Iamgold (NYSE:IAG) is prioritizing operational optimization, mine-life extensions and resource development over near-term acquisitions, President and CEO Renaud Adams said during a fireside chat. The company expects a series of technical studies over the next year to outline growth opportunities at its Côté Gold, Essakane and Westwood operations, as well as its Nelligan district in Canada.
Adams said the company does not expect to undertake major new construction projects during the next three years, instead focusing on mine extensions, pushbacks and other incremental opportunities. He said Iamgold’s power profile helps limit its exposure to energy inflation because Côté Gold and Westwood are connected to the electrical grid, while Nelligan is also expected to have grid access.
Côté Gold resource conversion and optimization
Adams said the original decision to build Côté Gold was based on approximately 10 million ounces of resources, with about 7.5 million ounces ultimately converted into reserves. By the time the mine was commissioned, the resource had nearly doubled, and the company recently reported a 20-million-ounce resource figure for Côté and Gosselin.
Iamgold expects to focus its next study on updating its 2022 operating scenario, including evaluating an increase in processing capacity from 36,000 tonnes per day to 40,000 tonnes per day. The work will focus on throughput improvements, lower costs and reserve conversion, Adams said.
The company has postponed a broader expansion decision while it evaluates additional options. Adams said management does not intend to pursue growth “for sake of growth” and will spend the next several years optimizing the asset. At the same time, Iamgold plans to begin environmental baseline work in 2027, including water and dust studies, to support potential future permitting.
“We definitely see this asset capable to go to the 40,000 tons a day and reducing the cost,” Adams said.
Essakane extension and underground potential
At Essakane, Iamgold intends to issue a National Instrument 43-101 technical report next year that targets an open-pit life extension into 2034 or 2035. Adams said the company has more than 4 million ounces of measured and indicated resources, compared with a lower reserve base, and plans to incorporate new open-pit phases within the existing strike area.
The company also plans to study underground potential beginning in 2027. Adams said mineralization at the bottoms of certain pits is higher grade and approximately 40 to 50 meters wide, though the zones have been constrained by available data. He said an underground mining scenario could potentially offer lower-cost mining and reduced exposure to fuel and power requirements.
Adams also discussed capital returns tied to Essakane’s cash generation. He said the operation could repatriate between $700 million and $800 million of cash to Canada this year at gold prices of roughly $4,300 to $4,500 per ounce. The company has completed about $400 million in share repurchases during the first half and expects additional cash from a June dividend exercise to support buybacks, although he said not all of the anticipated funds may be deployed this year.
Westwood and Nelligan development plans
At Westwood, Adams said Iamgold expects to maintain production of approximately 120,000 to 140,000 ounces over the next two years at costs at or below C$2,030 per ounce. The company is investing about $30 million this year in drilling and development of the Eastern Corridor, which Adams described as a wider, lower-grade and geologically distinct system from the mine’s current areas.
Iamgold plans to include the Eastern Corridor in a technical report next year. Adams said the company sees potential for Westwood to transition to a fully underground mine by around 2030, potentially producing closer to 200,000 ounces annually with more efficient mining methods.
Meanwhile, the company is advancing a preliminary economic assessment, or PEA, for the Nelligan district next year. The study is expected to incorporate the Nelligan open pit, Monster Lake underground opportunity and potentially Philibert, one of the recently acquired properties. Adams said an early-stage scenario could support production of about 400,000 ounces.
He said Iamgold is targeting approximately 2033 for a potential startup, though 2034 is currently considered more likely. The timing could align with the planned extension of Essakane, potentially replacing production from Burkina Faso with Canadian output.
Execution over M&A
For the next 12 to 18 months, Adams said Iamgold’s focus will be on executing its studies, drilling programs and Canadian growth plans rather than pursuing mergers and acquisitions. He said management believes the company’s value is not yet fully reflected in the market and wants to establish the value of its assets before moving too quickly on strategic alternatives.
“M&A, not a priority because quite frankly, what is the true value of this company?” Adams said. “And I think there is much more to be shown here.”
About Iamgold (NYSE:IAG)
Iamgold Corporation is a mid-tier gold mining company headquartered in Toronto, Canada. The company explores for, develops, and operates gold mines, producing gold doré and concentrate for sale to refiners and other customers.
Iamgold’s principal operations include the Essakane mine in Burkina Faso, the Côté Gold mine in Ontario, Canada, and the Westwood complex in Quebec, Canada. Côté Gold is operated through a joint venture with Sumitomo Metal Mining, while Westwood is being advanced as an underground mining project and Essakane is an open-pit operation.
Founded in 1990, Iamgold has developed a portfolio of assets in North and West Africa and has historically pursued exploration and development opportunities in additional gold-producing regions.
