IAMGOLD (IAG) Q4 2009 earnings summary

Executive summary

• FY2009 gold production was 939,000 oz, 7% above original guidance; average cash cost was $461/oz, below original guidance of $470–$480/oz.

• Adjusted net earnings reached $212.2M, up 97% YoY; GAAP net earnings were $114.1M, including $98.1M of non-cash impairment charges.

• Q4 revenue was $265.3M; adjusted net earnings were $41.4M ($0.11/share), while GAAP net loss was $47.4M ($0.13/share), including an $88.8M Camp Caiman impairment.

Financial highlights

• FY revenue rose 5% to $914.3M as higher realized gold and niobium prices offset lower gold sales volumes.

• Operating cash flow was $257.0M versus $258.2M in 2008; investing activities used $407.0M and financing activities provided $196.0M.

• Earnings from mining operations increased 26% to $313.7M; total earnings from operations and working interests rose 28% to $349.7M.

• Gold sales were 944,000 oz at an average realized price of $960/oz, up 12% YoY; attributable gold production declined 6% to 939,000 oz.

Outlook and guidance

• FY2010 gold production guidance is 940,000–1,000,000 oz at average cash costs of $490–$510/oz; costs are expected to rise with energy costs and operating factors, then benefit from Essakane start-up.

• 2010 guidance includes 540,000–570,000 oz from Africa, 380,000–400,000 oz from South America, and 20,000–30,000 oz from Canada.

• Essakane commercial production was scheduled by August 2010; Westwood remained on schedule for early 2013, with projected annual production of 186,000 oz at $358/oz cash cost.

• Planned 2010 capital expenditures were $373M and exploration expenses $38M; Niobec guidance was 4.2–4.4M kg production at a $17–$19/kg operating margin.