Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD Second 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, Ms. Gopinathan.

Thank you, Gaylene. And welcome, everyone, to the IAMGOLD second 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. 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 thank you for joining us. The second quarter of 2021 was extremely challenging for IAMGOLD, and we will walk you through both the challenges and mitigations in our discussion today. Attributable production guidance was reduced to between 565,000 and 605,000 gold ounces, due to lower actual production in the first-half of the year from Westwood and Rosebel, and their lower anticipated output for the second-half of the year. This is partially offset by higher production at Essakane. We increased cash operating cost guidance mainly to reflect the lower production, cost pressures and stronger Canadian dollar and euro versus the U.S. dollar. All-in sustaining costs guidance also reflects increased sustaining capital spending in the second-half of the year. Total capital expenditures for 2021 are expected to increase by about $35 million, primarily due to expected capital expenditure increases at Boto Gold. Site capital expenditures are expected to be lower primarily due to an unexpected reduction in planned work at Essakane and Rosebel. Boto Gold's estimated 2021 capital expenditures are expected to increase by $75 million to $430 million. I'll now touch on a few items in this slide. At a corporate and strategic level, IAMGOLD generated $1.9 million in mine-site free cash flow during a period, with an adjusted loss of $3.6 million or $0.01 per share. We have approximately $830 million in cash, cash equivalents and short-term investments, and approximately $1.3 billion in total liquidity. And, during the quarter, we effectively rolled forward our 2019 gold prepayment arrangement from 2022 to 2024. From a growth perspective, as indicated in our July update news release and Côté quarterly update, we have adjusted capital at the Côté Gold project, with total project costs recast to $1.125 billion to $1.175 billion, based on a number…

Thank you, Gord, and good morning, everyone. The following are some key highlights of our second quarter financial results. We reported adjusted EBITDA of $85 million from sales of 135,000 ounces, at an average realized gold price of $1800 per ounce. For the first six months of the year, adjusted EBITDA was $185 million from sales up 288,000 ounces, at an average realized gold price of $1788 per ounce. Net loss was $4.5 million, or $0.01 per share. And adjusted net loss was $3.6 million, or $0.01 per share. We generated $1.9 million in mine-site free cash flow in the second quarter, reflecting the operating challenges in the quarter that Gord discussed. For the first six months of the year, mine-site free cash flow was $91.4 million. In terms of our financial position, we ended the quarter with cash, cash equivalents and short-term investments of $830 million. We continue to maintain a largely undrawn credit facility of $500 million, maturing in January of 2025, resulting in total available liquidity of approximately $1.3 billion at June 30. We entered into further gold sale prepayment arrangements this quarter at a weighted average cost of 4.45% per annum in respect of 150,000 gold ounces, with an average forward contract price of $1753 per ounce on 50,000 gold ounces, and a collar range of $1700 to $2100 per ounce, on 100,000 gold ounces. These transactions have the effect of rolling all of the 2019 prepayment arrangement on 150,000 ounces, from 2022 to 2024, after the completion of the construction of the Côté Gold project. The new arrangement will result in total cash prepayment to the company over the course of 2022 of $236 million on 150,000 gold ounces. In respect of the 150,000 ounces that we pre-sold in 2019, under that particular prepayment arrangement,…

Thank you, Daniella. Looking ahead at Essakane, the mill optimization project has already demonstrated improvement in hard rock ore processing capacity, which is expected to continue over the balance of the year and into the future, and to stabilize and to provide additional crushing capacity for hard rock throughput. At Rosebel, we are implementing a number of initiatives to address the headwinds encountered in the second quarter, and we are progressing on the remaining Saramacca infrastructure. At Westwood, we have restarted mining in the East zone. At the Côté construction project, we are at 27% overall project completion. At Boto we continue to de risk and an exploration, we are targeting a main resource for Gosselin later this year. Thank you to everyone for joining us today. I will now pass the call back over to the operator for Q&A.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] First question is from Josh Wolfson with RBC Capital Markets. Please go ahead.

Good morning. Just sort of focusing on the Côté capital number, I'm curious to understand what specifically changed? Obviously, I know there's impacts from inflation and from COVID. But obviously, historical guidance had been fixed price contracts in place a lot of hedging. So I'm just wondering what beyond those items resulted in the overall change in capital?

Thanks, Josh. Well, as we stated in our disclosure, we undertook a project review during the quarter, in parallel obviously, with advancing detailed engineering and procurement work. And through this process, we identified additional costs, some of which were most significant and unexpected. The biggest impacts are related to structural, mechanical, piping, electrical and instrumentation, we call that SMPEI and earthworks and concrete costs, which together accounted for roughly 50% of the increase. So, there were estimate changes that included increases in both quantities of material and manpower. Additionally, to those impacts, which were, as I said, quite significant and as you commented, we did see some impacts due to the inflation, some minor changes in scope and growth projects. We do see impacts of COVID-19 on productivity assessments, as well as some direct COVID in costs, and the impacts of currency exchange. And additionally, we've done a probabilistic reassessment of the remaining work and applied a prudent contingency to those numbers. So there are a number of sources of change. The bigger changes were with the SMPEI and the concrete with some changes on earthworks and others.

Okay. And what's I guess, either percentage or dollar amount of the new capital number for this contingency now?

We're not to release that contingency number at this point in time. But we feel it's prudent, and as really looked at us applying a number that allows us to complete the remaining project within the revised estimate.

Okay. And then, for the actual construction activities, what are the critical path items today to keep this second-half 2023 scheduling?

Critical path, I guess, is really for us around completion of the process building. So we're working on foundation mats for the larger processing equipment, the ball mill and the birdie mills, that's ongoing. We're also building the foundation materials, both cast in place and precast for the structure of the building itself. Our current timeline for the process building enclosure is in Q1 of next year. We're working very aggressively to see if we can improve upon that. And other timeline, other critical path timeline, we are working through the pre-stripping on the pit. We expect to start over mining in Q3 next year. It's not fully on the critical path, because there's certainly some ability to accelerate it if we need to later on. However, it's one of our key activities right now. We're getting into tailings dam foundation work, again, tailings specifically is not on the critical path. But it's obviously an activity that we need to get out of the way. Most of the critical path goes through the process building.

Okay. And then for the operating cost targets, for the, I guess $800 per ounce, could you remind us what the forecast unit cost items are, if you happen to have those numbers?

Actually, right now, Josh, we are reworking and relooking at what our operating cost model is looking like. We aren't ready to release that right now. There's obviously been some short-term inflation issues that that we're reviewing. That being said, we are going back in zero basing and really, really looking at what the operating cost impacts are. When we made the announcement in July of last year, and through the technical session, we did go into a fair bit of detail as to where we saw the operating costs sitting, and updated them from what had been used for the feasibility study. Again, I don't have those numbers for you today, but we are looking to enhance that model and update that model. And we will release it when we have that information available.

Okay. And I apologize for taking up so much airtime here. Last one just on Westwood. Is there any sort of additional insight as to when the company could receive approval for mining in some of the other areas, I guess the western central area? And then if there's visibility on when do a new mine plant comes out or new protections there?

Yeah, so a couple of questions there. With respect to the west zone and the central zone, currently we are expected to be able to restart those early next year. Although, they will be staged. We're doing some additional design work and rehabilitation, and working through our work in east zone to understand the implications of all of that, as well as looking at the design with a real focus on safety as we move into those new areas. The team is working very hard on a medium-term mine plant that we plan to have out before the end of the year.

Great. Thanks so much.

Thanks, Josh.

The next question is from Mike Parkin with National Bank. Please go ahead.

Great. Thanks, guys for taking my questions. Following-up on some of the stuff that Josh mentioned, I know you're reviewing the OpEx. The June 2020 Côté had AISC at 771. In terms of what you've transferred over to cost, do you have a sense of like what that will do on a per ounce basis, with this update in terms of CapEx with some flowing over to OpEx?

Thanks, Mike. Actually, as we look at the numbers, there were some transfers to the operating period of some of the capital, mostly some additional mine times that have been pushed into the operating period, and some equipment to go with it. On the flip side, there were also some changes coming from the operating cost side back into the capital period. I think we mentioned in the disclosure, that the part of the camp cost had been assumed to be a third-party lease, which would have been borne by the operating period, and now that is being taken in the capital period. On a minor basis, there's also a similar sort of assumption or change with respect to the assay lab, smaller dollar number. Overall, the balance between those two changes is close to negligible. So with respect to the transfers into the operating period, we're not anticipating a big impact on the all-in sustaining costs from that transfer. We are reviewing along with our operating costs, we're obviously reviewing our sustaining capital at the same time, and when we're ready to come out with operating costs, we'll be able to speak to sustaining capital at the same time. That includes capitalized stripping. Obviously, any impacts we see on operating costs will bear directly on the cost of capitalized stripping. And as well, reviewing the construction sequence for the tailings dam, and working to understand what opportunities or changes might come out of that. So, it's sort of a complete package. And we're working through that right now, Mike.

Are you seeing any like I recognize it's pretty early days, but are you seeing any signs that your estimated costs on either tailings dam development or early strip work on the pit are showing signs that your life and mine estimates are too low? Or, is that too early to say?

It's pretty early to say. There are both gives and takes we're seeing. We're really focused on assessing what the impact of the inflationary pressures are on some of the input costs. At the same time, as we're looking at our productivity assumptions for operating and other measures of that nature, there are actually some opportunities and some improvements where we expect to see out of that. So there's a few moving parts. I don't want to speculate as to what the net impact will be. But it is something that is being assessed for sure.

Okay. Then with the comment around the project review and identifying additional costs. Was any of that you realize you need more cement or concrete work or steel work?

Yes. Effectively, yes. As we reassessed the volumes and we did the re-estimate, we saw there were some significant changes from the original estimate on those volumes as being applied to the cost estimate. So yes, we have seen some increase in concrete and steel versus what was used in the original estimate. And that, in fact, is driving a lot of the overall significant increase.

And what drove that in terms of concrete volumes? Is that, as you got down into bedrock for foundation work, you just realized you had to go a bit deeper? Or, is it a structural stability change that additional foundational materials required?

There's some of that, not a significant amount of that. There is also some scope change, if you will, within the building. We wanted to put additional reinforcement in and around the primary -- the crusher aisle and some of the structures around some of the larger pieces of equipment. So there was a little bit of scope change there. But, a lot of it is just going back to the original estimate, and how that estimate was done versus as we got into the details with the more advanced engineering and going through it. It's not scope change as much as it is that the estimate needed to be redone and identified that there was certainly additional materials and labor required to install it.

Okay. And then just last question for me, your partner Sumitomo was reviewing these changes. What's the path there? Like is there anything where they can come back and challenge the scope changes or their hands kind of tied, they have to kind of come to the table with their share of the capital?

Our JV agreement with Sumitomo is I think I would describe it as relatively standard with respect to this. Like us, they are very keen on the reconciliation exercise, we're going through and understanding it. We have majority vote as the senior partner on the budget, going forward for construction. And we do expect them to challenge the assumptions, just as we expect our own owner's team on an ongoing basis to challenge the assumptions and look for opportunities for savings. That being said, as you'd well imagine, with a project moving forward, the senior partner the majority partner basically has the ability to push forward the project.

Okay. Thanks, guys. That's it for me.

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

Good morning, everyone. Thanks for taking my call. So Gord, can I just ask in terms of your near-term capital plans, are there any changes to the outlook for the spending at Boto at this stage? Would you consider deferring that or plan to go ahead with that kind of spend? And could you remind us how much that is in 2022?

I believe the guidance and I will confirm it with you afterwards Anita, but I believe the guidance for 2021 for Boto is $55 million of new spend. There was some overlap from the prior year. That being said, we are obviously, given the revised guidance and given the cost increase at that at Côté, we are looking at all of our expenditures around the company, and Boto among them. We've always reiterated that the spend at Boto is on behalf of derisking that project and providing the opportunity to execute it at the appropriate time, when we want it. So, understanding that and understanding the scheduling our focuses on Côté, on executing and completing that project, so we will be looking at Boto amongst other capital requirements. We want to make sure that we're solidly founded in order to complete Côté, as per plan.

And the second question, I guess is with regard to operating costs. Josh asked this a little bit. But is there any -- I mean, are you -- I think I asked this every time Côté comes up. But how confident are you in mining cost per ton number. And the efficacy of these HPGRs when they come on stream, that's a relatively low mining cost number relative to just some of the other bigger operations in Canada and what they've been able to achieve? So I just wanted to get your latest thinking on where that could go. And then secondly, how that would impact your assumptions on reserves? Can you remind me are we doing the base case scenario or the extended case scenario in your current life of mine plan? And I think the extended case has 0.93 gram per ton material versus 0.098 as the average.

Yeah. The extending case, it has some additional low grade at the very end. So it may have that. We are using the extended case in our model. The impact is really just, I think, an extra year and a half of low grade or handling at the end of the mine life. With respect to the cost estimate, as I said, we're reviewing it, and have been doing so on an ongoing basis. From a productivity standpoint, we think we're comfortable. The numbers we're using are conservative, both on the mining and the milling costs. With respect to the inputs, the consumables and so forth, we do recognize that there has been some relatively sharpen inflation and some of the input, the consumables numbers. And we need to assess what the impact on costs will be for that. With respect to HPGR milling, again, we are comfortable there. There are several HPGR installations around the world. So there's a fairly good database of understanding what the impacts of that are. And quite typically HPGR versus SAG from a cost per ton basis, especially for brittle orders, like we have at Côté is significantly superior from an operating cost standpoint, both in terms of energy consumption, but also consumables like steel consumption. And that was part of our rationale for moving to HPGR for this project versus SAG milling. The ore sort of told us where to go with it.

Okay. And then just in terms of the tailings facility, could you remind me what kind it is? I'm assuming with central line, or was it modified central line in your current thinking?

Yeah, it's modified center line. I believe the first couple of lists are downstream. Once the pond is up and established, it moves the center line at the top. But the first couple of lists are typical downstream construction.

Okay. And last probably a little bit ignored with this release. But can you just remind us or kind of give us some indication of the amount what -- how you see Rosebel unfolding into 2022 given the issues that you've had in the first-half of the year with the camp and the labor and productivity rates? So how should we think about carryover impacts into 2022 for Saramacca and Rosebel?

So, Anita, we're currently assessing what 2022 is going to look like. I don't want to speculate on what those final numbers will be. And, at the end, some of it will be determined by the success of our remediation plans that we're putting in place or activities that we're putting in place right now at Rosebel. So as we build those back and as we get a little further on, we will be having a very good look at what 2023 and the remainder of the life of mine for Rosebel looks like, and understanding what that deposit can give us. We have a new block model as well that we are focused on and incorporating it. We do want to make sure that we have appropriate conservative estimates, as we move forward with Rosebel. So that's a bit of a stay tuned. And, as we move forward here, we will be providing additional color on what Rosebel looks like.

Thank you for answering all my questions.

Thank you, Anita.

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

Good morning everyone. And thank you for taking my call. Maybe just starting on to some of the smaller items, just on Boto, you said you're looking at all options to enhance value, optimize value there. Is selling the asset one of your options?

Look, Tanya, we really do take Boto and what it provides for us as well as the regional opportunities there. That being said, it's part of our role as stewards of this company to assess all of our assets at any given point in time. And, the current situation really demands that we have a good hard look at each and every asset in the portfolio and understand what the appropriate path forward is for us to achieve sort of the longer-term strategy. I am going to leave it at that, but we are looking at what's possible with Boto, just like we're looking at what's possible with Westwood and other assets.

Okay. Maybe then just moving on, I know we've asked quite a number of questions on Côté and we'll wait for as you get through your costs of reviewing your cost. But maybe what you can share with us as right now inflation wise, can you review with us what you are seeing inflationary pressures in your costs in jurisdictions you're operating, so Canada, Essakane and South America, like labor, consumables, et cetera?

I don't have all of the percentages for you, Tanya, but we are seeing increased fuel prices. Certainly, some of that is offset by our hedging program that we've run for several years in managing our fuel costs, primarily at the open pit operations, but also managing the input fuel costs for the Côté construction project. So we are seeing some pressures there. We are seeing some general supply chain pressures on class, I think in a few areas, both on the expediting and transport, obviously, the shipping industry out there in the world is a little bit topsy-turvy. So we have seen increases in that. Consumables like steel, as everybody's well aware, the price of steel is up right now. We do have fixed term contracts on grinding media, and liners and that sort of thing. But they're not longer-term. So as we look at it, we would expect to see some pressures there. Major inputs, like explosives as well have been affected by the increase in fuel prices, but also by the transportation cost increases. On the positive side, we were able to resolve our collective bargaining agreement at Rosebel. And so those numbers are baked into our current estimates as we move forward. Likewise, with respect to Essakane, albeit it was a much shorter period of time required to resolve it. We were also able to sign off on the collective bargaining agreement ay Essakane during the year for a three year term. So those things are going to serve us well from that side. Productivity, contractor costs, there are inflationary pressures out there right now. And unlike everything, and I imagine like a lot of our competitors, evaluating whether they are permanent inflationary impacts or a temporal inflationary impacts, kind of like we saw with lumber here in Canada. It's a challenging analysis to say, are these numbers up and are they going to stick, or is it something that's a bit ephemeral and will go away in the near-term.

Maybe just the labor costs in Canada then Gord, what are you seeing there?

Yeah, no labor costs in Canada, I mean, we were looking at labor cost inflationary statistics out of the government here, as part of the work that we're doing right now, in analyzing Côté. And there has been inflation of labor costs above and beyond what is the general inflation in Canada. I believe the number I saw was some, I believe in the orders of 5.5%, 6%, something like that, over the past year and in the industrial labor costs. I don't have the exact figure at the tip of my tongue, but certainly happy to report that back to you. Westwood is under an existing CBA, so we sort of managed there, although there is a degree of indexing to CPI. At Côté, we don't have any kind of a specific labor agreement to the operation. We do have some agreements in place with respect to the construction programs. So, it's one that's out there. And as we move to the operating period, we're going to need to understand it. I think, one of the things that we did at Côté specifically, understanding the Canadian labor market was the move to automated haulage and automated drilling really to help us mitigate somewhat our exposure to Canadian labor rates.

Okay. And then maybe if I could just ask on Rosebel, because there is a lot of things happening there from the pit to the mill. You've had change in management at the mine-site, you're still dealing with illegal miners. Just a bit concerned about everything going there. So maybe you can just review from the pit to the mill to all the management changing and the illegal miners, just what has happened?

Well, in some ways, a bit of a perfect storm, if you will, Tanya at Rosebel. As we reported, I'll start with the weather, because it was the one of the biggest smacks in the head. So to the middle of the year, Rosebel is experiencing it's beyond a one in 20-year event probably closer to one in 100-year event in Suriname in the month of May, nearly three quarters of a meter of rainfall was experienced that Rosebel. So that had a number of impacts. And to delineate them in the Rosebel pit, it obviously impacted our ability to dewater the pit and forced mining at Rosebel more into the expansion phases, which are lower grade and restricts our access into the bottom of the pit. Overall, rain impacts obviously affected just our ability to mine generally in the pushbacks at Rosebel as well, because the pushbacks tend to be in softer rock and access as difficult. At Saramacca, it had some very strong effects of the rainfall during the quarter. Again, mostly in pit, the main haul road between Saramacca and Rosebel is built out of rock and is well drained and generally performed very, very well despite the high rainfall. But the access areas within the pit itself were very challenged for the quarter. Saramacca is all saprolite, there is no hard rock there to help with road betting. The team has been working on a number of technical solutions to improve the in-pit access, but it was impacted. And as a result, part of what was done at Saramacca during the quarter was a move to a small satellite lower grade pit, which was easier to access, while they worked on reestablishing access into the pit. We are back hauling a lot of rock from Rosebel…

And maybe just on the illegal miners and what we're doing there to just keep them away from the pit?

Yeah, with respect to the illegal miners, we've been working very closely with the government. We have signed some agreements with the government with respect to the security. We, overall versus prior years are seeing a steady decrease in the number of illegal miners that we have at site. That being said, they are challenging. We are implementing some additional security measures to allow us to manage that situation better. We're also obviously working very hard with the communities, on our community development programs and other opportunities to provide alternatives for people who are being impacted by devaluation and inflation in country, and are obviously looking to find a way to generate some income for themselves. So, it's not only the immediate reactionary work we're doing to manage that issue, but it's also going back to the root cause behind that issue, and working closely with the government and with our communities, to find ways to reduce it to a manageable level in the long-term. They may be illegal, but they're not necessarily bad miners. They know where high grade material is and they're pretty creative in their tactics. So, we need to find a way to remove the incentive.

Okay. Well, good luck at Rosebel.

Thank you very much, Tanya.

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 Gaylene. And thanks to everyone for joining us this morning and for your continued engagement with IAMGOLD. We look forward to having you join us again for our third quarter conference call in November. Goodbye.

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