Iamgold Corp (NYSE:IAG) reported its second-quarter financial results after the closing bell on Wednesday.

Below are the transcripts from the Q2 earnings call, which took place Friday morning.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

OPERATOR

Thank you for standing by. This is the conference operator. Welcome to the Iamgold Second Quarter 2025 Operating and Financial results conference call and webcast. As a reminder, all participants are in a listen only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. To join the question queue, you may press Star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing Star then zero. At this time I would like to turn the conference over to Graeme Jennings, VP Investor Relations for IAMGOLD. Please go ahead, Mr. Jennings.

Graeme Jennings (VP Investor Relations)

Thank you operator and welcome everyone to today’s call. Our conference call today. Joining us on the call are Renaud Adams, Adams, President and Chief Executive Officer, Maarten Theunissen, Chief Financial Officer Bruno Lemelin, Chief Operating Officer Annie Torkia Lagace, Chief Legal and Strategy Officer and Darina Quinn, Chief People Officer. We are calling today from Iamgold’s Toronto office. office, which is located on Treaty 13 territory on the traditional lands of many. Nations including the Mississaugas of the Credit. The Anishinaabeg, the Chippewa, Haudenosaunee and the Wendat peoples. At Iamgold, we believe respecting and upholding Indigenous rights is founded upon relationships that foster trust, transparency and mutual respect. Please note that our remarks on this call. Call will include forward looking statements and refer to non-IFRS measures. We encourage you to refer to the cautionary statements and disclosures on non-IFRS. Measures included in the presentation and the. Reconciliations of these measures in our most recent MD&A, each under the heading Non GAAP financial Measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and technical information. The slides referenced on this call can. Be viewed on our website. I will now turn the call over.

Renaud Adams (President and Chief Executive Officer)

To our President and CEO Renaud Adams. Thank you Graham and good morning everyone and thank you for joining us to walk you through our quarterly result highlighting our operations, financial performance and strategic priorities. Overall at the halfway point of 2025, Iamgold has made major advancements as a leading mid term Canadian Gold producer. This starts with a highlight of the quarter which was the successful ramp up of Cote Gold and end plate capacity ahead of plan. The second quarter was also significant that it was a full quarter where the mine achieved overall operating milestones including throughput in gray in line with consensus estimate and with gold recovery and reconciliation. Mineral Reserve in line with plans as well. As we continue to stabilize cote, we are confident that the ability to to operate the mine with consistency and predictability and stability. Quarter over quarter will be rewarded by the market. Further, with another quarter behind us, we get closer to unlocking the expansion potential of Cote where we outlined to the market a larger Cote in skeleton scope targeting ounces from both the Cote and Gosling Zone at the conclusion of our 2025 drilling program of 20 million ounces plus of measure and indicated resources. As we will discuss today, work on this plan is in motion and we will be announcing an updated Cote life of mine in the second half next year. Operationally, Iamgold is on track to achieve its production guidance target of 735-820,000oz go this year though at a revised consolidated all in sustaining cost range of between $1,830 and $1,930 per ounce as we will discuss more on the revision in a moment. Financially we have now concluded our gold prepayment arrangement with 75,000 ounces delivered this year. In an environment where the gold price average $3,100 an ounce, these deliveries translate to approximately $200 million of value that went towards what can be considered a form of debt servicing this year. With this behind us, Iamgold is now the 800,000 ounces plus gold producer with full exposure to gold price and significant cash flow generation. Beyond Cote, Iamgold offers robust or organic growth portfolio with our own backyard in Canada with the rapid growth of the Nelligan and Munster Lake assets in Quebec which combined has nearly 9 million ounces of rural resources. Turning to the quarter and we are now on slide 5. Above all, the safety of our people remains our top priority and I’m proud to report that our total recordable injury frequency rate continued to trend below prior year level, reflecting our commitment to a culture of safety and continuous improvement. In addition, in May we released our 2024 sustainability report which marked the 18th year in the row. We have documented and disclosed our achievement and dedication to responsible mining practices. Looking at operation on an attributable basis, Iamgold produced 173,000 ounces of gold in the second quarter bringing the year to date production to 334,000 ounces. Ago the quarterly performance was led by strong results at cote which produced 96,000 ounces on a 100% basis followed by improved quarter over quarter production at Westwood with 29,000 ounces and the Sakane at 77,000 ounces of attributable production. As the mine continues work through the lower grades early in Phase 7 On a cost basis, Iron Gold reported the Q2 cash cost of $1,556 per ounce and an all in sustaining cost of $2,041 an ounce. Costs were higher in the first half of the year due to a combination of higher royalties, foreign currency movement and a higher unit cost. As we continue to work on stabilizing Cotay at maximum throughput and grade mill as we will discuss next, looking at our guidance, total attributable Production in the first half of the year was 334,000 ounces. The company expects attributable production in the second half of the year to be much stronger, ensuring that we are on track to achieve the full year production guidance of 735 to 820 ounces ago. The stronger second half is due to continued improvement at the Cote mine during its full first year of operation. Copper coupled with an increase in expected grades at both Hisakane and Westwood based on the respective mining sequences. Our Q3 performance to date at our assets reinforced our confidence in our production guidance for the year. On Essakane, the tributal guidance was estimated at the beginning of the year assuming IAMGOLD 90% ownership interest in the project. With the change in ownership to now 85% at the end of the second quarter, the company expect Essakane’s attributable production to fall towards the lower end of the original guidance range. Looking at cost, we have revised our cost guidance upwards with cash cost now expected to be in the range of $1,375 to $1,475 an ounce sold or approximately $150 per ounce higher and our all in sustaining costs of $1,830 to $1,930 per ounce. The increase in cash cost is a combination of external and operational factor including higher royalty being paid as gold prices rise at Cote and Essakane. At Essakane the government increased the royalty structure when gold prices are above $3,000 an ounce. Further, the recent strength in the euro has necessitated a revision of its impact to our costs in the country. At Cote we are seeing temporary higher costs at the mine and mill associated with the ramp up in stabilization activities. Processing costs at the mine are expected to fall following the installation of the additional secondary crusher in the fourth quarter and the mining costs expected to improve as the team continues to transition to bulk mining and that offer more direct feed mine to mill with with less rehandling in the short term. While rehandling is adding cost, it also allows until the mine is set for it to boost the mine grade of 0.995 grams per ton in Q2 to a 1.1 grams a ton mill adding approximately 25 to 30 cents per ton mine or roughly $1 per ton mill but also unlocking additional value of nearly $15 per ton mill by uplifting the grade mill. Same idea. With the extra milling cost we have accelerated nameplate in part because we found a way to temporary maximize throughput by incorporating additional refeed system using contractor for aggregate plant moving ahead named plates by five to six months allow for maximizing tons milled over just waiting for the second crusher. To this idea of allowing for extra milling costs bring also the opportunity to monetize additional terms already in mind till the end of the year by building fine and core stockpile that could be used during planned longer shutdown in particular around the installation of the second cone crusher. As we move forward, we will eliminate that practice and replace by in house crushing and repeat system once the second crusher is commissioned allowing for extra capacity. On the capital side at Cote, we have increased our sustaining capital estimate by $20 million this year for projects that will further improve the availability of the plant and working condition. This includes a more robust dust management system as well as a fine or repeat system to support the mill during scheduled downtime of the crushing plant. These adjustments at Cote are a byproduct of where we are in the life cycle of the project. This is the first full year of operations and in Q2 we achieved the first full month of nameplate production. Standing back, the ramp up of Cote has gone extremely well and the project is delivering and displaying its potential. With that, I will pass the call over to our CFO to walk us through our financial results and position.

Maarten Theunissen (Chief Financial Officer)

Maarten thank you Renaud and good morning everyone. In terms of our financial position at the end of the second quarter, Iamgold at 223.8 million in cash and cash equivalents and net debt of 1 billion. The company has 250 million drawn on the credit facility and approximately 391.7 million remains available resulting in liquidity at the end of June of approximately 616.5 million. We note that within our cash and cash equivalents, 91.4 million was held in the corporate treasury, 56.4 million representing Iamgold’s 70% share was held by Dakota Gold UJB and 85.1 million was held by Essakan in Burkina Faso. Aimgold’s interest in Essakan was adjusted from 90% to 85% effective June 20, 2025 as per the updated Burkina Faso Mining code adopted in August 2024 following the change in ownership, Essakane declared a significant dividend of approximately 855 million representing all of the undistributed profits of PITSA Cans up to and including the 2024 profits. The company’s 85% portion of the dividend net of withholding taxes is approximately 680 million. Essakane will make dividend payments during the third quarter based on the cash flows generated during the period and the remaining balance of the dividend will be converted into a shareholder account between Essakane and armgold. The shareholder account structure works like an intercompany loan and allows for the company’s portion of the dividend to be repaid at any time of the year using excess cash generated by Sakan, therefore improving the efficiency of cash repatriation and aligning the interests of both Ongold and the Government of Kina Faso. Being more regular cash flow movements from esocam, the Government of Burkina Faso received its portion of the dividend total 128.3 million in June of 2025. Looking at our debt obligations, Anggold is in a good position to execute on our strategy to responsibly delever the balance sheet over the last four to five years. In order to fund the construction and completion of Cote, Irgold put in place numerous financial vehicles with the goal to avoid permanent encumbrances or transactions that would permanently decrease Eimgold’s ownership interest in Cotay. These included the gold PPE arrangement and the second lien term loan. In the second quarter we concluded delivering into the gold PPE arrangements. Year to date, the company delivered 75,000 ounces into the arrangements resulting in deferred revenue of 154 million being recognized. Deferred revenue represents the cash iron gold received when entering into these arrangements, adjusted for the impact of any gold hedging structures included in the arrangements. If those ounces were delivered at today’s gold prices, cash would have been higher by approximately 200 to 225 million, illustrating the potential increase in our future cash flows as we will now sell all production at market prices. We are now prioritizing repaying the highest cost debt which is our second interim. Loan. And it has a floating rate of more than 12%. Repaying the term loan will also reduce our average debt carrying costs. We’re proud to announce that subsequent to quarter end the company made the first step on its delivering strategy and repaid 10% or 40 million of the term loan, reducing the principal balance to 360 million. Looking further ahead for Iamgold, we are continuously analyzing what the proper capital structure is for an organization of this size with our expected cash flow generation. Ultimately, we look forward to discussing the potential of returning value to our shareholders, whether through share buybacks or dividends, once we have addressed our capital structure. Looking at our Q2 financial results, revenues from continuing operations totaled $580.9 million from sales of 182,000 ounces on 100% basis at a record average realized price of $3,182 per ounce, which includes the impact of the gold prepayne arrangement in comparison to the spot price of $3,302 per ounce. Cost of sales excluding depreciation was 287.1 billion. An adjusted EBITDA was a record 276.4 million compared to $191 million in the second quarter of 2024. At the bottom line, adjusted earnings per share in the second quarter was $0.13. Looking at the cash flow waterfall at the bottom of slide 8 which is displaying the cash flow movements for the first half of the year, we can see the year to date combined impact of the gold prepaid deliveries and the dividend payment to the government of Ine Faso following Isakan’s large dividend declaration on a mine site free cash flow basis Iron Gold generated 114.5 million in the second quarter, including 93.9 million from Cotai and 36.6 million at Westwood. Essakan reported 10 million in mine site free cash flow in the second quarter which is important to highlight this impacted by approximately 47.5 million for the timing of cash tax payments related to the final assessment on 2024 earnings as well as an increase in working capital and the VAT receivable. I would also like to note that subsequent to quarter end Issakan received a 27 million VAT refund, reducing the receivable and with that I will pass the call to Bruno, our Chief Operating Officer.

Bruno Lemelin (Chief Operating Officer)

Bruno thank you Maarten. Starting with Cote Gold, as Renaud noted in the opening remarks, this was an important quarter for Cote as the mine transitions from ramp up to optimization and stability. We are very proud of our progress at the mine 16 months ago on March 31, Cote poured its first gold bar, followed by commercial production four months later and ultimately achieving main plate throughput of 36,000 tonnes per day on June 23, well before the 20 month estimate at project initiation. Looking at the quarter Cote produced 96,000 ounces on a 100% basis. Mining activity total 11.8 million tonnes in quarter with 3.2 million ore tons mined. Equating to a strip ratio of 2.7. The average grade mine increased from the prior quarter to 0.95 grams per tonne in line with the updated mining plan. As in pit activities continue to broaden the mining area within the pit to support the transition to bulk mining. On a cost basis, we saw unit mining costs of $3.88 a ton due to the higher than expected diazole consumption associated with additional RE handling as well as contractor costs consumable parts related to an increase in drilling, loading and blasting activities. Mining costs are expected to reduce in the second half of the year closer to the $3.50 a ton level. This will be achieved by targeting an objective of 1 million tonnes a week and the reduction of RE ending through an increased proportion of direct feed material coupled with improved blasting and pit management. Turning to processing mill throughput total 2.9 million tons with successive increases in throughput each month during the quarter head grades of 1.1% were in line with PLAN with feed material comprised of a combination of direct feed, ore and stockpiles. Mill recoveries averaged 93% in the quarter beyond PLAN as well, we believe we are seeing the benefit of the micro fracturing created by the hpgr. Reconciliation between the reserve models, grade control models, mill feed and production continues to be in line with expected tolerances with Q2 ex pip production seeing 7% positive reconciliation to both reserve tons and grade midden. Unit costs saw quarter over quarter improvement to $6.94 per ton milled, though they remain elevated from our target of about $12 per ton. Unit costs are impacted by the supplementary crushing and coarse or refit activities which have performed well to provide additional capacity during maintenance windows but come at an increased cost. The supplementary crushing is temporary and we expect unit costs to decline following the installation of the additional comb crusher in the fourth quarter. Looking ahead, we remain confident in our cote gold production guidance of 360 to 400,000 gold ounces on a 100% basis, which is essentially a doubling of production from last year. The primary focus continues to be the stabilization of the processing plant to operate at or above the design capacity of 36,000 tonnes per day on costs. As Renaud highlighted, cost guidance has been revised. Cash costs are now expected to be in the range of $1,100 to $1,200 per ounce sold and all in sustained cost is now expected to be $1,600 to $1,700 per ounce sold. The cash cost increase is primarily associated with higher royalties due to the higher gold price equating to an increase of about 50 to $60 per ounce coupled with the higher than planned cost to operate the temporary coarse or refeed crushing circuit and higher maintenance cost that Contributed Close to $150 per ounce over the course of the year. The all in sustained cost revision includes the additional $20 million or $40 per ounce for the additional non recurring capital to improve overall plant availability and operating conditions including dust mitigation systems inside the facilities. We are looking forward to seeing the impact of the installation of the second cone crusher in Q4 which will provide further capacity and flexibility in the dry side of the plant in support of the operation and potential future expansions which leads us to what is the most exciting slide the Advancement of the Cote Gosling Super Pit Scenario Our drills are busy at work with over 32,000 meter completed on the 45,000 meter program. This program is prioritizing the resource conversion at Goslin to provide the foundation and for an updated technical report that is expected to outline a significantly upsized reserve base combining Cote and gas line into a superfit. This report is expected to be released in the second half of next year. As currently designed, Cote has the mining capacity to average an annual ore mining rate of 50,000 tonnes per day versus our current nameplate processing rate of 36,000 tonnes per day. As part of the 2026 Technical Report, we will look to find the right balance between an increased processing rate with mining rates targeting the combined Cote gas line superfit. It is interesting to note that the Cotai deposit itself has over 400 million tons of measured and enscaven material. If mined at the rate of 20 million tons of ore per year or 50,000 tonnes per day, the Cote deposit itself will have a mine life of potentially 20 years prior to bringing Gaslink into plant. This would allow for considerable flexibility for phase permitting and capital offlase. Altogether there is a significant amount of value to continue to uncover at cotex. Turning to Quebec, the second quarter at Westwood saw improvement from the prior quarter with production of 29,000 ounces as the mine operates through some lower grade stopes and conducts additionally underground activities to set up the mine for a stronger second half. Underground mining totaled 98,000 tons averaging nearly 11 tons per day. As volumes from the underground continue to increase compared to the prior year and previous quarters, production drilling has continued to improve quarter over quarter achieving 193 meters per day, a record since the mine restarted in 2021, building confidence that our underground mining methodologies and systems are proving to be effective. The Gnajuk satellite open pit reported 315,000 tons mined higher than the previous quarters in line with the mining schedule. Mill throughput in the second quarter totaled 323,000 tons at an average head rate of 3.07 grams per tonne. The strong throughput was due to plant availability in the quarter of 96% which was higher than the same prior year period of 89%. The mill achieved recoveries of 92% in the second quarter 2025 in line with the same prior year period. Cash costs and all in sustained costs came in above our updated guidance ranges for the year as production is expected to be second half weighted with cash costs of reaching $1,562 an ounce and all in sustaining averaging $2,140 an ounce in the quarter. Looking ahead, we remain confident in Westwood’s ability to meet our production guidance with production of 125 to 140,000 gold ounce underground. Mining rates are expected to be maintained at around 1,000 tonnes per day from multiple active mining zones while grade is expected to increase in the second half of 2025 as the mining sequence transitions to higher grade zones during the period. As previously discussed, cost guidance has been revised and cash costs are now expected to be in the range of 1,275 to $1,375 per ounce sold and on sustained cost to be between 18 to 1900 dollars per ounce sold. Unit costs were higher in the first half of the year due to higher mining maintenance costs combined with lower production from lower average grade relative to planned in the first half of the year. Unit costs are expected to decline in the second half of the year on higher production expectations. Turning to Essakam, it was a challenging quarter as we worked through the lower grade of the upper benches of phase seven while being impacted by higher costs from increased royalties, a stronger euro increased maintenance and consumables cost and a higher proportion of stripping activities being expensed. Production of a 90% basis on a 90% basis Q2 totaled 77,000 ounces. Mining activity totaled 10.7 million tons with ore tons mined of 2.2 million tons. Equating to a strip ratio of 4 to 1 mill throughput was 3.1 million tons at an average head rate of 0.93 gram per ton. The great decrease at as the mining activities progressed through the upper benches of Phase 7, grades tend to reconcile slightly below the reserve model during the earlier stages of mining a new phase and conversely to the positive as mining moved deeper into the phase. As we saw in the first half of 2024 when we were mining the later stages of Phase 5, the transition to the higher grade benches in Phase 7 occurred later than forecast with increases in grade materializing subsequent quarter end. On a cost basis, Essakan reported cash costs of $1,855 per ounce and out in sustained cost of $2,224 per ounce in the quarter. Costs were higher in the quarter due to a lower proportion of capitalized waste in the period, higher maintenance activities and an increase in consumable costs including diesel and grinding media. Labor. Contractor and facility costs also increased due to the appreciation of the local currency which is pegged to the euro. Royalties accounted for $257 per ounce in the quarter quarter representing an increase of nearly $100 per ounce from the prior year period primarily due to higher realized prices and a revision in royalty rates. Looking ahead, we estimate that Essakanee will be on the lower end of the attributable production guidance target ranging from 360 to 400,000 golda the guidance. This guidance accounts for the revision of the company’s interest in the projects to 85% from 90% previously. Our second cost guidance has been revised and cash costs are now expected to be in the range of 1600-1700 per ounce sold and volume. Sustained cost is now expected to be between $1850 to $1950 per ounce sold. Costs at Essakaneee are higher than planned primarily due to the increased royalty rate previously mentioned and the impact higher gold prices have on royalties, resulting in an increase of approximately $77 per ounce and the continued impact on of a stronger euro on operating costs. While the cost of operation in country have risen over the recent years, Essakanee continues to be a world class mine and is positioned to generate significant free cash flows moving forward. Finally, it is worth highlighting that work is ongoing at the second largest gold mining camp, the Nittigan and Monster Lake. Project in Chibougamau, Quebec. Year to date we have completed over 12,000 meters of drilling at Nelligan with an upsized drill program of 15,000 meters and 11,000 meters of drilling at Monster Lake. The Nettington program prioritized the extension of the deposit at Dep Nelligan’s mineral resources estimate was updated earlier this year which saw indicated on ounces increased to 3.1 million ounces with an average rate of 0.95 gram per tonne and an additional 5.2 million ounces in infers at similar grades. We plan to have assay results from this program later in the year as we work to grow Nelligan, targeting over 10 million ounces, making it among the largest undelivered gold project in Canada. With that, I will pass it back to Renault.

Renaud Adams (President and Chief Executive Officer)

Thank you, Bruno. So, thank you all. There is no question we have to be exceptionally diligent at our operations to ensure cost management, containment management, particularly during a rising gold price environment, to ensure the margin expansion is protected. Looking beyond this, it is a very exciting time for us. We are now completely exposed to the gold price. With the conclusion of our prepayments, we are expecting a strong second half of the year and our Cotego project is performing very well with significant value growth opportunity ahead. So thank you for your support. With that, I would like to pass the call back to the operator for the Q and A operator.

OPERATOR

Thank you. We will now begin the question and answer session. To join the question queue you may press star then 1. On your telephone keypad you will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press Star then two. Our first question comes from Anita Soni with CIBC World Markets. Please go ahead.

Anita Soni (Analyst at CIBC World Markets)

Hi, good morning Renaud and team, a couple of questions just firstly on the cost increase at Cote. could you just give us an idea of what the. I think you mentioned that the stripping the amount of material moved would be around 11 to 12 million tons per quarter for the back half of this year. Could you just give a breakdown of what the strip ratio would be for those two quarters? I’m sorry if you’ve already said it, I’m just on two competing calls right now.

Renaud Adams (President and Chief Executive Officer)

On the strip ratio, we should be slightly below, I guess the H1. But the most important thing is when you look at the rehandling. So it’s not just rehandling that has to do with moving the grade mine to the mill. So we talk about a lot about the aggregate plan and the support from contractors. So that also encouraged some rehandling around this. But all in all, yes, we had about over 3 million tons of total move above the total mine. So this is all those movements. So what I like about this, at least in the short term is it does, as I said, it does bring some, some uplifting grade at the mill and so forth. So obviously the benefits offset largely. While not in the long run? We talked largely about it. In the long run we see more direct fees, we see bulk mining, we see the ability, you know, to reduce on rehandling while continue to separate at the source and the pit, you know, the lower grade from there. So Bruno, you have maybe more detail on this preparation.

Bruno Lemelin (Chief Operating Officer)

Good morning, Anita. So we’re going to have a stripping ratio closer to 2.5 in the second half, which is quite like similar to what we had in H1. And as Renaud mentioned, like the rehandling is due to be reduced as we transition to toward a direct or feed strategy that will be help coupled with the installation of the secondary cone crusher or the second cone crusher. So we expect a sharp decline in rehandling for that activity after the installation of the cone crusher.

Renaud Adams (President and Chief Executive Officer)

What I can add maybe to this is we have roughly 2 million tons of our stockpile, you know, what we call the ngo, which as Bruno mentioned, by processing it, you know, we had deposits of reconciliation on it. So that’s bring what I would call the project today pretty bang on. So we’re very, very pleased with that. But eventually it’s a strategy to continue to deploy so you’ll reach the point where you wouldn’t have all those stockpiles to play with. So the mine will continue to ramp up, reach a point where the excess or tons lower grid will be stockpiled for the long run and the direct fees. So this is really the strategy. So we’re not there yet, but we’re advancing well and we’re facing the fifth and so forth. So it’s a matter of time. But for the time being, the rehandling while adding costs actually add quite a bit of revenue as well.

Anita Soni (Analyst at CIBC World Markets)

Okay, and then second question on the processing. So I noticed you had a pretty good drop in the processing unit costs. How does that evolve with the two shutdowns? You’ve got a maintenance shutdown in Q3 and then also the tie-in that we knew about in Q4. So do you expect the processing costs to go up temporarily and then in 2026 could be at the cost that you delivered in Q2 or lower?

Renaud Adams (President and Chief Executive Officer)

Not necessarily for the exact same reason you just mentioned. You know, so that’s the reason why we decided to maintain external support. We got some tie in to do. Renaud can speak about that. There were quite a bit of work around the crushers as well, and safety first and all that. So we decided to maintain. So now we. That’s the reason why we adjusted the $150 because you could argue that the rehandling, extra re handling in the short term, all those extra milling costs. Yeah some also rent and maintenance power as well, you know to help. So all that in the short term which kind of a four or $5, you know, on a combined basis. So basically explain the $150. So we’re going to maintain this in place making sure we maximize the throughput once the second cone is installed. And that whole dynamic would change as we move forward. Bruno, any additional?

Bruno Lemelin (Chief Operating Officer)

So we have our annual shutdown in August, the five day shutdown. So we’re going to be again we just want to remain prudent. It’s the first year of operation. There will be training as well. We’re going to be doing it the safe way. And after that in Q4 with the installation of the concha we’re trying to strategize as to not to interrupt the mill too much. But there will be some interruption to make all the tie ins and everything. All in all we are very confident that we’re going to be producing as expected within the production guidance. But we need some support to complete those two activities. The activity of installing the second cone crusher is an activity that will bring us to a position where we will see after that a decline in the milling costs and also in the mining cost because you will have a reduction.

Renaud Adams (President and Chief Executive Officer)

In the real Perhaps the last comment on this is I know we talked about cost and I know it’s, you know it’s all about this industry to remain very disciplined and so forth. So again we see those additional costs kind of temporary, you know and not really. But what I like about our cost structure even though we’re just in the first year, if you look at our targeted, you know cost for the mine cost for the year $3.50 target is eventually towards the $3. So we’re not that that far. You still have about a 30 cents you know built-in and re handling which will reduce all your mining processes would continue to improve. So you’re not that far. You’re like approximately 10% you know of improvement down the road to get to your objective. And we’re going to get there. And we’re now mining at the 12 million tons run rate. So that’s the 48 and continue to improve. So we’re very confident on the mining side reconciliation works well and so forth. On the milling side if you could break down basically line by line. There is one line that really outstand the other and it’s the contract. The use of external Services to continue to support. That is a one line on its own. Consider about four to five dollars. So as we move forward, this is the line you know, we target. It’s not like all the cost structure is under control. Actually it works extremely well. You know, all the variable consumption versus cost. And so if you would, you would say an ultimate target of 1050. The difference in between is basically we achieve something like 1480 and in June as a milling cost. So we’re very, very confident we take the hit. In the short term, we’re going to continue to bring some additional value, but down the road we’re extremely confident in positioning the cost structure where we want.

Anita Soni (Analyst at CIBC World Markets)

And one final question, and apologies to my fellow analysts. The. My last question is with respect to the Gosling integrated study. I think I was expecting it nearer to the end of this year or early next year and I think you mentioned by the end of 2026. Is that a change? I think you mentioned in the opening. Comments that. COTA itself would sustain about 20 years of mine life. Is that just to give you more time to drill or was I wrong about that?

Renaud Adams (President and Chief Executive Officer)

Yes. No. Let’s separate reserve from resources. Right. So the plan is that we’re going to extend our drilling to the end of the year, maybe even June, January. So for the reserve resource estimate, don’t expect anything more than a kind of a delineation exercise at the end. We’re going to complete, maximize our drilling up to probably January, then update our new resource base within that from that new resource base which we’re targeting late Q1, maybe early Q2 for disclosure. This is a resource base where we’re targeting to have after the completion of the drilling a 20 million ounces plus of measure indicated which will form the base of the mine plan in a new reserve. And all this, the final will be released in the latter part of 2020, but the resource will be earlier in the year.

Anita Soni (Analyst at CIBC World Markets)

Okay, thanks for clearing that up. That’s it for my questions.

Renaud Adams (President and Chief Executive Officer)

Thank you.

OPERATOR

Our next question comes from Matthew Murphy with bmo. Please go ahead.

Matthew Murphy (Analyst at BMO)

Hi. Just a few more questions on Cote. How’s the HPGR (High Pressure Grinding Roll) holding up at this point? Are there any risks? You know, when you do this maintenance. It’S a chance to take a look. At how wear rates have been and so on. Or do you already have a good.

Renaud Adams (President and Chief Executive Officer)

Grasp of how it’s faring? So I’m sure Bruno. I see a little smile because Bruno and I would definitely see this like on a very, very glass half full rather than half empty. It is True. You know that as we mentioned earlier in the other day, the abrasives method and so forth may look like, you know, we’re going to achieve maybe less hour on the tires, but the performance of the machine is extraordinary and to a point that when we feed the wet, we’re capable to process and crush more with HPGR and we can actually extract. We’re still using external, you know, for longer, but the machine is operating very well.

Bruno Lemelin (Chief Operating Officer)

Yes, Matthew, this is Bruno. What we see is we see a very good performance from the tires although they are wearing fast due to the abrasiveness of the ore. But we see performance exceeding very often, like beyond 40,000 tons per day. So it’s not a matter of daily performance. I think the team is, is managing those roles better. They understand now the behaviors of the equipment. Right now what we’re doing is we’re going to be ultimately replacing those tires with a new generation which will have longer studs. So we hope that is going to increase the longevity. So it’s more like a longevity issue than performance issue. And there will be after that another generation of tires with larger diameter of the studs. So all in all, we believe that the HPGR actually is a piece of equipment that is bringing a lot of value for Cote. The team has been trained and educated us how to operate the hpgr. It works well. Right now it’s just like we need to change those tires more often than firstly expected, but the goal is to get there eventually.

Renaud Adams (President and Chief Executive Officer)

Having said that, two things that it’s important. With the addition of the second cone crusher, we should be in a position to re stabilize even further, crushing a little finer, feeding the HPGR more and its sweet zone, sweet spot zone. So we might see a reverse back to better life. But how are we going to bypass all this? We’re not so concerned as long as it doesn’t bring, you know, additional downtime. So as we mentioned, you know, this additional improvement on the refeed system will be allowing us as we crush to extract and refeed. And this is all going to be doing in house, so we’re going to adjust to that. But the performance of the machine is extraordinary.

Matthew Murphy (Analyst at BMO)

Okay, that’s great. And then I’m just trying to understand. Some of these temporary costs. Sounds like a pretty abrupt drop off in extra costs once you get this additional secondary pressure up and running. Are there any sort of tampering, temporary. Costs that you see persisting into 2026?

Renaud Adams (President and Chief Executive Officer)

I like to say that it is absolutely possible that all in all, if you would compare like SAG milling operation, let’s say with an hpgr. You might have to face a little higher maintenance cost or replacement of your wear part. But as we mentioned, this would probably be offset anyway by additional benefits from that is the only thing on the west side. There is absolutely nothing that I see remaining. Once you’re positioned to extract and refeed internally from your course and you’re fine, you’ll take care of that. We had a lot of additional extraordinary casino of repair, you know, extraordinary repair which we’ve seen super, you know, like much, much, much better now in stabilizations and so forth. So a lot will disappear. But it could be possible that $10 a ton as normally per 10 million assets like that should be doing. Could be a little shy, but other than that, I’m pretty confident.

Matthew Murphy (Analyst at BMO)

Okay, thank you.

OPERATOR

The next question comes from Steven Green with TD Securities. Please go ahead.

Steven Green (Director at TD Securities)

Good morning everybody. Just a quick one on the new agreement at Essakan, the new framework deal with the government. Obviously better to have good to have the better certainty on the cash flows. Is this something that you were seeking or is this something the government was looking to do in terms of the new agreement? I’ll pass it to Maya, to Maarten.

Maarten Theunissen (Chief Financial Officer)

Good morning, Steve. So, the government wants to have. A maximum dividend and Angol wants to make sure that we have an efficient structure to continue be able to move excess cash out of the country. And basically by declaring the full distributable profit from the past allowed us to pay that maximum dividend to the government. So we achieved their objective. And now what Iamgold has is instead of waiting and only being able to pay dividends during the third quarter every year, we have this intercompany loan structure where as Essakane generates free cash flow in the next period, we can repay that loan using that free cash flow. And Essakane paid a lot of taxes and other working capital amounts in Q2. But now going forward, we expect Essakane to continue to produce good cash flows and that is then available for us. So we achieved both benefits and we.

Steven Green (Director at TD Securities)

Work well with the government on this. Okay, thanks. And is there a stability agreement associated with this?

Maarten Theunissen (Chief Financial Officer)

The government is a 15% shareholder, so these things are done in board meetings as shareholders. While it is not that there’s a specific agreement, but there are, of course, agreements with Issacan for these type of instruments and the government had to agree to these things as a shareholder.

Steven Green (Director at TD Securities)

Okay, great. And I guess just larger picture with this in place, with this new agreement in place Is there potential for Essakan. To be something that you would look.

Renaud Adams (President and Chief Executive Officer)

To divest at some point? Just given your focus on Canada and Cote now, I would say at this stage all eyes is on the focus of cash flow and debt repayment. So the, this is a very good cash flow. Strategically, as we move forward, we continue to believe that Essakane is capable to bring good ounces cash flow and an opportunity to further reward our shareholders down the road. And this is what we see. I mean we reached a Point with 800,000 ounces at tributal. We have expectations to pay down quite a bit of our debt this year, next year. So we could be in a position where we made next year. And if you would have this excess cash, cash available, you would also be in the possibility to increase the reward to shareholders. So it’s, it’s very strategic as we move forward. But we’re extremely pleased now and with this vehicle in place, we’ll be capable to have more predictable. And so down the road we continue to monitor the situation. Okay, that’s, that’s helpful. Thanks a lot.

OPERATOR

Our next question comes from Tanya Jakuskonek with Scotiabank. Please go ahead.

Tanya Jakusconek (Analyst at Scotiabank)

Hi, good morning everybody. Thank you for taking my three questions. A lot of them have been answered, but just some follow ups on some of the ones that were asked. So just finishing off on Essakane, if I could. Renaud, how do you see the mine life there? We’ve got this higher goal price. So I’m just thinking about as we get to year end, your reserve pricing and resource pricing and you know, how does Essakan look in terms of extending beyond the technical study that you filed.

Renaud Adams (President and Chief Executive Officer)

So let’s start first by looking a bit of the regulation attached to this. So it is a bit of understanding, you know, that renewal of permit, you know, down the road could be, you know, for a period of five years. So let’s see now we’re focusing on looking beyond 28 up to 30, 20, 33. So it looks extremely well. So like if we wanted to stay, you know, and develop and increase the life of mine and invest, you know, to extend, we’re pretty confident we could easily bridge, you know, the first five years, extension beyond that. This is not our focus at this stage. But yeah, if you increase the gold price a bit, if you look at Essakane as you would accept that it’s more 2000, $2100 an ounce extended life of mine. And so far there is a lot of additional value and we’re more than confident we could extend for an additional five beyond.

Tanya Jakusconek (Analyst at Scotiabank)

Okay. So I should be thinking probably 2033 as sort of what you’re targeting for.

Renaud Adams (President and Chief Executive Officer)

Yeah. So now we have a 43-101. So it would imply of course successful conversations with the government. We would not obviously be inclined, you know, to inject, you know, inject capital is a big word because the mine is free cash flowing and would probably pay for its own investment. But the point is before you engage in such a thing, you know, you would like to have certainty, you know on, on permit extension and so forth now in 20202026 and then the expansion and so forth and refiling up. So that’s one scenario over the current scenario of 28. But yes, definitely, definitely at this rising gold price without using at all, maintaining a significant margin around the 2020, 100 kind of reserve, you, you would expand quite easily.

Tanya Jakusconek (Analyst at Scotiabank)

Okay. And then if I can just come back to Cote. So as I’m thinking about getting these costs stabilized, you know, you mentioned that you’re you know, $0.30 or thereaboutish, you know, $0.50 on the mining cost per ton to get to $3. I mean as you get rid of this rehandling, which when do you think that will be? Like is that like this year or, or like is that into next year we’re going to finish the rehandling. I’m trying to understand when I can.

Renaud Adams (President and Chief Executive Officer)

Get this money down to dollars again. There would always be a little bit of rehandling from the moment you mine more than the mailing, but not to the extent of what we see. Again a big portion of the rehandling as well takes place at the aggregate plan, or around you move the ore quite a few times. So that’s one thing. So it’s more at 2026. I think we feel strong that we probably can exit on an average of about 350. And as we continue I see about half of it is about rehandling and half of it is about just continue improvement, volume, bigger denominator, type of. To bring us to the $3 eventually. So it’s more, it’s more 2026.

Tanya Jakusconek (Analyst at Scotiabank)

Okay. And then on the processing side once we get, we eliminate these contractors and these other, you know, get this more stabilized and get the secondary crusher. And are we looking at this $$12 per ton also like in the second half of next year? I’m just trying to understand when the mine.

Renaud Adams (President and Chief Executive Officer)

I would like it earlier than that. I would like it earlier than that but you know, we’ll be commissioning. It should be straightforward Commissioning of the second, the second cone. At that point, you know, we would have already improved the in house or refeed system on the fine side. Maybe a little bit of improvement on the feeding system on the coarse side. But yes, technically you’ll be in a position already in Q1 next year to see a reductions of those costs. But it could go to the mid year, you know, where you would stabilizer in the long run. We would continue to improve beyond the $12, but I think it’s a fair call by mid next year we should stabilize.

Tanya Jakusconek (Analyst at Scotiabank)

Okay, so hopefully mid next year mining and processing where, where you are or close to where you want to be and, and we’ll move forward from that. Would that be a fair comment?

Renaud Adams (President and Chief Executive Officer)

Yep.

Tanya Jakusconek (Analyst at Scotiabank)

Okay, that’s. That’s helpful. Thank you. And, and then finally my final question is on the. When. When you know, when we talked about improvement in the second half. I’m just trying to understand. You have the same number of tonnes mined For Estakane in Q3, Q4 and similar grades but you have that maintenance downtime in August and then you have the secondary crusher going in. Should I be thinking that the quarters would be evenly distributed? I just don’t know how long you think a secondary crusher is going to take to install. So should I be thinking Q3, you know, a little bit better than Q4. I’m just trying to understand how Cote looks for the next year.

Renaud Adams (President and Chief Executive Officer)

Yeah, a little bit the same I guess like, like Bruno mentioned like this quarter we had, we had a plant shut down annual then Q4 is a tie in. I will be capable to reduce those by using some. So I would say Cote Gold is probably more a kind of lookalike Q3, Q4, strong boat and as I can of Renaud, you’re probably expecting Q4 a little higher.

Bruno Lemelin (Chief Operating Officer)

Yeah, the, the maintenance at we are, we have a 24 hour maintenance on line B and a 16 hour maintenance on line B. So the impact is going to be somehow marginal. So.

Tanya Jakusconek (Analyst at Scotiabank)

Okay, okay. No, no, that’s fair enough. So really it’s Essakan that has a stronger Q4 and there’s Westwood as well with the grade. I’m just trying to see if that quarter over quarter improvement, Q3, Q4 still stands.

Renaud Adams (President and Chief Executive Officer)

No, you’re absolutely right. You can take the view that Essakane and Westwood will have a stronger Q4 than Q3 and Cote should be about more or less the same. And Westwood as well. More or less the same. No, Westwood and just like a Sakana should have a stronger Q4. As you continue to improve on the grid.

Tanya Jakusconek (Analyst at Scotiabank)

Okay, so quarter on quarter improvement still. Okay, well that’s very helpful, thank you. Good luck with getting all.

Renaud Adams (President and Chief Executive Officer)

Thank you very much.

Tanya Jakusconek (Analyst at Scotiabank)

The secondary crusher and as well for Cote. That would be great to see.

Renaud Adams (President and Chief Executive Officer)

Working on it. Thank you.

OPERATOR

The next question comes from Mohamed Sidibe with National Bank Financial. Please go ahead.

Mohamed Sidibe (Analyst at National Bank Financial)

Morning Renault and team and thanks for taking my question. So maybe just on the second half expected at Essakane, just wanted to know if you could provide us with a little bit more color on some of the grades you’re expecting out of phase seven or should we also anticipate a little bit more. More increase of throughput in the second half versus the first year? Thank you, Bruno.

Bruno Lemelin (Chief Operating Officer)

Yes, good morning, Mohan. Yeah, for. You know, I used to be the GM at Essakane and it’s not necessarily the first time that we see lower grade material at the upper benches of the new phase. So. So it’s not like it’s not new. So what we expect in the second half is that as we dig deeper, we’re going to enjoy higher grade material and post subsequent to this water. This is what we see and we expect grades to pick up and to increase and also the reconciliation to be positive after month end. So our plans are somewhat conservative, but we are anticipating still a stronger H2. Thanks, Bruno.

Mohamed Sidibe (Analyst at National Bank Financial)

And then the second question would just be on the taxes paid and the increased guidance there. Could you give us maybe some color. On the cadence that we can expect for Q3? Q4? I know it’s impacted by the dividend and declaration at Sicane, but should we expect Q3 to be higher versus Q4 or how should we look at that? Thank you, Arjun.

Bruno Lemelin (Chief Operating Officer)

Good morning, Mohammed. So in Q3 or in July, we actually paid the withholding taxes on the dividend that was just over 40 million and then the rest of the tax payment should be equal over the rest of the quarter.

Mohamed Sidibe (Analyst at National Bank Financial)

Great. Thanks for my question. The rest have been answered.

OPERATOR

Thank you. This concludes the time allocated for questions on today’s call. I will now hand the call back over to Graeme Jennings for closing remarks.

Graeme Jennings (VP Investor Relations)

Thank you very much, operator, and thanks to everyone for joining us this morning. As always, should you have any additional questions, please reach out to Renaud or myself. Thank you all. Be safe and have a great day.

OPERATOR

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

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