Iamgold’s Westwood Mine: On Track for Full Ramp-Up by 2020



IAG’s Westwood mine: Production decline as expected

Iamgold’s (IAG) Westwood mine had a pivotal year in 2017 since it resumed operating at its normal production level in Q2 2017. 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 and Rosebel, the Westwood mine delivered lower production in Q2 2018. It produced 31,000 ounces, which was 6% lower YoY (year-over-year). Lower production was expected, however, due to mining lower grade stopes as part of the mine plan. The company maintained its fiscal 2018 production guidance of 125,000–135,000 ounces.

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Cost improvement

Westwood’s all-in sustaining costs for the second quarter were $1,129 per ounce, which was 13% higher YoY. The weaker US dollar compared to the Canadian dollar and higher sustaining capex were responsible for the increase.

The ramp-up of the mine continues. It has completed ~50 kilometers of underground development since the start of 2016. 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 IAG’s operating mines.

Due to the presence of hard rock, the cost structures for IAG’s Essakane and Rosebel mines remain 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.

Its peer (NUGT) (GDXJ) Eldorado Gold (EGO) is also facing issues at several of its mines, including its mines in Greece. New Gold (NGD) is facing issues at its newly commissioned Rainy River project. Kinross Gold (KGC) has temporarily halted its Tasiast Expansion Phase 2 activities since it’s in negotiations with the Mauritanian government regarding the division of benefits of mining activities in the country.


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