Close

IAMGOLD Corp. (IAG) Trims Near-Term Outlook of Westwood Mine Production

June 29, 2015 8:34 AM EDT

IAMGOLD Corp. (NYSE: IAG) announced that following an intensive review of the impact of a localized seismic event that took place on May 26, 2015 at the Company's Westwood Mine in Quebec, IAMGOLD remains confident in the long-term viability of the mine. In the short-term, however, the Company's Q2 2015 production is expected to be slightly below the production of 208,000 ounces in Q1 2015 and this has led to a downward revision of the Company's production guidance to a range of 780,000 to 815,000 ounces for 2015. Although the cost impact is still being assessed, the lower production guidance is expected to adversely impact Westwood's production costs.

The review confirmed the Westwood mine's positive attributes of:

  • a continued ability to operate following the May seismic event;
  • an average grade of measured and indicated resources of over 11 g/t gold, as previously disclosed (see news release dated February 18, 2015);
  • its anticipated long mine life of approximately 20 years;
  • an exploration upside;
  • location in the prolific Abitibi region of Quebec;
  • the potential to be IAMGOLD's lowest cost mine when ramped up to full production;
  • excellent reconciliation on grade, recovery and dilution; and
  • a strong mine management and workforce with over 30 years of experience at Westwood's predecessor mines: Doyon and Mouska.

IAMGOLD's President and CEO, Steve Letwin said, " Safety is our number one priority. We and the other companies mining underground in the region know that this district is prone to seismic activity and we are taking the necessary measures to keep our excellent safety record intact. Westwood is still in its infancy and similar to mines in the area, we expect it to have growing pains as we gain operational experience in this mining environment.

"Our current focus is to invest further in the development of the mine to ensure a safe operation and to optimize Westwood's long-term production profile. A recent visit by investors and my own visit to Westwood last week have strengthened my confidence that we have the experience and the quality of mine management in place to develop Westwood's high grade potential to become our lowest cost mine and a strong contributor to IAMGOLD's long-term future."

GOLD PRODUCTION GUIDANCE FOR 2015

The initial assessment of the May seismic event was inconclusive regarding the impact of the event on annual production for Westwood and, therefore, guidance was not changed at that time. Further investigation has shown that the extent of the seismic event will have a more significant impact on 2015 production than originally indicated.

Full-year production guidance for Westwood was originally provided as a range from 110,000 to 130,000 ounces of gold and that range has now been changed to 60,000 to 75,000 ounces of gold. This adjustment is slightly offset by the expectation of an additional 10,000 ounces of attributable gold production from the Company's joint venture mines in Mali.

The impact of these two adjustments to the Company's attributable annual production guidance is a net reduction of 40,000 ounces or 4.9% to the bottom end of the range and 45,000 ounces or 5.2% to the top end of the guidance range. The revised guidance for attributable gold production for 2015, as shown on the following table, is now a range of 780,000 to 815,000 ounces.

IAMGOLD 2015 Guidance

New

Previous

Rosebel (000s oz)

290 - 300

290 - 300

Essakane (000s oz)

360 - 370

360 - 370

Westwood (000s oz)

60 - 75

110 - 130

Total owner-operator production (000s oz)

710 – 745

760 - 800

Joint ventures (000s oz)

70

60

Total attributable production (000s oz)

780 - 815

820 - 860

The Westwood team, working with external experts, have commenced an action plan to complete the analysis of the seismic event and have put together a rehabilitation and recovery plan for the zones affected. Mining continues in the unaffected areas.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Corporate News, Guidance, Hot Corp. News, Management Comments