IAMGOLD - Earnings Call - Q3 2025
November 5, 2025
Transcript
Operator (participant)
Thank you for standing by. This is your conference operator. Welcome to the IAMGOLD Quarter 2025 Operating and Financial Results Conference Call and Webcast. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference, you may signal an operator by pressing star then zero. At this time, I would like to turn the conference over to Graeme Jennings, Vice President of Investor Relations for IAMGOLD. Please go ahead, Mr. Jennings.
Graeme Jennings (VP of Investor Relations)
Thank you, Operator, and welcome everyone to our conference call today. Joining us on the call are Renaud Adams, President Chief Executive Officer; Martin Theunissen, Chief Financial Officer; Bruno Lemelin, Chief Operating Officer; Annie Torquay-Lagete, Chief Legal and Strategy Officer; and Doreena Quinn, Chief People 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, the Anishinaabeg, the Chippewa, Haudenosaunee, and the 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 included in 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'll now turn the call over to our President and CEO, Renaud Adams.
Renaud Adams (President and CEO)
Thank you, Graeme, and good morning, everyone, and thank you for joining us today. This is an exciting time for IAMGOLD, with another quarter of production led by strong performance at Côté Gold and Essakane, helping to fuel record cash flow generations for the company. The current strong gold market has been very well timed for IAMGOLD, coinciding with the advancement of our assets, allowing the company to advance our strategic plans ahead of schedule. We are proud of this transformation and also to introduce today our new logo and refreshed brand, which we believe reflect who we are today. We are extremely proud of our roots and history, but now our name stands for Innovative Accountable Mining. IAMGOLD is a modern gold mining company that is proudly Canadian, with strong cash flow and significant long-term growth opportunities ahead.
We mine with a mining-redefined purpose in mind, putting safety, responsibility, and people first. We hold ourselves accountable and embrace change and drive innovations at every level, from smarter systems and technology to better ways of working. There are many highlights to discuss for IAMGOLD today, from our operations, financial achievement, and an approved share buyback program, which remains subject to TSX approval. We will also discuss our forward-looking plans, including the expansion scenario for Côté Gold, which is expected to demonstrate significant upside to the current mine plan at Côté. Finally, we will cover the recent announcement of acquisitions to consolidate the Chibougamau region in Quebec to create a Nelligan complex. These transactions further position IAMGOLD as a leading modern Canadian-focused multi-asset gold mining company.
I am proud of our team's achievement and remain confident in our ability to deliver enduring values for investors and partners while maintaining a steadfast commitment to safety and accountability. Turning to the quarter, we are now on slide five. At IAMGOLD, the safety of our people and communities remains our top priority. In the third quarter, our total recordable injury rate was 0.56, a 15% improvement year over year on a 12-month rolling average, and comparing well with our industry peers. We are focused on advancing our critical risk management program, including an important integration of contractor into the IAMGOLD way of safety management, with the goal to reduce high-potential incidents. Looking at operations on an attributable basis, IAMGOLD produced 190,000 ounces of gold in the third quarter.
The quarterly performance was led by strong results at Côté, which produced a record 106,000 ounces on a 100% basis, followed by improved quarter-over-quarter attributable production at Essakane as the mine saw grades bounce back while mining deeper into phase seven of the pit. Year to date, IAMGOLD has reported 524,000 ounces of attributable production. As we will walk through in a moment, production is expected to be the highest in the fourth quarter, positioning the company well to achieve our guidance target of 735,000-825,000 ounces of gold this year. On a cost basis, IAMGOLD reported third quarter cash costs of $1,588 an ounce and an all-in sustaining cost of $1,956 an ounce. Costs remain higher year to date as the record gold prices directly translate into higher.
Royalty, compounded with the new royalty regime in Burkina Faso, as well as higher unit costs at Côté from an increased proportion of supplementary contracted crushing to stabilize operations during our first full shutdown and until the second gold crusher is installed in the fourth quarter. Cash costs and all-in sustaining costs for the year are expected to be at the top end of the guidance range, though we expect to see a strong end to the year with higher expected cash flow in the fourth quarter on an improved production and higher margins. With that, I will pass the call over to our CFO to walk us through our financial highlights. Martin.
Maarten Theunissen (CFO)
Thank you, Renaud, and good morning, everyone. It was indeed an important quarter for IAMGOLD as we were able to use the strong financial results to take significant steps towards our goal of delivering the company and advancing our plans to reward shareholders. Mine site free cash flow was $292.5 million in the third quarter, a record achieved off IAMGOLD's high production levels following the ramp-up of Côté, increasing the company's exposure to the gold price during a record high gold price environment. The record mine site free cash flow improved our financial position, and the company's net debt was reduced by $210.7 million to $813.2 million at the end of the third quarter. IAMGOLD had $314.3 million in cash and cash equivalents and approximately $391.9 million available on the credit facility, resulting in total liquidity at the end of the third quarter of approximately $707.2 million.
As we noted last quarter, Essakane dictated a significant dividend in June of approximately $855 million, representing all of the industry profits of Essakane up to and including the 2024 financial year. IAMGOLD's 85% portion of the dividend, net of taxes, was approximately $680 million and is expected to be paid over the next 12 months through a revised framework that enables payments to be made at any time of the year based on the cash generated in excess of working capital requirements by Essakane. At September 30th, $116 million of IAMGOLD's consolidated cash and cash equivalents was held by Essakane in Burkina Faso, which was used to pay IAMGOLD a dividend of $98 million in early October. The remaining portion of the company's dividend receivable was converted into a shareholder account, with the first payment against a shareholder account of $56 million also received in October.
The company expects to receive monthly payments going forward. These funds were used to make additional payments of $170 million against the company's secondary notes, with $130 million of the original $400 million remaining outstanding on the 4th of November. Holistically, when we consider our liquidity outlook under a high gold price environment, we are in a fortunate position to continue to repay debt and commence in the not-too-distant future on another of our strategic initiatives, which is to reward our shareholders. Accordingly, subsequent to quarter end, our Board of Directors approved the share buyback program to be put in place through an NCIB program, allowing for the purchase of up to approximately 10% of IAMGOLD's outstanding common shares. All common shares purchased under the NCIB will be either canceled or placed under trust to satisfy future obligations under the company's share incentive plan.
IAMGOLD will file a notice of intention to implement the NCIB with the TSX, which is subject to TSX approval. Following the approval, IAMGOLD will be allowed to purchase its common shares over a 12-month period in the open market. This initiative reflects management confidence in the company's long-term value and its commitment to disciplined capital allocation. The actual number of common shares that may be purchased, if any, and the timing of such purchases will be determined by the company based on a number of factors, including the company's financial performance, the availability of cash flows, and the consideration of other uses of cash, including capital investment opportunities and debt reduction. Turning to our financial results, revenues from continuing operations total $706.7 million from sales of 203,000 ounces on a 100% basis at a record average realized price of $3,492 per ounce.
Cost of sales, excluding depreciation, was $324.2 million, and adjusted EBITDA was a record $359.5 million, compared to $221.7 million in the third quarter last year. At the bottom line, adjusted earnings per share in the third quarter was $0.30. Looking at the cash flow waterfall on the left side of slide seven, we can see the year-to-date impact on our operating cash flow of the gold prepay deliveries, which we completed in June, as well as the impact of the secondary payment and the dividend payment to the government of Burkina Faso following Essakane's dividend declaration. On a mine site free cash flow basis, IAMGOLD generated $292.3 million in the third quarter, including $135.6 million from Côté and $150.5 million from Essakane, driven by higher revenues due to the high realized gold price, partially offset by higher production costs.
With that, I will pass the call to Bruno Lemelin, our Chief Operating Officer, to discuss our operating results. Bruno.
Bruno Lemelin (COO)
Thank you, Martin. Starting with Côté Gold, it was a strong quarter with Côté reaching new milestones while maintaining stable performance at the processing plant. Notably, the plant underwent its first full shutdown in August, which was executed successfully. I'm very proud of our team at Côté. It's important to remember that it's still the first full year of operation at the mine, with main plate throughput achieved at the end of Q2. Our teams are learning every day how to better position Côté for success, including the refinement of the mine plan, of the maintenance schedules, and identifying efficiencies to drive continuous improvement. Now, looking at the third quarter, Côté produced 106,000 ounces on a 100% basis, which is a record quarter of production for the mine. Mining activity totaled 11.5 million tons in the quarter, with 3.8 million ore tons mined equating to a strip ratio of 2:1.
The average grade mined was 0.96 grams per ton, in line with plan and demonstrating good reconciliation with our reserve and grade control model. Looking ahead, mining activities will continue to work on extending the fixed perimeter to support efficient bulk mining and also in preparation for the future expansion of Gotech. On processing, mill throughput totaled 3 million tons in the quarter, averaging near name plate in July and in September. The first annual maintenance shutdown in August was successful, with the comprehensive maintenance cycle completed and including the replacement of the high-pressure grinding roll tires, relining of the ball mill, changes to the primary crusher outer shell, and additional maintenance work on the electrical infrastructure. Head grades average 1.18 grams per ton, with feed material comprised of a combination of direct feed ore and stockpiles.
Mill recoveries averaged 94% in the quarter, which continued to be above design rates. Turning to cost, a major driver of cost this year has been associated with the temporary aggregate crusher, which has been contracted to support the processing plant. The plant was built with a single secondary cone crusher as part of the crushing circuit, and through day-to-day operation, we learned that this is a bottleneck. This has been addressed with the addition of a second cone crusher to sustainably achieve the main plate throughput rates and provide redundancy during shutdowns. We accelerated the push to achieve main plate to mid-year from our original target of Q4, in part because we found a way to maximize throughput and offset the bottleneck by incorporating an additional refeed system using a contractor aggregate plan.
Moving ahead, main plate by five to six months allows for maximizing tons milled today versus waiting for the second cone crusher to provide the additional flexibility. This may account for an extra $4 per ton milled, yet brings the opportunity to monetize tons already mined to the end of the year. In the third quarter, the aggregate crusher processed a higher proportion of ore due to the shutdown in August. The use of the aggregate crusher is expected to be reduced following the installation of the secondary cone crusher in Q4 and eventually eliminated. Looking at mining costs, the average $4.51 per ton in the third quarter, mining costs are higher than planned due to higher tire wear and were also impacted by the operation of the aggregate crusher and refeed system. The aggregate crusher requires.
The utilization of mining equipment to feed it, including haul trucks and a shovel, resulting in higher amounts of rehandling that is accounted to mine. These costs will decrease into 2026 as further operational improvements are made and the elimination of the contracted aggregate plant. Milling unit costs also increased in the quarter, averaging $22 per ton milled. The temporary aggregate crusher system has a direct impact on our processing unit costs as it is more costly to operate. In the third quarter, we rely on it more due to the August shutdown. Overall, we estimate around $6 per ton was associated with the cost of the aggregate crusher in the third quarter. Maintenance costs to replace the HPGR tire and wear components accounted for $1.87 per ton during the quarter.
Unit costs are expected to decline over the course of 2026 following the installation of the additional cone crusher in the fourth quarter of this year. Looking ahead, we remain confident in our Côté Gold production guidance of 360,000-400,000 gold ounces on a 100% basis, which is essentially a doubling of production from last year. As noted here, we expect cash costs to exceed the top end of our updated guidance range of $1,100-$1,200 per ounce sold, primarily due to a combination of higher oil fees impacted by a significant increase in gold price, an increase in the expected usage of the supplementary crushing during the year to support the mill fees, and the expensing of certain parts and supplies that were previously expected to be capitalized.
Taken together, Côté is performing very well for an operation of this size less than 20 months after pouring its first gold. We are looking forward to seeing the impact of the installation of the second cone crusher in Q4 on availability and throughput, paving the way for future expansion options. This leads us to what is the most exciting slide, the advancement of the Côté Gas and Super Pit scenario. As we have discussed previously, we are working towards announcing in 2026 an updated mine plan that envisions Côté operating at a higher throughput, targeting a significantly larger ore base for both Côté and Gosselin. The first step is drilling out the Super Pit of Côté and Gosselin to provide the resource foundation for the mine plan. Our drills are busy at work with over.
50,000 meters drilled so far this year, with the goal to infill and upgrade Gasline and bring the bulk of mineralization there into measured and indicated. As currently designed, Gotech has the mining capacity to average an annual ore mining rate of 50,000 tons per day versus our current main plate processing rate of 36,000 tons per day. As part of the 2026 technical report, we will look to find the right balance between an increased processing rate with mining rates targeting the combined Gotech-Gasline Super Pit. In this scenario, we anticipate a mine plan that prioritizes the expansion of the plant, which could be implemented years before other major capital items that would be part of the Super Pit scenario, including paving capacity expansion and ore-Gasline earthworks.
The updated mine plan and technical report is expected to be completed by the end of next year, and in the interim, we will continue to focus on optimizing Côté, reducing our cost profile, and capturing low-hanging opportunities for operational improvements and capacity expansion. Turning to Quebec, in the third quarter, Westwood produced 23,000 ounces, bringing the year-to-date production to 76,000 ounces, tracking below the bottom end of the guidance range of 125,000-140,000 ounces. The third quarter at Westwood saw similar results as prior quarters this year, as mining activities underground operated through lower-grade stopes, encountering areas of challenging ground conditions resulting in higher-than-expected dilution and lower mining recoveries. The teams are implementing mitigation measures that include changes in blasting techniques and refinement, stope design, and sequencing.
We are already seeing improvements from these efforts in October, with the average grade so far this month from underground averaging over 9 grams per tonne in the month. The Grand Duc at Edith Open Pit added another quarter of decent ore volume, with a reported 315,000 tonnes mined. Open Pit activities from Grand Duc are currently being evaluated for an expansion and extension of the pit. The outline scenario would push the pit into phase four, which would allow for mining until 2027. Mill throughput in the third quarter was 250,000 tonnes, which was below the average throughput rate over the previous quarter due to a 14-day shutdown of the plant in July for the replacement of a critical gear in the grinding circuit, resulting in plant availability in the quarter of 75% versus 90% in the same prior year period.
We expect to see mill throughput return to near 90% availability in the fourth quarter. As a result of the low availability and lower ton milled, we saw an increase in milling unit costs in the quarter. Likewise, mining costs also remained elevated due to an increase in the number of stopes prepared underground to set up the mine for the remainder of the year, combined with an increase in mining costs, labor costs, and exclusive and power consumption. Together. Cash costs were $1,924 an ounce in the quarter. Looking at this year, as noted, Westwood production is expected to be below the bottom end of the range of 125,000-140,000 ounces.
Accordingly, and despite unit cost improvement expected in the fourth quarter, annual average cash costs are expected above the guided range of $1,275-$1,375 per ounce, and AISC is expected to be above the range of $1,800-$1,900 per ounce. The turnaround in October is expected to be sustainable as we continue to refine stope design in the varying underground conditions at Westwood. Despite the challenges in the first nine months of this year, I'm very proud of the team there as they have demonstrated their innovative and accountable mindset to operation, safety, and environmental care. Turning to Essakane, it was a strong quarter for the mine with production of 108,000 gold ounces on a 100% basis or 92,000 ounces based on our 85% interest. Production rebounded on higher grades as mining activities were deeper into phase seven.
Mining activity totaled 8.7 million tons, with four tons mined of 3.2 million tons equating to a strip ratio of 1.7 to 1. Total tons mined was lower than prior periods as the mining fleet did not operate at full capacity in August due to a fuel shortage in the country. The situation improved in September, and the mining fleet was able to operate at capacity to end the quarter and into October. Mill throughput was 3.1 million tons at the average head grade of 1.18 grams per ton. The transition to the higher grade benches in phase seven was initially expected earlier in the year but was realized in the third quarter. Grades have continued to reconcile positively to the reserve model in October, positioning the mine for a strong fourth quarter.
On a cost basis, Essakane reported cash costs of $1,737 per ounce and Westwood at $1,914 an ounce in the quarter, an improvement on the prior quarter. Despite the production improvement, costs remained elevated in the quarter. Over the same period last year, royalty costs have increased 61% on the per ounce basis due to the strong gold market and the new royalty decrease. Royalty accounted for $283 an ounce in the third quarter. Additional drivers include a higher proportion of mining costs being expensed, as well as higher maintenance activities and an increase in consumable costs, including diesel and grinding media. USD-equivalent labor, contractor, and facility costs also increased due to the appreciation of the local currency, which is tagged to the euro.
Looking ahead, we estimate that Essakane will be at the midpoint of the 100% basis estimate of 400,000-440,000 ounces, which equates to the lower end of the attributable production guidance target based on 85% of 360,000-400,000 ounces. Production is expected to be higher in the first quarter due to the higher grade. As the mining sequence moves in the primary zone of phase seven, cash costs are expected to be at the higher end of the guidance target of $1,600-$1,700 per ounce sold, and AISC is expected to be at $1,850-$1,950 per ounce sold. Looking beyond next year, we are initiating conversations with the government on the mining lease renewal when ours expires in 2028. While the cost of operations in-country has risen, Essakane continues to be a world-class mine and an important member of the Burkina Faso community.
The mine has over 2 million ounces in reserves and is positioned to generate significant free cash flows moving forward. With that, I will pass it back to Renaud to discuss our latest exciting news coming from Chibougamau. Renaud?
Renaud Adams (President and CEO)
Thank you, Bruno. I really want to take a moment here to talk about our news from two weeks ago when IAMGOLD announced the proposed acquisitions of Northern Superior and Orford Mines for total consideration of approximately $267 million in shares of IAMGOLD and approximately $13 million in cash. The strategic rationales for these transactions are clear when you look at this map here. Our goal was to consolidate IAMGOLD's land position and gold resources in the Chibougamau district, where IAMGOLD Nelligan and Monster Lake assets are located. Creating the next-grade Canadian mining camp.
Our Nelligan deposit has 3.1 million ounces indicated and another 5.2 million ounces have been purged, with rapid growth from minimal drilling in recent years. Nelligan is a large-scale open pit style of deposit with average grades around 0.95 grams a ton. Monster Lake, located approximately 15 km north of Nelligan, is a high-grade underground style project. Prior to the acquisition announcement, we were looking at putting out economics on Nelligan and Monster Lake, envisioning a project that would take most of the ore feed from Nelligan with a high-grade kicker from Monster Lake. The potential additions of Philibert may result in a revised timeline of technical study and proposed mining scenario. Norton Superior's primary asset, Philibert, is an open pit style deposit located 8 km northeast of Nelligan. Philibert has estimated mineral resources of approximately 2 million ounces.
At an average of 1.1 grams of gold, making it, at this time, smaller but yet higher grade than Nelligan. In the consolidated scenario, in a conceptual multi-pit and underground complex mine plan, we envision Philibert as having the potential to be the initial deposit due to the higher-grade infrastructure advantage, providing important synergies versus a standalone Nelligan. This year, we have drilled over 16,000 meters at Nelligan and over 17,000 meters at Monster Lake, with both projects having seen the programs upsized and continued success at the drill bed. Upon completion of the transaction, we look forward next year to putting together a comprehensive program with Philibert to extend and expand mineralization as we look to bring all these assets together.
As of today, the combination of Nelligan and Monster Lake with Norton Superior's assets and Orbeck's property, which are now referred to as the Nelligan Mining Complex, will rank as the fourth-largest pre-production gold camp in Canada, with estimated mineral resources of over 3.8 million ounces indicated and 8.7 million ounces inferred. The closing of these proposed transactions remains subject to shareholder votes from both Norton Superior and Orbeck shareholders, as well as other customary closing conditions for transactions of that nature. Together, this asset has a bright future, and we look forward to welcoming the Norton Superior and Orbeck shareholders to the IAMGOLD team. It will be an exciting year for us, with significant value growth opportunity ahead and many catalysts, starting with the upside scenario for Codigo, but also including the advancement of the Nelligan Mining Complex, as well as the valuable contribution of Westwood and Essakane.
Thank you for your support. With that, I would like to pass the call back to the operator for the Q&A. Operator?
Operator (participant)
Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question will come from Satish Kothinathan with Bank of America. Please go ahead.
Sathish Kasinathan (Equity Research Analyst)
Yeah, hi. Good morning. Thanks for taking my questions. Congrats on a strong quarter in addition to initiate share buybacks. My first question is on Côté Gold. Once the secondary crusher is installed.
Can you give us a sense of what the anticipated cost improvements could be? Maybe talk about how you see the exit rate of cost as you exit 2025.
Renaud Adams (President and CEO)
Yeah, it's an excellent question. As we mentioned, we appreciate the very high record free cash flow at Côté and everywhere, but that doesn't take away our focus on cost. We made a conscious choice in the Q2 to maintain the aggregate plan functioning, maximizing throughput, maximizing grade by allowing more rehandling, and maximizing grade and production and free cash flow. It has worked just perfectly. Now, as you've mentioned, moving forward, as Bruno mentioned in his note or Martin Theunissen, there's about $6 a ton right from the start on a per ton of ore by using and operating the aggregate plan. We think that with the second crusher, we'll be capable to generate our own stockpile internally.
That is one of the focuses. Right from the start, down the road, and I am not saying that is going to be a walk in the park and a one-quarter, but on the milling side, definitely our objective remains to stabilize eventually down the road towards the $12. We appreciate that there are other assets maybe that could do slightly better, but for us, at $12, we believe with the kind of design and configurations, that is probably achievable. There will be some transitions, of course. Q1, probably a transition, and as we enter Q2. On the mining side, yes, we appreciate the, again, rehandling has been a big component of it. Could we stabilize in the short term more towards the 350?
We're working on our plan as we speak, but we believe that the big component here is being capable to operate without the aggregate plan, which will have a big effect. There are other aspects we need to improve. We need to improve significantly tire consumptions, the life on it. There is probably room to improve significantly, 50-60% of consumption. All that will have an impact on it. Our objective remains down the road to be as close as the $3 per ton mine. I know there has been inflation all over the place, and everyone is facing the same, but this is an objective. Not going to be there at the start of the year, but as we advance in the year. 3 and 12 remains our strategic target. The rest becomes pure math. You mine at the reserve grade as we're doing.
You try to uplift your grade as you separate a lower grade. With the 400,000 ounces plus, and with the better unit costs, and a very low strip ratio at Côté, we definitely see this asset performing amongst the best. Leading on the cost side. That is what we see. Bruno, you want to add anything?
Bruno Lemelin (COO)
That is exactly right. The mining costs will have better performance once we stop using the aggregate crusher, reducing much more rehandling. There are also many projects in terms of improving drilling performance as we drive vertically in the pit with less fracture terrain. We expect improvement quarter after quarter.
Sathish Kasinathan (Equity Research Analyst)
Okay. Thanks for the follow-up. Sorry?
Renaud Adams (President and CEO)
No, no. That is what we could say at this stage as we complete our plan for next year.
Sathish Kasinathan (Equity Research Analyst)
Yeah, thank you. That is helpful. Maybe one follow-up on the share buybacks.
I understand that you will begin share repurchases after you paid on the $130 million in debt. Is there a minimum target in mind, maybe tied to a certain percentage of free cash flow that we should look at in terms of the potential for buybacks going forward?
Renaud Adams (President and CEO)
Good morning, Satish. Once we have the program in plan by the end of the year, it gives us that flexibility to start allocating capital to the different parts of the business. We are kind of looking at it in thirds. We would look at internal growth and opportunities, as well as we still want to prepay the amount drawn on a credit facility, $250 million. The third part is buying back shares. We do not have to do this sequentially. We can do all of this at the same time.
We were kind of breaking it down into thirds. And starting next year, we'll look at the cash being generated and then do it that way. So that's kind of as close as percentage, I guess, a third that we can give at this point.
Sathish Kasinathan (Equity Research Analyst)
Okay. Thank you. That's helpful.
Operator (participant)
The next question will come from Tanya Jakusconek with Scotiabank. Please go ahead.
Tanya Jakusconek (Analyst)
Great. Good morning, everybody. Congrats on the balance sheet. Really was impressed on your getting your net debt to even jot down so low versus Q2. Sorry, there's four calls going on at the same time, so I've missed a lot of yours. I just want a clarification, if I could. Slide 11, you have a new technical report and mine plan to be released in the second half of 2025. I thought that was coming in the second half of 2026. Has that been moved forward?
Maarten Theunissen (CFO)
No. If there was any mention to '25, that would be a typo or a mistake, Tanya, but no, we remain with disclosure of our next Côté Gold expansions late 2026.
Tanya Jakusconek (Analyst)
Okay. All right.
Maarten Theunissen (CFO)
Sorry about that. And thank you for mentioning that. We'll fix it. Thanks.
Tanya Jakusconek (Analyst)
No, no. I joined when you talked about Westwood, and so it was a slide before, and I noticed that, and I said, "Oh my God, they've moved it." I wasn't aware of it. Okay. No worries.
And just maybe still on Côté, if I could. You talked about bringing the processing costs down to that 12, the mining costs down to 3. We had talked on the previous conference call that you thought you would get there by mid-2026.
Should it be fair to say that we're still looking for that second half of 2026 where we should see these costs get into that range? Is that a fair assumption?
Renaud Adams (President and CEO)
There is one thing that we don't control, and it's some external factor. Let's start with that. If there's an inflation, I'm looking at our peers. I'm looking at what we could eventually do. This is our objective. I think the parking, the aggregate plan, you would start transitioning in Q1 and starting in Q2, you must see the effect of much less rehandling, more direct feed to final destinations. A little bit of rare. You're going to continue to rehandle around the HGO, and if your grade is lower for a period of time, you would swap in an NGO. Yes, starting Q2, this is where we start seeing the effect of it.
We continue to work very hard towards achieving the lowest. We need to control our consumption, mostly around, of course, mentioned tires and rehandling and so forth. I think we're competitive when it comes to the procurement and so forth. It is really on consumptions and better control of our maintenance. We believe that the HPGR should be running better at two, allowing to feed it at a smaller size and so forth and increases life. It is not just like a one-ticket type of item. The big impact would start with the parking. The cost will be what it would be in the sense that we cannot control some external factor, but what we can control, this is our intention in 2026 to get it done.
Tanya Jakusconek (Analyst)
Okay. I should be looking sort of mid-2026 that we should hopefully be there.
Renaud Adams (President and CEO)
Yeah. Mid-2026, you should start.
Tanya Jakusconek (Analyst)
Yeah. Okay. Can I just come back? I wanted to. One more technical, if I could. Just on your reserves and resources, I'm asking all companies, what are you thinking about in terms of pricing as you get your mine plans in place and start thinking about your pit shells and so forth? What pricing assumptions are you looking at for year-end 2025 and 2026? And sort of inflation and cost?
Renaud Adams (President and CEO)
Yeah. The most important aspects are the reserve. As we're looking at Côté and so forth, we're very comfortable to remain at the $1,700 or so for reserve at Côté. We'll look at as well what the industry is aligning and so forth. There is no real rush there. Essakane is a longer, short-term life of mine, so there's ability here to increase a bit and maximize cash flow down there.
Typically, for our main asset like Côté, we're not seeing more than $1,700 at this stage for the year-end exercise. We're also testing the long-term resource deposit like Nelligan and so forth. We'll be testing it probably up to $2,500 as a resource exercise. We'll be disciplined. We're not intended to use the full gold price in the short term and like to see how the industry. Eventually, of course, we're going to pick the price for the Côté study and so forth. It is not our intention to transform our asset and low grade using the full gold price.
Tanya Jakusconek (Analyst)
Okay. Thank you for that. If I can ask a financial question, I just. I saw your debt target, your net debt even jot down to 0.74.
I think I heard that we still have another $250 million in 2026 that we want to reduce our debt by. I'm just wondering, one, is that correct? I should think about another $250 million for 2026. Do we have a net debt even target you're comfortable with so that I can and a minimum cash balance on the balance sheet so I can then sort of look at my share buyback?
Maarten Theunissen (CFO)
Good morning, Tanya.
Tanya Jakusconek (Analyst)
Good morning.
Maarten Theunissen (CFO)
That is correct. We have $250 million drawn on the credit facility, and we would like to pay that down in 2025 or 2026. We also have $130 million left on our second lien that we plan to do this year. That then leads us to next year. We think $200 million-$250 million is a good minimum cash balance for our company.
Over time, as I mentioned earlier, we'll probably build that up as a third of the capital allocation would go to that. But that's kind of the main benchmarks, $200 million-$250 million minimum cash, and then pay down that $250 million. From a net debt to EBITDA ratio, that would bring us down to 0.5 or maybe even less. We are comfortable with one and lower, but we also understand it's a very high gold price environment. We do not put all of our targets for net debt to EBITDA using a high gold price. We are kind of looking at it, what would it be at lower gold prices as well. We do not want it to be much higher than one in a lower gold price environment.
Tanya Jakusconek (Analyst)
Okay. That's great.
If I could squeeze in a next iteration question, I would really like to talk a little bit about the Nelligan camp. Maybe, Renaud, I'm keen to—you said there are synergies of that entire camp. It's never going to be called the Nelligan camp once this is done. Can you talk about, is it going to be—are you envisioning one central mill to sort of treat all of these ores? How are you envisioning this camp?
Renaud Adams (President and CEO)
I had the pleasure to be leading the Rosevale Gold Mines at the very early days of IAMGOLD following the takeover of Cambiar. At the very early days, when I rejoined this company, I was looking at this camp. There was kind of an obvious type of look-alike, if you will.
I'm sure you're very familiar as well with the Rosevale concept back in time where we started with two and eventually had six mining areas and so forth. I like that one even further because of the high-grade, underground component as well that comes at play. Kind of the closest for us, and we've operated this place for many years, so we have a pretty good understanding and mining experience of. Think of it as a bit of a kind of a Rosevale concept back in time. Definitely a center processing facilities, kind of gravity center and fed, and hopefully multiple mining sources that eventually comes and go as you advance in time. That's the closest example I could take. I could think of.
Tanya Jakusconek (Analyst)
Okay. One tailings facility, or should I think of it as that as well?
Renaud Adams (President and CEO)
Sorry. Yeah. One tailing. Yeah, no, definitely.
Yeah, yeah. One tailing, but again, with the new concept and minimizing footprints and the importance of protecting and minimizing environmental footprint, I could see over time a kind of a use as well of depleted pit to be incorporated in the scenario of how you minimize for tailings purpose. Early stage, but this is our concept here. The priority will be Philibert, Nelligan, Monster Lake, and eventually, hopefully, as we continue to drill, maybe incorporating more areas.
Tanya Jakusconek (Analyst)
Look forward to hearing more about it next year.
Renaud Adams (President and CEO)
Thank you.
Operator (participant)
Again, if you have a question, please press star, then one. Our next question will come from Anita Soni with CIBC World Markets. Please go ahead.
Anita Soni (Research Analyst)
Hi. Thanks for taking my question. Similar position to Tanya with a number of competing conference calls, so I apologize if I missed anything.
I just wanted to follow up on Tanya's questions around costs going into next year. I guess I was just trying to understand. If, as we look at Côté and sort of push forward higher tonnage, what are the dual sort of things that you're thinking about? What are the inflationary factors that you're facing on the mining cost front? Where do you see some offsets in terms of maybe pushing higher tons?
Renaud Adams (President and CEO)
You were breaking up a bit. I'm sorry. Maybe on the mining.
Anita Soni (Research Analyst)
Yeah. No, go ahead, Renaud.
Renaud Adams (President and CEO)
Yeah. If we got your questions on the inflationary aspects on the cost and so forth, yes, we did see some pressure, but it's more around we don't see necessarily on the pressure on the procurement side. Martin, you can add to this. I think it's really around the productivities and creating.
Moving more towards bulk mining, as Bruno said, as we open the pit even further and creating more phases. Minimizing the movement of equipment during blast. This is all productivity. This is all same equipment, more movement, less rehandling, and the tire and improving on drilling blasting. This is the most important aspect of 2026 that would probably get us to a significant improvement. There is no reason for Côté to lag its peers when it comes to the best mining we could do. We have been very restricted. We have not allowed the group to really mine within the perfect setting and force a lot of rehandling and so forth. We need to be patient here and give a chance to the winner here to run the race. Bruno?
Bruno Lemelin (COO)
Just to give you an example, at the mill site. In maintenance. We have done numerous iterations to.
Try to find the right liners for secondary compression. More than one. Probably five, six, five different types of liners were tested out. And now we are very glad to see that we have one that is performing very well, that's going to double the lifetime of this liner. We expect improved productivity, improved production, and a lower cost on a ton basis. When you start an operation at the size of Côté, you need to do some iterative. You need to have an iterative process on some areas to define the best parts. That will trigger your cost down. That's what we do. It takes some time, but we know where we have to work on.
Anita Soni (Research Analyst)
Okay. Thank you for that. I know these operations take some time to ramp fast, and you've done a good job.
Renaud Adams (President and CEO)
Yeah, exactly.
You have mentioned that, Anita, more than once. This is the thing, and maybe we sound like not direct to the questions, but the reality being is from the commissioning, you are building up to 2023 to the full commissioning in 2024. You are looking at this year, our first year was to really eliminate any red flags remaining and so forth. 90% recovery at the mill, perfect reconciliations, mining at the mining grade, proven our concept of minimizing on segregations and make it more like work. As you could see, three-quarter in a row where you actually have been capable to uplift at the mill. Those are all significant milestones for us at the very early days. To say that we enter 2026.
What we want is an average for four years of the '36 with the full focus on the cost, and you turn back and you look at what this group has achieved to date, and now the mission is on the cost, and we're going to have the same focus and the same discipline in attacking this. I have all reason to believe that we're going to do great, great, great improvement on this. That would be the first time really where we're going to be focusing on it. It is kind of the next logical step for us after focusing this year on throughput and free cash flow and ounces and so forth. I have all reason to believe, Anita, that you're going to see great things coming out of Côté as we make it our priority next year. Yeah.
From most of the operations that are doing well, year three is definitely the optimization year and that is year three for you in 2026.
Anita Soni (Research Analyst)
Absolutely. Can I just ask just one more question in terms of, sorry, grades? The grades that you are—so the mill's plant feed has been above the mined grade, right? You have created some significant stockpiles previously, but now the grades are sort of in the 0.9 level this quarter. What should we be expecting, what the grade profile looks like going into next year? Is it going to be more along reserve grade, or will we still have a couple of quarters of mill feed that is above?
Renaud Adams (President and CEO)
I will pass it to Bruno over there.
Bruno Lemelin (COO)
Anita, this is Bruno. Good morning. We have already a good inventory of high-grade at the end of 2023. The question is, if we mine at 0.96.
How long are we going to be able to mill at a grade above that? We're currently looking at our 2026 budget, and the intent is still to mine a higher proportion of ore that will have a grade above the average grade. The goal for Côté is ultimately to be averaging the mining at average grade, but the first three years is going to be a little bit above that. We're talking about 1.1, 1.2, which will give us a good path towards the 400,000 gold ounce per annum. While we are increasing capacity at the mill, the grade will be reduced, but still protecting that 450 level.
Renaud Adams (President and CEO)
Yeah. If I may just add something to it, it has a lot to do as well with the volume you mine, correct?
If you look at this year, how do you move from 0.96 mine to uplifting above 1.1 at the mill has a lot to do with not super segregation, but at least remove the lower-grade blast from your inventory and just stockpile for the long term. That practice could continue a little bit down the road. I am confident that by mining at the reserve grade, we will be capable to continue to uplift along the line of what we are seeing.
Anita Soni (Research Analyst)
Okay. Thank you for taking my questions.
Operator (participant)
Thanks. The next question will come from Mohamed Fadib with National Bank Capital Markets. Please go ahead.
Mohamed Sidibé (Equity Research Analyst)
Morning, Renaud and Tim. Thanks for taking my questions. Apologies, I missed the start of the conference call due to conflicts there.
On the grade front, not at Côté, but maybe at Westwood, given the challenging ground conditions, I think you've seen improvement in October in terms of the underground grade there. How should we think about Q4 and maybe next year, 2026, as we think about the Westwood grades and the mining rate there?
Renaud Adams (President and CEO)
Thank you. Go ahead, Bruno.
Bruno Lemelin (COO)
Good morning, Mohamed. The plan, or if I can explain, Westwood on the east side has areas of less challenging ground conditions, but it's lower grade. On the central zone and western zone, it has the ability to give better grades, but with more challenging ground conditions. When we started facing those challenging ground conditions, we just shifted our strategy and we sequenced the production of mine tons towards the east side.
That's the reason why you see the lower grade since the beginning of this year. Since then, we have readjusted the way that we do our blasting patterns, gridding patterns, stope design, stope parameters to take into account these ground conditions. I'm very pleased to say that we've been very successful in October in those zones, and the average grade that we collected was above 9 grams per tonne. Right now, what we have is we have an inventory of almost one month and a half in front of us that are accessible. I think the algorithm that we have developed over the past few years is working very fine, but we just need to refine it further at the stope level so we can expect safely and profitably each stope that we have in the sequence. We just had to make some readjustments.
For the Q4, we expect a very strong Q4. For 2026, it's going to be a balancing act between how much stope we're going to be scheduling in the east side and the central zone in reserve. It's a risk-adjusted type of planning. Again, Westwood is a mine that needs to deliver 10,000 gold ounce a month to be on its X. Very, very confident about the rest of the year, and 2026 goes very well.
Renaud Adams (President and CEO)
If I may just add to this, and thank you, Bruno, for this. To be very frank, the mine, we did extremely well in 2024, rehabilitated all the zone. There's maybe some aspect of it that maybe we tried to run a little bit before walking, but the plan is I really have all the confidence that it's pure engineering, and we're already seeing quite a bit of.
Turnaround and back on our feet. The way we look at the mine is we'll be absolutely happy, as Bruno says, an average of 10,000 a month. A mine capable to operate sub $2,000, bringing significant free cash flow and longevity. That is how we think of these mines for the next two, three years. The future could be very exciting depending on what happens and on covering all the resources to the east and so forth. More to come on that one. For the time being, when I look at the next two, three years, we'll be absolutely happy with the mine predictable, capable to deliver its 10,000 a month, sub $2,000. With that, we'll be very happy, and it would do very well for us.
Mohamed Sidibé (Equity Research Analyst)
Thanks a lot, Bruno and Renaud, for that. That is very helpful.
If I could maybe shift to Essakane, I think you noted, again, maybe you already commented on this, but you noted that you had in August a fuel shortage in the country. As you're looking at your operations now, we've heard kind of neighboring countries having issues and know that some of the agriculture energy being provided to Burkina may have had some challenges there as well. Are you seeing any impact from fuel pressures at Essakane currently, or what is the latest that you can provide us on that front?
Bruno Lemelin (COO)
Thank you. Mohamed. We are not using the same rules as NAVI does. We have a very specific supply rules for fuel. That is for one. The second thing is that we have more than 48 days of inventory, right? It gives us enough time to.
Rearrange our logistics should we have some hiccups. We have enough to maintain the operations uninterrupted. It requires good logistic efforts, and we have continuous support from the government, allowing us to bring the convoys of fuels at sites at the appropriate time. The main strategy was to make sure that we have enough fuel depots at Essakane so we can withstand a long period of time without supplies arriving to Essakane. In a sense, we're not using the same roads. We don't see the same type of pressures as Néviny, and so far, the other strategy that we have is increased inventory at site.
Mohamed Sidibé (Equity Research Analyst)
Great to hear. Thanks a lot, Bruno. A final question maybe on, that's a bit complex and great consolidation of the complex there. What should we look at in terms of next key steps for this complex?
I know that you're advancing an exploration campaign there with potential resource update in early 2026, but how could we look at this beyond? What are the next key steps for the zone?
Renaud Adams (President and CEO)
Thank you. Just quickly on that. Expect us focusing on resource growth in 2026. The incorporation of the Philibert, so we need to answer one question that is really key. How big could that Philibert be, and how does it fit in a mine plan, right? This is the very, very key focus of 2026, increased drilling program. We'll be aggressive but smart about it. Proven record from the team. I'm not concerned at all there, and I think we'll do a very good use of money deployed there. That's the very short term. As I mentioned, we were hoping of maybe putting some sort of a study in 2026, but.
I think it's worthwhile getting great answers from. Objective with almost 12 million already. We could only shoot for the 15-20 million camp. This is what we're going to be doing. We're going to drill, drill, drill, and hopefully having a very good update, resource update late 2026. Having said that, Nelligan and Monster Lake will be somewhat updated at year-end with the drilling of 2025 in it. Look at it as resource growth the next year or two, and then we'll start putting study out there. Anything we could advance and start putting in place, we'll do it. We have a high, high level of confidence that this is going to be a mining camp. Bruno, if you want to add anything to this.
Mohamed Sidibé (Equity Research Analyst)
Thanks a lot for that answer, Bruno, and congrats on a great financial performance. Thank you. Thanks.
Operator (participant)
This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Graeme Jennings for any closing remarks. Please go ahead.
Graeme Jennings (VP of Investor Relations)
Thank you very much, Operator. And as always, thank you, everyone, for joining. If you have any questions, please reach out to Bruno or myself. Thank you all. Be safe and have a great day.
Operator (participant)
This brings to a close today's conference call. You may disconnect your lines. Thank you for your participation, and have a pleasant day.