(income):
Corporate
administration 1,990 1,839 5,900 5,928
Corporate transaction
costs 32 3,295 172 9,509
Litigation - - (381) -
Exploration 2,326 2,280 6,972 5,364
Foreign exchange 773 790 423 790
Investment income (296) (169) (683) (1,849)
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4,825 8,035 12,403 19,742
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Earnings before income
taxes 5,760 545 16,811 8,771
Income taxes (recovery):
Current 2,114 656 4,236 2,973
Future (552) (1,019) (1,741) (2,914)
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1,562 (363) 2,495 59
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Net earnings 4,198 908 14,316 8,712
Retained earnings,
beginning of period 52,515 38,064 42,397 38,064
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Retained earnings,
end of period $ 56,713 $ 38,972 $ 56,713 $ 46,776
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Number of common shares
Average outstanding
during period 147,182,000 145,597,000 146,383,000 145,540,000
Outstanding at end
of period 147,619,000 145,667,000 147,619,000 145,667,000
Net earnings per
share - basic and
diluted $ 0.03 $ 0.01 $ 0.10 $ 0.06
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See accompanying notes to the consolidated financial statements.
CONSOLIDATED BALANCE SHEET
(unaudited)
(United States Dollars in 000's, except per share data)
As at September 30, 2005
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As at As at
Sept. 30, Dec. 31,
2005 2004
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ASSETS
Current assets:
Cash and cash equivalents (note 1) $ 42,159 $ 37,380
Gold bullion (market value $70,045;
Dec. 31, 2004 - $63,880) (note 2) 48,640 48,056
Accounts receivable and other 31,396 27,330
Inventories 12,529 11,605
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134,724 124,371
Marketable securities 1,285 1,285
Ore stockpiles 17,228 16,883
Long-term receivables 6,207 6,861
Working interests 99,559 92,476
Royalty interests 52,832 57,219
Mining interests 72,219 72,825
Other assets 1,286 1,196
Goodwill 74,886 74,886
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$ 460,226 $ 448,002
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 15,112 $ 21,809
Long-term liabilities:
Non-recourse loans payable (note 3) 9,051 10,437
Future income tax liability 17,303 18,464
Asset retirement obligations 5,608 5,549
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47,074 56,259
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Shareholders' equity:
Common shares (Issued: 147,619,000 shares)
(note 4) 352,426 343,957
Stock-based compensation (note 4(b)) 4,309 5,675
Share purchase loans (296) (286)
Retained earnings 56,713 42,397
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413,152 391,743
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$ 460,226 $ 448,002
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See accompanying notes to the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(United States Dollars in 000's, except per share data)
For the period ended September 30, 2005
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
-------------------------------------------------------------------------
Operating activities:
Net income $ 4,198 $ 908 $ 14,316 $ 8,712
Items not affecting
cash:
Earnings from
working interests,
net of dividends (2,551) 6,486 (7,083) (578)
Depreciation,
depletion and
amortization 6,729 5,826 18,867 18,144
Deferred revenue - (414) - (1,241)
Future income taxes (552) (1,019) (1,741) (2,914)
Stock-based
compensation 294 584 692 1,340
Gain on sale of
marketable
securities and
long-term
receivables - - - (1,120)
Unrealized foreign
exchange losses 922 1,049 590 525
Change in non-cash
operating working
capital Current (8,134) 6,199 (9,640) (1,069)
Long-term 922 (733) 40 (3,403)
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1,828 18,886 16,041 18,396
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Financing activities:
Issue of common shares,
net of issue costs 2,875 383 6,412 946
Dividends paid - - (7,276) (6,725)
Repayments of
non-recourse loans (6) (3) (1,713) (606)
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2,869 380 (2,577) (6,385)
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Investing activities:
Mining interests (2,373) (1,855) (8,596) (6,481)
Note receivable (80) (56) 654 (32)
Distributions paid to
working interests - (19,204) - (28,238)
Purchase of gold bullion (203) (168) (584) (552)
Proceeds from disposition
of marketable securities
and long-term receivables - - - 1,833
Other assets (17) (34) (159) (34)
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(2,673) (21,317) (8,685) (33,504)
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents 2,024 (2,051) 4,779 (21,493)
Cash and cash equivalents,
beginning of period 40,135 47,233 37,380 66,675
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Cash and cash
equivalents,
end of period $ 42,159 $ 45,182 $ 42,159 $ 45,182
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Supplemental cash
flow information:
Interest paid $ 140 $ - $ 187 $ 78
Income taxes 2,115 656 4,236 2,973
-------------------------------------------------------------------------
See accompanying notes to the consolidated financial statements.
NOTES TO CONSOLIDATED STATEMENTS
(unaudited)
(Tabular amounts in thousands of United States Dollars except per share
data)
For the period ended September 30, 2005
The interim consolidated financial statements of IAMGOLD Corporation
('the Company') have been prepared by management in accordance with
accounting principles generally accepted in Canada. The interim
consolidated financial statements have been prepared following the same
accounting policies and methods of computation as the consolidated
financial statements for the fiscal year ended December 31, 2004 except
