IAMGOLD (IAG) Q4 2004 earnings summary

Executive summary

• 2004 priorities were to increase production, cash flow, growth and management depth; proposed Wheaton River and Gold Fields combinations failed, and the strategy remains stable production, exploration and shareholder-value opportunities.

• Four West African mine interests generated 432,000 attributable gold ounces; Quimsacocha emerged as a major exploration focus after high-grade gold, silver and copper intersections.

Financial highlights

• Revenue was $121.9M in 2004, including $112.7M gold sales and $9.2M royalties, versus $101.1M in 2003; net earnings were $11.6M versus $20.0M.

• Net earnings were $0.08/share versus $0.14/share; 2004 included $11.2M of corporate transaction costs related to unsuccessful proposals and a takeover bid.

• Q4 revenue was $34.7M, net earnings $2.9M or $0.02/share, and operating cash flow was negative $4.7M; Q4 2003 net earnings were $7.0M.

• Operating cash flow fell to $13.7M from $30.6M, reflecting transaction costs and working-capital buildup at the Mali mines; working capital was $102.6M and current ratio 5.7 at year-end.

Outlook and guidance

• 2005 attributable production from the four operating mines is forecast at 450,000 oz, with direct cash cost of $240/oz and Gold Institute total cash cost of $270/oz.

• 2005 exploration budget is $8.9M, including $3.9M for Quimsacocha and a planned 21,000m drilling program to define an inferred resource and test further targets.

• Mine-level 2005 forecasts, on a 100% basis: Sadiola 435,000 oz at $270/oz total cash cost; Yatela 250,000 oz at $295/oz; Tarkwa 750,000 oz at $225/oz; Damang 230,000 oz at $325/oz.

• Management expects production and costs to be slightly higher than 2004 overall, while pursuing cost reductions, mine-life extensions and measured, opportunistic acquisitions.