IAMGOLD Corporation (IAG) Q3 2019 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD 2019 Third Quarter Operating and Financial Results Conference Call and Webcast. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] At this time, I would like to turn the conference over to Indi Gopinathan, Investor Relations Lead for IAMGOLD. Please go ahead, Ms. Gopinathan.

Thank you very much, and welcome to the IAMGOLD third quarter conference call. Joining me today on the call are Steve Letwin, Chief Executive Officer of IAMGOLD; Gord Stothart, President and Chief Operating Officer; Carol Banducci, Executive Vice President and Chief Financial Officer; Craig MacDougall, Senior Vice President, Exploration; and Jeff Snow, Senior Vice President, Corporate Development and General Counsel. Our remarks on this call will include forward-looking statements. Please refer to the cautionary language regarding forward-looking information in our disclosure document and be advised that the same cautionary language applies to our remarks during the call. The slides referenced on this call can be viewed on our website. I will now turn the call over to our and Chief Executive Officer, Steve Letwin.

Thank you, Indy. And good morning, everyone. And thank you for joining us. Before I start, I just want to reach out and extend on behalf of the Board of Directors and management of IAMGOLD that our thoughts and prayers to Samafo. Obviously, there was a horrific tragedy yesterday with the attack on their convoy. I reached out to Benoit to offer assistance and help if he requires it. But in the mining business, we're all brothers and sisters and this was a tragedy that obviously we're very, very concerned about, and we're very, very sorry to hear about the news from our good friends at Samafo. So thoughts and prayers, Benoit and team, from IAMGOLD. So we reported a solid third quarter last night, which demonstrates a clear pathway to an improved fourth quarter. I'll just tell you that I've been at the sites quite frequently. I think you know I spend a lot of time at the sites. I just want to tell you personally that we confirm our full-year 2019 production and cost guidance. In addition, we announced the appointment of Gord Stothart as President and Chief Operating Officer of IAMGOLD. Congratulations, Gord. Gord's been with the company since late 2007, and we're pleased to promote him to this expanded leadership role. I'm going to stay here as Chief Executive Officer. I'm going to be focusing on what I would call more strategic opportunities for the company. These would be centered around what we are going to do moving forward with protease [ph] as an example and trying to -- around the company that's going to unlock some of the value that we have currently without our asset base that we don't think is being recognized. I'm now going to make the case for investment in IAMGOLD. We expect improved performance over the coming quarters on a number of catalysts, and I think some of you have probably already seen some of the photos. Cirmac [ph] is now online. I was down there last week. We had our first delivery of ore on October 31. I was in one of the Haulmax trucks. Wasn't qualified to drive it, but I was in the cab. We plan to ramp up production levels in 2020, contributing soft rock, higher-grade ounces to the Rosebel mill. We will have the Westwood preliminary mine update completed by the end of the year for the 43101 report by mid-2020. We expect to showcase a safe, long-life profitable mine, and Gord can speak to that a little bit later. We continue to improve productivity through various initiatives, including de-bottle necking the mill at Essekane and gaining incremental ounces from the Rosebel [Technical Difficulty]. Essekane is and will continue to be a solid contributor, time goaled asset base of operational improvements, providing additional upside. Our free cash flow, as you know, has been an area focus as well and we're improving our outlook as we speak. We've also enjoyed wonderful aspiration success, including the declaration of malignance [ph] initial resource estimate, outlining over 3 million in ounces in Canada, which together with our Monster Lake project is consolidating our presence in the Chibougamu area. And the new Korea discovery on trend between the Bodo and Diaka [ph] deposits, which we expect will expect will contribute positively to our future resource base in West Africa. We are an undervalued story with many more chapters to come. On Slide 6, we thought we'd talk a little bit about or environmental social and governance, what we call ESG. We have internalized the zero harm culture. We remain as an ongoing goal and journey of ours as we strive to put health and safety above all else, as well as building strong partnership within our communities and respecting the environment. We've always conducted our business with the highest environment social and governance standards. We've implemented the Mining Association of Canada's towards sustainable mining framework, not just as our Canadian operation, but at our global operations. And we are implementing the World Gold Council's responsible gold mining principles. Recently, [indiscernible] first assessment of corporate governance in the metals and mining sector, where IAMGOLD achieved the highest rating in GA1 based on an adjusted score of 2.7. This was the second best score received of the 31 companies profiled. We were also recognized for our sustainability efforts. This year, we were ranked as one of Canada's top 50 sustainable companies in Canada. Additionally, we were included in the 2019 Bloomberg Gender-Equality Index. There are an addition to our ongoing ESG efforts, including the solar farm commissioned at Essakane last year, our ongoing commitment to education, health and safety, access to medical care, and our continuing work building relationships for our stakeholders. And a little bit off script because this sort of feeds into Rosebel, I will tell you, after nine years in this business, that the relationship with the communities that we have really can't be measured. Everybody in the mining space hits headwinds from time to time, and I will tell you, at Rosebel or at Essakane in particular, if we didn't have the relationships that we have, the strong relationships with the communities and the governance, these headwinds would become a lot more challenging. We had some issues, particularly at Rosebel, that we were able to quickly solve simply because our relationships with the community and the government are so strong. And they should be underestimated. So on Slide 7, you will see both northern pits and southern pits at Rosebel, which we're now back actively mining. I was down there again last week. We've been working with the government and local stakeholders to ensure we can work safely on the site. I spent the morning with the President of Suriname. I can tell you that things are very positive there. The government has been giving their full support. I feel very comfortable telling you that I believe we have a pathway to ramp Rosebel up back to full production. We also have a pathway to seeing Saramacca become the deposit that we've talked about for so long. As you know, Saramacca is located to the southwest of the site, of the Rosebel mill, highlighted on the slide. The main haul road is expected to be completed by the end of Q1. The interim haul route is noted here as well in blue. We're connecting to the usable portions of the main haul road. So I was on this haul road. Spent a fair amount of time on it. You'll see the pictures up there. It really was a sight to behold. This has been done below budget. It really is a work of art. This will open a pathway for us to new areas to bring more not only from Saramacca, but from Sarafina and Brokolonko over the longer term. So this road is really going to be a very important route for us as we move forward. So last week, on Slide 8, we had a celebration of our first ore delivery from Saramacca to the Rosebel mill. We have a few pictures that were up there. We had the Minister of Justice, who handles the security for the concessions. We had President of Minister Resources. So you can see the Haulmax trucks out there in the background. They carry about 80 tons. Each truck really does a round trip in about one hour and 45 minutes and we have eight trucks working. So we're going to be moving a lot of ore in the interim. We'll use smaller trucks on the logging road to stockpile the ore from Saramacca and then pick it up at about the 15 kilometer mark by the Haulmax trucks and move it to the mill. And so you'll see the celebrations on the slides. These are all village captains as well as members of the Suriname government, as I mentioned. And on this special occasion, we also presented the inaugural check for our community fund in the amount of $2.5 million. Grants from this fund are intended for local projects, which demonstrate potential for pause in an economic and social impact. The fund will be managed by our country director, Sharmila Jadnanansing. Sharmila's just an incredible individual that we have down there and has been absolutely outstanding in helping us manage what I've said and repeated, is a very, very special relationship with our communities. On Slide 10, we highlight the road in progress from Saramacca to Rosebel. As I've said earlier, this is our future starting with ore and down the road, we're going to be tying in other concessions, which look, from what Craig has been seeing, quite prolific. And on our website, I encourage you to look at the short video clip, which shows Saramacca's progress. So it's very rare that after announcing a resource just a couple of years ago that we would have a haul road in place, and this deposit, I think people really underestimate how much work had to go into this and how much planning. And I really want to congratulate our team at Rosebel. I want to congratulate Gord Stothart for the excellent leadership [indiscernible]; this was a big feat for us. It's very real. You can see it up on the slide. This is a very, very exciting achievement for us and the positive news that's going to come from this. So we ask your patience. We know this hasn't been an easy year for our shareholders, but I can tell you that again, I spend a lot of time at the sites. I have a very high level of confidence that we're going to be able to move ahead in a very safe, and sustainable and profitable... That takes us to Slide 11. You've heard the term self-funding that's been coming from us for some time now, and we want to emphasize our progress, which we knew would be weighted to the back half of this year. We have now completed the Essakane CIL heap leach feasibility study, which Gord will speak to in a few minutes. We issued the initial resource for Nelligan. And we have to delivered the first ore from Saramacca. So what are we focused on? We're focusing on the Westwood redesign, the CIL optimization work at Essakane, the completion of the Saramacca development, and obtaining the exploitation permit for Bodo. I want to reinforce the fact that Cote is not off the shelf. It is sitting there. We're minimizing our expenditures for Cote going forward. We understand the sentiment out there is not in favor of large CapEx. We accept that and I think if anything, we have a strong record of listening to our shareholders. That doesn't mean that there isn't some optionality at Cote that we could work to the advantage of our shareholders. There's a lot of interest in Cote from a number of companies around the world. With our deep, deep pipeline and the success that Craig MacDougall and his team -- there's a lot of hidden value in the company and there's a lot of value that we can crystalize to other means and methods. So with Gord's to President, he is going to be focusing a lot more on what I've been doing at the sites. I'm going to be focusing a lot more with Carol and Jeff Snow on what I would call the more strategic side of IAMGOLD going forward. So it's a good combination. We have a good team here. And on that note, I will now pass the call over to Carol to review our financial results.

Thank you, Steve. And good morning, everyone. This next slide presents key performance highlights for the third quarter. Revenues were $224.4 million in the quarter, while cost of sales came in at $251.6 million, resulting in a gross profit of $22.8 million. Adjusted net income before income tax and non-controlling interest was $21.4 million. Adjusted net loss was nil, and this was largely due to recognition of the tax impact from increased profit at our offering mines, while the offsetting recovery from regions was lost, such as our expiration site. Net cash from [Technical Difficulty] changes in working capital was $65.4 million in the third quarter, 53% higher than in the second quarter. We continue to hold a strong financial position with cash, cash equivalents, short-term investments, primarily in money market funds, and restricted cash of $677.2 million as of September 30, 2019. We're seeing strong improvement in operating cash flows of 28% from Q2 and 354% from Q3 2018. Our gold margin improved by 38% from Q2. We continue to focus on improving working capital, which was impacted in Q3, primarily due to lower accounts payable following the temporary cessation of mining activities at Rosebel. Now that we've resuming mining, payments from mining related supplies will return to normal levels, as will payables. Our [Technical Difficulty] improved in the quarter with two sites, Essakane and Westwood, generating positive cash flows. Rosbel was also back on a positive trend following the temporary setback caused by the security incident in the summer. This is made possible by the immediate mitigation efforts taken by site personnel, enabling the resumption of mining activities within a short few weeks. This ramp up to full operations is ongoing. For Q3, [Technical Difficulty] key operating metrics, production and all-in sustaining costs. We are expecting to achieve year-end guidance from gold production of 765,000 to 810,000 ounces. Our all-in sustaining costs demonstrate our commitment to managing operating costs and sustaining capital expenditure. On this metric, we are trending down from $1,132 per ounce in Q2 to $1,118 per ounce in Q3. Operating cash flow before changes in working capital continue to increase throughout the year from $33.1 million in Q1 to $65.4 million in Q3. Our gross margin trends positively as we benefit from a strong gold price environment. Accordingly, our gross margin has increased from a slight negative in Q1 to 8.3% in Q3. We continuously work to manage our cost structure. We have a strong balance sheet with cash and cash equivalents of almost $634 million, short-term investments of $16 million, and an unused credit facility of almost $500 million, for a total liquidity of approximately $1.2 billion. This total is before the receipt in December of this year of $170 million in forward-sale funds. We continue to work on improving cash flows and making prudent capital allocations. I will now pass it over to Gord.

Thanks very much, Carol. So IAMGOLD, our top priorities are health and safety of our employees. In Q3, we continued to perform better than Target and improve further from our strong Q2 performance. We work every day to meet or exceed our safety goals implanting and refreshing a number of initiatives to ensure safer working environments, including a new comprehensive behavior-based safety program. As mentioned, total consolidated attributable production for the quarter was 187,000 ounces. All-in sustaining costs were $1,118 an ounce, and those -- that all-in sustaining costs at a consolidated level includes corporate G&A costs, and I'll review each operation in turn. At Essakane, contributable gold production for the third quarter 2019 was 96,000 ounces. We experienced higher total cash costs and all-in sustaining costs due to overall higher challenges increased fuel costs from trucking fouls goods [ph] and ore. The results from the carbon in leach and heap leach feasibility study at Essakane were released last night, and I'll review details in a moment. Sustaining capital expenditures were $8.6 million, primarily for spare parts and equipment, and non-sustaining capital expenditures of $11.5 million were primarily for capitalized stripping, [indiscernible]. Essakane continues to generate positive cash flows for 2019. This slide outlines the key results from the carbon in leach and heap leach feasibility study. With an after cash MPD of $874 million at a discount rate of 6%, the feasibility study supports an investment in the mill optimization project, which would increase CIL by 6% to 11.7 million tons per annum. [Technical Difficulty] compared to the 2018 run rate of 11 million tons per annum. The existing CIL primary and secondary question circuits continue to be used for the heat bleach process at the end of CIL operation. The key changes from the pre-feasibility study include optimized mining capacity to tonnage handle, a 4% increase in gold production during CIL. We are about even on the annual heat bleach production profile notwithstanding a reduction in a 15% throughput. A significant increase in heat bleach recoveries of 12 percentage points, 11% improved average diluted grade by 5% to 1.24 grams per ton on the CIL material. And optionality at a later date to process the heat bleach material through the heat bleach plant or supported by prevailing metal prices and cost at the time through the CIL plant. Looking at Slide 23, reserves decreased 12% primarily due to depletion. The application of our self-funding aligns to this project and declassification of some of the highest ratio ounces of reserves. The feasibility study identified opportunities to de-bottle at the plant in order to increase to steady-state processing and 11.7 million pounds of equivalent hard rock per annum. The grinding circuit and modifications for [indiscernible] as well as pumps and windy scaling. The FS also identified that the gravity concentrators were unfed leading to underperformance of the gravity circuit. To rally this we plan to increase water supply and an existing spare screen replaced to gravity scalping screen. Test work has demonstrated that improved gravity recovery performance would lead to improved total net for all recovery. At Roosevelt, attributable gold production for the third quarter 2019 was 55,000 ounces. Strongly impacted by the security incident in the summer. We are progressing well with top production levels with mining activities ongoing at all of our pits. Total cash cost and all-sustaining costs were also negatively impacted and in accordance with higher furnace, both metrics were normalized given the lower production for the quarter. These records are MD&A for further details on the organization. Because of the column plant we built in January we recovered 1,300 ounces from tailings in the quarter bringing year-to-date claims and recoveries to 5,600 ounces. I remind you here that as these are recoveries from reprocessing tailings water, the ounces extracted are [Technical Difficulty] quarter and we don't want the plant on 100% of the time Sustaining capital expenditures were $12.4 million in the third quarter, primarily for spare parts and equipment. Non-sustaining capital of $8.8 million was spent mostly on the Saramacca project. As Steve mentioned we achieved an important milestone by delivering our first oil from Saramacca through the Roosevelt mill. Our main development is progressing well, and we anticipate completion by the end of Q1 2020, with ramp-up of Saramacca to full production levels through 2020. Q3 gold production at Westwood was 20 [Technical Difficulty] ounces. Total charge cost and all in-sustaining cost was slightly higher this quarter relative to Q2 due to slightly lower production and sales. Sustaining capital expenditures of $2.9 million in the quarter primarily was deferred development and underground equipment. Non-sustaining capital expenditures of $2.4 million primarily reflected deferred development and development drilling. Underground challenging grades are expected to increase in Q4. We plan to exploit excess milk capacity with open-pit tons from our Grand Duc satellite deposit and currently target positive free cash flow at Westwood in Q4 on 2019 guidance. We continue to study various design approaches to Westwood with a primarily, Westwood mine planning expected in the fourth quarter this year, followed by a plan in accordance with NI.3101 in the first half of 2020. .:

Thank you, Gordon. Good morning, everyone. Before I begin, please note that the results they talked about today have been previously disclosed in accordance with the security regulations and signed off by the qualified persons within the company referring them. Historically, the [Technical Difficulty] quarter is a quieter quarter for global exploration programs due to seasonal weather conditions at some of our project sites. Despite this, the quarter was noteworthy with a series of positive exploration results reported from several projects. We also completed approximately 49,600 meters of drilling at our mine sites and exploration projects during the quarter. Exploration announcements for the quarter included remaining drill results from programs competed at [indiscernible] Monster Lake and Nelligan projects in Quebec and the Cote Gold project in Ontario with further positive drilling results from the previously announced [indiscernible]. Positive drilling results were also reported in our deep drilling program evaluating the underground potential of the Saramacca deposit. We announced a new discovery at in Guinea which I'll speak to shortly. And finally our declaration of an initial you know, resources inelegant project was the discovery of the Year in Quebec is recognized by the Association of exploration linear of Quebec. I'm especially proud of our exploration team in Quebec for this achievement. Afraid it is important to note that the new discovery is strategically located along the prolific Senegal Melis zone between the bottom gold project in Senegal to the north and the Diack bio project in Mali to the south. High rates for the results reported form our 2019 drilling program, which was comprised of 16 reverse circulation drill holes just over 1,800 meters, including 29 meters grading 2.96 grams per ton gold, 16 meters grading 3.17 grams per ton gold and 21 meters grading 9.01 grams per ton gold. The Nelligan project is located Southwest in Quebec project located 15 kilometers to the north. Remaining results at Nelligan reported from the 2019 delineation drilling program included 123.7 meters grading 1.26 grams per ton gold, 50.2 meters grading 1.8 grams per ton gold and 17.3 meters grading 5.5 grams per ton gold. The delineation drilling program supported the completion of an initial resource totaling 3.2 million in gold ounces, comprised of nearly 97 million grading 1.02 grams per ton gold at 0.5 grams per ton cut off. The remaining significant exploration potential to further expand this initial resource and that will be the target of future programs. Overall, our exploration program is balanced and continues to advance early-stage projects towards new discoveries while continuing to support our near mine Brownfield exploration to leverage our existing infrastructure? With that, I will now pass the call back to Steve to conclude.

Well, thank you, Greg. We have just started to deliver on a number of catalysts. Yes, you can see CIL and heat bleach feasibility study that we talked about. Saramacca production and the initial Neligan resource. Q3 had challenges with the incident at Roosevelt. Our team has always met that challenge and as well on their way to resolving the unauthorized mining issue, resulting in even stronger stakeholder relations. And again, I can't reinforce enough how strongly I feel about this being a very big asset for the company, and we live it every day. We're working hard on the Westwood Lake mine update and await the decision on the mining permit to Boto. In 2020, we're looking forward to achieving full production at Saramacca and assessing its underground potential during the work optimized as it can, further delineating resources and key expiration projects and positioning ourselves for development decision on Boto. We are building the case for IM Gold to improve margins, cost containment initiatives and ultimately cash flows while executing on the plan and safely. We look forward to keeping you updated on our progress. And thank you very much for joining us.

[Operator Instructions] Our first question is from Mike Parkin with National Bank. Please go ahead.

Hi, guys, thanks for taking my question. I was just looking for a bit of color in terms of how Roosevelt may be operating in October if you can give it? Looks historically like you do roughly around a million tons of water mined per month, where we kind of relative to that for October and If you can give color in terms of where you expect to be for the full quarter that'd be great.

I actually don't have the total mine plans for October here but I will get back to you. I can say we are mining in all [Technical Difficulty] We're close to normal production levels across the operation notwithstanding we did lose a bit of equipment as a result of the incident. So we're in the process of recovering that back but generally, our production is going full blast.

Super. Congrats on the first ore from Saramacca. How do you kind of see that ore coming in through the quarter in terms of volume? Is it going to be a fairly marginal amount or do you expect it to actually contribute fairly significant? Do you want to give it a percentage basis or something for the quarter?

It will contribute some ounces. We haven't included in our forecast numbers but we are looking for potentially somewhere between 2,000 or 5,000 ounces out of Saramacca for the fourth quarter. The materials that we're mining are part of the ongoing effort. So we have ore right at the surface and as we're driving the road into the pit there we're picking up some more along the way.

Actually, as you travel along the surface, gold at the surface.

Pulling it back in the backpack. That's good. Sounds like the fourth quarter is coming along nicely. I'll leave it there for others to ask question.

The next question is from Steven Butler with GMP Securities. Please go ahead.

Good morning again. Gordon, congratulations on your promotion. Well done. And then I want to ask you a question about the study for the CIL and the Hard Rock maximum capacity filler design capacity 11.7 million tons per year. Of course, with some soft rock still in the mine plan, you're milling way above that rate. So maybe it does -- how does the profile look in the next couple of years on milling rate for [indiscernible] and what percentage of the reserves are hard rock?

I think going forward, our reserves are about 92% to 95% hard rock somewhere in that range. This year and for the past several years, we've had a pretty strong contribution from our satellite tip to the West. But that's really winding down for us in the coming year. In 2020, we do have a second satellite for like the second one. Immediately south of the existing African main zone, which will contribute some soft rock. We do have some lower grade soft rock stockpiles as well [Technical Difficulty] full hard rock as we move forward. Current team has been out looking at other satellite opportunities. We have a great line package there. part of the work in [Technical Difficulty] is to evaluate what the business case is for those. Obviously, soft rock skips through the mill very nicely and certainly adds a lot of incremental gold production to us at a relatively low cost. We're aggressively looking for more but the reality is most of its hard work.

Sure, and Gordon, this quarter how much percentage would have been soft rock approximately?

This quarter I think we're running I want to say about 80% hard rock, probably 10% transition and 5% to 10% satellite.

Okay. So do you have certain expectations that you deserve some conservatism potentially built into the 7.7 or is that a good number you feel comfortable with?

There's always conservatism as we look at numbers. I start with every -- every time we've done an expansion, we have met or exceeded our production levels. We do that on purpose to make sure that the business [Technical Difficulty] for that investment.

Okay, sounds good. Thanks, Gordon.

The next question is from Tanya Jakusconek with Scotiabank. Please go ahead.

Good morning, everybody. And Gordon, congratulations again on your promotion. I just wanted to circle back and Steve asked a bit about the next couple of years. We're expecting a stronger Q4 from Africa are we not?

Yes. We're going to start in Q4. We saw some great pick up in October and we actually saw exceptional recoveries as we got into some very low graphite ores. October was okay. The remainder -- the next 2 months November, December we're looking for [Technical Difficulty]

Is that based on grade and improved recovery that we get the pickup?

It should be ton grade. The recovery ore is a bonus for us. We're not counting those chickens yet.

Okay, coming downgrade; okay, perfect. That's all I had on the technical side. I did want to talk -- come back to Steve if I could, just on -- you know, you mentioned Steven in your opening remarks that you're going to be focusing more on strategic options for the company and surfacing value; and I think you highlight quote. Can you talk a little bit about some of the auctions that's surfacing value at quote?

I mean, Tanya, you know this better than anybody because you've been around a long time. I mean, we clearly -- I think one of the comments we get from our shareholders is that we spend the time to get their feedback and we actually listen to them. Quote representing a very large CapEx project for us even though it has tremendous transformational capability for the company, it's just a non-starter, the way it's currently structured. So we have a number of options, do we sell down additional percentage from the [indiscernible]? Do we sell all of it? Do we take those proceeds and reduce our debt that's not due to 2025, though we use it to trying in invested minds and I'm just using Bodo [ph] as an example, that are smaller CapEx; and let's risk from an investor standpoint. So, you know, we have a lot of optionality with quote; I would just tell you that there always have been expressions of interest in that asset, it's in Canada, it's surrounded by infrastructure, it is low-grade, both challenged by the [indiscernible] positive attributes that you can find significant interest. So, my time is going to be more strategically focused on things like quote; we have had list of very robust discoveries, whether it's Monster Lake in Maligan [ph], whether it's Bodo [indiscernible], and then more recent discovery in Guinea. We have a lot of optionality that I think we need to work to surface for value purposes and we're not going to fight city hall here. People are interested in cash flow, cash flow, cash flow; they want to see dividends coming out of the operations just like you would on many businesses. So stock market seems to be on yield as opposed to value placed; so I'm not -- we're not going to beat a dead horse here. I need to spend less time at the sites, I've spend a phenomenal amount of time at the sites that you know, I'm at Atakan [ph], I'm at Rosabell a lot at Westwood; Gord is as well. We're going to increase Gord's time at the sites, and I'm going to be spending a lot more time with Carol and Jeff on these strategic options, which we feel very positive about in terms of being able to deliver value for shareholders.

So is it safe for me to interpret this as excluding Cote gold that you talked about -- some of your options, all of these other ones that you've mentioned from [indiscernible] Monster Lake, etcetera, etcetera. Would some of your options be considering selling of these assets to generate that cash flow?

Yes, absolutely.

Okay. All right. So not real -- can I also ask on Cote? We're waiting for the concession approval. You mentioned a development decision in 2020. Steve, what do you need to see to pull the trigger on that asset?

Well we had an agreement in place with the former government before the election, and I was over there with the president and minister of mines, and we were well there. It's a beautiful opportunity for us, a $250 million capital expenditure, about a 10-year life of mine, a very nice term for us, a very expandable resource. With the election, we had new players to come in: minister of finance. And I'm in my 60s now, Tania, so I call them younger people. Young bucks come in with new ideas. And these are manageable, but they're time consuming. And so to answer your question, we need to solidify the royalty, the dividends, the tax holiday, the things that we thought we had pretty well -- and believe they still are because we still have strong support from the president and minister of mines. We are getting push back from what I would call new players. So I need to get over there and deal with this youth enthusiasm and get this locked down so that we can move ahead because our board is really excited about it. Our top 10 shareholders really [Technical Difficulty] the project. It's bite-sized for us. It delivers value very quickly. So that's another thing that I spent time on. And you've been around this a long time. These things don't happen overnight. You have to make multiple trips; you have to have multiple meetings. So that's why we promoted Gord, and that's what I'm going to be focusing on. More time on a plane, unfortunately for me I guess, but it's part of the business. And we're just seeing a lot of interest. We have a very robust pipeline, as you know. But that doesn't matter today. People really don't care about that. They care about what are you producing, what's your margin. It's not 2016; it's [Technical Difficulty] align ourselves with the sentiment that's currently out there. That may change like it always does in this space. But right now, we need to focus on cash flow. We need to generate margins that are attractive to investors. And we need to make sure that we are funding all of our sustainable CapEx and [Technical Difficulty] what we generate. So our goal is to eventually get ourselves into a position where we can pay dividends, where we can be more what I would call a more attractive operating model that currently exists in the environment. So that's my job. That's what I'm going to be working on.

So is it safe for me to understand from what you said that you don't have right now fiscal agreement in place that has defined your royalty, your dividends, your tax holiday, et cetera?

Yes, that would be a fair comment. I mean we do have it, but bind.

It's advanced in terms of the negotiations, Tania. It's very advanced.

It's advanced but you don't have it in place. If you were to have it in place, does everything else in the project meet your criteria to make a go-forward decision?

Yes, it does. It's quite attractive.

Okay. Look forward to getting that agreement. Thanks a lot, guys.

The next question is from Anita Soni with CIBC. Please go ahead.

Good morning, everyone. Congratulations, Gord, on your promotion.

Thank you.

And my first question -- just a little bit focused back onto Westwood. The catalyst, I think you said Q4. When do you plan to put out that plan in Q4?

We'll probably send out something in December. We're looking to provide some ranges around [Technical Difficulty] and cost structures. And looking to put it out in December. We're actually looking internally at presentations in the coming week on that, and obviously, it needs to go through [indiscernible] internal review and some tweaking to make sure that we're all aligned. But we're still on track to get it out in Q4.

Are you happy with I mean the progress there in terms of if you did reduce the workforce? I'm just trying to get an idea of whether or not we're going to be returning to larger production numbers or sort of sticking with something that's a little more tighter mine plan and perhaps more free cash flow.

Yes. Look, I'm extremely happy with the operation there. I was there -- I've just been there twice in the last month and an opportunity to go underground. It's really good moral. Our safety meets statistics, which is always a harbinger of what's to come. Our safety statistics are moving aggressively in the right direction. Our productivity numbers are good. It's an underground mine. We'll always have a couple of challenges, but yes, we're really looking to turn it around. I think there will be a bit of a wrap-up required. It's not going to be immediate, but we are turning it around. As I mentioned in my dialogue earlier, we started mining a small satellite pit called Bandook, which will provide ounces here in Q4 and through all of 2020, and probably a little bit into 2021. So that's helping supplement while the operation gets its feet underneath it. I had an opportunity to talk to a lot of the technical people about the study that's coming out and getting into it a lot more granularly. Yes, we'll be coming out with some stuff here.

Okay. And then just moving onto Saramacca. So I think the last time you guys were evaluating underground versus open pit options -- you're delivering ore right now. Can you just give us an idea of how the open pit versus an underground option would play out in terms of timing, if it does go ahead?

Yes. So I mean right now, in our approved mine plans, it's open pit option only. The underground study is progressing well. I've seen some of the preliminary results from that. We're working on financial models and trying to understand on an integrated basis how that might sort of pull in. We've got some budgetary quotes on contractors to really start to understand what the upfront cost for that option would look like. The challenge is -- some of it -- you've got to get some interest. And challenge is obviously as you convert some of your block models from open pit to underground, it's a change of support. But you see there and your definition of what is ore -- or sorry, what is measured and further indicated changes. So we're sort of wrestling with that right now. The work we're doing in the pit -- because it's a multi-phase pit, we're not establishing any final walls right now. Really the pit -- to reduce, we'll have to go to an underground option. We'd still be mining all of the [indiscernible] and most of the transition, and even a little bit of hard rock through the pit. So the Phase 1 pit, the Phase -- actually, the Phase 1 and Phase 3 pits are all contained still within that original design. If we do go underground, what that gets us away from is some really high stripping that we'd have to start thinking about towards the end of 2020 to open up the [Technical Difficulty] if we need to go to a solely open pit option.

Okay. And would you be doing -- I guess drifting away from the pit or drifting from the bottom of the pit into the underground?

Sorry?

If you're looking at this, would you be drifting from the bottom of the pit into the underground?

Yes, sorry. We actually have an interesting portal location. If you remember at Saramacca, we're starting the pit basically on the top of the hill. We have locations down on the -- closer to the valley floor at the base of the hill where we can put a quarry in. And the quarry designs is -- it's not quite horizontal, but it's actually a fairly gradual decline to get right into the middle of what you'd call the hard rock portion of the quarry body.

Thank you very much.

This concludes the time allocated for questions on today's call. I'll now hand the call back over to Indi Gopinathan for closing remarks.

Thank you very much, Julie. And thanks to everyone for joining us this morning, and for your continuing interest in IAMGOLD. We look forward to having you join us again for our 2019 year-end conference call in February. Goodbye.

This concludes today's conference call. Please disconnect your lines. Thank you for participating and have a pleasant day.