管理層發言
Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD Second Quarter 2026 Operating and Financial Results Conference Call and Webcast. The conference is being recorded. At this time, I would like to turn the conference over to Graeme Jennings, Vice President, Business Development and Investor Relations for IAMGOLD. Please go ahead, Mr. Jennings.
Thank you, operator, and welcome, everyone, to our conference call this morning. Joining us on the call are Renaud Adams, President and Chief Executive Officer; Marthinus Theunissen, Chief Financial Officer; Bruno Lemelin, Chief Operating Officer; Ankit Shah, Chief Strategy Officer; and Annie Torkia Lagace, Chief Legal Officer. We are calling today from IAMGOLD's Toronto office, which is located on Treaty 13 territory on the traditional lands of many nations, including the Mississaugas of the Credit, Anishinaabe, Chippewa, Haudenosaunee, and Wendat peoples. At IAMGOLD, we believe respecting and upholding Indigenous rights is founded upon relationships that foster trust, transparency and mutual respect. Please note that our remarks on this call will include forward-looking statements and refer to non-IFRS measures. We encourage you to refer to the cautionary statements and disclosures on non-IFRS measures, including the presentation and the reconciliations of these measures in our most recent MD&A, each under the heading non-GAAP financial measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and CEO, Renaud Adams.
Thank you, Graeme, and good morning, everyone. Thank you for joining us today. It was another strong and safe quarter for IAMGOLD. We produced 188,100 ounces of gold in the second quarter, bringing our year-to-date production to 371,700 ounces, positioning IAMGOLD firmly on track to meet our full year guidance of 720,000 to 820,000 ounces. Our company continues to generate strong cash flow with nearly $900 million of mine site free cash flow produced year-to-date. This allows us to invest in our assets, strengthen our balance sheet and return capital to our shareholders at the same time. Since December, we have repurchased more than $0.5 billion of IAMGOLD shares. These repurchases reflect our confidence in the company's future and our view that our shares represent compelling value. That confidence is built on the growth we have across each of our mines. Over the coming quarters, we expect updated studies at Cote, Essakane, Westwood and Nelligan. Our next phase of value creation starts at Cote. The first step is the updated mine plan and the technical report, which remains on track for the end of the year. For the first time, this plan will bring the Cote and Gosselin deposits together, building on the more than 20 million ounces of measured and indicated resources across the combined zone. The updated plan will define a near-term path to increase throughput towards 40,000 tonnes per day through targeted debottlenecking of the existing plant. This work is expected to be low cost and high return, supported by a larger reserve base and a longer mine life. In parallel, we are advancing trade-off studies on a larger expansion of Cote. We have adjusted the scope of this work to reflect the significant size and opportunity at Cote. We are taking the time to assess the full scale of the asset, evaluating multiple scenarios to ensure that Cote is positioned to deliver value for generations to come. At Essakane, we continue to see strong cash flow generation, which remains a key driver of our share buyback program. In the first half of the year, we plan to release an updated mine plan that is expected to outline a mine life extension to 2035. At Westwood, our Quebec underground mine continues to redefine itself as a stable cash-generative operation. Next year, we are excited to outline a path to extend mine life and increase underground throughput with the potential to transform Westwood into a larger, higher-throughput, lower-cost operation. And of course, at Nelligan, we are advancing one of Canada's largest emerging gold camps toward an initial economic study next year, marking an important step in defining its long-term development potential. In summary, IAMGOLD is performing well, generating strong cash flow, returning capital to shareholders and building real growth for the years ahead. With that, let's get into the quarter. Starting with health and safety, our total recordable injury frequency rate was 0.70 for the quarter and is tracking at 0.56 year-to-date. I would like to recognize the Westwood team in particular; their continuous focus on safe operations sets a strong standard. Safety comes first to us, and I want to thank our teams across our operations for their ongoing commitment to safe and responsible mining. Turning to operations. IAMGOLD produced 188,100 ounces to our account in the second quarter. At Cote, attributable production was 67,300 ounces or 96,200 ounces on a 100% basis, which was possible as the plant operated at near full capacity in June following the conveyor belt replacement and the commissioning of the second crusher. Essakane and Westwood also delivered strong quarters with grades slightly above forecast. Cash costs, including royalty, were $1,289 per ounce for the quarter and $1,244 per ounce year-to-date. For the full year, cash costs are tracking towards the upper half of our guidance range with improvement expected in the second half as Cote production increases. All-in sustaining costs, including royalty, are likewise tracking towards the upper half of the guided range. As a reminder, both Cote and Essakane have royalty structures tied directly to the gold price. With the realized gold price averaging over $4,600 per ounce year-to-date, royalties have added approximately $380 per ounce so far this year, about $55 per ounce above our guidance assumption. We continue to monitor inflation and energy market volatility closely. In the first half of the year, certain input costs increased by approximately 3%, in line with our expectations. In the second quarter, oil prices were approximately $25 to $30 per barrel above our guidance assumptions, adding about $35 per ounce above our cost guidance. With that, I will pass the call over to our CFO to walk us through our financial matters. Maarten?
Thank you, Renaud, and good morning, everyone. The combination of strong operating performance and a favorable gold price environment continued to generate significant cash flow during the quarter. Our capital allocation strategy is to deploy funds to sustain and optimize our operations, fund our expansion and mine life extension initiatives and then use remaining funds for strategic opportunities and shareholder returns. Net cash from operating activities totaled $445.1 million during the quarter, an increase of $359.3 million when compared to the $85.8 million of cash from operating activities in Q2 2025. We used the operating cash flow to fund $115.6 million of capital expenditures, the full repayment of the remaining $100 million outstanding on the credit facility, $74 million paid to the government of Burkina Faso related to the Essakane dividend distribution and $147.9 million of share repurchases under our share buyback program. As Renaud noted, since we initiated the share buyback in December, IAMGOLD has repurchased approximately 28 million shares for $510.4 million, which equates to approximately 45% of our mine site free cash flow returned to shareholders, a clear signal of our confidence in the value of our shares. In June, we further enhanced our financial flexibility by amending the credit facility, increasing total capacity from $650 million to $850 million, extending the maturity to 2030, improving covenant terms and lowering overall borrowing costs. The amended facility also includes a further $250 million accordion feature, providing additional liquidity potential. As a result, we ended the quarter with $501.4 million in cash and cash equivalents, no amounts drawn on the revolving facility and total available liquidity of approximately $1.35 billion. Revenues for the second quarter were $856.9 million on sales of 195,100 ounces at an average realized gold price of $4,384 per ounce. This was slightly below the quarter average as production was weighted towards the back end of the quarter. Adjusted EBITDA in the second quarter was $507.1 million and adjusted net earnings attributable to equity holders were $241.6 million or $0.42 per share compared with $77.3 million and $0.13 per share in the prior period. On a trailing 12-month basis, adjusted EBITDA has increased to approximately $2.2 billion. Cash flow from operating activities, excluding working capital adjustments, was $442 million in the quarter, an increase of $315.6 million year-over-year. Mine site free cash flow was $368.9 million in the second quarter, a $228.4 million or 169% increase compared to Q2 2025. Year-to-date mine site free cash flow was $893.5 million, a $613.5 million increase compared to the same period in 2025. Taken together, these results reflect the fundamental transformation of the company's financial position. Just over a year ago, IAMGOLD carried more than $800 million of net debt. As of June 30, 2026, the company is in a net cash position with an undrawn and increasing revolving facility and the balance sheet capacity to fund growth and return capital to shareholders concurrently. And with that, I will pass the call to Bruno Lemelin, our Chief Operating Officer, to discuss our operating results and outlook. Bruno?
Thank you, Maarten. Starting with Cote Gold. Cote produced 96,200 ounces on a 100% basis in the quarter, bringing the year-to-date production to 170,900 ounces. Strong production is expected in the second half, putting Cote well on track to meet the production guidance of 309,000 to 440,000 ounces this year. The story of the quarter is really the story of June when the plant operated at near full capacity following the conveyor belt replacement in May and the commissioning of the second cone crusher earlier in the year. On the mining side, we moved 11.7 million tonnes of total material with 3.1 million tonnes of ore at a strip ratio of 2.8:1. Head grade averaged 0.86 gram per tonne; both the strip ratio and the grade reflect where we are in the mine plan. We worked on pushback areas and focused on opening up a new bench to set up the second half of the year. In the plant, we milled 2.9 million tonnes. We managed throughput early in the quarter ahead of the CV10 conveyor replacement in late May. Once the new heavier gauge belt was installed, we ramped the plant back to nameplate and processed over 1 million tonnes in the month of June alone. Head grade averaged 1.12 gram per tonne at recoveries of 93%. I would note that reconciliation between our reserve model and mill feed continues to sit well within expected tolerances. The most significant operational milestone in the quarter was discontinuing external contractor crushing by the end of June. We are already seeing the benefits as the processing cost in June averaged $17.72 per tonne, down from an average of $22.50 per tonne over the prior three quarters. We have seen additional operating improvement. First, with better sized material now feeding the HPGR, we are seeing improved wear rates on the rollers. A longer HPGR lifespan should translate into lower maintenance costs and better crushing circuit availability going forward. Second, the mining fleet that had been dedicated to rehandling material for the contract crusher is now being redeployed on mining activities. Combined with three new haul trucks coming into service, we expect mining rates to step up in the second half. Looking forward, we anticipate the plant averaging nameplate of 36,000 tonnes per day over the course of the year and head grades between 1.05 and 1.15 gram per tonne. Production is weighted to the second half on both higher throughput and higher grades. Turning to costs. Cote reported second quarter cash costs, excluding royalties, of $1,245 per ounce and all-in sustaining cost of $2,082 per ounce. Costs remain elevated on external contractor crushing, contractor support for the conveyor repair and scheduled maintenance, compounded by higher diesel prices. On a unit basis, mining costs averaged $4.49 per tonne mined and milling costs $20.85 per tonne milled in the quarter. Both remain above where we intend to operate and the path to improvement is clear. On mining, the contractor crusher required significant rehandling and tied up haul truck utilization. With the contractor phased out and three new haul trucks coming into service, that capacity returns to the pit. In June, processing cost of $17.72 per tonne gives us a real-world data point for what the circuit delivers without contracted crushing. We are targeting mining costs of $4.00 per tonne and processing costs of $15.00 per tonne by year-end with further reductions expected into 2027. On capital, we invested $54.6 million at Cote in the quarter on an attributable basis; capital expenditures are to be weighted to the second half on equipment delivery timing and project schedule. Putting that together for the year, we expect cash costs, excluding royalties at Cote, near the top end of our $900 to $1,050 per ounce guidance range and AISC, excluding royalties at the top end of the $1,475 to $1,625 range. Cote carries a 7.5% gross margin royalty and various net smelter return royalties, which accounted for $309 per ounce in our cash costs or 20% of cash costs. Costs are expected to improve through the second half on higher production volumes, the removal of contracted crushing, improved maintenance cycles and greater efficiencies as the pit opens up. With a clear path to higher production and lower cost, attention now turns to the next phase for Cote. On June 1, we announced an updated mineral resource estimate that, for the first time, combined the Cote and Gosselin zones together into a single block model. On a 100% basis, measured and indicated resources increased to 20.3 million ounces with 3.5 million ounces inferred. This larger resource base will support our updated technical report and life-of-mine plan, which we expect to release towards the end of the year. The plan is expected to show a significant increase in both reserves and mine life. It will also set out a near-term path to raise processing capacity beyond the current nameplate of 36,000 tonnes per day towards a sustained rate of about 40,000 tonnes per day. That first step comes from further debottlenecking and targeted plant improvement, not from a major new build. It includes accelerating certain works such as an additional Verde mill. In parallel, we are evaluating longer-term expansion scenarios beyond 40,000 tonnes per day through technical, infrastructure and permitting studies. Our objective is to determine the right scale and the right development path for Cote. For a project of this size, scope and importance, it is critical we determine the optimal long-term expansion strategy. The additional nonrecurring sustaining and expansion capital we are investing to date supports that work. The plant improvements provide improved capacity. The Phase 2 pit pushback gives us operating flexibility in the near term, and it also prepares the ground for a larger operation. We are reducing the risk of the bigger build well before we commit to it. We also continue to grow the resource. At Cote and Gosselin, we are drilling over 30,000 meters to test extensions to the northeast to improve confidence in the resource and to convert inferred ounces into indicated. Turning to Westwood. The operation delivered another strong quarter, producing 32,400 ounces, supported by solid underground performance. Year-to-date, Westwood has produced 68,600 ounces, positioning it well on track with our guidance target of 110,000 to 130,000 ounces. Underground mining totaled 104,000 tonnes at an average grade of 8.4 grams per tonne with the guaranteed open pit contributing 109,000 tonnes of ore as waste stripping continued to position the pit for future production. Mill throughput was 287,000 tonnes at a blended grade of 3.75 grams per tonne and recoveries of 94%. Throughput was lower than the prior year due to a planned mill shutdown early in the quarter, but overall operating performance remained strong. Most importantly, Westwood generated $56.5 million of mine site free cash flow during the quarter and $166.5 million year-to-date. The operation continues to demonstrate the value of the technical and operational changes implemented over the past years, delivering safe and reliable production, strong margins and meaningful cash flow generation. Turning to cost and outlook. Westwood continues to perform well across both operational and financial metrics. Cash costs were $1,606 per ounce in the quarter and all-in sustaining costs were $2,163 per ounce. Year-to-date, AISC is averaging $1,921 per ounce which is tracking below our full year guidance range. While we have seen modest cost increases related to additional drilling activity and higher explosive costs, overall cost performance remains strong. Looking ahead, our focus is on unlocking the next phase of value at Westwood. This year, we are investing around $30 million of expansion capital to advance exploration and development activities in the eastern extension of the mine, where drilling continues to demonstrate encouraging results, including a thickening of the mineralized system. Our teams are now advancing underground development into this area and conducting bulk testing to better understand its long-term potential. We expect to publish an updated technical report in the second half of 2027. This work is expected to support an extension of mine life and evaluate the potential for more productive bulk mining methods within the Eastern zone. If successful, this could support higher underground throughput, improve mining costs and increase production over time. Turning to Essakane. The operation delivered another strong quarter, producing 88,400 attributable ounces, an increase of 15% over the prior year period. Year-to-date, Essakane has produced 183,500 ounces, putting the mine well on track with our guidance targets. Performance in the quarter continued to benefit from positive grade reconciliation as mining progressed deeper into Phase 7, consistent with what we have observed in previous phases of the deposit. Mining activities totaled 12 million tonnes during the quarter, including 2.5 million tonnes of ore, while waste stripping remained elevated as we continue to advance the adjacent Lao pit. Despite the higher stripping requirements, the operation delivered solid throughput of 3.2 million tonnes with head grades of 1.13 grams per tonne and recoveries of 88%. Most importantly, Essakane continues to generate substantial cash flows. Mine site free cash flows totaled $162.1 million during the quarter and $464.8 million year-to-date, even after a $60.2 million tax payment. Over the last 12 months, Essakane has generated more than $800 million of mine site free cash flow, highlighting the strength of the asset in the current gold price environment. As we look into the second half of the year, mining will remain focused on Phase 7 and the development of the Lao pit. While grades are expected to normalize as additional Lao ore enters the mine plan, the operation remains well positioned to achieve annual production guidance and continue generating significant free cash flow. Turning to costs. Essakane delivered a strong quarter. Cash costs, excluding royalties, were $1,214 per ounce, a reduction of 22% from the prior year period and all-in sustaining costs, excluding royalties, were $1,691 per ounce. The improvement was driven largely by unit cost performance in the pit, where open pit mining costs fell to $4.79 per operating tonne from $6.02 a year ago as gains in the initial saprolite benches of the Lao pit reduced both explosives and energy consumption. Milling costs also improved to $18.88 per tonne as the liner replacement was completed in the first quarter this year rather than the second. Royalties accounted for $510 per ounce, representing approximately 30% of cash costs and an increase of $220 per ounce over the prior year period. This reflects both the higher gold price and the current royalty regime in which our average royalty rate in the quarter was 12% against 9% a year ago. Looking beyond 2026, we intend to publish an updated technical report in the first half of 2027, which is expected to demonstrate the potential to extend Essakane's mine life through 2035, supported by additional phases in the Essakane pit and the adjacent open pits. With that, I will pass it back to Renaud.
Thank you, Bruno, and congrats to you and your teams on strong and safe operational results. Turning to growth. Beyond our three operating mines, the Nelligan mining complex in Quebec is where we see the next chapter of this company. Nelligan now holds 4.3 million ounces of indicated and 7.5 million ounces of inferred mineral resources. The consolidations completed last December give us 100% ownership of one of the largest preproduction gold camps in Canada on a single contiguous land package. Our focus this year is on drilling. We have budgeted approximately $24 million across the complex in 2026 with programs at Nelligan, Philibert and Monster Lake. Roughly 45,000 meters of close to 70,000 meters are complete, and we expanded the Nelligan program during the quarter from 18,000 to 24,000 meters on the strength of results to date. Mineralization remains open along strike and at depth, and we expect to release drill results later this year. What makes this district compelling is not any single deposit, but the relationship between them. All of the primary deposits sit within a 17 kilometer radius, which supports the conceptual vision of a central processing facility fed from multiple ore sources. That is the concept our teams are working to define. We expect to publish an inaugural technical report for the complex in the first half of 2027, which will bring these deposits together into a single development concept for the first time. Nelligan has the potential to become one of the premier development projects in Canada. And with the deposit still open, our focus remains on growing the resource and defining the full scale of the district. Before we open the line for questions, a few closing thoughts. This was another quarter of safe, consistent execution. We remain on track for guidance. We have generated nearly $900 million of mine site free cash flow year-to-date, and we ended the quarter in a net cash position with nearly $1.4 billion of liquidity while returning over $0.5 billion to shareholders since last December. Looking ahead, we have work underway across every asset. At Cote, an updated technical report later this year, integrating Cote and Gosselin for the first time with a much larger reserve base, a longer mine life and a near path to approximately 40,000 tonnes per day. The consolidated resource point to a larger operations over time, and we'll continue to advance that work. At Essakane, an updated mine plan in the first half of 2027, evaluating a mine life extension through 2035. At Westwood, mine life extension and underground expansion study in the second half of 2027. And at Nelligan, our inaugural technical report in the middle of next year. Each is about the same objective: understanding the full scale of what we hold and doing it from a position of financial strength. Thank you for your continued support. Operator, you can now open the line for questions.
分析師問答
The first question comes from Sathish Kasinathan with Bank of America Securities.
My first question is on the Cote expansion study. Could you maybe provide a bit more color on what changed over the past three months that drove the shift to a more phased approach? Are you now leaning towards a much larger expansion, maybe doubling the capacity to 70,000 to 80,000 tonnes per day? Or did you come across some technical findings that require more time to complete the studies?
Okay. So thanks for your question. I'm happy to provide more color, and Bruno can add to it. This is really about a disciplined and diligent capital allocation approach at this stage. Over the last few months, as we advanced and continued to look at the opportunity, it became clear that the large resource base at Cote and Gosselin provides multiple different scenarios. When you're looking at the next three years, we'll be executing on a common set of activities regardless of the scenario. The focus over that period is on improvements: reducing our costs, consistently hitting our 36,000 tonnes per day nameplate and then ramping up to 40,000. We're going to continue our baseline work and progress the studies required for potential expansion, but we do not want to limit ourselves to a single scenario. It's not so much about technical challenges but about assessing the full range of opportunities. If you remember back in 2022, the company released the 43-101 with a plan moving from 36,000 towards 42,000 and at the time we were sitting at about 7 million ounces of reserves. The opportunity now is to update this with the new projections from 36,000 to roughly 40,000 and potentially a little more, but we want to take the time to assess and pick what we think is best. Cote is one of the top resource bases in Canada. It's not about rushing the outcome, but about taking the time for a proper and disciplined evaluation. There are no technical challenges beyond the normal trade-offs; there are just multiple opportunities. As Bruno mentioned, you can expect a large expansion in the reserve side from the technical report, but the near-term focus is hitting sustained performance at 36,000 and moving toward 40,000 while lowering costs and opening the pit. Bruno, if you want to add anything.
Yes. So the main objective of this technical report is also to valorize and confirm the reserves on the Gosselin side. You will see a large expansion on the reserve side coming from that report.
And quite frankly, as Bruno mentioned, there are very low milling differences. We will capture the massive increase in the reserve base. In the short term, the 40,000 or 50,000 scenarios are less important to immediate value than the extension of life of mine and the significant expansion of reserves. We'll work diligently to hit 36,000 consistently and up to 40,000, lowering costs and opening the pit. Over the next two years, execution will be largely the same. We'll use the time for environmental baseline work and permitting advances, including water studies. We'll be more specific in the report and capable of providing the next three years' plan. Again, depending on the expansion path down the road, it doesn't really change the next three years.
Okay. Looking forward to the update in the fourth quarter. Maybe my second question is on your capital allocation priorities. Great to see continued strong buybacks. With the company now in a net cash position and generating strong free cash flow, what is your latest thinking on buying back the 50% Cote royalty from Franco-Nevada and on the initiation of dividends? And where does M&A fit into this priority list?
Sathish, we continue to look at the buyback opportunity of that royalty from Franco-Nevada, and there are many reasons why it would make sense for us. The price would be the same as the price that was set a year ago in a much lower gold price environment, and there are many other impacts, including reducing the cost structure and burden on Cote. So we continue looking at that. In the future, we can fund that with internally generated cash flow, and we have until April of next year to make that decision. We are looking at it very closely. The price doesn't change, so there's no real reason for us to do it earlier than when it makes economic sense to do so. On the dividend, we continue to look at this year as a good year to buy back shares, and we'll continue using Essakane cash flows to fund that buyback. Then beginning of next year, as we are in that net cash position, it would start making sense for us. So we are looking at initiating a dividend early next year.
On M&A, we won't comment specifically at this stage. We remain very focused and continue to create value for our shareholders through the organic work underway.
The next question comes from Mohamed Sidibe with National Bank.
Congrats on the strong operating quarter there. Maybe just a follow-up on the expansion to the 40,000 tonnes per day there. If I recall correctly, the prior target expansion to 50,000 tonnes per day also was understood to have a doubling of the dry line, a third Verde mill and increased dry capacity. So for this debottlenecking to 40,000 tonnes per day, can you provide us with a little bit more color on how we should think about capital for that optimization versus the previous maybe $500 million and change that was envisioned for the 50,000 tonne per day case?
Well, essentially, as I said earlier, the next three years are pretty much the same scenario. If you remove the major expansion and focus on optimizations, we are spending around $80 million to $85 million in growth capital this year to open the pit, prepare the pits for larger volume and so forth. We are advancing well and you could expect this spending to continue in 2027 and 2028 as equipment is delivered and the pit is advanced. At that point, we hope the pit will be opened to support larger volume mining and more efficiencies. We're also spending more sustaining capital this year to improve plant aspects, and I expect that to continue as we want to install the repeat system and improve the course/fines continuum in the circuit. There are infrastructure improvements and mine fleet expansions planned, as well as maintenance facility upgrades. The next three years are really about positioning the site to be a strong low-cost long-term asset. The $500 million to $750 million estimate you referenced was really for bringing throughput from about 40,000 to 50,000 tonnes per day. That portion we are pausing for now until we have a better view on the optimum scenario. But expect execution on sustaining capital, optimization and fleet expansion to continue. So there's no change to the short-term plan; the uncertainty is about the larger $500 million to $700 million expansion which we've parked for the time being.
That's very helpful. And then maybe if I can move on to Cote into the quarter. Great to see the process cost improvement in June. I think mining costs were also lower for the quarter. How should we think about mining and processing costs? Specifically, you pointed to about $18 per tonne realized in June on the processing cost front. How can we think about that improvement into Q3 and Q4 at the asset and into 2027 towards your target of $15 per tonne?
This is Bruno. First, we have a program that is tracking these costs and we have close to 31 initiatives that we are meeting and tracking to get costs down. The reduction and elimination of contracted crushing will help because now the fleet is fully dedicated to mining. That will increase mining volume and reduce unit costs. We are adding new haul units to the fleet. Our continuous improvement program identified those 31 initiatives and we are confident we will meet our $4.00 per tonne target on the mining side by year-end. For processing, the second cone crusher is helping deliver better granulometry into the HPGR, and we expect longer life from our HPGR rollers. In the past we used to change them twice a year; now we expect to change them once a year. That will have a big positive impact on maintenance cost and availability because you don't stop the HPGR as often. So increased availability, improved granulometry and better maintenance cycles will all contribute. We have also identified numerous other incentives from our cost improvement program and are well positioned to meet our $15 per tonne processing target by year-end.
Great. And then if I may, a final question for Maarten. Just on the income tax payment for the remaining second half of the year: how should we think about that spread for the remaining about $100 million to $115 million there?
So for the income taxes, we made a larger payment in Q2 in Burkina, and that's normally what happens. It's your catch-up payment every year because we do pay quarterly payments. The future payments are based on expected taxable income. For the remaining part of the year, income tax payments are between $35 million to $40 million per quarter. In addition, we will be paying the withholding tax on the newly declared dividend in Burkina Faso of $26.8 million in the third quarter. So we are still kind of falling in that full-year range of $205 million to $250 million for the year.
The next question comes from Anita Soni with CIBC.
Congrats on a strong operational quarter. I have a question about Cote stripping. How should we think about stripping into the back half of the year? I noted the beginning of the year was a little lighter on stripping than I had expected.
Yes. The stripping ratio should be around about 2.6 to 1 in the back half of the year.
And that's in the back half of the year. Okay. Any change to the grade in the back half of the year? I know you guided to 1.05 to 1.15, but any variability — like lower versus higher in Q3 versus Q4?
That's correct. We expect stronger head grades in the second half of the year, roughly between 1.05 and 1.15 grams per tonne, which will help deliver a stronger H2.
Okay. And then just in terms of the study, could you clarify what we should expect to see in the study? For example, will it show a path to 40,000 tonnes per day with the CapEx associated with that? And then longer term, what would you be including in the study to be released at year-end?
Yes. We expect to release the technical report at the end of this year. The main objective is to understand and valorize the Gosselin reserves. You should expect a significant reserve expansion when you tie the Cote and Gosselin block models together — the super-pit concept. The report will describe the near-term path to approximately 40,000 tonnes per day and an adjusted cost structure. The report will also include a section on future opportunities that outlines potential expansions beyond the near term.
If I could just add one thing, Anita. The way to really look at it is that at 36,000 up to 40,000 tonnes per day, you maximize the depletions of Cote before you have the obligation to start mining Gosselin. You maximize potential in-pit co-disposal and similar opportunities. As you advance throughput towards 50,000 and beyond, you reach the point where you must start mining Gosselin quicker. So the trade-off is capital allocation versus production ramp-up and how quickly you want to bring Gosselin online. We want to continue to work on those trade-offs.
Okay. With respect to tailings capacity under the 40,000 tonnes per day scenario, is the current capacity sufficient for that scenario and the reserves you'd incorporate in the study at year-end? Or would you need additional tailings capacity?
Right now, the tailings storage facility (TSF) has capacity up to 233 million tonnes. Of course, by including Gosselin you will need additional tailings capacity. The project team is looking at adding more capacity and also evaluating other disposal options, including co-disposal into decommissioned pit space. Those are the trade-offs that will be published in the technical report.
As a rule of thumb, there's maybe around 200 million tonnes of tailings to be managed depending on the scenario, but there wouldn't be any issues finding the space. As you increase throughput and reduce co-disposal, you would just build additional capacity, but it all fits within the project area.
I'm sorry, when you say co-disposal, do you mean placing tailings or waste within parts of the Cote pit that have been depleted and sectioned off?
That is correct.
Yes. There is an opportunity as Cote is depleted to use some of that space for tailings and potentially some waste as well.
The next question comes from Matthew Murphy with BMO Capital Markets.
I had a question on Essakane. You have another dividend declared. While you're studying this mine life extension, how much cash do you keep in Burkina? Do you have to let that build up a bit in the event you go forward with the extension?
It's our decision how much cash we keep in Burkina. At the moment, depending on the timing within the year and when tax payments are scheduled, it's between $100 million to $200 million. Looking to next year, Essakane's cash flow is more than sufficient to fund any potential mine life extension by itself and still repatriate a considerable portion to IAMGOLD. So there is no need to build up a much larger balance there; the operation generates enough cash to fund additional capital as needed.
Got it. And then this latest dividend — should we think about that being paid out over a period such that it will take some quarters to repatriate, and then you'll look at the next dividend?
Yes. The current dividend we declared — our portion of $400 million — assuming a gold price averaging about $4,000 per ounce, it will take roughly three quarters, maybe slightly more, for us to repatriate that amount. At a higher gold price, it could happen faster. We'll balance repatriation speed with funding for mine life extensions and other priorities.
The next question comes from Tanya Jakusconek with Scotiabank.
Just so I understand completely on Cote and some of your cash flow that would be going out: Renaud, I think you said that $80 million to $85 million of expansion capital for the next couple of years just to position towards 40,000 tonnes per day and maintaining that would be about — over three years that's about $250 million or thereabouts. And then there's the potential $350 million going out for the Cote royalty buyback, if you were to buy that back. Should I be thinking that the expansion to 50,000 tonnes per day would be something you probably wouldn't look at spending until 2029–2030 timeframe? I'm just trying to see the cash flow and what sort of things are going out.
Thanks, Tanya. To clarify: the $80 million to $85 million I referred to is largely for mining growth capital this year — opening the pit, fleet, and related activities. Those expenditures are largely sustaining in the sense that they improve efficiency and support higher throughput. To get to 40,000 tonnes per day, some plant improvements and operational investments are needed, but the large additional capital — the $500 million to $700 million we discussed previously — would be for expanding from 40,000 to 50,000 tonnes per day and beyond. That larger expansion is something we have parked for now and would likely be considered in the 2029–2030 timeframe, depending on the outcome of the studies and trade-offs. So the near-term focus is on organic growth, sustaining improvements and optimization. Maarten?
Yes. Thanks, Renaud. This year we are spending about $50 million to $55 million of capital to increase operational efficiency and reduce unit costs. We expect to continue spending at that level or slightly higher over the next couple of years to fund initiatives Bruno referred to. The payback on those investments is attractive because any improvement in dollar per tonne costs pays back quickly across this large resource base, which is why we want to make those investments in the next few years.
Okay. So that's in your $160 million plus or minus sustaining costs that you have guided for this year. I guess what I'm really trying to get at is for us to get to that 40,000, which you'll provide more detail on in the study, from the mining side and the processing side, how should I think about the allocation of growth between expansion and sustaining? Should I be thinking it's $160 million plus $85 million per annum for the next three years?
I'm afraid we cannot be that precise today because we are still finalizing those allocations as part of the study. The technical report at year-end will provide a clear view of capital allocations and the next three years' plan. I would defer to that report for the detailed breakdown.
Okay. Maybe just on the Nelligan complex: how should we think about processing capacity conceptually? Is this a camp that could do 300,000 ounces, 400,000 ounces per annum from multiple deposits feeding a central plant? I'm trying to understand the potential scale.
Yes. The complex has the resource base to consider scenarios toward 300,000 to 400,000 ounces per annum. Our objective is to define a central processing facility fed by multiple deposits within the district. We are working toward scenarios that could approach the high end of that range, and the inaugural technical report in the first half of 2027 will provide more clarity.
Okay. One last question: you gave guidance on Cote for the second half with higher throughput and higher grade. How do Westwood and Essakane look for Q3 and Q4? Is production evenly distributed, or should we expect variability?
For Essakane, production is going to be pretty much even with a little bit stronger weighting into Q4. For Westwood, we expect Q4 to be stronger than Q3.
We had a very strong H1 at Westwood. H2 will be strong as well, but H1 was particularly robust. For Essakane, there is a rainy season impact, so Q3 can be a bit softer relative to Q4, but nothing material beyond the usual seasonal patterns.
The next question comes from Carey MacRury with Canaccord Genuity.
Just a quick one for me. You mentioned the performance at Cote in June. Just wondering how it's gone through July now and into August, if that's still running at nameplate?
It's gone very well. The addition of the second cone crusher has given us great performance and in some instances throughput beyond 36,000 tonnes per day. The name of the game is sustainment: delivering that performance consistently over time. That's our current plan. July showed strong results, but our focus is to sustain that performance over the long run so we have a good baseline to identify the next bottleneck and then progress toward 40,000 tonnes per day. Also note that in August we have our annual shutdown, which we need to account for.
So still comfortable with the 36,000 tonnes per day average for the second half of the year?
Yes. The capacity is there. We saw several peak days in June. The challenge now is to stabilize production at those levels without relying on third-party aggregate sources. We are confident the capacity exists to average 36,000 tonnes per day.
How long is the August shutdown?
It's a five-day shutdown.
This concludes the question-and-answer session. I would like to turn the conference back over to Graeme Jennings for any closing remarks.
Thank you very much, operator, and thanks, everyone, for joining us this morning. As always, should you have any additional questions, please reach out to Renaud or myself. Thank you all. Be safe, and have a great day.
Thank you. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.