IAMGold, the owners of Mupane mine outside Francistown, this week released first quarter results for 2009 with a net earnings increase and a jump in gold reserves.
The company’s net earnings increased by 53 percent to $52.5 million compared to $34.4 million in the prior year period.
Excluding the foreign exchange loss due to higher Canadian dollar denominated cash balances and a termination benefit expense net of tax of $1.5 million related to employees and officers of Orezone, the company’s net earnings were $29.9 million.
The company, which is also listed on the Botswana Stock Exchange (BSE), said mining costs decreased by 17 percent (or $18.8 million) because of the closure of the Sleeping Giant mine and reduced royalty expenses due to the elimination of two royalties in 2008.
There was an attributable gold production of 212,000 ounces and average cash cost of $464 per ounce.
The mill expansion investment at Rosebel drove production at the mine to 83,000 attributable ounces of gold, a 16 percent increase over the first quarter of 2008.
IAMGold President and CEO Joseph Conway said the first quarter was a solid start for the year.
“We will continue to focus on operational improvements to lower costs even further and increase production levels beyond our current guidance of 880,000 ounces for 2009,” he said.
The company’s gold reserves were boosted by the acquisition of Orezone Resources, which owns 90 percent of Essakane gold project in Burkina Faso.
The Essakane project is one of West Africa’s largest undeveloped gold properties with production expected in the second half of 2010. The acquisition boosted the company’s reserves by 29 percent.
“The Essakane acquisition and the $282 million equity financing completed in the first quarter represent a significant change in terms of our near term production outlook, reserve base and financial strength,” added Conway.
“In terms of our operations and development projects, we have also made significant progress and we have allocated significant funds for drilling and development activity at virtually all of our ongoing assets,” he said.
Meanwhile, the company said it maintains its full year production guidance of 880,000 ounces of gold at an average cash cost of $470 to $480 per ounce based on an $800 per ounce gold price, a $65 per barrel oil price, and a foreign exchange rate of C$/US$1.15.