Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD 2019 third quarter 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 questions. To join the question queue, simply press star then one on your touch-tone phone. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Indi Gopinathan, investor relations lead for IAMGOLD. Please go ahead, Ms. Gopinathan.
Thank you very much. Welcome to the IAMGOLD third quarter conference call. Joining me today on the call are Steve Letwin, Chief Executive Officer of IAMGOLD; Gord Stothart, President and Chief Operating Officer; Carol Banducci, Executive Vice President and Chief Financial Officer; Craig MacDougall, Senior Vice President, Exploration; and Jeff Snow, Senior Vice President, Corporate Development and General Counsel. Our remarks on this call will include forward-looking statements. Please refer to the cautionary language regarding forward-looking information in our disclosure documents. Be advised that 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 Chief Executive Officer, Steve Letwin.
Well, thank you, Indi. Good morning, everyone, thank you for joining us. Before I start, I just want to reach out and extend on behalf of the Board of Directors and management of IAMGOLD, our thoughts and prayers to SEMAFO. Obviously, there was a horrific tragedy yesterday with the attack on their convoy. I've reached out to Benoit to offer assistance and help if he requires it. In the mining business, we're all brothers and sisters, this was a tragedy that obviously, we're very concerned about, we're very sorry to hear about the news from our good friends at SEMAFO. Thoughts and prayers, Benoit and team, from IAMGOLD. We reported a solid third quarter last night, which demonstrates a clear pathway to an improved fourth quarter. I'll just tell you that I've been at the sites quite frequently.
I think you know I spend a lot of time at the sites. I just want to tell you personally that we confirm our full year 2019 production and cost guidance. In addition, we announced the appointment of Gord Stothart as President and Chief Operating Officer of IAMGOLD. Congratulations, Gord. Gord's been with the company since late 2007, and we're pleased to promote him to this expanded leadership role. I'm going to stay here as Chief Executive Officer. I'm going to be focusing on what I would call more strategic opportunities for the company. These would be centered around what we are going to do moving forward with Côté, as an example, in trying to structure things around the company that's going to unlock some of the value that we have currently within our asset base that we don't think is being recognized.
I'm now going to make the case for investment in IAMGOLD. We expect improved performance over the coming quarters on a number of catalysts, and I think some of you have probably already seen some of the photos. Saramacca is now online. I was down there last week. We had our first delivery of ore on October 31st. I was in one of the Haulmax trucks. Wasn't qualified to drive it, but I was in the cab. We plan to ramp up production levels in 2020, contributing soft rock, higher-grade ounces to the Rosebel mill. We will have the Westwood preliminary life of mine update completed by the end of the year, with a 43-101 report by mid-2020. We expect to showcase a safe, long, life profitable mine, and Gord can speak to that a little bit later.
We continue to improve productivity through various initiatives, including debottlenecking the mill at Essakane and gaining incremental ounces from the Rosebel CIP plant. Essakane is and will continue to be a solid contributor to IAMGOLD's asset base, with operational improvements providing additional upside. Our free cash flow, as you know, has been an area of focus as well. We're improving our outlook as we speak. We've also enjoyed wonderful exploration success, including the declaration of Nelligan initial resource estimate, outlining over 3 million inferred ounces in Canada, which together with our Monster Lake project, is consolidating our presence in the Chibougamau area, and the new Karita discovery on trend between the Boto and Diakha deposits, which we expect will contribute positively to our future resource base in West Africa. We are an undervalued story with many more chapters to come.
On slide six, we thought we'd talk a little bit about our environmental, social, and governance, commonly called ESG. We have internalized the zero harm culture. We remain as an ongoing goal and journey of ours as we strive to put health and safety above all else, as well as building strong partnership within our communities and respecting the environment. We've always conducted our business with the highest environmental, social, and governance standards. We've implemented the Mining Association of Canada's Towards Sustainable Mining Framework, not just as our Canadian operation, but at our global operations, and we are implementing the World Gold Council's responsible gold mining principles. Recently, Moody's released its first assessment of corporate governance in the metals and mining sector, wherein IAMGOLD achieved the highest rating in GA1 based on an adjusted score of 2.7. This was the second-best score received of the 31 companies profiled.
We're also recognized for our sustainability efforts. This year, we were ranked as one of Canada's top 50 sustainable companies in Canada. Additionally, we were included in the 2019 Bloomberg Gender Equality Index. There are, in addition to our ongoing ESG efforts, including the solar farm commissioned at Essakane last year, our ongoing commitment to education, health and safety, access to medical care, and our continuing work building relationships with our stakeholders. A little bit off script, because this sort of feeds into Rosebel. I will tell you, after nine years in this business, that the relationship with the communities that we have really can't be measured. Everybody in the mining space hits headwinds from time to time.
I will tell you, at Rosebel or at Essakane in particular, if we didn't have the relationships that we have, the strong relationships with the communities and the governments, these headwinds would become a lot more challenging. We had some issues, particularly at Rosebel, that we were able to quickly solve simply because our relationships with the community and the government are so strong, and they shouldn't be underestimated. On slide seven, you will see both northern pits and southern pits at Rosebel, which we are now back actively mining. I was down there again last week. We've been working with government and local stakeholders to ensure we can work safely on the site. I spent the morning with the president of Suriname. I can tell you that things are very positive there. The government has been giving their full support.
I feel very comfortable telling you that I believe we have a pathway to ramp Rosebel up back to full production. We also have a pathway to seeing Saramacca become the deposit that we've talked about for so long. As you know, Saramacca is located to the southwest of the site of the Rosebel Mill, highlighted on the slide. Main haul road is expected to be completed by the end of Q1. The interim haul route is noted here as well in blue. We're connecting to the usable portions of the main haul road. I was on this haul road, spent a fair amount of time on it. You'll see the pictures up there. It really was a sight to behold. This has been done below budget. It really is a work of art.
This will open a pathway for us to new areas to bring ore, not only from Saramacca, but from Sarafina and Brokolonko over the longer term. This road is really going to be a very important route for us as we move forward. Last week, slide eight, we had an event in celebration of our first ore delivery from Saramacca to the Rosebel Mill. We have a few pictures that were up there. We had the Minister of Justice, who handles the security for the concessions. We also had present the Minister of Resources. You can see the Haulmax trucks there in the background. They carry about 80 tons. Each truck really does a round trip in about one hour and 45 minutes. We're going to have eight trucks working. We're going to be moving a lot of ore.
In the interim, we'll use smaller trucks on the logging road to stockpile the ore from Saramacca and then pick it up at about the 15-kilometer mark by the Haulmax trucks and move it to the mill. You'll see the celebrations on the slides. These are all village captains, as well as members of the Suriname government, as I mentioned. On this special occasion, we also presented the inaugural check for our community fund in the amount of CAD 2.5 million. Grants from this fund are intended for local projects which demonstrate potential for positive economic and social impact. The fund will be managed by our country director, Sharmila Jadnanansing . Sharmila is just an incredible individual that we have down there and has been absolutely outstanding in helping us manage what I've said and repeated is a very special relationship with our communities.
On slide 10, we highlight the road in progress from Saramacca to Rosebel. As I said earlier, this is our future, starting with ore, down the road, we're going to be tying in other concessions, which look, from what Craig has been seeing, quite prolific. On our website, I encourage you to look at the short video clip which shows Saramacca's progress. It's very rare that after announcing a resource just a couple of years ago, that we would have a haul road in place and this deposit. I think people really underestimate how much work had to go into this and how much planning. I really want to congratulate our team at Rosebel. I want to congratulate Gord Stothart for the excellent leadership. To Bruno Lemelin. This was a big feat for us. It's very real. You can see it up on the slide.
This is a very exciting achievement for us, and the positive news that is going to come from this. We ask for your patience. We know this hasn't been an easy year for our shareholders. I can tell you that, again, I spend a lot of time at the sites. I have a very high level of confidence that we're going to be able to move ahead in a very safe, and sustainable, and profitable. That takes us to slide 11. You've heard the term self-funding that's been coming from us for some time now. We want to emphasize our progress, which we knew would be weighted to the back half of this year. We have now completed the Essakane CIL heap leach feasibility study, which Gord will speak to in a few minutes. We issued the initial resource for Nelligan.
We have delivered the first ore from Saramacca. What do we focus on? We're focusing on the Westwood redesign, the CIL optimization work at Essakane, the completion of the Saramacca development, and obtaining the exploitation permit for Boto. I want to reinforce the fact that Côté is not off the shelf. It is sitting there. We're minimizing our expenditures for Côté going forward. We understand the sentiment out there is not in favor of large CapEx. We accept that, and I think if anything, we have a strong record of listening to our shareholders. That doesn't mean that there isn't some optionality at Côté that we could work to the advantage of our shareholders. There's a lot of interest in Côté from a number of companies around the world.
With our deep pipeline and the success that Craig MacDougall and his team have had, there is a lot of hidden value in the company, and there is a lot of value that we can crystallize through other means and methods. With Gord's promotion to president, he is going to be focusing a lot more on what I have been doing at the sites. I am going to be focusing a lot more with Carol and Jeff Snow on what I would call the more strategic side of IAMGOLD going forward. It is a good combination. We have a good team here. On that note, I will now pass the call over to Carol to review our financial results.
Thank you, Steve, and good morning, everyone. This next slide presents key performance highlights for the third quarter. Revenues were $274.4 million in the quarter, while cost of sales came in at $251.6 million, resulting in a gross profit of $22.8 million. Adjusted net income before income tax and non-controlling interest was $21.4 million. Adjusted net loss was nil, and this was largely due to recognition of the tax impact from increased profit at our operating mines, while the offsetting recovery from regions with losses, such as our exploration sites. Net cash from operations before changes in working capital was $65.4 million in the third quarter, 53% higher than in the second quarter. We continue to hold a strong financial position with cash equivalents, short-term investments primarily in money market funds, and restricted cash of $677.2 million as of September 30th, 2019.
We experienced strong improvement in operating cash flows, up 28% from Q2 and 354% from Q3 2018. Our gold margin improved by 38% from Q2. We continue to focus on improving working capital, which was impacted in Q3, primarily due to lower accounts payable following the temporary cessation of mining activities at Rosebel. Now that we've resumed mining, payments from mining-related supplies will return to normal levels, as will payables. Our cash flows improved in the quarter, with two sites, Essakane and Westwood, generating positive cash flows. Rosebel was also back on a positive trend following the temporary setback caused by the security incident in the summer. This was made possible by the immediate mitigation efforts taken by site personnel, enabling the resumption of mining activities within a short few weeks, with ramp-up to full operations ongoing.
For Q3, we are presenting the key operating metrics, production, and all-in sustaining costs. We are expecting to achieve year-end guidance for gold production of 765,000-810,000 ounces. Our all-in sustaining costs demonstrate our commitment to managing operating costs and sustaining capital expenditures. On this metric, we are trending down from $1,132 per ounce in Q2 to $1,118 per ounce in Q3. Operating cash flow before changes in working capital continued to increase throughout the year from $33.1 million in Q1 to $65.4 million in Q3. Our gross margin trends positively as we benefit from a strong gold price environment. Accordingly, our gross margin has increased from a slight negative in Q1 to 8.3% in Q3. We continuously work to manage our cost structure.
We have a strong balance sheet with cash and cash equivalents of almost CAD 634 million, short-term investments of CAD 16 million, and an unused credit facility of almost CAD 500 million, for a total liquidity of approximately CAD 1.2 billion. This total is before the receipt in December of this year of the CAD 170 million in forward sale funds. We continue to work on improving cash flows and making prudent capital allocations. I will now pass it over to Gord.
Thanks very much, Carol.
At IAMGOLD, our top priority is the health and safety of our employees. In Q3, we continued to perform better than target and improve further from our strong Q2 performance. 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 new comprehensive behavior-based safety program. As mentioned, total consolidated attributable production for the quarter was at 187,000 ounces. All-in sustaining costs were $1,118 an ounce. Note that all-in sustaining costs at the consolidated level includes corporate G&A costs. I'll review each operation in turn. At Essakane, attributable gold production for the third quarter 2019 was 96,000 ounces. We experienced higher total cash costs and all-in sustaining costs due to overall higher tonnages and increased fuel costs from trucking polygoon to ore.
The results from the carbon-in-leach and heap leach feasibility study at Essakane were released last night. I will review details in a moment. Sustaining capital expenditures were CAD 8.6 million, primarily for spare parts and equipment. Non-sustaining capital expenditures of CAD 11.5 million were primarily for capitalized stripping, tailings liners, and tailings dams. Essakane continues to generate positive cash flows for 2019. This slide outlines the key results from the carbon-in-leach and heap leach feasibility study. With an after-tax NPV of CAD 874 million at a discount rate of 6%, the feasibility study supports an investment in a mill optimization project, which would increase CIL plant throughput by 6% to 11.7 million tons per annum hard rock, compared to the 2018 run rate of 11 million tons per annum.
The existing CIL primary and secondary crushing circuits would continue to be used for the heap leach process at the end of CIL operations. The key changes from the pre-feasibility study include optimized mining capacity to tonnage handled, a 4% increase in gold production during CIL. We are about even on the annual heap leach production profile, notwithstanding a reduction of 15% in throughput. A significant increase in heap leach recoveries of 12 percentage points, 57%. Improved average diluted grade by 5% to 1.24 grams per ton on the CIL material. Optionality at a later date to process the heap leach material through the heap leach plant, or supported by prevailing metal prices and costs at the time, through the CIL plant. Looking at slide 23, reserves decreased 12%, primarily due to depletion.
The application of our self-funding lens to this project and declassification of some of the highest strip ratio ounces out of reserves. The feasibility study identified opportunities to debottleneck the plant in order to increase to steady state processing at 11.7 million tons of equivalent hard rock per annum. These included the primary screening circuit, the grinding circuit, and modifications to the cyclone underflow, as well as pumps and line descaling. The FS also identified that the gravity concentrators were underfed, leading to underperformance of the gravity circuit. To remedy this, we plan to increase water supply, add an existing spare screen and replace two gravity scalping screens. Test work has demonstrated that improved gravity recovery performance will translate into improved total net overall recovery. At Rosebel, attributable gold production for the third quarter 2019 was 55,000 ounces, strongly impacted by the security incident in the summer.
We are progressing well on our ramp-up to normal production levels, with mining activities ongoing at all of our pits. In accordance with IFRS, total cash costs and all-in sustaining costs were also negatively impacted, and both metrics were normalized given the lower production for the quarter. You can reference our MD&A for further details on normalization. The carbon and column plant we built in January recovered 1,300 ounces from tailings in the quarter, bringing year-to-date tailings recoveries to 5,600 ounces. I'll remind you here that as these are recoveries from reprocessing tailings water, the ounces extracted are quarter, and we don't run the plant 100% of the time. Sustaining capital expenditures were CAD 12.4 million in the third quarter, primarily for spare parts and equipment. Non-sustaining capital of CAD 8 million was spent mostly on the Saramacca project.
As Steve mentioned, we achieved an important milestone by delivering our first ore from Saramacca through the Rosebel mill. Our main haul road development is progressing well, and we anticipate completion by the end of Q1 2020, with ramp-up of Saramacca to full production levels through 2020. Q3 gold production at Westwood was ounces. Total cash cost and all-in sustaining costs were slightly higher this quarter relative to Q2 due to the slightly lower production and sales. Sustaining capital expenditures of CAD 2.9 million in the quarter primarily reflected deferred development and underground equipment. Non-sustaining capital expenditures of CAD 2.4 million primarily reflect deferred development and development drilling. Underground tonnage and grades are expected to increase in Q4, and we plan to exploit excess mill capacity with open pit tons from our Grand Duke satellite deposit and currently target positive free cash flow at Westwood in Q4 on 2019 guidance.
We continue to study various design approaches to Westwood with a preliminary life of mine plan expected in the fourth quarter of this year, followed by a plan in accordance with NI 43-101 in the first half of 2020.
At Boto, we continue to maintain our relationships with stakeholders while advancing our application for the mining concession. We are also continuing to optimize the design of the project in preparation for a development decision subsequent to receiving approval from the government. At Côté, we continue to de-risk the project within our capital expenditures guidance in positioning for a future development decision. We are approximately 42% complete on the detailed project engineering and also continued geotechnical evaluation and modeling of the proposed tailings management facility, as well as delineation drilling to improve the resource block model. At Monster Lake-Nelligan, we continue our exploration efforts in the region and will work to improve resource inventories. I'll now turn the call over to Craig to discuss exploration.
Thank you, 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. Historically, this quarter is a quieter quarter for our global exploration programs due to seasonal weather conditions at some of our project sites. Despite this, the quarter was noteworthy with a series of positive exploration results reported from several projects. We also completed approximately 49,600 meters of drilling at our mine sites and exploration projects during the quarter. Exploration announcements for the quarter included remaining drill results from winter programs completed at Rouyn, Monster Lake, and the Nelligan projects in Quebec and the Côté Gold Project in Ontario, with further positive drilling results from the previously announced Gosselin discovery.
Positive drill results were also reported from our deep drilling program evaluating the underground potential of the Saramacca deposit. We announced a new discovery at Karita in Guinea, which I'll speak to shortly. Finally, subsequent our declaration of an initial mineral resource at the Nelligan project, awarded the discovery of the year in Quebec, as recognized by the Association de l'exploration minière du Québec. I'm especially proud of our exploration team in Quebec for this achievement. At Karita, it is important to note that the new discovery is strategically located along the prolific Senegal Mali Shear Zone between the Boto Gold Project in Senegal to the north and the Diakha-Siribaya Project in Mali to the south.
Highlights of the results reported from our 29 drilling program, which was comprised of 16 reverse circulation drill holes totaling just over 1,800 m, included 29 m grading 2.96 g/t gold, 16 m grading 3.17 g/t gold, and 21 m grading 9.01 g/t gold. The Nelligan project is located kilometers southwest of Chibougamau in Quebec, with the Monster Lake project located 15 km to the north. Remaining results at Nelligan reported from the 2019 delineation drilling program included 123.7 m grading 1.26 g/t gold, 50.2 m grading 1.8 g/t gold, and 17.3 m grading 5.5 g/t gold. The delineation drilling program supported the completion of an initial mineral resource estimate totaling 3.2 million inferred oz, comprised of nearly 97 million 1.02 g/t gold at a 0.5 g/t cutoff.
There remains significant exploration potential to further expand this initial resource, and that will be the target of future programs. Overall, our exploration program is balanced and continues to advance early-stage projects towards new discoveries while continuing to support our near mine brownfield exploration to leverage our existing infrastructure. With that, I will now pass the call back to Steve to conclude.
Well, thank you, Craig. Just to reinforce, we have just started to deliver on a number of catalysts. The Essakane CIL and heap leach feasibility study that we talked about, Saramacca production, and the initial Nelligan resource. Q3 had challenges with the incident at Rosebel. Our team has always met that challenge and is well on their way to resolving the unauthorized mining issue, resulting in even stronger stakeholder relations. Again, I can't reinforce enough how strongly I feel about this being a very big asset for the company, and we live it every day. We are working hard on the Westwood life of mine update and await the decision on the mining permit for Boto.
In 2020, we're looking forward to achieving full production at Saramacca and assessing its underground potential, doing the work to optimize Essakane, further delineating resources and key exploration projects, and positioning ourselves for development decision on Boto. We are building the case for IAMGOLD through improved margins, cost containment initiatives, and ultimately cash flows while executing on the plan and safely. We look forward to keeping you updated on our progress, and thank you very much for joining us.
Thank you. We'll now begin the question and answer session. To join the question queue, press star, then one on your telephone. You'll hear a tone acknowledging your request. If you're using a handset, please pick up your handset. If you're using a speakerphone, please pick up your handset before pressing any keys. Anyone who has a question may press star then one at this time. Our first question is from Mike Parkin with National Bank. Please go ahead.
Hi, guys. Thanks for taking my question. I was just looking for a bit of color in terms of how Rosebel may be operating in October, if you can give it. Looks historically like you do roughly around 1 million tons of ore mined per month. Where are we relative to that for October? If you can give color in terms of where you expect to be for the full quarter, that'd be great.
Mike, I actually don't have the total mine tons for October handy here, but I will get back to you. I can say we are mining in all pits. We're close to normal production levels across the operation, notwithstanding that we did lose a bit of equipment as a result of the incident. We're in the process of recovering that back. Generally, our production is going full blast.
Okay, super. Congrats on the first ore from Saramacca. How do you see that ore coming in through the quarter in terms of volume? Is it going to be a fairly marginal amount, or do you expect it to actually contribute fairly significant, like to a, I don't know if you want to give a percentage basis or something for the quarter?
Yeah, it will contribute some ounces. We haven't included it in our forecast numbers, but we are looking potentially somewhere between 2,000 and 5,000 ounces out of Saramacca for the fourth quarter. The materials that we're mining are part of the ongoing pre-stripping efforts. We have ore right at the surface, and as we're driving the road into the pit there, we're picking up some ore along the way.
Yeah, actually, as you travel along the road, there's gold at the surface.
Yeah.
I had my pick out there, Mike. I was helping out even with my bad knee.
Hauling it back in a backpack. Sounds good.
Oh, you got it, man.
All right. That's good. Sounds like the fourth quarter is coming along nicely. I'll leave it there for others to ask questions.
The next question is from Steven Butler with GMP Securities. Please go ahead.
Good morning, gang. Gord, congratulations on your promotion. Well done.
Thank you.
I want to ask you a question about the study for the CIO and the hard rock maximum capacity fuel or design capacity, 11.7 million tons per year. Of course, with some soft rock still in the mine plan, you're milling way above that rate. How does the profile look the next couple of years on milling rate for Essakane, and what percentage of the reserves are hard rock?
Well, I'll answer it in reverse. I think going forward, our reserves are about 92%-95% hard rock, somewhere in that range. This year and for the past several years, we've had a pretty strong contribution from our Falagountou satellite pit to the west, but that's really winding down for us in the coming years. In 2020, we do have a second satellite or a, not the second one, immediately south of the existing Essakane main zone, which will contribute some soft rock. We do have some lower grade soft rock stockpiles as well that the site will throw at it. Generally, we're going to be moving to pretty much full hard rock as we move forward. Craig's team has been out looking at other satellite opportunities. We have a great land package there.
Part of the work in the coming months is to evaluate what the business case is for those. Obviously, soft rock scoots through the mill very nicely and certainly adds a lot of incremental gold production to us at relatively low cost. We're aggressively looking for more, but the reality is most of it's hard rock.
Sure. Gord, this quarter, how much percentage would have been soft rock, approximately?
This quarter, I think we were running, I want to say about 80%-85% hard rock, probably 10% transition and 5%-10% of satellite.
Okay. Do you have certain expectations, is there some conservatism potentially built into this 11.7, or is that a good number you feel comfortable with, I'd say?
There's always conservatism in our throughput numbers. I mean, historically, every time we've done an expansion, we have met or exceeded our production levels. We do that on purpose to make sure that the business case matches that investment.
Okay. Sounds good. Thanks, Gord.
The next question is from Tanya Jakusconek with Scotiabank. Please go ahead.
Great. Good morning, everybody, and Gord, congratulations again on your promotion.
Thank you.
You're welcome. I just wanted to circle back on Essakane. Steve asked a bit about the mix for the next couple of years. We're expecting a stronger Q4 from Essakane, are we not?
Yeah, we've got a slightly stronger Q4. We saw somewhat of a grade pickup in October, and we actually saw, for us, exceptional recoveries as we got into some very low graphite ores. October was okay. The remainder of the next two months, November, December, we're looking for
Is that based on grade and improved recovery that we get the pickup?
It's on grade. The recovery portion is a bonus for us. We're not counting those chickens yet.
Okay. Mainly on grade. Okay, perfect. That's all I had on the technical side. I did want to come back to Steve, if I could, just on, you mentioned, Steve, in your opening remarks that you're going to be focusing more on strategic options for the company and surfacing value, and I think you highlighted Côté. Can you talk a little bit about some of the options for surfacing value at Côté?
Tanya, you know this better than anybody because you've been around it a long time. I think one of the comments we get from our shareholders is that we spend the time to get their feedback, and we actually listen to them. Côté representing a very large CapEx project for us, even though it has tremendous transformational capability for the company, it's just a non-starter the way it's currently structured. We have a number of options. Do we sell down additional percentage from the 70% we own? Do we sell all of it? Do we take those proceeds and reduce our debt that's not due till 2025? Do we use it to try and invest in mines, and I'm just using Boto as an example, that are smaller CapEx and less risk from an investor standpoint. We have a lot of optionality with Côté.
I would just tell you that there always have been expressions of interest in that asset. It's in Canada. It's surrounded by infrastructure. It is a low-grade bulk tonnage, but it's got a lot of positive attributes that people find of significant interest. My time is going to be more strategically focused on things like Côté. We have had a long list of very robust discoveries, whether it's Monster Lake and Nelligan, whether it's Boto, Siribaya, Diakha, and then our more recent discovery in Guinea. We have a lot of optionality that I think we need to work to surface for value purposes. We're not going to fight city hall here. People are interested in cash flow. They want to see dividends coming out of the operation, just like you would on many businesses. The stock market seems to be on yield as opposed to value plays.
We're not going to beat a dead horse here. I need to spend less time at the sites. I spend a phenomenal amount of time at the sites, as you know. I'm at Essakane. I'm at Rosebel a lot, at Westwood. Gord is as well. We're going to increase Gord's time at the sites, and I'm going to be spending a lot more time with Carol and Jeff on the strategic options, which we feel very positive about in terms of being able to deliver value for shareholders.
Is it safe for me to interpret this as excluding Côté Gold, that you talked about some of your options, all of these other ones that you've mentioned from Nelligan, Monster Lake, et cetera? Would some of your options be considering selling of these assets to generate that cash flow?
Yes. Absolutely.
Okay. All right. That role. Can I also ask on Boto? We're waiting for the concession approval. You mentioned a development decision in 2020. Steve, what do you need to see to pull the trigger on that asset?
Well, we had an agreement in place with the former government before the election, and I was over there with the president and minister of mines, and we were pretty well there. It's a beautiful opportunity for us. $250 million capital expenditure, about a 10-year life of mine, very nice return for us, a very expandable resource. With the election, we had new players come in. A minister of finance, and I'm in my 60s now, Tanya, so I call them younger people. Young bucks that have come in with new ideas. These are manageable, but they're time-consuming. To answer your question, we need to solidify the royalty, the dividend, the tax holiday, the things that we thought we had pretty well and believe they still are because we still have strong support from the president and minister of mines.
We are getting pushback from what I would call new players. I need to get over there and deal with this youth enthusiasm and get this locked down so that we can move ahead because our board is very excited about it. Our top 10 shareholders really like the project. It's bite-sized for us. It delivers value very quickly. That's another thing that I'd spend time on. Then you've been around this a long time. These things don't happen overnight. You have to make multiple trips. You have to have multiple meetings. That's why we've promoted Gord, and that's what I'm going to be focusing on. More time on a plane, unfortunately for me, I guess. It's part of the business, and we're just seeing a lot of interest. We have a very robust pipeline, as you know. That doesn't matter today.
People really don't care about that. They care about, what are you producing? What's your margin? It's not 2016, it's 2019. We need to align ourselves with the sentiment that's currently out there. That may change, like it always does in this space, but right now we need to focus on cash flow. We need to generate margins that are attractive to investors, and we need to make sure that we are funding all of our sustainable CapEx and expenses from what we generate. Our goal is to eventually get ourselves into a position where we can pay dividends, where we can be more, what I would call, a more attractive operating model that currently exists in the environment. That's my job. That's what I'm going to be working on.
Is it safe for me to understand from what you said, that you don't have right now fiscal agreement in place that has defined your royalty, your dividends, your tax holiday, et cetera?
That would be a fair comment. We do have it, but signed.
It's advanced in terms of the negotiations, Tanya. It's very advanced.
It's advanced, but you don't have it in place. If you were to have it in place, does everything else in the project meet your criteria to make a go forward decision?
Yeah, it does. It's quite attractive.
Okay. Look forward to getting that agreement. Thanks a lot, guys.
The next question is from Anita Soni with CIBC. Please go ahead.
Good morning, everyone. Congratulations, Gord, on your promotion.
Thank you.
My first question, just a little bit of focus back onto Westwood. The catalyst, I think you said Q4. When do you plan to put out that plan, in Q4?
We'll probably put out something in December. We're looking to provide some ranges around production cost structures, and looking to put it out in December. We're actually looking internally at presentations in the coming week on that, and obviously, it needs to go through a lot of internal review and some tweaking to make sure that we're all aligned. We're still on track to get it out in Q4.
Are you happy with the progress there in terms of, if you did reduce the workforce? I'm just trying to get an idea of whether or not we're going to be.
Yes
returning to larger production numbers or sort of sticking with something that's a little bit more tighter mine plan and perhaps more for cash flow.
Yeah. Look, I'm extremely happy with the operation there. Actually, I've been there twice in the last month, and had an opportunity to go underground. There's really good morale. Our safety statistics, which is always a harbinger of what's to come, are moving aggressively in the right direction. Our productivity numbers are good. It's an underground mine, and we'll always have a couple of challenges. Yeah, we're really looking to turn it around. It will be a bit of a wrap up required. It's not going to be immediate, but we are turning it around. As I mentioned in my dialogue earlier, we started mining a small satellite pit called Grand Duke, which will provide ounces here in Q4 and through all of 2020, and probably a little bit into 2021. That's helping supplement us while the operation gets its feet underneath it.
Had an opportunity to talk to a lot of the technical people about the study that's coming out and getting into a lot more granularity. We'll be coming out with some stuff here.
Okay, just moving on to Saramacca. I think the last time you guys were evaluating underground versus open pit options. You're delivering ore right now. Can you just give us an idea of how the open pit versus an underground option would play out in terms of timing? If it does, go ahead.
Yeah. Right now, in our approved life of mine plan, it's open pit option only. The underground study is progressing well. I've seen some of the preliminary results from that. We're working on financial models and trying to understand on an integrated basis how that might sort of fold in. We've got some budgetary quotes on contractors to really start to understand what the upfront costs for that option would look like. You get into some interesting challenges. Obviously, as you convert some of your block models from open to underground, it's a change of support that you see there, and your definition of what is measured, inferred and indicated changes. We're sort of wrestling with that right now. The work we're doing in the pit, because it's a multi-phase pit, we're not establishing any final walls right now. Really, the pit, if we.
We do select to go to an underground option, we'd still be mining all of the saprolite and most of the transition, and even a little bit of hard rock through the pit. The phase 1 pit, actually, the phase 1 and 2 and 3 pits are all contained still within that original design. If we do go underground, what that gets us away from is some really high stripping that we'd have to start thinking about towards the end of 2020 to open up the phase, some of that if we need to go to a solely open pit option.
Would you be doing, I guess, drifting away from the pit, or drifting from the bottom of the pit into the underground?
Sorry?
If you're looking at this, would you be drifting from the bottom of the pit into an underground?
Oh, yeah. Sorry. We actually have an interesting portal location. If you remember at Saramacca, we're starting the pit basically on the top of a hill. We have locations closer to the valley floor at the base of the hill where we could put a portal in. The portal designs, it's not quite horizontal, but it's actually a fairly gradual decline to get right into the middle of what you'd call the hard rock portion of the ore body.
Thank you very much.
This concludes the time allocated for questions on today's call. I'll now hand the call back over to Indi Gopinathan for closing remarks.
Thank you very much, [Daylene], and thanks 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 2019 year-end conference call in February. Goodbye.
This concludes today's conference call. Please disconnect your lines. Thank you for participating, and have a pleasant day.