Challenges at the Westwood mine
IAMGOLD’s (IAG) Westwood project is located in southwest Quebec, Canada. This site started production in the first quarter of 2013. It achieved commercial production in 2014, producing 70,000 ounces in the first two quarters of the year.
During the early stages of the mine’s ramp-up, a seismic event occurred, which left part of the operation in a rehabilitative state for most of 2015. This led to lower production at higher costs in 2015.
Based on its revised plan for the mine for 2016, IAMGOLD is focused on underground development to expand the mining area and on doing remedial work in the area impacted by the seismic event.
The company has guided that the mill will operate on a reduced schedule throughout 2016 due to the low level of mining taking place. Its ramp-up to full capacity is expected by 2019.
Operating performance during 2Q16
As expected, tgold production at the Westwood mine during 2Q16 was 16,000 ounces, 30% lower than in 2Q15.
Cash costs per ounce and all-in sustaining costs (or AISC) for 2Q16 were $948 per ounce and $1,150 per ounce, respectively. These were gains of 13% and 11% YoY, respectively.
The underground development during 2Q16 continued to open access to new mining areas.
The company also maintained its annual production guidance for Westwood of between 50,000 and 60,000 ounces.
For 2017, the company expects to significantly increase its production due to better grades. A ramp-up to full production of between 180,000 and 200,000 ounces per year is expected by 2019.
The structure of IAMGOLD’s Essakane and Rosebel mines remains high-cost due to the presence of hard rock, which makes it a high-cost producer. Under these circumstances, Westwood remains key for IAMGOLD to increase its production while reducing costs.