IAMGOLD Corporation (IAG) Q1 2021 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD First Quarter 2021 Operating and Financial Results Conference Call and Webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator 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, Ariel. And welcome, everyone, to the IAMGOLD first quarter 2021 operating and financial results conference call. Joining me today on the call are Gordon Stothart, President and Chief Executive Officer; Daniella Dimitrov, Executive Vice President and Chief Financial Officer; Craig MacDougall, Executive Vice President, Growth; Bruno Lemelin, Senior Vice President, Operations and Projects; and Tim Bradburn, Senior Vice President, General Counsel and Corporate Secretary. Our remarks on this call will include forward-looking statements. Please refer to the cautionary language regarding forward-looking information in our disclosure documents and be advised that the same cautionary language applies to our remarks during the call. During the call, non-GAAP measures will be referenced, and we direct you to review the reconciliations in our disclosures relating to these measures. With respect to the technical information to be discussed, please refer to the technical information and qualified person 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. Good morning, everyone and thanks for joining us. I hope everyone is happy and healthy in these fun times. I'd like to start by saying how pleased I am to introduce Daniella Dimitrov as our new CFO. Daniella joined us at the end of March, upon the retirement of Carol Banducci, who had been with IAMGOLD for almost 15 years. I'm sure that Daniella is well known to many of you having been involved in our sector, as a seasoned executive in the investment corporate and banking components of the mining industry at various times through her career. I'm very happy that she's agreed to join us, bringing her wide skill set to further enhance our strong executive and finance teams, as we move forward through this exciting growth phase we're in. Now let's get into overview of our first quarter of 2021. So at the corporate and strategic level, IAMGOLD generated $89.5 million in mine site free cash flow during the period with adjusted earnings of $6 million, or $0.01 per share. On our balance sheet at quarter-end, we have $968 million in cash, and approximately $1.5 billion in total liquidity, which fully funds our construction plans. For each of our sites, we have continued our proactive management of COVID-19 with rapid response and strict protocols, some of which I will expand on in a moment. We continue our comprehensive community engagement programs including funding the infrastructure improvement projects through the Rosebel Community Fund in Suriname, and starting the planning for Phase 2 of the Burkina Faso, Triangle d'eau project to bring much needed potable water to the communities around Essakane in Northeastern Burkina. The board has amended its renewal and diversity policies targeting the average tenure of the board to be 10 years or less, and 30% or better female representation. As well, the policy has been adjusted to limit the board chair in each committee chair to a maximum tenure of 10 years in their respective roles. From an operations and growth perspective, we continue to execute our growth plan with Cote construction well underway and advancing rapidly. And the project achieving 18% overall completion at quarter-end. Overall completion is a composite metric taking into account progress on all aspects of the project including engineering, procurement, fabrication, construction and commissioning. At Essakane, we delivered strong operating performance and we have completed the CIO upgrade project. At Rosebel, our first quarter of the year was impacted by heavy rain and camp capacity restrictions. However, we are expecting a much stronger second half with the completion of the camp expansion in Q2 and as we move past the rainy season. At Westwood, we continue to take a cautious approach targeting a safe restart of the underground operations in the second half of the year, following a decision point this quarter. In addition, we continue to advance our development pipeline by de-risking the Boto Gold project, continuing delineation drilling at the Gosselin target near Cote and advancing exploration work targets, including at Nelligan and in the Bambouk district. Bruno and Craig will provide some additional color on all of this activity in a few minutes. IAMGOLD is committed to achieving high standards and environmental, social and governance practices which reflect our long-held Zero Harm Cision. In the first quarter, we committed to investing $950,000 in a four-year Giants of Africa program, aimed at encouraging the development of youth through sports in Burkina Faso, Senegal, and Mali. We also joined a few of our like-minded pure companies in sponsorship of the Artemis project, which aims to promote female business owners and entrepreneurs in the mining sector, including innovative and award winning social and natural scientists. As mentioned earlier, we applied $400,000 in funding from the Rosebel Community Fund towards solar, LED streetlights for public security, electrification, and potable water supply in the communities around Rosebel, and Saramacca. And we continue our public-private partnership with Canada's government, the One Drop Foundation and Cowater on the Triangle d'eau project by completing Phase 1, which provides potable water to 60,000 people there in Essakane and advancing Phase 2, which aims to bring potable water to an additional 75,000 people. We are humbled to receive recognition for our efforts. And we were recognized the prestigious Corporate Knights 2021 Global 100 Sustainability Scorecard, where we have been ranked out of 116 - we've been ranked 10 out of 116 global mining companies reviewed and among 8000 global companies spanning various industries. IAMGOLD is recognized for a third consecutive year as part of Bloomberg 2021 Gender Equality Index among 380 global companies across various industries that foster a more inclusive and equitable workplace. And we received the Mining Association of Canada's prestigious Towards Sustainable Mining or TSM Excellence Award in the Environmental category for innovative recycling of plastic at Essakane. Essakane recognized in 2010, that there was a need to enhance its plastic waste management, particularly as there were no recycling facilities in the region, which meant public waste had to be - public and plastic waste had to be buried. Working with local entrepreneurs Essakane been able is it being able to recycle, rather than bury plastic while supporting local businesses and creating jobs with over 65 tons recycled to date. On behalf of the whole company, I offer our congratulations to the Essakane team on their well-deserved recognition. COVID-19 health and safety protocols are embedded in our operations and projects. These protocols are continuously adapted and enhanced. And in the quarter, Essakane implemented additional member measures, including thermal screening of all personnel and visitors entering the mine site and the Ouagadougou office. The 20-bed field hospital and medical confinement house established and Ouagadougou in 2020 remains available to accommodate any future COVID-19 cases at At Westwood, in addition to existing protocols, random antigen testing was implemented on site to further protect the workforce against COVID-19. And at Rosebel, following the increase of COVID-19 cases in country, there was a temporary suspension of daily commuting by employees during the quarter, with off-site employees required remain at site during their shift cycle. To enable mining capacity to increase the full site complement while respecting COVID-19 protocols and accommodating the workforce, Rosebel added 150 beds to the camp in the first quarter, with an additional 210 beds expected to be completed in the second quarter. And at Cote, in addition to existing protocols, a combination of PCR and antigen testing for all personnel and visitors entering the site has been established. Further, mandatory antigen testing at the Sudbury and Timmins bus terminals has been implemented to detect COVID-19 cases before there is an opportunity for contact as personnel board the bus. COVID-19 related community activities include financing the Suriname Bureau of Public Health cooling system of the Central Laboratory, which provides critical testing capacity for HIV, malaria, influenza, tuberculosis and more recently, COVID-19. Funding was provided through the Rosebel Community Fund Community Fund and the Suriname Environmental and Mining Foundation also known as SEMIF. And both of these entities are funded wholly or partly by Rosebel. As well, IAMGOLD contributed $250,000 to UNICEF to support the international Act A/ COVAX Emergency Vaccination Response effort in West Africa. Now looking at our operating results. In the first quarter on a global basis, attributable production was 156,000 ounces. Total cash costs were $1052 per ounce produced, and all in sustaining costs were $1238 per ounce sold. In addition, capital expenditures, including both sustaining and expansion expenditures at our operating sites, as well as capital spent at our construction and development projects was just over $102 million in the quarter. We've included few bar charts, to provide a comparison of results overtime. Attributable gold production was low compared to recent quarters due to the heavy rains and COVID-19 restrictions impacting Rosebel's, as well as Westwood's reliance on open pit feed following the cessation and suspension of underground activities. Total cash costs have increased in the quarter due to the lower production base. All-in sustaining costs were a bit lower in the quarter, primarily reflecting lower sustaining capital spend. And operating capital expenditures were also relatively lower in the quarter due to lower capitalized stripping at Essakane and impact of rainy season and COVID restrictions at Rosebel. In the quarter, we made good progress in a number of areas while experienced some setbacks and others. At Essakane, mill optimization project was completed, with expected improvement in hard rock ore processing capacity over the balance of the year. The site is working on optimization following the upgrade. At Rosebel, we achieved approximately 85% of mining capacity by the end of the quarter, with Saramacca, non-critical path infrastructure work ongoing. At Westwood, we announced a couple of weeks ago that we have started recalling our underground employees for rehabilitation work underground and training in April. And we expect to make a decision this quarter on a second half restart of the mine. At the Cote Construction project, we have commenced major earthworks ahead of our target schedule and continue to expand the construction camp. Bruno and I had an opportunity for a quick COVID-safe visit to Cote a couple of weeks ago. And I'm very excited about the progress that I saw. We have continued to progress the access road construction and project infrastructure de-risking work at the Boto project. And an exploration resource delineation work continues at Gosselin, where we are targeting a maiden resource later this year. Finally, we have ongoing resource delineation work at Nelligan, the Rouyn project and the Fayolle property in Quebec, a Diakha in Mali and the Karita discovery in Guinea. I will now pass it over to Daniella to review our financial results.

Thank you, Gord, and good morning everyone. I'm very pleased to be joining IAMGOLD at such a transformational stage of the company. With my diverse background and experiences, I am confident I will add value. I look forward to working alongside the entire team to successfully drive the company to next major milestone. 1 million-plus ounce producer at all in sustaining costs of less than $1000 per ounce by 2024. The following are key highlights of our first quarter financial results. We generated revenues of $297.4 million, down from the previous quarter due to lower sales and lower realized average gold price of $1781 per ounce. Earnings were $19.5 million or $0.04 per share and adjusted earnings were $6.2 million or $0.01 per share. We generated $89.5 million in mine-site free cash flow, reflecting lower operating CapEx this quarter. In terms of our financial position, we ended the quarter with cash and equivalents of $967 million, benefiting from net VAT inflows of $36 million at Essakane and the net proceeds of $36 million from our non-core royalty portfolio sale. We maintain a largely undrawn credit facility of $500 million, resulting in total available liquidity of approximately $1.5 billion at quarter-end. In the quarter, we extended the term of $490 million available under the credit facility to January 31 2025. Subsequent to quarter-end, we entered into a new gold sale prepaid arrangement for 50,000 ounces at $1753 per ounce and a cost of 4.44% per annum. We will receive a prepayment of $80.3 million in equal monthly payments in 2022, with the obligation to physically deliver such 50,000 ounces in equal monthly installments in 2024. This transaction effectively rolls one-third of our obligation to physically deliver 150,000 ounces under the 2019 prepay from 2022 to 2024 after Cote is in production. Looking forward, sales are expected to improve and stronger expected production in the second half of the year at Rosebel and Westwood. Unit costs are expected to trend down in the second half of the year, driven by higher production and sales, potentially offset by some cost pressures on energy and supplies, along with continued to strengthen the Canadian dollar and euro. CapEx is expected to trend up for the balance of 2021, reflecting increased activity at our operating sites Cote Construction and Boto de-risking Taking a closer look at our cash flows in the quarter. Cash in-flows from operating activities reflect earnings after adjustments and before changes in non-cash working capital of $87.3 million, partially offset by $7.5 million in income tax paid. The inflow from working capital of $19.2 million benefited from cash received from the Essakane VAT refunds, partially offset by the timing of payments of approximately $13 million. Net cash used in investing activities of $63 million, reflects $102 million CapEx spend, partially offset by the cash received from the royalty sale. Please note that an additional $10.5 million was received from the sale in April as the final payment. Net Cash used in financing activities of $14.2 million, reflects payments for financing cost, leases and loans as well as dividends to minority interests. Our cash position was $970 million at quarter end, with net cash at $436 million and total available liquidity of almost $1.5 billion. Our senior notes mature in 2028. Our financial position combined with mine site free cash flow, continuous improvement at our operations, and a disciplined management of our growth pipeline supports the transformation of IAMGOLD into a lower cost, higher margin million ounce producer in a few years' time. I will now pass the call to Bruno to discuss the operation.

Thank you, Daniella. I'm happy to report that we started the first quarter of the year with our safety performance metrics tracking better than target levels. Our DART and PRI rates were 0.46 and 0.67 respectively, per 200,000 hours works. We continue to implement several initiatives, including I am safe, the revamped health and safety management program to promote a safe work environment. I will now review operating performance at each site in turn. At Essakane, attributable gold production was 12000 ounces for the quarter. Production reflected above plant grades due to complex or partially offset by lower gold recoveries on the same material. We have completed the mill optimization project with an anticipated of 10% improvement in hard rock processing over the course of the year, from annualized 10.8 million tonnes to 11.7 million tonnes. This improvement in capacity is important as this metro site moves to greater volumes of transition in hard rock versus softer ore in the coming years. All-in sustaining costs for the quarter was $1061 per ounce sold reflecting lower sustaining capital. Looking forward to the balance of the year, production remains on track relative to guidance and we expect higher capital in the second half of the year due to the initiation of strategic pushbacks. At Rosebel, attributable gold production for the first quarter was 47,000 ounces impacted by lower grade stockpile see and lower throughput caused by unusually if it rains. At the Saramacca, we still experienced the lower grades due to mining at the edges of the top of the deposit in some areas. The community bypass road, part of the Saramacca infrastructure program was completed in the quarter. All-in sustaining costs at Rosebel were $1450 reflecting lower sales on this lower production, with the ramp up of accommodation which Gord mentioned earlier, we expect to reach normal capacity in the second half of the year. To generate increased recoveries, we have started the engineering and procurement process for the adsorption disruption and recovery or ADR search of continuous improvement project. At Saramacca, completion of the non-critical infrastructure work has been rescheduled and the project is no claim for completion in the fourth quarter, due to the lodging restrictions. Finally, we have been progressing negotiation on the collective labor agreement, and these efforts continue into the second quarter. Westward produce 7,000 ounces in the first quarter 2021, with the mill processing in ounces [ph] equivalent this quarter while the underground remains on care maintenance. The Business Continuity assessment is ongoing, including geotechnical engineering work, All-in sustaining costs for the quarter were $11 $187 per own ounce sold, lower quarter-over-quarter due to lower sustaining capital level. In April, we announced the recall of underground employees for rehab work and training. A decision to restart the underground operations is under consideration in the second quarter, after which we would anticipate the restart at Westwood in the second half of 2021. The restart would target lower seismicity extraction zones starting with the E zone. We are advancing the final study to assess the potential of the asset in the Westwards hub and spoke concept. Work on file includes further engineering and permitting I will now provide an update on our construction project Cote Gold. This slide highlights the key metrics that we believe make the Cote Gold project a tier one asset. Cote has 18-year mine life under the extended case, almost 500,000 ounces per year of production in the first five years. Second part of total cash costs with all-in sustaining costs of $770 per ounce sold and Cote is located in mining-friendly Onterio with access to experienced labor in close proximity to key infrastructure. The first quarter was a busy one at Cote. I will start with a few key metrics. As of March 31, detail engineering for Cote as advanced to approximately. We are at 18% project completion. Procurement and expediting of major equipment contracts are progressing with the contract for the mining fleet being awarded in the first quarter, securing pricing of major items as part of early works has helped mitigate pricing pressure. However, we remain cautious given recent copper and steel price movement. The project incurred $67 million in the quarter and $143 million since July 1 2020. In the first quarter, the team started major earthworks ahead of the milestone scheduled, and focused on a whole widening and overburdened stripping. We commenced water management infrastructure for the tailings management facility. And we set up temporary camps with the construction of permanent camp underway. From health and safety perspective, to-date, we have not experienced any impact to schedule due to COVID-19. For the balance of the year, we will focus on earthwork construction whole road construction initial open pit pre-stripping and water management infrastructure around the pit. We aim to commission a portion of the permanent camp in the second quarter and fully commission the final camp in the third quarter. Civil works are also underway at the plant site, with concrete activities expected to start in the second quarter as planned. This slide summarizes our progress to-date. We remain on track and we are working steadily to meet our time and cost targets. We look forward to providing you with our quarterly updates as we progress the project. I will now turn the call over to Craig to discuss development and exploration.

Thank you. 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 qualified persons within the company reporting. In the quarter, our brownfield exploration work included at Essakane and air core drilling advancing program to help screen the sand [ph] covered area which we refer to DEM [ph] for potential targets located northwest of the Essakane operations and within tracking distance. Results will be used to guide the plan pole of drilling program expected to commence in the second half of the year At Rosebel, the team completed approximately 13,300 meters of diamonds and RC drilling, with a focus on resource development and conversion that are known deposits, as well as targeting selected high priority targets within our exploration concession. At Westwood, surface drilling focused on operating inferred resources at the grand new satellite pit, with underground drilling focused on supporting the potential restart of underground mining operations. Greenfield exploration in the quarter included the reporting of assay results from the Goseelin zone at the Cote gold project from an ongoing delineation drilling program, which will support an initial resource estimate expected in the second half of the year. The commencement of a further round of drilling at the Lac Gamble zone at a Rouyn gold project in Quebec to also support a future made resource estimate as well as the reporting of assay results from a drilling program completed at the [indiscernible] zone. And we initiated infill drilling at the Diakha deposit in Mali, which is located south of the Boto Gold's development project. Exploration spending the quarter was $10.4 million, split roughly evenly between Brownfield and Greenfield programs. On this slide, you can see a few assay results reported during the quarter at the Gosselin zone, where growing continues to intersect wide zones of mineralization with locally high grade. Over the balance of the year, the Greenfield exploration budget for the Cote district is $2.8 million, reflecting approximately 13,000 to 16,000 meters of planned diamond drilling, which includes 12,000 to 14,000 meters of delineation drilling on the Gosselin zone itself. As noted earlier, we are targeting a main resource for Gosselin win in the second half of the year. At the Boto gold development projects in Senegal, we continue to make progress in de-risking the project. We have advanced the construction of view around access roads. And permanent cap construction with the award of a camp contract during the second quarter. Geotechnical and hydro-geological assessments are underway to refine the mine facilities and pits design. And plant detailed engineering has advanced to 75%. COVID-19 restrictions have eased somewhat since the first quarter, allowing work on site to progress with appropriate protocols in place. Our development capital guidance for the year reflects the early works package, which includes completion of the year-round access road and an airstrip, engineering for critical plant equipment and the implementation of local sustainability programs. We've included a few pictures here of the access road, campsite, and bridgework on the slide. The Boto gold project anchors the Bambouk district where exploration efforts have led to several additional discoveries. Building on the resource potential this part of the Senegal Mali shear zone. Infill drilling has commenced at the Diakha deposit in Mali with two diamonds in one RC rig currently operating. The program is designed to upgrade additional inferred ounces, while at Karita, in Guinea, a diamond drill rig is on site and will commence an initial delineation drilling program to support a future made and resource estimate. We've updated this slide to show not only industry reserve trends over the past few years, but also measures indicated resource trends. The story unsurprisingly is the same. Our industry has been on a steady decline since 2012, which represents a significant challenge to maintain future production levels. Finally, as a bit of a recap, I will finish with our project pipeline. As I've said many times previously, competition for an access to quality exploration projects and acceptable entry cost remains challenging for the industry. And especially in the face of the current environment, the bullish gold prices. At IAMGOLD, we believe that a balanced project pipeline strategically advanced is a fundamental asset to the future growth and viability of any mining company. As such, IAMGOLD has developed and continues to invest in a healthy pipeline of early to advanced greenfield exploration projects to support future growth, as well as support near mine Brownfield exploration programs with a view to extend the mine life and leverage our existing infrastructure. I will now pass the call over to Gord to conclude.

Well, thank you, Craig. So in the first quarter 2021, the IAMGOLD team made good progress towards our operating and development goals. With the normalization of operations and continuous improvement, we expect to see better production levels and costs over the balance of the year, and to continue to steadily advance our development projects and pipeline. We look forward to continuing our quarterly conversations with you on performance and cash generation from IAMGOLD's operating mines, on construction progress at Cote and de-risking progress at Boto, as we realize our transformational growth strategy and our exploration and development pipeline news, as we set the business up for the long run. On an editorial note, I'd encourage everyone to get your vaccines as soon as you can. If you haven't already done so, it's important for the safety of us all as we get the world restarted. So thank you to everyone for joining our call today. I will now pass the call back over to the operator. And we'll be happy to answer a few questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Fahad Tariq of Credit Suisse. Please go ahead.

Hi, good morning. Thanks for taking my two questions. Maybe first on Cote Gold and the spend for the rest of the year. You mentioned, I think you use the word cautious on some of the cost pressures you're seeing on copper and steel, maybe even timber. Can you talk a little bit about the potential risk to the CapEx spend this year? Like how much higher could it be? How much has already been locked in in contracts already? Any color there would be helpful. Thanks.

Thanks very much. So, look, we're having a good hard look at all of our costs right now. We don't see a significant vulnerability for this year or for the rest of the project. However, steel prices have moved up concrete prices, as well concrete supply prices. And there's some general inflation pressures on labor costs for construction. So we are over - currently, over 50% of the total spend is already locked up in term contracts. Some of those are unit price contracts are or are cost plus contracts. So there is still some exposure to inflation, but not huge. I think as we move towards the end of this year, we're going to have a very, very clear picture of where the total cost spend is going to go. And we're comfortable that there's nothing coming at us that provides too much concern for us in terms of costs, other than some minor aspects of what we're looking at. I guess the other thing I would add is, 85% of the total costs at Cote are Canadian dollar based. We have done quite a bit of hedging and we do have a lot of Canadian dollars in the bank to support that. I think we're covered over 70% of our Canadian dollar exposure for 2021. However, the Canadian dollar does continue to strengthen. We look at it on a regular basis. And we continue to monitor where it's at. And our expectation is that it's going to move a little bit more back in our favor as we head towards the end of the year. And the economy starts to shake out.

Okay, great. Okay, that's helpful. And then maybe just switching gears on the labor agreement negotiations at both Rosebel and Essakane. Any updates on how - maybe it's too early for Essakane. But maybe how Rosebel is proceeding any potential hurdles?

Look, Rosebel is very near the end of the process. We have a presentation into the board. They are looking for ratification in the coming couple of weeks here. So we do hope that the Rosebel situation is-- it will clear up here very, very shortly. Essakane is just entering into their process. I think they've been - it's two or three years since they last negotiated. So that one's still ahead of us. With all of these projects, we start that work very early and start the discussions to make sure that we get alignment on what the issues to be talked about. But I'm certainly hoping that Rosebel shakes out sooner rather than later.

Okay, thank you.

Our next question comes from Anita Soni of CIBC World Markets. Please go ahead.

Good morning, everyone. My first question comes on that Cote? Could you just give me an idea of, when you're measuring the 18% completion? What basis are you using dollars or units of production?

So the 18% of total project completion is a composite measure. So it incorporates a weighted average score between engineering, procurement, construction, commissioning. I'm sorry and fabrication. I miss fabrication. So each of those components is weighted. Construction is by far the biggest component, but it's not the only component. And each of the metrics is measured under different KPI. So construction is based on construction spend, procurement is based on advancement towards the schedule. Procurement is a weighted average based on the value of contracts, but sort of tied to the number of contracts that get negotiated and signed off. Engineering is based on hours. So each of the components has a different weighting to it. When we get into construction, like I said, it will tie quite closely to spend. That being said, I don't want to give anybody the impression that where we at with the spend versus advancement is - it can be extrapolated to final costs. I guess what's a little different with Cote compared to some other projects, is the fact that because engineering and procurement was so far advanced compared to traditional project execution models. We are right now seeing a lot of - perhaps of additional value in that 18% metric, because of that advancement in construction - or sorry in engineering and procurement versus a traditional project which might follow a little more closely with the spin timeline.

Thanks. Switching to some of the operations. So on Westwood, I noticed you guys said you were focused on remediation and training. So does that mean that, maybe there's not as much focus on pulling or and putting it through the mill in Q2?

Well, with respect to Westwood, what we said, we want to get underground. There's some rehabilitation, there's some training, there's some new development protocols that we want to put in place. Right now, we're working internally to reach a decision on when to start pulling a work. And our guidance estimate contemplates that that ore production from underground will start relatively early in the second half. So we're not pulling or right yet, but it shouldn't be too long before we get there assuming we reach that go ahead decision internally.

So then, do you feel it would be similar grades for Q2?

Bruno, could you help with that?

Yes. I think there's going to be similar around the one gram per tonne. Also what is interesting with Grand Duc is that we have increased the amount of reserves. We have more than 50,000 ounces additional than what when we first started the project. So Grand Duc is going to be helping Westwood to complement its production seed over the next two years.

And then my last question and I'll leave it for others, is Rosebel. So a little bit more detail on that one. So you had some rain Q1. I'm looking at your - one of my weather maps and stuff. And Q2 is your traditional rainy season. So could we expect similar types of sort of softness in the throughput levels and in the grades? And I noticed, the mill did well. It seems like there were some stockpiles that you were pulling from. And so could you give us an idea of what the stockpile level is so that we can get an idea where Q2 will shake out?

Bruno?

Yeah. So, Anita, you're right. Rosebel as experience, unusual amount of seasonal rain. Usually, it starts in Q2, but you have a smaller season in Q1. This year, we had twice the volume as in the same period in 2020. So twice as much as what we usually get. So what happened is, we were limited in terms of rock all-in capacity. So we were impacted also. In terms of production, also the material was added greater content and humidity. So we have to rely on lower grade material from the stockpiles, as you mentioned. And these stockpiles are at elevated numbers. So for the moment, I don't have the precise number. But it's certain that as we are going to go through H2, the raining season is going to subside. Also, we will have additional rooms to increase the mining capacity. Right now with the COVID restriction, we have to limit the number of people on site to favor social distancing. So with the additional room and the seasonal rains that will subside in H2, we forecast that we target an increase in production. And also to have a better grade maybe in Q4 which sound like a coming strong as we will be at the other areas of the deposit where we expect to revert back toward the average reserve grade.

Okay, thank you.

Our next question comes from Tanya Jakusconek of Scotiabank. Please go ahead.

Yes. Good morning, everyone. Thank you for taking my question. Just following off Anita's question, just on the performance of some of these mines. Just Essakane, I mean that was very high costs in Q1. Maybe Bruno, can you talk us through what you're expecting cost wise as we go through the rest of the year

Certainly. Sorry, Tanya. Yeah, we had some costs increase due to the higher consumption of region due to the complexity of the material that we have in the Phase 3. The Phase 3 is a wonderful material, very high-grade, higher than what we forecasted. Although that recovery on some of that complex ore requires more consumption of region. Also we were bit impacted by higher energy costs and also higher royalties due to the higher realized gold price as you know. So for the remaining of the year, we expect to remain within the guidance. And Also, we had some maintenance activity to done in Q1. And those maintenance are going to be - since they are done, they're not going to be repeated in the coming quarter. So we expect to have a cost profile that will revert back to our target planning. That's where Essakane.

Okay. So just on Essakane on its own. Is it safe to assume then because of the - some of these maintenance and so forth that we would see a bit of relief in the cost structure for Essakane going into the rest of the year?

Yeah. Look, again, it's going to depends on many parameters. As you know, like, how is going to be - the fuel price is going to be. Also if we continue to hit the higher-grade material and Phase 3, which will also have some impact on our region. So we expect to have a very good - strong production for Essakane in 2021. And overall a, good performance in terms of cost. But again, that depends on the variance of those input parameters.

Okay. Maybe just an overall as a company. What I'm getting from the presentation. And maybe correct me if I'm wrong, is that Q2 overall, is appears as though it's going to be similar to Q1 from a production standpoint. And then better second half of the year with a stronger Q4, because of Saramacca. Is that a correct way of looking at it?

I think that's a pretty safe way of looking at it, Tanya. We will see some rebound in Q2 from a couple of things. But overall, I think your assessment is pretty fair.

Okay. And then maybe, Gordon, now that I have you on. Just a couple of things I wanted to touch base on partly was the comments you made on inflationary pressures. You talked about the copper, the steel concrete. But you also mentioned labor. And labor is a big portion of the cost structure? Should we expect then from these labor agreements that your costs should go higher in the next few years? Should we be factoring in, and maybe you can share with us what your wage inflation that you're seeing looks like? Is it 3% to 5 or am I wrong?

I mean your numbers aren't bad. They're more or less, certainly in U.S. dollars. They may even be a little bit high. I really can't share the exact numbers with you right now, because we don't have everything signed up. But I will say that, when we've done our cost estimates, and our cost guidance, it's based on an assumption of an increase. And we're within those assumptions, currently. So the class guidance you see for this year, is already incorporating the higher labor costs. When I said that earlier, I was specifically relating to construction labor costs for Cote. So it's an area we're keeping an eye on. There seems to be a little bit of COVID premium in some of the estimates we're seeing. So we're working hard to bring those down. But the remainder of the costs - as we move forward, you're going to see better production at Westwood and at Rosebel in future years, which will more than over dominate any sort of cost inflation that we're seeing on labor side, for sure.

Okay, that's good to hear. And then just lastly, I looked at on the slide of the catalyst. And I didn't see Westwood new mine plan? I thought we were supposed to get one this year. Where do we stand on that?

Yeah, I mean, assuming we get a positive decision to move ahead. Our expectation is later this year, we'll certainly be putting out our mine plan for the next couple of years. We want to get a little bit of empirical information from the underground restart on some of the new development design we're putting in place. We want to see what that looks like. We're also looking at some little bit more higher use of remote equipment. But later this year, our expectation is towards the end of the year, we'll be able to put out a multi - at least the short-term plan for the coming three to five years and then revisit the overall after that.

Okay, perfect. I'll leave it to have someone else ask questions. Thank you.

Thanks, Tanya.

.:

Well, good morning, everyone. And thanks for taking my questions. I just wanted to start with Cote. Usually, the civil side of things is the part that's hardest to gauge. How is that coming along Gord and Bruno? Is as earthworks and your construction civil coming along as expected so far?

Yeah, generally, the civils are coming along as expected. We have encountered less overburden and more rock in a few areas, which is sort of changed the mix a little bit. But in terms of actual progress, things are looking really good. I mean, it's - as I said, Bruno and I were up at site a couple of weeks ago and had a good look around. It's quite amazing. I mean, with COVID, I hadn't been there and in about seven months, which is a little weird for me. But it is what it is. Yeah, overall, we're not getting really any surprises that the project is more or less following the recipe that we laid out for ourselves. And we're pretty excited about how it's moving forward.

Good. So you're not finding situations, where the mill footings have 30-feet of extra shift or you're under-rock [ph]?

It's actually the other way around. The overburden was shallower in most places than we had anticipated.

And then can you just touch on your - Bruno, touch on this lease costs of $120 million versus $80 million? Give us some color on that?

So when we originally set the project, our anticipation, what was available for lease was just around the mining fleet. As we've gotten into the project, and as we went out to look for leasing support, we saw that there is opportunity to do some additional leasing, specifically with respect to camp and some other pieces of equipment. And obviously, from a payback point of view, given how this project develops, it's much better if we can lease things and have those costs occur commensurate with when that that work is happening rather than having all the cost upfront. So we are looking at leasing. We have some pretty aggressive opportunities to do some additional leasing. So we continue to look at it. And that's what's buried into the current estimate.

And how does the - say that is the mining fleet cost for the lease compared to what you'd expected?

The total cost of the mining fleet, we haven't ordered it all yet, but we certainly put the biggest order in here last month. And the costs are - I think they're about 1% or 2% below what our capital estimate was on the mining fleet. So it's come in pretty much dead-on plan.

That's great. Good to hear. At Saramacca, the grade wasn't particularly stellar at all. And it was said, because of the mind sequencing. Can we get a little bit more color on how the grades can improve over the over the year?

Sure. I'll let Bruno answer that.

Yes, hello Don. So right now, because we are at the very beginning of this project, were mining at the very edge of the deposit on top of the deposits in some areas. And once we're going to get more of the heart of the deposits, you'll see the grade to improve nicely and getting toward the average grade that we are in our block model. So right now we see that grade to be lower than the average grade for the whole project. But in H2, that grade is going to improve nicely above the 1-gram per tonne easy. And then we'll help Rosebel to increase its production even for the second half of the year and mainly also in Q4. So it's an average for the block. But some summary as you will hit 0.8 grams per tonne, other area you will hit 2-gram per tonne. That's the just the mind sequencing that we are right now to get access to the richest part of the zone of the of Saramacca as we speak

Yeah. I think the other thing I'd add, Don, is with respect to Saramacca, we are still - we're, we're seeing positive reconciliation versus the block model. So it really is - it is a sequencing issue in that the highest elevation wise areas of Saramacca that we were accessing first, as we mined top-down are more towards the southeast and lower grade areas. But as we mined down more to the northwest and extend the benches to the northwest, you're going to see those higher grades coming at us.

So that's encouraging to hear that you've got - like we know it's only a snapshot at the very beginning that at least it's starting off positive the reconciliation. Then Bruno, maybe you could just touch on security at Essakane?

So security for Q1, we are no way impacted or production for the mine. We are good in the region. There are some activities done by some stakeholders from country to G5, the Bakken forces. And we are always need to keep adding a focus in the region increasing security datas and protocols. And also for us that's what we do. We continue to monitor the situation as we speak. But so far, it's very stable for us at Essakane.

Perfect. Okay, thank you guys.

Our next question comes from Mike Parkin of National Bank. Please go ahead.

Hi, guys. Thanks for taking my question. Just with Cote, can you give us an idea of for the steel work in terms of the mill framing and cladding? Has that been ordered and is it - is there any of it at risk of price adjusting for either inflationary pressures you were hearing and reading about on steel prices? Or are those prices largely locked in at this point?

Most of the steel contract for the building has been locked in, but there are for the main building. For the some of the other structures, they haven't been locked in yet.

Okay. And then, I guess same for like steel going into all the heavy equipment like mills and stuff. Those are under fabrication already?

Yeah. The stuff for the mills and the mining equipment - the steel, most of that has been resolved. Most of the manufacturers of that larger stuff, they'll hedge their supply costs at the time we place the order. So that they're not exposed to changes in the steel price. So a lot of that is there, where we're still outstanding. There's steel, obviously there's rebar and concrete. There's a number of other buildings and there's timber for scaffolding and framing and forming. And so there are some other bits yet that were waiting to come in. We're working through them now. We would expect to have almost everything locked up here, certainly by the time we get into Q4 this year.

Okay, super. That everything else for me has been answered. Thanks very much, guys.

Thanks, Mike.

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

Thank you very much, Ariel. And thanks to everyone for joining us this morning and for your continued interest IAMGOLD. We look forward to having you join us again for our second quarter 2021 conference call in August. Goodbye.

This concludes today's conference call. You may disconnect your lines. Thank you for participating. And have a pleasant day.