Earnings Call: Q4 2019

Feb 20, 2020

Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD 2019 4th Quarter and Full Year Operating and Financial Results Conference Call and Webcast. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask At this time, I would like to turn the conference over to Indi Gopinathan, Vice President, Investor Relations and Corporate Communications for IAMGOLD. Please go ahead. Thank you very much, and welcome to the IAMGOLD 4th quarter and full year conference call for 2019. Joining me on the call today are Gord Stothart, President and Chief Operating Officer Efi Tsimaneikas, Vice President, Operations Finance and Information Technology, who is covering the finance section for our EVP and CFO, Carol Banducci Frank McDougall, Senior Vice President, Exploration and Jeff Snow, Senior Vice President, Business Development and General Counsel. We also have Umer Tugayeni, our Regional Vice President in West Africa, joining us here in the room. Our remarks on this call will include forward looking statements. Please refer to the cautionary language regarding forward looking information in our disclosure documents and be advised the same cautionary language applies to our remarks during the call. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and Chief Operating Officer, Gordon Stotherm. Well, thank you, Andy. Good morning, everyone, and thank you for joining us. So last night, we issued our Q4 2019 full year results, which reflect a year of successfully overcoming the strong headwinds faced by the company. I'd like to note a few highlights from 2019. In response to a challenging gold price environment at this time last year, we implemented a self funding strategy where each site is mandated with covering their own operating cost sustaining and site expansionary and capital as well as corporate G and A, exploration and financing costs. We've achieved this goal on a consolidated basis with Essakane and Westwood already self funding its sites and all sites looking to self fund for 2020. In addition, we reduced the exploration budget by 22%. At Westwood, we aligned our cost structure with production levels early in the year, reducing our workforce by a third. With ongoing work on the Westwood Mine Plan, we were able to provide updated guidance at year end, outlining our vision for a safe, profitable and long life mine. At the Rosebel site, the team acted quickly in response to the unauthorized pit intrusion incident over the summer, working with all strict stakeholders to return the operation to regular mining activities once the situation was judged sufficiently safe to do so. We delivered our first ore from the Saramacca deposit to the Rosebel Mill at the end of October. We bolstered our pipeline with a significant maiden resource at Nelligan, which also won the prestigious AEMQ Discovery of the Year award. We continue to de risk our development projects, Cote and Boto within budget. Finally, we maintained our strong balance sheet. IAM's Gold Ethos is one of 0 Harm and we aim to achieve high standards in environmental, social and governance practices. And this 0 harm vision has been fully integrated in our organization for over a dozen years. In 2019, we were ranked as 1 the top 50 sustainable companies in Canada by Corporate Knights. Additionally, we were included in the 2019 Bloomberg Gender Equality Index. IAMGOLD has also achieved the highest possible rating category and ranked 2nd best in absolute scoring of the 31 companies profiled in Moody's Corporate Governance in Metals and Mining report. IAMGOLD has implemented the Mining Association of Canada's Towards Sustainable Mining, TSM framework, not just at our Canadian operation, but at our global operations as well, and we are implementing the World Gold Council's responsible gold mining principles. Our ongoing ESG efforts include commitment to education, health and safety, access to medical care, safe water and our continuing work building relationships with our many stakeholders. As noted in 2019, we achieved a number of our targets. And looking forward to 2020, our next catalysts include completion of the construction of the Saramacca Main haul road which is well positioned to occur by the end of Q1 setting Saramacca up for a ramp up in the last three quarters of 2020. The mill debottlenecking project at Essakane is underway with minimal capital and anticipated improvements in the range of 10% increased throughput while also improving recoveries. Expected completion is Q3. Westwood guidance was provided in December and we are working on the NI 40three-1 101 report for mid-twenty 20 which will provide added details demonstrating a safe, profitable and long life mine. All of the work I have described is intended to improve our operating cash flows and margins with the ultimate goal of significantly achieving and maintaining our self funding strategy. On the exploration front, we are working on further resource delineation programs at Nelligan and the Roam project in Quebec, Goscelin at Cote and the new Corita discovery in Guinea, and we are conducting a growth project strategy review. On that note, I will now pass the call over to Efi to review our financial results. Thank you, Gord. Revenues improved in Q4 from Q3 by 7% on stronger gold prices, while costs remained flat quarter over quarter. As a result, gross profit improved approximately 80% quarter over quarter. The adjusted net loss for the quarter was $600,000 or $0.00 per share. Net cash from operating activities before changes in working capital totaled $226,200,000 reflecting the receipt of the gold prepayment in December. In addition, we reported a net $275,300,000 impairment charge, primarily consisting of a 395 $1,000,000 charge on the Westwood Mine as well as a reversal of impairment charges on the Essakane Mine of $122,000,000 Year over year, revenues were down 4% as higher gold prices were offset by lower production levels, while cost of sales increased by 2%, primarily as a result of lower capitalized stripping being now accounted. We ended the year with gross profit of $69,600,000 down from the previous year due to lower sales ounces and slightly higher costs due to lower capitalized stripping. Adjusted net loss for the year was $18,300,000 or $0.04 per share. Net cash from operating activities before changes in working capital totaled $367,500,000 including the gold prepayment. IAMGOLD remains in a strong financial 2019. This figure reflects further strengthening of the balance sheet with the additional funds from the gold prepay. Overall, we were cash flow positive in Q4 with Essakane and Westwood generating positive cash flows on a site basis, demonstrating progress on our self funding strategy. In 2020, we expect a capital intensive year with significant waste stripping required at both Essakane and Rosebel. At a gold price of $1500 per ounce or better, we would expect to see meaningful cash flow expansion. As you can see on this slide, excluding restricted cash and including our $500,000,000 credit facility, which remains virtually undrawn, our year end liquidity stood at $1,300,000,000 The $400,000,000 senior notes are not due until 2025. We continue to work on improving cash flows and making prudent capital allocation decisions. I will now pass the call back over to Gord to discuss operations. Well, thanks, Effie. So our top priority is the health and safety of our employees. In Q4, we continue to achieve or better our targets. On a full year basis, we achieved a DART rate, which stands for days away restricted or transferred duty of 0.51 per 200,000 man hours, which is our best in a decade. We work every day to meet or exceed our safety goals, implementing and refreshing a number of initiatives to ensure a safer working environment, including a comprehensive behavior based safety program. Our reserve and resource base remains strong with total proven and probable reserves of 16,700,000 ounces based on a $1200 per ounce gold price assumption. The total decreased by 6% in 2019 compared to 2018, primarily due to mine depletion. Measured and indicated resources, inclusive of reserves, decreased by 2% year over year to 27,200,000 ounces, while inferred resources increased by 38% to 12,000,000 ounces with the addition of the Nelligan gold project and updated resources at the Cote gold project. Our gold price assumption for resources for most of our operations and projects remains at $1500 per ounce with Westwood assessed at $1200 per ounce for resources. As mentioned, total consolidated attributable production for the quarter was 192,000 ounces. All in sustaining costs were $11.61 an ounce for Q4. And note that all in sustaining costs at the consolidated level includes corporate G and A costs. I'll review each operation in turn starting with Essakane. Attributable gold production for the Q4 2019 was 94,000 ounces and for the full year 368,000 ounces. Production was lower than the prior year, which was a record year for Essakane, primarily due to mine sequencing through lower grade zones, partially offset by higher throughput. The 4th quarter was impacted by a number of factors, including lower grades in the Falagun II satellite pits, mine sequencing and the presence of graphitic ore. Despite this, Essakane was cash flow positive throughout the year. All in sustaining costs were $1,006 for the quarter, lower than the prior year, primarily due to the down payments for fleet additions that had occurred in 2018. Full year AISC was $10.28 marginally higher than the prior year, primarily due to the higher cost of sales per ounce, partially offset by lower sustaining capital. In 2020, full year guidance is 365,000 to 385,000 ounces. Our focus is on mill optimization, which targets improvements in throughput and recovery with about a 10% throughput improvement targeted. Completion of this work is expected in the Q3. Sustaining capital for 2020 is $40,000,000 It is a highway stripping year for Essakane as we're beginning some new pushback with about $80,000,000 of the $100,000,000 in non sustaining capital planned for those pushbacks. In 2021, Essakane is expected to have another high stripping year with slightly lower production but with better grades. Guidance for Essakane in 2021 is between 355,000 and 385,000 ounces of gold production. On the exploration front, drilling and evaluation of the nearby Tisserie, JEM and Soke D targets continues. At Rosebel, attributable gold production for the Q4 was 56,000 ounces and 251,000 ounces for the year. Production was lower primarily due to the temporary suspension of mining activities following the security incident in the Q3, which resulted in the mill primarily processing lower grade stockpiles. The Carbon and Column CIC plant continued to operate as expected, recovering 2,000 ounces from tailings in the 4th quarter and bringing total tailings recoveries in 2019 to 7,600 ounces. All in sustaining costs were $1307 for the quarter and $11.65 for the year. As you know, the biggest impact to Rosebel in the year was the incident involving unauthorized miners in our pits. We were able to address this issue by working with our community and government stakeholders toward developing a long term solution. In 2020, full year guidance for Rosebel is 245,000 to 265,000 ounces, Following the milestone of delivering 1st ore from Saramacca to the Rosebel Mill in Q4 of last year, we anticipate the main haul road development to be completed by the end of Q1 2020 with ramp up of Saramacca production in subsequent quarters. 2020 CapEx is expected to be $55,000,000 in sustaining and $60,000,000 for non sustaining. Similar to Essakane, Rosebel has also a high waste stripping year ahead with $15,000,000 of the sustaining capital and $35,000,000 of the non sustaining capital related to pushbacks. These strategic expansionary pushbacks are expected to position Roosevelt for a very strong 2021 and beyond as the mine is expected to have higher ore availability and higher grades. In 2021, we have guided to 305,000 to 335,000 ounces of gold production, representing a significant future increase in gold. Development work at Saramacca continues on plan and is expected to be completed in the first half 2020. I would add that we are continuing diamond drilling at Saramacca to assess its underground potential. Production at Westwood was 29,000 ounces for the 4th quarter and 91,000 ounces for the full year. 4th quarter production was slightly higher than the prior year period due to increased throughput, partially offset by lower head grades, while the full year was lower primarily due to lower throughput and grades. All in sustaining costs were $11.17 for the quarter $10.79 for the year. AISC was lower for the 4th quarter primarily due to lower cost of sales per ounce and lower sustaining capital due to less development work. AISC was relatively flat year over year due to a reduction in the operating costs following the Q1 labor force reduction. Earlier in the year, we normalized fixed overhead costs to accommodate the unusually low production in Q1. And by the end of the year, we were able to share forward production guidance reflecting a safe and profitable long life mine. The updated production profile has in turn impacted carrying value for Wood as discussed earlier. In spite of a challenging year, West Wood was cash flow positive in the 4th quarter. And in 2020, full year guidance is 9,000 to 110,000 ounces. We have allocated 25,000,000 for each of sustaining and non sustaining capital. And our next milestone for Westwood is the completion of the life of mine plan and accompanying NI 40three-1 101 technical report in the first half of twenty twenty. We will also provide an updated resource and reserve statement at that time. In 2021, Westwood continues to advance on its ramp up plan with guidance provided at 100,000 to 120,000 ounces. At Boto, I'm looking at our projects. So at Boto in 2019, we continue to maintain our relationship with stakeholders. And as announced in January, we have received the exploitation permit for Boto from the government of Senegal. Early this year, we provided metrics of the optimized design of the project as well and have now filed the associated NI 40 three-1 101 report. At Cote in 2019, we continue to derisk the project within our capital expenditures guidance. We have completed more than 50% of the detailed project engineering to date, signed an impact and benefit agreement with our First Nations partners, reviewed and updated the resource estimate confirming the robustness of that resource, reviewed and adjusted our cost models and advanced the permitting process. We have also partnered with our First Nations firm for tree clearing work. Following these advancements, we are reviewing the 5 to 10 year strategy for IMGOLD. Looking at our reserve profile, we're including this chart to show what the reserve base looks like compared to our peers. As you can see, industry reserves have been on a steady decline since 2012, while IAMGOLD has been working hard to reverse from this industry trend, generating a 48% increase in reserves over that same timeframe. Since 2016, we have added 8,900,000 ounces over double the ounces to our reserve base. We believe this is a significant competitive advantage for Iongold. So I've walked through the site by site expectations for the year and I will comment here that the full year attributable guidance for 2020 is 700,000 to 700 and 60,000 ounces with AISC guidance of 1100 to 1100 per ounce. The key contributing factors to this guidance are the high stripping work planned at both Essakane and Rosebel, advancement of Westwood's development work and the end of production at Sadiola as we anticipate completion of the sale process in April. As noted, in 2021, Rosebel is anticipated to have higher ore availability and higher grades, while Westwood continues to advance. Westwood Essakane is expected to have another high stripping year in 2021 with slightly lower production but slightly better grades. Overall, for 2021, we anticipate increased attributable gold production expected to be approximately 10% higher than the 20 20 guidance levels at 760,000 to 840,000 ounces of gold and with lower all in sustaining costs. For capital expenditures, the 2020 spend on a consolidated basis of $370,000,000 includes $65,000,000 for our development projects Boto and Cote. At Cote, dollars 35,000,000 is budgeted for site tree clearing, access road development and detailed engineering, while at Boto, dollars 30,000,000 is budgeted for road and camp construction and advancing project engineering. In 2021, we expect lower capital expenditures of approximately $250,000,000 with the completion of development at Saramacca in 2020 and lower capitalized stripping. I'll now turn the call over to Craig to discuss exploration. Thanks, Gord, and good morning, everyone. Before I begin, please note that the results I talk about today have been previously disclosed in accordance with security regulations and signed off by the qualified persons within the company reporting them. In 2020, our planned exploration spend is $47,000,000 comprising both near mine brownfield and greenfield exploration programs. The brownfield program will continue its focus on discovering and delineating resources along the Saramacca and Broklanco trend near Rosebel as well as that identify targets near our Essakane operation. We will also focus our drilling efforts on continuing to convert resources at Westwood and delineating resources at the nearby Ruane Gold Project. The greenfield program continues to target resource expansions and evaluating priority targets on our advanced resource and discovery stage projects, including the Cote Gold project in Ontario, the Nelligan and Monster Lake projects in Quebec, the Boto project in Senegal, Diakka Surabaya Project in Mali, the Petangi Project in Brazil and the Carita Gold Project in Guinea. The next few slides, I will highlight some of our accomplishments from last year. In 2019, we continue to make progress advancing the resource stage projects in our pipeline with prioritizing projects near existing IAM gold deposits and infrastructure. At Nelligim, the exploration team delivered an initial resource estimate comprising approximately 97,000,000 tonnes averaging 1 gram per tonne of gold for 3,200,000 ounces on a 100% basis. The new Reynard zone contributed positively to the resource, which was intersected for over 1 kilometer along strike with true sickness locally exceeding 100 meters. Following the delivery of the NI forty three-one hundred and one technical report, we exercised our option to increase our undivided interest by 25% to now hold a 75% interest in the project. Nelligan is located 15 kilometers south of Monster Lake, which hosts an inferred resource of 1,100,000 tons grading 12.1 grams or 433,000 contained ounces on a 100% basis. During the year, we met our expenditure commitments under the terms of the earning agreement to vest to a 75% interest in this project. From this work, we announced further positive drill results from our winter drilling program, which was targeting additional zones of mineralization. Results included 0.8 meters grading 3 57 grams per tonne gold and 6.8 meters grading 3.9 grams per tonne gold, which included 1.67 meters grading 6.4 grams per tonne gold. And we also had a 0.5 meter intersection grading 133 grams per tonne gold. Throughout 2020, we expect to drill approximately 8,000 meters at Nelligan, focusing on infill drilling to improve resource classification and step out drilling to evaluate resource extensions at depth in a long strike. At nearby Monster Lake, we will continue to evaluate the plus 4 kilometer long corridor, which hosts the 325 Megan zone, and we look to extend mineralization intersected during the 2019 program at the Anish year zone. During the year, we also announced a new discovery at the Cote project referred to as the Gosselin zone located with an exploration target potential of between 3000000 to 5000000 ounces grading between 0.7 grams and 1.2 grams per tonne gold. Please note the cautionary language on the slide relating to exploration targets. Drill result highlights from the drilling program completed at Gosselin announced during the year included 342.5 meters grading 1.0 grams per tonne gold and 412 meters grading 1.3 grams per ton gold. In 2020, we expect to complete approximately 14,000 meters of drilling to continue to evaluate the resource potential of this new zone and evaluate other targets on the property. 1 of our shovel ready development projects, Boto, falls in the highly prospective Boto Kurita, Diakka Gold District, which is on trend from B2 Gold's Fekola mine in Mali. Throughout 2019, we announced results from various properties, which continue to highlight our exploration success and demonstrate the exploration upside of our properties in this region. Early in 2019, we announced an updated Diakosir Bayou resource estimate comprising 18,000,000 ounces of indicated resources averaging 1.3 grams per ton gold for 744,000 contained ounces and a further 23,200,000 tons of inferred resources averaging 1.6 grams per ton gold for 1,200,000 ounces. This represents a 57% increase in the resource total of the project. At Carida, a wholly owned project in Northeastern Guinea and immediately contiguous with the Bodo project, we reported results from 16 RC holes totaling 1800 meters completed as part of a 2019 program, which confirmed a new discovery. Highlights include 29 meters grading 3 grams per ton gold, 16 meters grading 3.2 grams per ton gold, and 21 meters grading 9.0 grams per ton gold. Overall, we have developed a robust and balanced pipeline of early to advanced greenfield exploration projects in geographically diverse locations, while continuing to support our near mine brownfield exploration to leverage our existing infrastructure. With that, I will now pass the call back to Gord to conclude. Thank you, Craig. You guys get me once again. Anyways, I want to reiterate that we are focused on improving our cash flow outlook while executing on plan and doing that safely. Our goal over the next few months is to provide clarity regarding our company strategy and we look forward to speaking with you again at that time. Thanks for joining us. I'll now turn it back to the moderator. Thank you. We will now begin the question and answer session. Our first question comes from Fahad Tariq of Credit Suisse. Hi, good morning. Thanks for taking my question. Just maybe some clarity on the thought process behind Cote and Boto. I know that there's another $65,000,000 that will be spent on basically getting these projects shovel ready. I mean, any color on how you're thinking about kind of the priority between the two, how much more CapEx that may be required even before an investment decision and when you expect to make an investment decision on either project? Thanks. Thanks, Fad. So I mean obviously with the imminent sort of leadership change, with the changing gold price, and I think somewhat the change in sentiment, plus all of the work that we've been doing on derisking this project, we are coming to a decision point with our Board and really sort of going through that strategic exercise right now. As we look at our company going forward, our existing assets, I love them to death, but they are getting older and will start to head into decline at some point in time. So we have a benefit, an incredible benefit compared to our peers of some great growth projects. Each of them do different things for our company strategically. Boto is a nice tuck in project, relatively straightforward to execute, and has a very nice quick payback to it, but on a consolidated basis has less of a total impact on the company. Cote is a somewhat larger project. It's still it's not a massive project by any means. In fact, when you look at Cote, it's a smaller operation than Essakane and it's a similar sized operation to Rosebel. So it's sort of in our snack bracket in terms of operating, but the capital build is higher. We have a strong balance sheet and we can manage it quite nicely actually. And we do recognize there was some negative sentiment around some aspects of Tote in the marketplace. So on the positive side, it is a on a consolidated basis, it really does transform our company. We love both of those assets. It's just it's a matter right now of reaching a decision as to which one makes the most sense. I've been on the road with Indy pretty extensively in the last month and have even more visits coming up with the investment community over the next couple of weeks to really help do some talking obviously, but also do a lot of listening to the shareholders and understand how they see the decision and how they see the priorities so that we don't end up surprising anybody with whichever decision we take going forward. Timeframe, personally, I'm restless. I'd like to see something decided here in the next 2, 3, 4 months. And at that point in time, then we'll come forward. I wouldn't expect, other than the numbers we talked about here for capital, I wouldn't expect that either of those require any additional capital. And please note that the capital that we're spending now is serving to reduce the post decision capital. So this is money being spent towards an objective of achieving those projects. It's not just moving sideways with the project still being pushed out. That's how I'd sort of leave it with that for Bob. Okay, great. That's really helpful. And just on the reserves and resources, I can appreciate the resources growing, specifically in Nelligan Gosselin. But as you look at the portfolio, where do you see reserve growth over the next, call it, several years, similar to the trajectory that you had prior to this year with the reserve growth? I'm just trying to get a sense of I can see where the resource growth is coming from. Yes. That's a good question. And actually, I'm going to sort of let Craig have a whack at it and I'll step in afterwards. Well, I'll start with maybe the exploration things. I mean, obviously, these are sequential programs that we have to run. You get your first inferred resources. You increase the classification to something that the engineers can then study through more detailed feasibility studies, pre feasibility studies, those things. So certainly, we have a number of resource stage projects. Some of them are still growing. Many of them have inferred resources that can be converted. And once converted, then used to backstop studies that can lead to reserves. So on an exploration front, I think we do have quite a lot of opportunities to continue to increase our reserves, albeit the projects that still have to be developed. I'll dabble a little bit on Gord's side here on the operations. As you know, we're working very hard to continue to expand resources, proximally infrastructure. Saramacca was obviously a big success for us. Prior to that, Salangunto was a big success for us at Essakane. And we do continue to put time and effort into understanding the satellite targets and when strategically they're viable for the operations, which ones can extend the reserve base and which ones can help top it up. And that's an ongoing process and it's iterative and we continue to invest seriously to extend our operations as long as we can. I don't know, Gord, do you have anything to add? Yes. At a high level, I can see incremental reserve growth at the mature assets. I don't have any huge targets that are going to jump out there. Westwood will continue to convert over time. Programs we have for 2020 specifically designed to increase reserves would be extensions Saramacca along strike. Work we're doing on infill on an ongoing basis at Westwood at least to cover depletion and a little bit better. We are also looking at a few small surface showings we have in and around Doyon that can make it into reserves this year. Essakane, I talked earlier about some of the satellite targets. I would expect Tassir and potentially Soke de to hit the reserve table this year. We'll be looking at some expansions to the EsaCann main zone itself. We have stuff that's ongoing at the brownfield sites, but it is more marginal. The lumpy growth you're going to see in the future is really going to come again from the exploration targets, whether it's Nelligan coming to the reserve, Goscelin, that one's going to be a really straightforward one to march towards reserves given everything we understand there. There are some permitting steps that are required there. But other than that, it's a pretty straightforward line of sight to getting some nice increases in reserves. I guess at a higher level, there is still a large gap at Rosebel between the reserves and the resources at Rosebel proper. That requires ongoing work on our cost. Those ounces are available to us if we can get our cost in the right spot. And we do have a couple of things we're working on there that could potentially change and actually produce a material change in Rosebel. But I got to sort of leave you hanging on that one because we need to do a little more work in house first. And just a point of clarification, Fed. Gosselin itself is not at a resource stage just yet. It's still discovery stage. We are implementing a winter drilling program this winter that if the ice cooperates and ice is ice, it does melt. We are hoping to bring that to a first resource as part of our program this year, but that's not included in the upgrade that happened at Cote this year. Got it. Thank you. Our next question comes from Anita Soni of CIBC. Good morning, guys. I just wanted to ask on Cote. Would you be updating the reserve sorry, the 40 three-1 101 that was put out in November of 2018? Or do you think that's sufficient? And secondly, if not, then can you talk about what kind of derisking you've done at the project since that time? Yes. We're not looking to issue a new 40 three-1 101 on Cote at this point in time, but I'm and I am happy to talk about the derisking we've done. As I said in my talk, we're over 50% detailed engineered now, which has added it's really, I guess, I describe it as it's really tightened up the goalposts around our capital estimates and allowed us to understand that better. We've done a little bit of rescoping. As we look at the project, you always want to know what your potential downstream opportunities are for expansion. So we've done a little bit of rescoping on the project to facilitate a potential future expansion once it gets developed. On the reserve and resource side, we did upgrade the resource. The reserve we kept flat. We are in the process of reworking that reserve. The changes aren't material enough really to prompt us to want to put out a new 40 three-1 101, but there will be a reserve update coming at us here probably in the next quarter for Cote. What we've done is we brought in a different modeler, specifically a modeler that we know approaches things more conservatively than the earlier model. And it provided a lot of validation for us because it just demonstrated the robustness of the Cote resource. So from a resource risk point of view, I'm really comfortable with where Cote is at. We mentioned the IBA we signed with the First Nation partners and that again removes one other opportunity for issues. We've advanced a lot of the permitting work And we've really gone back. We listened to some of the commentary based on the original feasibility study. We've gone back and validated a lot of our cost models, both for the Plaid mill operating costs, mine operating costs, G and A and completely revalidated them and checked them and explained internally, we've explained what we see as differences from maybe some other peer projects and we're very, very comfortable with the numbers that we have in our pocket right now. So we've been paddling pretty hard below the surface over the past year with the engineering team there. And the best description for me is we've just really narrowed the goalpost, which reduces the opportunity for extreme variability as we go forward with the project. Okay. So you're still planning to use HPGRs and then also selective like stockpiling lower grade material and processing that later in the mine life? Yes. And to test that, we've done some really tight space drilling in a few areas and done a lot of conditional simulation as to how that will work and what our opportunities for success are to do that engineered cutoff grade sort of plan going forward. If you have about 5 days, I can go through it with you. But the upshot of it is we're very comfortable that we'll be able to achieve the higher grades at the higher cutoffs in the earlier years given the geometry and the grade distribution in that deposit. All right. And then the other question I had was, I'm just flicking through this report right now and I'm noticing the use of the phrase upstream slopes on the dams. And so that's not an upstream dam or tailings dam, is it that's that is it's still all downstream, right? It's all downstream. Yes. And are you comfortable with the one of the things that I was looking at with Cote when it for this technical part came out was that the total capital for the tailings dam, it seemed a little on the light side. Is that something that you've also taken a look at? And what's your initial opinions on it? Yes. I mean, we've completely reviewed all of those costs, and we're not uncomfortable with the costs on the tailings dam. We modified in our current internal models, we've modified the mining cost upward. So that does have some sort of some knock on effects on the cost of the tailings because a lot of the sources of the bulk fill is coming out of the pit. So you do get a bit of a knock on there. But they're not significant numbers and we like where we're at. We've also done a lot of work and I probably should have mentioned it earlier. We did some pretty comprehensive geotechnical studies in and around the tailing storage facility to make sure that we understand the foundation conditions there. And likewise, a lot of geotechnical work at the plant site. Again, just trying to confirm where we're at and also groundwater inflow and wall stability studies in the pit. So quite a bit of geotechnical work has advanced our understanding there. All right. And then I guess one last question on that. So in your mind, if you get the Board's approval on the construction timeframe that you would like, when would you see Cote potentially being put into production? We're currently working with about a 34 month construction and commissioning schedule. Okay, all right. Thank you very much. Our next question comes from Mike Jolene of Bank of America. Hi, Gord. Good morning. Good morning, again. Just had a question on your strategy. You mentioned you'll have clarity on the company's strategy in the next few months. But as you know, there's been a lot of CEO transition in the sector recently. And it's always interesting to see what new CEOs, what their strategy going forward is. Like for example, Paul Brink of Franco Nevada says there'll be no change in the Franco Nevada strategy given that it was worked and as evidenced by the share price keeps hitting new highs every day. And IAMGOLD share price the past year, despite hitting many milestones, has been flat. So if you're going to BMO next week, you probably have 4101 meetings. Investors are going to want to know what steps you're going to take to get a higher share price than IAMGOLD, which has lagged the peers. So just wondering if you can give me any guidance there. Well, I think the first one is to pick a strategy, be very transparent as to what our rationale is behind that strategy and what we're looking to achieve. On an operational level, we're going to continue to make sure that the operations execute. We've been very conservative in our guidance numbers on purpose, and that's the strategy that I want to pursue going forward. At the operations themselves, there are opportunities, but as I said earlier, they are getting older. But we need those operations to perform very well. We continue to do a lot of work with our communities and making sure that the operating environment we're working in at all of our operations is conducive to those operations having the space to produce what they need to produce. So it's making sure those operations are doing well. And then as I said, I was speaking with Anita is let's find out which horse we're going to pick here and whichever one we pick, we're going to be very, very focused on making sure we execute that. As we've been able to do with our other development projects, we did it with Essakane. We did it with Essakane expansion. We've had 4 expansions at Rosebel. These open pit projects are really in our wheelhouse and we want to continue to demonstrate that we know how to build projects. We've done it in the past and we'll do it well in the future. But that will be the focus. When you talk at a high level, the message to the shareholders, we're building long term value. We've done such a good job, Craig and his team, of bringing additional reserves and resources into the portfolio here that as I look at ourselves compared to maybe some of the peers, we have a huge opportunity to be a truly long life company at a I don't want to say an enormous production level, but certainly a higher production level than we're at now and can sustain that into the future. And we don't have enough time here for Craig to go into all the other stuff that's coming in behind the ones he's already been talking about. Okay. I guess one thing you haven't mentioned at all is M and A. It's just a number of your peers were the same production size as yourself and now they're over a 1,000,000 ounces and I wonder if smaller mittures are just kind of getting left behind. So just wondering what you thought of that? You always keep an eye on it and when talking with Steve, there is an issue of relevance. Obviously, M and A has to be done at the right price with the right partner. You don't stop looking at it. I think if we execute on our growth projects here in the next 2 or 3 years and we're in a strong, much stronger position than we are now, it positions us on the other side of the table in M and A discussions moving out from there. When we build Cote and Boto and we see some of the expansion at Saramacca, we ramp up Westwood. We've got a lot of really nice long life cash flowing projects into the future that really sets us up, I think, in somewhat of a distinct position versus a number of our peers. It's going to be a great place to be talking about M and A. The other thing we keep having the discussions at is gold price is up. We need to start looking at other ways to generate some returns for the shareholders. Okay. Well, thank you and good luck. Thanks very much, Mike. Our next question comes from Mike Parkin of National Bank Financial. Hi, guys. Just back in Cote. I was kind of wondering where we could expect the advancement on the engineered rate over the course of this year? Where would you kind of expect it to kind of be at the end of Q1, Q2? And if you were to make a decision on it, what would you kind of want to see that rate at percent completion that is before moving ahead? Yes, great question. We actually had a meeting last week with the project team. The actual number currently I think is 51.2%. We're adding about 2.2% per month right now. Most projects that you execute on, when you launch your construction decision, you're at about 10% detailed engineering. So we're well, well beyond that, and we'd be comfortable going forward at any time based on where we're at. One of our challenges is without actually kicking off the project and entering into final contracts on some of the equipment, it will get to a point where we can't actually advance it without actually getting the field information. That last bit of detailed information actually really depends on information coming back from the field during the construction process. So it's tough to get more than about, I don't know, 60%, 65% without actually starting construction. All right. That's it for me guys. Thanks very much. Thanks Mike. Our next question comes from Tanya Jakusconek of Scotiabank. Great. Good morning, everybody. Gord, maybe just coming back on your strategic outlook, is it safe to assume that both of these projects, Cote and Boto, are shovel ready to go, they meet your internal rates of returns from an economic standpoint? When you do make that decision 3 to 4 months out, is it safe to assume that it's 1 or the other? Or are you thinking maybe to pull the trigger on both? I mean, everybody knows me. I'm a huge optimist, and I would love to do both. But I know I would be the shortest lived tenure as a CEO, I think, if I tried to do that. So it will be 1 or the other in staged format with the second one nominally scheduled to start as the first one is getting well up the completion curve. I would love to be building them both together, but we're not going to do that. It will be 1 or the other. Okay. And then maybe what we haven't touched on is the Saramacca underground. Can you talk a little bit about where that study is? And conceptually, as you look at this underground, any information or insights you can give on sort of what you've reported in the reserve base, I think it's about 1,000,000 ounces, Like how much of that is the underground? Where do you conceptually see the strip ratio going? So any information you can give on timing and more details on that? Getting too outside on disclosure. So I would describe the study right now as being completed through conceptual design and in some ways getting close to the sort of pre feasibility level of design. We've done a lot of work on portal and ramp access and how much that would cost. We've got budgetary quotes from contractors because we really understand that first part is important. As we look at it within our production and as we look at it within our self funding envelope and using a conservative gold price for Rosebel in our planning exercise we planned this year at $13.50 for the 5 year plan. Under those conditions and staying true to our mantra of self funding, although the project is good from an overall return point of view, it did impair our near term self funding because we would be spending some additional capital in the near term to execute on that underground concept. To my eye, it's something that should happen. We will be revisiting that now, obviously looking at current gold prices and what our cash flow looks like and what we're able to achieve. It gives us an opportunity to relook at it. You're talking probably a 2.5, 3 year development period before you could deliver. The current reserve does not assume any underground ore. We would need to relook at our reserves. It would allow you on the current pit design probably to take your stripping rate. I think the stripping rate in the 43.1.1 was around 11 to 1. When you do the trade off, you probably come back somewhere on an overall basis around 6 or 7 to 1 for that pit. So you remove the pitable reserves. You take out some of the lower grade stuff below that smaller pit, now doesn't make reserve grade using underground costs, but quite nicely, you can extend obviously underground to much greater depth so you can access parts of the ore body that the pit would never access. So there's some trade offs there. We have really nice coherent zones, I want to say 20 in some areas even 30 meters width of plus 3 gram material over strike lengths of 200 meters in a few areas, 200, 300 meters. So it's a very attractive block. And we have hit a few small graphitic zones as we've gone down. So we want to circle back with the metallurgists. We're in the process of going back through the metallurgical work just to make sure we don't get under there and find something that doesn't actually work. But that's in my mind right now, that's moved into the lower risk category. So I'm less worried about that. The next steps for us, at some point, this is probably it's an investment decision you'd make before at least to drive the access portal. That's something you do as part of the study work. It's so much easier to drill this deposit off from underground and hitting those kind of targets from surface is a pain in the ass and costs a lot of money and it's slow. So I think once we get to a threshold point on rate of return, we can show a 20% plus rate of return, something of that nature. If we're comfortable with our cash flow with our cash position and our balance sheet strength and our self funding model, we could move we could start to move towards executing on that project sooner rather than later. So when is the study going to come out for us in terms of public information? I need to revisit that. I'll come back and I think at the next meeting, we'll make a bit of a declaration. We originally were hoping to get something out this year. As we pull back from the project to satisfy our self funding requirements, we had pushed that out. But obviously, it's worthwhile revisiting here as part of our overall strategic review. So is it safe to assume that this has sort of pulled back versus Cote and Boto being more advanced and more ready to make the decision on those? Yes. I mean it really is a different class of project. You're talking around a much more modest level of investment required. And it really would be a completely different group that would be involved with it. So they're not mutually exclusive. That being said, obviously, if we move to one of these big projects or if and when we move to one of these big projects, the corporate focus will be on that. Our next question comes from Carey MacRury of Canaccord Genuity. Hi, good morning. Just had a question on in the release, it talks about the guidance incorporating factors related to negative grade reconciliation at Rosebel Saramacca. Just wondering if you could provide a little bit of color on that. So, Rosebel, we haven't seen negative reconciliation issues at Saramacca at all. Saramacca geologically is quite a bit of a different beast, and we're not expecting to see those issues. At Rosebel itself, certainly in the past year and as the mine gets more mature and we get into deeper and deeper pushbacks and accessing more distal parts of the ore bodies, it's a little more challenging to drill off and model and Rosebel historically has been a real bugger to model and reconciliation is perennially a challenge. Historically, we see somewhat modest negative grade reconciliation, but a huge positive tonnage reconciliation at Rosebel. The past couple of quarters, we've seen some a little higher negative grade reconciliation than we've seen historically. We put a SWAT team on it. We're going back and looking at our mining practices and trying to understand exactly what's the best way to approach it. So in my mind, it's a combination of 1, just the challenge to model this deposit in any kind of drill spacing. We've approved for the budget this year an enhanced RC drilling program that will really help us with modeling in the sort of in the midterm and help us sort of maybe smooth over some of those challenges along the way. None of this is nothing we haven't seen before, but we're jumping on it now. Anecdotally, I saw positive grade reconciliation for January. So, Rosebel is one where you can never let off never let the hammer off. What sort of magnitude would you be seeing on the grade, just out of curiosity? We don't normally, I think the negative reconciliation for Q4 was in the neighborhood of minus 15% on grade and plus 25%, something like that on tons. Total gold is there, but obviously it creates a different cost model for you if it's at those kind of lower grades. All right. Got it. Thank you. Yeah. This concludes time allocated for questions on today's call. I will now hand the call back over to Indi Gopinathan for any closing remarks. Thank you very much, and thanks very much to everyone for joining us this morning and for your continued interest in IAMGOLD. We look forward to having you join us again for our Q1 2020 conference call in May. Goodbye. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.