Drop in production
IAMGOLD (IAG) produced 191,000 ounces of gold in 1Q16, a fall of 8.2% year-over-year (or YoY). As we’ll discuss later in this series, this fall was mainly due to lower grades at its Rosebel, Essakane, and Westwood mines.
IAG’s attributable gold sales were similar to its production for 1Q16. The company’s revenue amounted to 220 million Canadian dollars in 1Q16. Lower gold sales and lower gold prices compared to the same period in 2015 led to the fall in revenue.
Outlook remains unchanged
The company expects its production to be slightly lower in 2Q16 compared to 1Q16 due to seasonal factors. However, it expects production to take off in the second half of 2016 to reach its unchanged guidance of 770,000–800,000 ounces at all-in sustaining costs of $1,000–$1,100 per ounce.
IAMGOLD also reported a rise of 90% YoY in net cash from operating activities in 1Q16 to 51 million Canadian dollars.
During 1Q16, the company sold 135,000 ounces of gold bullion for proceeds of $170 million, a 75% return on investment. During the same period, IAMGOLD also issued flow-through shares, which helped it to realize $30 million. These funds will be used to fund about half of the company’s 2016 capital expenditure at its Westwood mine.
New Gold (NGD) released its 1Q16 results on April 27, 2016. Its results were in line with market expectations. Kinross Gold (KGC) and Eldorado Gold (EGO) are expected to release their results on May 11, 2016.
The Sprott Gold Miners ETF (SGDM) invests in US-listed gold miners. Kinross Gold forms 14% of SGDM’s holdings. Investors can also get exposure to gold by investing in the iShares Gold Trust ETF (IAU) and the SPDR Gold Shares ETF (GLD), which both track gold prices.
In the next few parts of this series, we’ll discuss IAMGOLD’s mines’ performances.