Benzinga | Aug 4, 2021 05:40PM EDT

IAMGOLD Provides Quarterly Ct Gold Project Progress Update

IAMGOLD Corporation (TSX:IMG) (NYSE:IAG) ("IAMGOLD" or the "Company") provides a second quarter update on activities at its C?t? Gold Project ("C?t?" or the "Project"). All dollar amounts are in US dollars at a USDCAD exchange rate of 1.30, unless otherwise indicated.

Overview

The C?t? District, located 125 kilometres southwest of Timmins and 175 kilometres north of Sudbury, Ontario, Canada, includes the C?t? Gold construction project and the adjacent Gosselin exploration zone. The Project is being developed by a 70:30 joint venture between IAMGOLD, as the operator, and Sumitomo Metal Mining Co., Ltd. ("SMM"), as a 13.1 million tonnes per year open pit operation estimated to produce, on a 100% basis, an average of approximately 469,000 gold ounces at all-in sustaining costs below $800 per ounce sold annually in its first six years of operation under the extended case mine plan cited in the 2018 feasibility study (see news release dated November 1, 2018), subject to receipt of certain additional permitting. The Company effectively owns 64.75% of the Project and the Gosselin zone which is currently undergoing a resource delineation drilling program and could provide future supplemental feed to the C?t? mill. The Company expects to release an initial mineral resource estimate for the Gosselin zone in the fourth quarter of 2021.

As at June 30, 2021, detailed engineering reached approximately 82% and the Project overall was 27% complete. Procurement and expediting of major equipment contracts are progressing with the logistics contract awarded. The Project remains on track for commercial production in in the second half of 2023.

Activities During the Quarter

The second quarter saw an increased number of COVID-19 cases in the Timmins area. Although some cases were experienced by a small number of workers during this wave, heightened testing and additional constraints on site circulation were implemented which limited the number of cases. To date, the Company has not experienced a material impact on the construction schedule due to COVID-19.

Earthworks activities continue to progress with roadwork, water pumping, fish relocation, the completion of the tailing management coffer dam and continuation of drill and blast activities in the open pit.

Plant site blasting has been completed and final level adjustments are ongoing. The concrete batch plant has been commissioned and is in production and concrete pouring and form work has started with a focus on the ball mill and vertical mill foundation work. The freshwater line and overhead 13.8kV powerline have been completed, are being commissioned and are expected to provide 4MW line power availability to site in the third quarter of 2021. The Hydro One electrical upgrade work continues with the completion of tie-in modifications at the by-pass at Timmins Porcupine Main Substation and tower reinforcements and stringing in progress.

Construction of the permanent camp is progressing with approximately 60% of the planned permanent capacity commissioned at the end of July. The Project was accommodating over 700 workers at site at the end of July between temporary and permanent camp accommodations. The administrative building has been completed and the wastewater treatment plant is being commissioned.

Permitting and stakeholder engagement continues. On June 28, 2021, the Company, the M?tis Nation of Ontario and SMM celebrated the signing of an impact and benefit agreement ("IBA") relating to C?t? Gold. In addition to the existing IBA with Mattagami First Nation and Flying Post First Nation, the Company has completed all of the IBAs it expects to complete relating to the Project.

Operational readiness commenced with the start of the operation's new General Manager and a focus on organizational design review, maintenance and health and safety systems.

Costs Summary

The Company announced on July 22, 2021 that a Project review had identified certain estimated Project costs increases. In accordance with the terms of the joint venture, the updated capital costs will be reviewed by SMM. The table below summarizes the updated estimated Project costs as compared to the Company's previous estimate from July 2020:

Project costs estimate July 2020 July 2021

Company's 70% share of Project costs $875 - $925 $1,125 - $1,175 millionestimate1,2 million

Leasing (on a 70% Project basis) $80 million $100 - $120 million2

USDCAD exchange rate $1.35 $1.30

Expended - July 1, 2020 to June 30, - $193.0 million3 2021

Company's remaining 70% share of $875 - $925 $930 - $980 million Project costs estimate million



1 Total costs are approximately 95% capital expenditures and 5% non-capitalized costs. Approximately 95% of the estimated capital costs are in Canadian dollars. The Company has implemented a hedge program which includes USDCAD exchange rate hedging, described in further detail in the second quarter Management Discussion and Analysis "Market Risk - Summary of Hedge Portfolio".

2 Leasing is net of lease payments during the construction period. Previously $120 million at a USDCAD exchange rate of $1.30 (see news release dated May 3, 2021).

3 Recorded at an average USDCAD exchange rate of $1.2871.

The Company's remaining 70% share of Project costs from July 1, 2021 forward, based on these assumptions, is estimated at $930 million to $980 million. On an annual basis, the Company's share of estimated remaining total costs to completion is expected to be expended as follows: second half of 2021 - approximately $301.3 million; 2022 - approximately $510 to $540 million; and 2023 - approximately $120 to $140 million. The above-noted amounts are estimated at a USDCAD exchange rate of $1.30 and take into consideration working capital adjustments, therefore, actual amounts are expected to vary.

At June 30, 2021, the Company had total available liquidity of $1.3 billion.

As previously disclosed, based on information currently available and work completed to date, which is ongoing, the change in the project costs estimate was primarily driven by increased structural, mechanical, piping, electrical and concrete estimates for the processing plant facility and increases in earthworks and concrete estimates due to estimates updates and certain scope changes representing, collectively, almost 50% of the increase. Additional increases were estimated in mine facilities costs and the inclusion of a portion of the camp cost previously included in operating costs as a lease; resulting increases in indirect costs, EPCM and owner costs; direct costs related to COVID-19; and changes in the currency exchange rate; partially offset by the transfer of certain costs to the operating period. The revised project costs range includes new contingency amounts for the remaining expenditures estimate. These revisions result from increases in estimates including quantities and manpower, changes in scope, the negative impact of COVID-19 on labour productivity and inflation. The Project metrics remain similar as previously announced in the Company's July 21, 2020 news release with some estimated increases in cash costs and all-in-sustaining costs per ounce of gold sold primarily resulting from the impact of recent inflation on operating consumables.

Schedule and Upcoming Milestones

The planned construction schedule is approximately 32 months, and the remaining estimated schedule is 23 months, with achieved and the approximate currently estimated key milestone dates noted below:

* Construction start: Q3 2020 - commenced on schedule

* Major earthworks start: Q2 2021 - commenced early, in Q1 2021

* Main access road complete: Q3 2021

* Process building enclosed: Q1 2022

* Start of owner mining: Q3 2022

* Tailings Management Facility Phase 1 completed: Q4 2022

* Permanent power available: Q4 2022

* Commissioning completed: Q3 2023

* Commercial production: H2 2023

Work will continue to focus on earthworks, haul road construction and water management infrastructure around the pit site. Pre-stripping work in the pit is expected to continue and the permanent camp is expected to be fully commissioned in the third quarter 2021. Civil works, currently underway at the plant site, are expected to continue with the placement of pre-cast and cast-in-place concrete, as well as the preparation for erection of the plant building shell.

The Company continues to work on opportunities to further optimize the schedule. The schedule does not account for any potential delays or disruptions caused directly or indirectly by the COVID-19 pandemic, including potential impacts on timing of activities, productivity or workforce numbers, supply chain and logistics. The Company has all key permits in place for construction activities planned for 2021. Additional permits are required to complete certain subsequent construction elements planned for 2022 as well as commissioning of operations planned for 2023, all of which the Company expects to receive in due course.

District Potential

The Project has estimated mineral reserves totalling 7.3 million ounces of contained gold (on a 100% basis) in proven and probable reserve categories (calculated at $1,200 per ounce gold) and estimated mineral resources (calculated at $1,500 per ounce gold) totaling 10.2 million ounces in measured and indicated resource categories (including mineral reserves), with a further estimated 3.8 million ounces in inferred mineral resources (see news release dated February 17, 2021).

In addition to planned delineation drilling programs to support the future mining activities of the C?t? Gold deposit itself, the Company is also carrying out an ongoing greenfield exploration program on the C?t? Gold property. This greenfield exploration is included in the corporate exploration budget. In 2021, the Company expects to spend $2.8 million on greenfield exploration related to the C?t? Gold property, including the Gosselin zone, and has spent $1.4 million in the first half of 2021.

The Gosselin zone is centered approximately 1.5 kilometres northeast of the C?t? Gold deposit. Approximately 13,000 to 16,000 metres of diamond drilling is planned in 2021, focused on the delineation drilling program on the Gosselin zone, of which 10,200 metres were drilled in the first half of 2021. The Company expects to release an initial resource estimate for the Gosselin zone in the fourth quarter of 2021.

Pictures from C?t? Gold - July 2021

Plant site - Overview

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Pre-cast Concrete Foundations

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Earthworks - Loading and Hauling

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Caustic Mixing Tank

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Permanent Camp Construction

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Plant site - Mill Raft Foundation

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Water Realignment Channel Bypass

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Earthworks - C?t? Lake Coffer Dam

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Ball Pit and Mill Raft Foundations

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Concrete - Batch Plant

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Transmission Line - Erected Tower

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Transmission Line - Along SR6 Road

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Transmission Line - Stringing

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Haul Road

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Camp Construction

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