Iamgold (IAG) had AISC (all-in sustaining costs) of $1,084 per ounce in 1Q16. That’s 26% higher than the average AISC of senior and intermediate gold miners (SGDM) (GDX). IAG’s AISC guidance for 2016 is $1,000–$1,100 per ounce.
Cash costs for the Rosebel mine fell by 9.6% YoY (year-over-year) to $768 per ounce in 1Q16. This fall was mainly due to lower fuel prices, devaluation of the Surinamese dollar against the US dollar (UUP) (USDU), and lower labor costs following the reduction of the labor force in 2015.
While Iamgold benefited due to currency movements in 1Q16, the gains from this front going forward are expected to be muted as inflationary pressures build up in the import-driven economy of Suriname.
The company is also shifting its focus toward more technology-based processes. These include high-precision detonation in its drill and blast operations and high-precision GPS (Global Positioning System) loading unit control. These will help the company control costs.
Essakane’s cash costs fell by 9% YoY to $691 per ounce in 1Q16. The fall was mainly due to reduced fuel prices, favorable exchange rates, and improved plant performance. Iamgold is continually exploring options to reduce fuel consumption, including the addition of a solar plant.
During the company’s 1Q16 conference call, its CEO (chief executive officer) mentioned that Essakane’s all-in sustaining costs are expected to fall in the second half of 2016. Operations are expected to progress on a 15-megawatt solar power plant that will help reduce energy costs.