Earnings Call: Q1 2019

May 7, 2019

Thank you for standing by. This is the Chorus Call conference operator. Welcome to the IAMGOLD 2019 First 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. 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, and welcome to the IAMGOLD conference call. Joining me today on the call are Steve Letwin, President and CEO of IAMGOLD Gord Stothart, Executive Vice President and Chief Operating Officer Carol Banducci, Executive Vice President and Chief Financial Officer Craig McDougall, Senior Vice President, Exploration and Jeff Snow, Senior Vice President, Business 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 and 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 President and CEO, Steve Letwin. Well, good morning, everyone. Obviously, we had one of our tougher quarters here in a long time. But I want to reinforce that IAMGOLD is committed to achieving a self funding model with all of our cash requirements as an entity met by our mines. And in the slide that you have in front of us, we're basically tasking all of our mines with generating cash flows on a standalone basis. We want to be able to cover our corporate exploration and project expenditures and those will draw from the overall pool, But our goal and we will be aggressively pursuing it this year is to reduce our costs, improve productivity and create a model where we are simply self funding across the board. So on slide 6, if we go through our various mines, we're going to be focusing on each and every one of them to reduce the costs, increase margins, preserve cash, and fund all our cash requirements with these site cash flows. Our general managers are in town this week. We're going to ensure that we obviously work safely and responsibly, but we will be tasking each and every one of our general managers with these objectives. At Essakane, as you know, we have strong production and are working to optimize performance through debottlenecking the mill and other projects. We aim to complete a CIL and heap leach facility study in the Q2. At Rosebel, we reported significant reserve growth. We're extending the mine life. Saramacca development is ongoing with first production planned in the second half of this year. At Westwood where we've had some seismicity challenges, we've had a long life production asset in a transition year. Gord will speak a lot more comprehensively to what we're doing. But we recently rightsized the operation through a headcount reduction. We let go of about 288 people earlier this year. We are very committed to making sure that the mine redesign continues and that we have a long life economic mine in front of us. Our exploration successes highlight the district potential of each of our sites and projects. Our balance sheet is strong. We continue to exercise prudence in our allocation of capital. We remain committed to our goal of delivering shareholder value in 2019 and beyond. In Slide 7, you'll see that we have a very strong reserve ounce position. While we're working to reinforce our self funding model today at each of our sites, we want to take a moment to highlight the future of IAMGOLD, our industry leading reserve profile of almost 18,000,000 ounces. On an enterprise value reserve ounce basis, we are deeply discounted relative to our peers. We know that is drawn around our cost structure and our cash flow and that's why we need to take a very aggressive approach to ensuring that from a long term basis we are generating free cash flow that we are covering our sustainable costs and development capital. And the potential we have is clear. We are undervalued, but we need to work hard to prove to shareholders that we can produce a model that creates free cash flow at each of our sites and covers our overhead. On Slide 8, you can see further information around balance of ounces and equity. We're among the top 5 in our peer group. In other words, we have a very strong reserve ounce per share and again we're focusing on attracting the full value of each ounce through our self funding model. On Slide 9, for the quarter, we experienced severe significant reserve growth at Rosebel, extending the mine life and are progressing development at Saramacca. We believe Rosebel will be positioned for self funding with Saramacca coming online. Essakane is closer to self funding and self sustaining, enjoying a very strong production this quarter, and we continue to work on optimizing performance through a number of initiatives, which Gordon is going to discuss further. At Westwood, we believe we have a long life production asset, which we target to be cash flow neutral for 2019. The mine redesign is in progress and we are working to improve the cost profile through the process. For our projects, Cote Gold and Boto Gold, we are progressing within the previously provided capital guidance and outlook. We understand that the time is not right for any large scale project. We therefore have gone to the sidelines on these projects. We only revisit these projects once we've achieved our operational performance goals. So we need to go back to basics here at the company, make sure that we are generating sufficient free cash flow and then as time and opportunity and markets permit, we'll look at further growth. Our exploration success highlights the district potential of each of our assets and exciting possibilities at our greenfield locations. We have a very enviable pipeline for the future. Production guidance is maintained for the year, with the first half lighter than the balance of the year as anticipated. So we're working hard to achieve our self funding model at each of the sites and across the company. Given our people and potential, I'm very confident we can achieve this goal. On that note, I will pass it over Carol to review the financial results. Thank you, Steve. As Steve noted, Q1 2019 was a challenging quarter. This first slide presents key performance highlights for the Q1. Revenues were $251,000,000 in the quarter, while cost of sales came in at $251,900,000 resulting in a gross loss of just under $1,000,000 Adjusted net loss was $2,200,000 or nil per share. And net cash flow from operating activities before working or changes in working capital was $33,800,000 in the first quarter. We ended the quarter in strong financial position with cash, cash equivalents, short term investments, primarily in money market funds and restricted cash of $696,600,000 at March 31, 2019, down $61,400,000 from December 31, 2018. The decrease was primarily due to spending on property, plant and equipment totaling $69,700,000 partially offset by cash generated from operating activities at $8,800,000 In accordance with International Financial Reporting Standards, we reduced cash costs and depreciation attributed to inventory at Westwood for the Q1 2019 by $11,300,000 $5,000,000 respectively, to normalize for the amount of fixed overhead on a per unit basis as a consequence of abnormally low production. Normalization impacts total cash cost and all in sustaining cost metrics, but does not reduce cost of sales per ounce. Despite our short term challenges, I wanted to take a moment to highlight our continuing strong financial position. As noted on this slide, which compares IAMGOLD with peers as of March 31, 2019, we have a leading balance sheet from a cash and cash equivalents and short term investments perspective. We are positioned to withstand gold price volatility and will continue to exercise prudence in the allocation of capital with cash preservation a key focus. I'll now pass the call over to Gord. Well, thanks Carol. So our top priority at IAMGOLD is the health and safety of our employees. On the basis of a 200,000 man hour record, our total recordable injury rate or TRI rate for the Q1 of 2019 was 0.91, which is below our internal targets, which are based on continuous improvement versus prior years. The DART rate or days away restricted or transferred duty rate was 0.58, which is also below target. So we are pleased with our progress there. Unfortunately, the health and safety performance of the company was tragically affected by the vitality of a contractor at the Esa Can mine in the Q1 of 2019 due to an equipment fire. We continue to work every day to meet or exceed our safety goals, implementing several initiatives, including a new behavior based safety program to ensure a safer working environment. Total consolidated attributable production for the quarter was 185,000 ounces. All in sustaining costs were $10.86 an ounce, just outside of the guidance for the full year. No sustaining costs at the consolidated level includes corporate G and A costs. We maintain our full year 2019 production guidance of 810,000 to 870,000 attributable ounces and guidance for all in sustaining cost per ounce sold of $10.30 to $10.80 per ounce. We also maintain our full year guidance for cost of sales per ounce of $7.90 to $8.40 per ounce and total cash cost per ounce produced of $765 to $815 but note that a number of cost and productivity improvement initiatives are underway to mitigate the risk that these two targets may not be achieved by the end of the year. Guidance will be reviewed in the Q2 2019 and updated as necessary. Gold production at Westwood is expected to improve starting in Q2 2019 compared to the Q1 and is expected to be strongest in the Q4. Looking at the individual operations and starting with Rosebel, attributable gold production was 68,000 ounces in the Q1 of 2019, and all in sustaining cost was $10.64 per ounce. Total recoveries were higher due to startup of the carbon in column plant which added 2,200 ounces in the period through the treatment of tailings decant water. The plant is situated between the 2 existing tailings ponds and intended to recover at least 5,000 ounces of gold annually from the decant at a marginal cost of $35 an ounce to cover additional power and elution costs. Operating costs were higher in the quarter at Rosebel due to an increase in mining and milling volumes with harder rock, in addition to increased local labor costs following the finalization of the collective labor agreement in Q3 of 2018. Notably, while mine production was higher, Rosebel did see lower energy costs combined with lower light fuel consumption as a result of shorter hauling distances to the mill. All in sustaining costs per ounce sold were higher in the quarter compared to a year ago due to higher cost of sales per ounce and higher sustaining capital expenditures. At Saramacca, we are on the path to production with ore expected to arrive at the mill later in the year. In the Q1, we announced that we'd received notice of approval for the environmental and social impact study from the government of Suriname for the project. Haul road construction continued during the quarter and deliveries of the haul fleet are expected in the second half of the year. Commencement of critical path infrastructure construction will also occur in the second half. We are also assessing the potential to capture ounces earlier from Saramacca as we begin to develop the pit. On the exploration front, we are drilling to assess the underground potential at Saramacca, both for additional ounces and viability to access higher grade hard rock material while reducing waste volumes associated with open pit mining. Looking at Essakane, production for the quarter was 90,000 attributable ounces at an all in sustaining cost of $10.10 per ounce. Ore feed was primarily sourced from lower grade zones compared to a year ago with coarser mill feed and lower mill availability due to maintenance work and lower recoveries due to some graphitic ore impacting production levels. Cost of sales and total cash cost increases compared to a year ago were primarily due to the impact of lower sales and production volumes. Rising energy costs were partially mitigated in the quarter due to the positive impact of the hybrid solar plant and hedging. Operating costs were higher due primarily to increased mine equipment maintenance. A strong U. S. Dollar relative to the euro helped to somewhat alleviate the impact of these cost pressures. All in sustaining costs were higher in the quarter compared to 1 year ago, primarily due to the higher cost of sales per ounce, partially offset by lower sustaining capital expenditures. At Essakane, we continue to optimize operations through the debottlenecking of the carbon in leach circuit. With engineering complete on that project, we are now moving to procurement. The oxygen plant is now operational, and we are optimizing oxygen injection. We expect the plant will increase recoveries by 0.5% as a result of improved leach kinetics, while improving also improving efficiencies of the circuit and reducing reagent consumption. On the exploration front at Essakane, we are assessing regional prospects for resource potential with ongoing drilling at the Tisserie target and on our highly prospective land package. Looking at Westwood, Q1 gold production was 15,000 ounces at all in sustaining cost per ounce sold of $1192 as the mine assessed and adjusted stope sequences to address local seismic issues impacting production. The risk of seismicity varies according to local lithologies and alteration, combined with the geometry of the openings in the mining sequence. To manage this, we are studying various design approaches to Westwood with a preliminary life of mine expected in the Q4 this year, followed by an NI 40three-1 101 compliant plan in the first half of twenty twenty. To optimize the future development of the Westwood resource and to achieve a cash flow neutral position this year, we made a difficult decision in the Q1 to proactively manage costs and headcount to align to 2019 production levels. As Carol discussed, costs were normalized for Westwood for the amount of fixed overhead on a per unit basis as a consequence of abnormally low production in Q1. This resulted in adjustments to total cash costs and all in sustaining costs. Cost of sales per ounce was negatively impacted by lower sales volume and total cash cost per ounce produced incorporating the impact of normalization was also higher compared to 1 year ago. All in sustaining costs per ounce sold were higher than a year ago due to the higher cost of sales, partially offset by the impact of cost normalization and lower sustaining capital expenditures. Work in Q1 was focused on Zone on Block 3 access, which is on track for mining midyear and averaging 28 meters per day in lateral development. Production sequencing will see lower grade materials through Q1 to Q3 with improved production in Q4 as lower seismic risk areas are accessed. I will 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 talked about today have been previously disclosed in accordance with securities regulations and signed off by the qualified persons within the company reporting them. During the quarter, we completed just over 78,000 meters of drilling at our various active projects and mine sites, including at Essakane to support the feasibility study and at Rosebel, a long trend at Saramacca and to evaluate the underground potential of the deposit. At Nelligan, we announced the remaining assay results from our 2018 diamond drilling program. Highlights include 5.6 9 grams per ton gold over 27.8 meters, 3.59 grams per ton gold over 42.1 meters and 2.35 grams per ton gold over 40.4 meters. Additionally, we completed approximately 12,800 meters during the quarter to infill and test the continuity of mineralization associated with the Renard zone. These results coupled with the ongoing geological, geochemical and structural studies will be integrated to support the development and refinement of a deposit model with an objective of completing an NI 40three-1 101 compliant resource estimate in the second half twenty nineteen. At the Cote gold project, we reported diamond drilling results from our 20 seventeen-twenty 18 exploration program, which identified a new intrusive referred to as the Gosselin zone. This zone is located approximately 1.5 kilometers northwest of the Cote deposit. Highlights include 350 meters grading 0.81 grams per ton gold, 132.3 meters grading 1.13 grams per ton gold and 139.7 meters grading 1.36 grams per ton gold. Building on our 2018 exploration successes, we are working to advance some of our early stage projects, including a maiden resource at Nelligan, while continuing to support our near mine exploration to leverage our existing infrastructure. With that, I'll pass it over to Steve to conclude. Thanks, Craig. Well, look, this performance in Q1 is simply not acceptable. I can tell you none of us around the table are happy. I particularly am not. I know Gord's not pleased either as Carol or Craig or Jeff. And similar to what we had to do a few years ago, we've had 10 strong quarters in a row here And last year at this time we were sitting a lot better in terms of our cost structure and certainly market sentiment. But we have to deal with reality and we have to deal with the fact that our sites need to be producing enough cash flow to support our company. If they don't then obviously we have to take immediate action to remedy this. And I can tell you and I think you know me well enough, we will be taking immediate action. We will be aggressively looking at costs right across the board starting in this office. We will be looking again at everything we do from a productivity standpoint. And we are very fortunate that we have near term catalysts that we believe we will add value. This is the Essakane CIL and heap leach feasibility study in the first half of the year, followed in the second half with the Saramacca production. The Westwood plant update and an initial Nelligan resource and receipt of the mining permit at Bodo. I'm headed to Suriname next week, We'll be spending 5 days there. I then head to West Africa. I'll be spending a week in Essakane. I'll be then coming back and spending time at Westwood. We have to go back. It's a bit of back to the future. We've got to go back in time and look at our self funding model again. And there are no excuses here. We have to deal with the fact that we've got some challenges at Westwood. We need to get it fixed. We have to do it safely. We have to maximize our value at Essakane and at Roosevelt. There's no other explanation. It's on our watch. We have to fix it. And I'm telling you as I sit here that we're going to do it. We're going to build a cash flow pipeline and we obviously have a lot of leverage to the gold price. We have a great future. We have a great balance sheet. But we have to take we can't take that balance sheet for granted. We have to keep it strong. So we have to make sure that we're taking a disciplined approach to each of our mines and self funding ourselves so that we don't lose the strength of that balance sheet over time. A robust pipeline of projects in the portfolio have, the reserves we have is all great and it's attractive, but we need to generate free cash flow. And that is the mandate, that is the objective of this team. And we're going to do everything in our power without compromising safety to accomplish this in 2019 and going forward. So on that note, I will turn it back to Andy or we'll take questions I guess Andy? Yes. Okay. Thank you. We will now begin the question and answer session. Our first question is from Steven Butler with GMP Securities. Please go ahead, sir. Good morning, guys. Yes, it was a tough quarter. We shared that sentiment, unfortunately. Gord, at Westwood, what confidence do you have at the moment in the ability for this asset to mine safely? Obviously, you highlighted your safety record, which has been a good one overall. I guess at Westwood, your thoughts on the ability to safely mine this asset in the future and maybe what is unique about the asset in the Abitibi when I know we don't see seismicity as a regularly occurring concern, but what is maybe unique about Westwood as far as you know? Yes, I'm confident that we can mine it safely. We need to revisit specific areas and how we attack certain zones. The whole deposit is not affected by seismic activity. We have some very specific zones where seismicity has crept up a couple of times. Unfortunately for us, that is related to some of our higher grade material. Importantly, I'd note out that the seismicity is really an issue in the footwell zones. It isn't an issue in the ore zones. We have not reduced or we're not taking any of our resources out of inventory as a result of the seismic activity. It just affects how we access, and we need to revisit the mine methods and the sequencing specifically in those areas. We do have access to other zones and that's where we're focusing right now. Unfortunately, with the last events that we had there at the end of 2018, that was the high grade production for the 1st part of this year. And so obviously, the impacts are strongest in the near term. So the impacts to Q1, as a result, were high. We've been able to drive out into other zones free of that sort of issue and starting production from those. And as I said in the commentary, really expect to build through the year with a very strong Q4 at Westwood. We're looking at what our opportunities are. We've got a team put together that is reviewing the overall mine plan for Westwood. That team has been constituted and the work is underway. As we said, we expect to be able to give some preliminary results with an update towards the end of this year. I don't think that we're particularly different from some of our near field neighbors. We know our next door neighbor to the east has ongoing seismic issues. To their benefit, they've been operating for 30 plus years and have multiple work areas so that they're able to anticipate where there could be problems and move to new zones. Whereas, we don't quite yet have that flexibility. We're working to build it. I spoke to the fact that we're attacking Block 3 now, and that will continue to add some flexibility for us. So it's a challenge in the short term. We are driving to make it cash flow neutral this year and that was sort of the primary motivation behind the layoff we made. And in our forecast, we are achieving cash flow neutrality for Westwood in 2019. The team is strong there. We've added some fresh blood. As I said, we put this study team together in parallel and really looking forward to what's coming out. I mean I have regular contact with the individuals on the team and they are all very positive that we will put together a solution to build a safe and profitable Westwood with a long life going ahead of it. Okay. I think the grade was reasonably okay in the Q1. I just want to ask a question. I think the grade was reasonably okay in the Q1. I just want to ask a question about is grade sequencing any explanation for a better second half at Essakane or not? Or maybe is it just driven by expected improvements in throughput? And do you think you can deliver the increased throughput? You talked about coarser feed size, maybe that's a crushing issue or blasting issue in Q1 and mill availability, maybe just a few thoughts there on the mill performance Essakane going forward? Yes. I mean those comments were really in reference to the Q1 from last year. Q1 from last year was blowout wonderful. And so when we're comparing quarter on quarter, it's just it's maybe a little bit more of a trip back to earth. We are working on blasting. We did have some major maintenance program maintenance in the Q1 that we won't see going forward. So that will certainly provide us with uptime, not that the availability there is bad, it's already over 94 percent. We continue to work on mine to mill, optimizing the blasting programs to manage the throughput through the crusher. And the second half of the year, yes, we get into slightly better grades as we mine down in Phase 3. We do have some opportunities that we're looking at. We've talked about optimizations to bring a few additional ounces into the plan for ethacam this year. So I'm waiting with bated breath on the site to come back to me with those plans and understand where we're at. Our next question comes from Anita Soni with CIBC. Please go ahead. Good morning, guys. Thanks for taking my call. So first question is regards to the $8,800,000 in stripping at Essakane, that's project related capital. Could you give me some color on that and what kind of growth that's going to be attributable to? Maybe I'll start Anita. So when we take a look at our capital stripping, we take a look at when we're actually going to be accessing that ore. So if we're going to access that ore within the next year, then it's part of our sustaining capital. Beyond that, then it factors into the categorization of expansion capital. Okay. Then what would Is that answering your question? Yes, it did. So when you did the strip ratio for operating, that was the operating result, right? That doesn't include the 8.8% when you're reporting the strip there? I have to check on that one, Anita. I believe our strip ratio reports all waste types, but I need to confirm that. Okay. All waste categories. I don't think we for strip ratio, we change it. We change it, no. Okay. So from a production profile for Westwood, can you give us an idea of how the tonnage and grade will evolve over the course of the year? I mean, you started at 15,000 ounces and that's low relative to the guidance. So I'm just wondering how you're reiterating the guidance and how are you going to get there? The grades are better in the 4th quarter than they are in the 1st three quarters. The tonnage does pick up starting Q2. I don't have the numbers hard at hand here, but we do sorry, just getting something here. Yes. So the tonnage steps up here in Q2. It's about 30% higher than it was in Q1 for Q2, Q3 and then we get another step up, maybe another 15% on top of that by Q4. Grades build through the year. Q1 was low because we were including some low grade stockpiles to fill the mill while we redirected the mine plan to some of the newer the outer production areas. But we do see a nice little step up of grades both in Q2 and Q3 and then a further step up in Q4. Okay. And then just in terms of the Rosebel capital spend, it's pretty light versus the budget. So given that Saramacca is supposed to be delivering in H2, how should we see the capital evolving? Is there going to be a big slug of it coming in Q2 or is it spread out Q2, Q3? As of right now, we're maintaining our capital guidance. We do see Q2, Q3 will it's fairly even through the last three quarters because we a lot of it a lot of the capital spend is built around the road building at Saramacca. We are also starting to receive some equipment, but a good deal of that equipment is coming in under a leasing arrangement. So it doesn't hit us that much. We are also reviewing our opportunities to push some of the Saramacca infrastructure costs, things like maintenance shops and so forth a little later on. And then one last question before I let other people ask some questions. So at Essakane, what proportion of ore hard ore are you in now? Is it 100% or is it still somewhat below that? I think we're at around 80%. But I mean, let me confirm that for you. Yes, it's 80%, 85%. And when do you anticipate getting to 100%? If we continue to have success with the exploration stuff of maybe 3 or 4 years. But certainly in our current life of mine, I think we get to 100% 2021. We're still getting some soft rock from Falagunto for the next couple of years. We do have Gossey. Gossey is being incorporated into the new mine plants. And I apologize because I haven't looked at that level of granularity as to when it's sequenced, but there is some soft rock there. But typically looking 90 plus percent from sort of 2021 on, unless we have some success someplace else and then we'll recast it. All right. Thank you very much. Anita, just on your last question, the strip ratio does include all waste. All waste, including that $8,800,000 that you had put in on. Yes. Okay. Our next question is from Tanya Jakusconek with Scotiabank. Please go ahead. Great. Good morning, everybody. First one is a simple one, just for outlook for 2019 in terms of quarterly, how we look at the production profile growing. Does it make sense, Gord, that you mentioned that second half better grades at Essakane. You then mentioned better grades plus throughput, strong Q4 at West Wood and then Rosebel, we have Saramacca really coming in, in Q4. So is it safe to assume that your Q4 will be your best quarter? Per forecast right now, yes, Q4 looks superior to the others. But as Steve mentioned, we are looking at ways to improve the intervening quarters if we can as well. I think there's some opportunities certainly for Q2 and Q3 to improve beyond they will be improved beyond where Q1 was. It's just a matter of scale right now. Okay. And then I just wanted to circle back on Westwood, a couple of questions there. I think, Gord, you mentioned that the seismic areas are just in the footwall and not in the ore zone areas. Maybe just as a benchmark, if you were to say the seismic areas as a percentage of reserves or resources, what are we talking about? In terms of total resources, it's probably somewhere between 6% 8% of total resources. Okay. Okay, that's helpful. And then just maybe a bit of clarity. You're putting out a preliminary life of mine plan and I guess is it Q4 and then you're putting out 40 three-one hundred and one compliant plan in H1 of 2020. Can you let us know exactly what that means? Because usually you file a technical 40 three-1 101 45 days after you've put out your life of mine plan. So what's the preliminary and why the lag and what are we really expecting on that front from you? Well, I think what we'll be able to do towards the end of the year is speak to how quickly we can get and what sort of sustained production levels we're targeting. We probably won't be able to supply the full level of detail that you would see from a 40three-1 101, but we know everybody is looking for some indications. The group is going to strive to get everything done as quickly as possible, obviously, but we want to make sure that it's technically consistent and supportable before we come out with a full blown report. So we'll try and obviously within the securities regulations come out with some indications as to where we see things going by Q4. But we didn't want to sort of overpromise that you're going to get a full blown LOM with all the details by then. So if I was to take what you said, we're looking maybe at just production targets for Q4 and then costs, capital and maybe reserves and resources as sort of in 2020? Yes. I mean, I'd hope we have some costs for you as well in Q4. Okay. And then maybe Carol, can you remind us what the book value is on your books for Westwood? Yes, it's about $500,000,000 I guess that will be reviewed with year end numbers. That's correct. Okay. Great. Thank you. We review all of our assets quarterly, so Westwood and all the other ones. Yes. I would assume that once you look at the reserves and resources based on mine plants, costs and other, that would be a time to really take a look at that 500,000,000 dollars That's correct. Okay. Thank you. Our next question is from Mike Parkin with National Bank Financial. Please go ahead. Hi, guys. Just a couple of questions. Could you give us a sense of how Westwood has been performing in the month of April? Yes. We're starting to see that pick up in production a little bit. I mean, I can't give you a lot of detail. We don't report on a monthly basis. But starting to see things a little better, obviously, with the size of a layoff like we had, we've been spending some time sort of rebuilding the team and getting the morale in place. We've got some new leadership that's recently installed there and he's very bullish about what the next couple of months is going to be and driving it forward. Okay. And then with those layoffs, is there any severance fees that will be carrying over into Q2 or are those all pretty much booked in Q1? I'm looking at Carol, but I believe they're all in Q1, the severance. That's correct. I mean, again, as Steve said, we're going to continue to look across the organization in terms of rightsizing, but absolutely the cost for Westwood was $3,200,000 in the Q1 and that was reflected in our disclosure. Okay. And then with Saramacca, you mentioned the second half start. Can we get any additional color as we're nearing that in terms of expectations for start up? Where you just to kind of set the tone right in terms of tonnage expectation? In terms of ounce production for this year, it's not a huge number. It's probably in the neighborhood of 5% of our production material. We're seeing if we can stockpile it. I mean, in terms of sequencing, the road is there. It's we're about 30% of the road is at least roughed in now and continuing to work forward. We're seeing pretty good progress. We are heading into the wet season. So we expect that that will change a few things. We're going to get the road roughed in sometime probably Q4, although there are opportunities to improve upon it. What we are also looking at is we do have alternative routes between Saramacca and Rosebel. And that's one of the things we're looking at to see if we can accelerate some of the ore by alternative routes until the full haul road is in position. Equipment deliveries are basically starting. They've already started and continue to move forward. We are on the site doing tree clearing and driving access road up into the pit, putting the ore pad in place, building the infrastructure pads. So there's a lot of work ongoing right now. Again, we're saying second half order delivery. If I didn't make it Q3, I'll make it Q3. Right now, it's probably Q4. Okay. And I remember you guys were commenting on the strip ratio being a bit conservative potentially because you were still working on models with the water table. How is that progressing? Yes. A lot of that work is progressing. The later designs, the more recent designs I've seen have more aggressive pit slopes in the saprolite, so that's positive. And obviously, that's positively impacting the strip ratios. I did mention, I mentioned a number of times, we are continuing to look at the underground and that has the opportunity to make really a complete game changer in terms of what the strip ratio would be and the total volumes offset by accessing higher grade hard rock underground. So that one we're really working hard on. But to your original question, yes, a lot of the hydrogeology work has already come out in favor. Some of the saprolite slopes have moved up by as much as 5 degrees, 6 degrees. Okay. That's good. When could we expect kind of a broader update for that project in terms of kind of those new numbers in terms of where you could see strip, if there is a potential for an underground timing, that kind of thing? I haven't sat down with the guys and worked out an exact schedule, but I know internally we were eager to try and get some information out into the market late Q3, early Q4 as we start production, we'd like to be able to sort of speak to what the future for Saramacca looks like about that period of time. Okay, great. That's it for me guys. Thanks so much. Thanks, Mike. Our next question is from Carey MacRury with Canaccord Genuity. Please go ahead. Hi, good morning. Just another question on Westwood. The mining rate in Q1 was about 1,000 tonnes per day down from 1500, 1600 prior. Given the workforce reduction, is that the sort of rate we should expect in the near future until a longer term plan is sorted out? No. As I mentioned earlier, we do see a step up starting in Q2 on the production rate, at the hoisting rate, if you will, and then a further step up in Q4. Where do you think you would exit the year then on Q4? In terms of production, give me a few seconds here. Yes. I mean by Q4, we are 60% higher throughput than we are showing in Q1. And then we should carry that into kind of 2020 until again the longer term plan is sorted out, that sort of rate? That's my hope. We'll see where again, we're working pretty closely with the site to find out what numbers make sense there. Okay, great. Thank you. Thanks, Gary. Our next question is from Don MacLean with Paradigm Capital. Please go ahead. Well, good morning, guys. Gord, just can we get a little more color on the Saramacca underground? It sounds like it's a pretty significant shift. What do you need for this to actually become the scenario and maybe a little bit of color on the impact on the economics and capital requirements? Yes. So I mean we did some desktop work late last year on the underground option, really looking at mining the saprolite and some of the transition open pit and then converting the higher grade zones below that to underground. I mean, the net impacts are very substantial in terms of the volume of waste. It was over 150,000,000 tons less waste from open pit in that scenario, which obviously creates a pool of cash in your cash flow can be redirected in a different direction. You do lose a few lower grade hard rock ounces within the original pit. However, you carry high grade below the existing pit. So on the back of that desktop work we did last year, we've been out drilling some deeper holes on the primary shoots to understand what the continuity of those is going deeper. We haven't released those results and we are considering doing that at some point in time together with some of the work that Craig's team is doing on strike extensions of the saprolite zones. And I mean, it's a bit of a you're sort of chasing your trail trying to drill deeper underground. We're not talking deep by any means. We're talking sort of 300, 400 meters. It's not as deep as our other mines. And because of the topography there, it's actually pretty close. The underground areas wouldn't be very far below the bottom of the valley. So there's some geometry that works in our favor there. We've drilled enough, I think, now to do a closer PEA sort of level study on the underground option. One of the challenges, obviously, if you recast the deposit as underground versus open pit, you have to re examine your categorization of your resource because of the drill spacing. So we're trying to wrap our heads around that. But that work continues to be to move forward. And it's interesting that the deeper drilling we've done has encouraged us to continue studying. Right. So you're finding the indications of the continuity? Yes. Interesting. We will look forward to that. Yes. Thank you. This concludes the time allocated for questions on today's call. I will now hand the call back over to Indi Gopinathan for closing remarks. Thank you very much, Savvis, and thanks to everyone for joining us this morning and for your continued interest in IAMGOLD. We look forward to having you join us on our Q2 2019 conference call in early August. Goodbye.