IAMGOLD Adjusts Gold Delivery Schedule to Boost Q2 2024 Cash Flow
IAMGOLD has announced significant financial arrangements that adjust its gold delivery schedule, effectively enhancing its cash flow for the second quarter of 2024 by approximately $73.6 million, assuming current gold prices. This strategic financial maneuver involves a forward gold sale arrangement for the second quarter of 2025 and a modification to an existing gold prepay agreement, collectively referred to as the "Arrangements." These adjustments will postpone the delivery of 37,500 ounces of gold initially scheduled for Q2 2024 to the same period in 2025.
Renaud Adams, President and CEO of IAMGOLD, highlighted the timing of these Arrangements, noting their role in providing additional liquidity as the Cote Gold mine progresses towards commercial production. Adams underscored the company's confidence in the initial ramp-up activities at Cote Gold, with expectations of achieving commercial production in Q3 2024 and reaching 90% throughput by year-end.
The company has structured the 2025 Q2 Prepay Arrangement to receive $59.4 million in prepayment during Q2 2024, in return for delivering 31,250 ounces of gold in Q2 2025. This Arrangement includes a pricing collar between $2,100 and $2,925 per ounce, allowing IAMGOLD to maintain upside exposure within this price range.
Additionally, the Q2 Deferral Prepay Arrangement enables IAMGOLD to defer the delivery of 6,250 ounces from Q2 2024 to Q2 2025, with the deferred ounces initially funded at a forward price of $1,753 per ounce. This deferral will contribute approximately $14.2 million to the company's Q2 2024 cash flow based on current gold prices.
Maarten Theunissen, Chief Financial Officer of IAMGOLD, emphasized the competitiveness of these Arrangements against other financing options, particularly during the pre-commercial ramp-up of operations at Cote Gold. The company views these financial strategies as integral to strengthening its balance sheet amid potential risks, including possible delays in finalizing transactions for West Africa exploration assets.
