IAMGOLD (IAG) Q4 2005 earnings summary

Executive summary

• 2005 was a transition year: attributable production rose 3.5% to 447,000 oz, net earnings reached $20.5m, and operating cash flow was $34.0m.

• The March 2006 Gallery Gold acquisition added Mupane and the Buckreef project, advancing the goal of 1.0m oz annual attributable production by year-end 2008.

Financial highlights

• FY revenue was $129.8m versus $121.9m in 2004; net earnings were $20.5m versus $11.6m, and basic and diluted EPS was $0.14 versus $0.08.

• Q4 revenue was $39.4m and net earnings were $6.2m, or $0.04/share, versus $34.7m and $2.9m, or $0.02/share, in Q4 2004.

• Operating cash flow was $34.0m versus $13.7m; 2005 included an $11.0m reduction in non-cash working capital at Sadiola and Yatela.

• Year-end cash, short-term deposits and bullion totaled $110.2m; total assets were $469.0m.

• 2004 earnings included $11.2m of transaction costs, or $8.2m net of tax, tied to unsuccessful business combinations and takeover defense.

Outlook and guidance

• 2006 attributable production target: 480,000 oz from the four West African interests plus 100,000 annualized oz from Mupane; forecast combined cash cost $290/oz.

• 2006 cash cost forecast for the four West African mines was $295/oz; Mupane was forecast at $270/oz.

• Long-term target was 1.0m oz attributable production by year-end 2008; Buckreef was hoped to enter production around 2008 and Quimsacocha in 2009–2010.

• Quimsacocha drilling, metallurgical work and scoping studies were planned for 2006, with close to $5m budgeted for H1.