IAMGOLD’s production is down and costs are up
IAMGOLD’s (IAG) gold production for Q1 came in at 185,000 ounces, a decline of ~19% from Q1 2018. The company attributed the unexpected decline in output to “increased seismicity at Westwood in December 2018 (25,000 ounces), lower head grades and throughput at Essakane (19,000 ounces), and lower head grades at the Joint Ventures (3,000 ounces).” As a result of a decline in volumes, its all-in sustaining costs (or AISC) increased by 14% YoY in Q1 to $1,086 per ounce.
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Westwood’s production in Q1 was 15,000 ounces, 63% lower YoY. IAG said it continues to adjust mining methods, ground support, and safety protocols to address seismic activity. The company expects Westwood production to improve starting in Q2 and it expects the strongest volumes during the fourth quarter.
Probable guidance review
While the company maintained its full-year gold (GLD) production guidance at 810,000 to 870,000 ounces and AISC of $1,030 to $1,080 per ounce, it said the guidance could be reviewed in the second quarter of 2019. It mentioned that while it has initiated a number of cost and productivity improvement measures to mitigate the impact of negative factors during Q1, the full risk might not be fully overcome through these measures by the end of the year.
IAMGOLD also provided an update on the development of its Saramacca project, which it said remained on schedule to begin production in the second half of 2019.