IAMGOLD (IAG) Q4 2006 earnings summary

Executive summary

• 2006 marked a major expansion through the Gallery Gold and Cambior acquisitions, adding operating mines and development assets; attributable gold production rose 43% YoY to 642,000 oz.

• The million-ounce production milestone was brought forward to 2007, one year ahead of the prior goal; reserves increased over 110% and measured and indicated resources, including reserves, doubled to ~20 million oz.

Financial highlights

• Revenue was $303.3M in 2006 versus $129.8M in 2005; net earnings were $72.5M versus $20.5M, including $0.1M from discontinued operations.

• Operating cash flow rose to $64.0M from $28.8M; 2006 benefited from higher gold prices, higher production and Cambior results from Nov. 8, partly offset by payables and stockpile increases.

• Total assets increased to $2.279B from $469.0M, largely reflecting acquisitions; cash and bullion were $173.4M at year-end.

Outlook and guidance

• 2007 attributable production from operating gold mines was forecast at 1.0M oz with Gold Institute cash costs, including royalties, of $395/oz.

• 2007 exploration spending was expected at ~$30M; priorities included advancing Quimsacocha, Camp Caiman, La Arena and Buckreef and integrating acquired operations.

• Tarkwa’s CIL plant and North heap-leach expansions were expected to support production above 700,000 oz/year until 2021; 2007 guidance was 715,000 oz at $350/oz cash cost.

• Camp Caiman permits were anticipated in mid-2007, subject to regulatory and public review; a construction decision was contingent on permits and financing.