IAG’s Westwood mine: Significant growth
IAMGOLD’s (IAG) Westwood project had a pivotal year in 2017, as it resumed operating at its normal production level in 2Q17. A seismic event occurred during the early stages of the mine’s ramp-up, which left part of the operation in a rehabilitative state for most of 2015.
Along with Essakane, IAG’s Westwood mine also delivered a record quarter in 1Q18 with respect to production. Total production came in at 40,000 ounces of gold, 33.0% higher than in 1Q17. Higher grades and a continued successful ramp-up resulted in higher output.
Production weighted toward 1H18
The production at Westwood is expected to be more heavily weighted toward 1H18 with the mining of its high-grade stopes. The company maintained its fiscal 2018 production guidance of 125,000–135,000 ounces.
Westwood’s all-in sustaining costs (or AISC) decreased 10.0% year-over-year (or YoY) to $873.00 per ounce in 1Q18. Higher production volumes and its continued ramp-up, partially offset by higher sustaining capital expenditures, led to this decline in AISC.
The company is expecting a full ramp-up by 2020, which should drive its unit costs down. Once the mine is operating at full capacity, it’s expected to have the lowest unit costs of any of its operating mines.
Due to the presence of hard rock, the cost structure for IAG’s Essakane and Rosebel mines remains high. While exploration results at these mines have shown encouraging results, Westwood is a key factor as the company seeks to increase its production while lowering costs.
Peer (NUGT)(GDXJ) Eldorado Gold (EGO) is also facing issues at several of its mines, including its mines in Greece. New Gold’s (NGD) capital expenditure requirements for its key project, Rainy River, have crept higher. While Kinross Gold (KGC) initially faced issues at its Tasiast expansion project, work on the project is now going as planned.