Executive Summary / Key Takeaways

• IAMGOLD Corporation is undergoing a significant transformation, shifting its focus to become a leading Canadian gold producer, primarily driven by the successful ramp-up and optimization of its Côté Gold project. The company achieved nameplate throughput at Côté ahead of schedule and concluded its gold prepayment arrangements, marking a critical inflection point for cash flow generation.
• The core investment thesis hinges on Côté Gold's substantial expansion potential, with plans to integrate the Côté and Gosselin zones into a "super pit" targeting over 20 million ounces of measured and indicated resources, reinforcing its position as one of Canada's largest gold mines.
• Financially, IAMGOLD is prioritizing deleveraging its balance sheet, targeting high-cost debt like the second lien term loan, having already repaid $40 million. The company aims for a net debt to EBITDA ratio of 1 or less before considering shareholder returns, with strong cash flow expected in the second half of 2025 and into 2026.
• Operational performance in the first half of 2025 saw attributable production of 334,000 ounces, with a revised full-year guidance of 735,000 to 820,000 ounces. While costs were temporarily elevated due to Côté's ramp-up and higher royalties at Essakane, management anticipates stronger production and declining unit costs in the second half of the year.
• IAMGOLD holds a moderate position in the global gold mining market, leveraging its geographic diversity and regulatory licenses as competitive advantages. However, it faces vulnerabilities from geopolitical exposure in regions like Burkina Faso and a smaller operational scale compared to industry giants like Barrick Gold and Newmont .

A New Dawn for IAMGOLD: Forging a Canadian Gold Powerhouse

IAMGOLD Corporation, incorporated in 1990 and headquartered in Toronto, Canada, is rapidly redefining its identity within the global gold mining landscape. The company is strategically repositioning itself as a leading Canadian gold producer, a transformation largely centered on the successful development and ramp-up of its Côté Gold project in Ontario. This strategic pivot, coupled with robust organic growth opportunities in Quebec and a disciplined approach to debt reduction, forms the bedrock of IAMGOLD's investment narrative.

The gold mining industry is characterized by high capital requirements, stringent regulatory approvals, and evolving environmental standards, creating significant barriers to entry. Within this competitive arena, IAMGOLD holds a moderate position, competing with larger, more diversified players such as Barrick Gold Corporation , Newmont Corporation , Agnico Eagle Mines Limited (AEM), and Kinross Gold Corporation (KGC). While these larger rivals often benefit from greater operational scale and potentially lower costs per ounce, IAMGOLD differentiates itself through its focused geographic diversity, particularly in Canada and West Africa, and its commitment to unlocking significant resource potential in mining-friendly jurisdictions.

The company's history over the past few years has been instrumental in shaping its current strategic direction. To finance the construction of Côté, IAMGOLD utilized various financial instruments, including gold prepayment arrangements and a second lien term loan, carefully designed to avoid permanent dilution of its ownership. The year 2024 marked a monumental period, with attributable gold production increasing by 43% to 667,000 ounces, largely due to Côté Gold's initial contribution of 199,000 ounces (100% basis) in its first year of operation. This period also saw IAMGOLD repurchase a 9.7% interest in Côté from Sumitomo (SSUMY), restoring its full 70% ownership, and divest non-core assets, signaling a sharpened focus on its primary growth engines.

Technological Edge: The HPGR at Côté Gold

A key technological differentiator for IAMGOLD, particularly at its flagship Côté Gold project, is the integration of the High-Pressure Grinding Roll (HPGR) in its processing circuit. This technology is foundational to the plant's design and contributes significantly to its operational efficiency and recovery rates. The HPGR's performance has been "extraordinary," often exceeding 40,000 tonnes per day, which is above the nameplate capacity of 36,000 tonnes per day. This capability allows the plant to process more ore efficiently, contributing to higher throughput.

The tangible benefits of the HPGR include improved gold recovery, which averaged 93% in Q2 2025, "beyond plan". Management believes this is partly due to the "micro fracturing created by the HPGR". While the HPGR tires have shown faster wear due to the ore's aggressiveness, the company plans to replace them with a "new generation, which will have longer stuff" to increase longevity. Furthermore, the upcoming installation of a second cone crusher in Q4 2025 is expected to "restabilize even further crushing a little finer, feeding the HPGR more and its sweet zone". This strategic enhancement aims to optimize the HPGR's performance, potentially extending tire life and further improving overall crushing efficiency, thereby contributing to lower milling costs and enhanced plant availability. This technological advantage is crucial for Côté's long-term cost structure and its ability to maximize gold extraction.

Operational Momentum and Strategic Growth

IAMGOLD's operational strategy is firmly anchored in the performance and expansion of its three producing assets: Côté Gold, Essakane, and Westwood, complemented by a robust exploration pipeline.

Côté Gold: The Crown Jewel's Ascent

Côté Gold, a 70%-owned joint venture in Canada, is the cornerstone of IAMGOLD's growth strategy. The mine has successfully transitioned from ramp-up to optimization, achieving nameplate throughput of 36,000 tonnes per day on June 23, 2025, ahead of its 20-month estimate. In Q2 2025, Côté produced 96,000 ounces (100% basis), contributing significantly to the company's attributable production. While the first half of 2025 saw temporary higher unit mining costs of $3.88 per tonne and milling costs of $6.94 per tonne milled due to ramp-up activities and rehandling, these are expected to decline in the second half of the year. The installation of an additional secondary crusher in Q4 2025 is anticipated to reduce processing costs, and a transition to bulk mining will improve mining efficiency.

The long-term vision for Côté is even more ambitious. IAMGOLD is actively working to unlock the expansion potential of a "super pit" combining the Côté and adjacent Gosselin zones. A 45,000-meter drill program is underway, prioritizing resource conversion at Gosselin, with an updated technical report expected in the second half of 2026. This initiative targets over 20 million ounces of measured and indicated resources, positioning Côté as one of Canada's largest gold mines. The Côté deposit alone has over 400 million tonnes of measured and indicated material, suggesting a potential 20-year mine life at 50,000 tonnes per day even before integrating Gosselin.

Essakane: Cash Flow Engine with Evolving Dynamics

The Essakane mine in Burkina Faso remains a significant cash flow contributor for IAMGOLD. In Q2 2025, Essakane produced 77,000 attributable ounces. However, the quarter was challenging, with lower grades in the upper benches of Phase 7 and higher costs. Cash costs reached $1,855 per ounce and AISC $2,224 per ounce, primarily due to increased royalties (triggered when gold prices exceed $3,000 per ounce), a stronger Euro, and higher maintenance and consumable costs.

Effective June 20, 2025, IAMGOLD's ownership interest in Essakane was adjusted from 90% to 85% due to an updated Burkina Faso Mining Code. This change led to a significant dividend declaration of approximately $855 million, with IAMGOLD's $680 million portion (net of withholding taxes) to be repaid through a shareholder account structure, improving cash repatriation efficiency. Despite the cost pressures, Essakane is expected to generate "significant free cash flows moving forward". The mine life is currently projected through 2028, with management exploring opportunities to extend it to 2033 or beyond, contingent on successful government discussions and higher gold price assumptions.

Westwood: Canadian Underground Resilience

Westwood, an underground gold mine in Quebec, has demonstrated a strong turnaround, becoming a positive cash flow generating asset. Production in Q2 2025 was 29,000 ounces, an improvement from the prior quarter. While Q1 2025 saw lower grades due to temporary equipment challenges, underground mining rates are expected to stabilize around 1,000 tonnes per day, with grades increasing in the second half of 2025 as mining transitions to higher-grade zones. The mine has potential to expand underground mining to 1,200-1,300 tonnes per day without significant infrastructure changes, through improvements in transportation and blasting techniques. The Grand Duc open pit mining is slated for completion by Q4 2025, though stockpiles will continue to feed the mill into 2027, with further expansion being evaluated if gold prices remain high.

Nelligan and Monster Lake: Future Growth in Quebec

Beyond its operating mines, IAMGOLD boasts a robust organic growth portfolio in Quebec with the Nelligan and Monster Lake projects. These assets collectively hold nearly 9 million ounces of gold resources, positioning Nelligan among Canada's largest undelivered gold projects. A significant 2025 drilling program is underway, targeting the extension of the Nelligan deposit at depth and high-grade underground structures at Monster Lake. The company aims to grow Nelligan to over 10 million ounces, envisioning a large open pit combined with decent underground high-grade resources over the next two years.

Financial Strength and Deleveraging Pathway

IAMGOLD's financial performance in the first half of 2025 reflects its operational progress and the favorable gold price environment. In Q2 2025, revenues from continuing operations reached $580.9 million from sales of 182,000 ounces (100% basis) at a record average realized price of $3,182 per ounce. Adjusted EBITDA hit a record $276.4 million, significantly up from $191 million in Q2 2024.

Mine site free cash flow was strong at $140.5 million in Q2 2025, with Côté contributing $93.9 million and Westwood $36.6 million. A pivotal financial milestone was the conclusion of the gold prepayment arrangements in Q2 2025, with 75,000 ounces delivered this year, equating to approximately $200 million in debt servicing value. This frees IAMGOLD from these obligations, providing full exposure to current gold prices and significantly enhancing future cash flow generation. At the end of Q2 2025, the company reported $223.8 million in cash and cash equivalents and net debt of $1 billion, with total liquidity of $616.5 million.

The company's deleveraging strategy is clear: prioritize the repayment of its highest-cost debt. The second lien term loan, carrying a floating rate of over 12%, is the immediate target. IAMGOLD has already repaid $40 million of this loan, reducing the principal balance to $360 million. Management aims for a net debt to EBITDA ratio of 1 or less, considering a lower gold price environment, before actively considering shareholder returns through buybacks or dividends. The expectation is for "strong expected cash flows" to facilitate this debt reduction, with the company potentially being in a position to discuss shareholder returns by mid-2026.

Competitive Landscape and Strategic Positioning

IAMGOLD operates in a highly competitive gold mining sector. Compared to industry giants like Barrick Gold (GOLD) and Newmont , IAMGOLD generally operates on a smaller scale, which can lead to comparatively higher unit costs and less consistent revenue expansion. For instance, Barrick's extensive mine portfolio and operational scale often result in more efficient resource extraction and stronger cost structures. Similarly, Newmont's emphasis on technological innovation can lead to greater operational efficiency and lower environmental impacts.

However, IAMGOLD leverages its strengths in geographic diversity and established regulatory licenses. Its presence in West Africa, particularly with Essakane, provides exposure to emerging markets, while its growing Canadian assets offer stability in a mining-friendly jurisdiction. This diversified approach helps mitigate risks associated with over-reliance on a single region or project. The company's focus on organic growth, particularly the Côté-Gosselin super pit and the Nelligan-Monster Lake camp, is a strategic response to build scale and resource base, aiming to close the gap with larger peers.

While IAMGOLD may lag in innovation speed compared to Newmont's (NEM) R&D investments, its strategic focus on optimizing existing technologies like the HPGR at Côté, coupled with planned infrastructure enhancements, aims to improve efficiency and cost performance. Geopolitical risks, particularly in Burkina Faso, remain a vulnerability, as evidenced by the recent change in royalty structures and ownership interest at Essakane. However, management maintains confidence in its operations in the region and its ability to manage these dynamics through strong government relationships and efficient cash repatriation mechanisms.

Outlook and Risks

IAMGOLD's outlook for 2025 is positive, with attributable gold production guidance of 735,000 to 820,000 ounces. The company anticipates a "much stronger second half of the year," driven by continued improvements at Côté and increased grades at Essakane and Westwood. Consolidated all-in sustaining costs are revised upwards to $1,830 to $1,930 per ounce, reflecting temporary cost pressures at Côté and higher royalties at Essakane.

Key assumptions underpinning this outlook include the successful commissioning of the second cone crusher at Côté in Q4 2025, leading to declining processing costs and improved mining efficiency through a transition to bulk mining. Essakane is expected to see grade increases as mining progresses deeper into Phase 7, and Westwood anticipates higher grades from transitioning to richer zones. Labor inflation is projected at 3% to 3.5%, but operational efficiencies at Côté are expected to largely offset these increases.

Despite the optimistic outlook, several risks persist. Operational challenges during the ramp-up of a large-scale mine like Côté, such as equipment wear and unscheduled maintenance, can impact throughput and costs. Geopolitical risks in Burkina Faso, including changes in mining codes and security concerns, could affect Essakane's cash flow and long-term stability. Commodity price volatility and foreign currency movements also pose inherent risks to financial performance. However, management's proactive measures, including strategic capital investments at Côté and a new dividend structure at Essakane, aim to mitigate these challenges.

Conclusion

IAMGOLD Corporation stands at a pivotal juncture, transforming into a formidable Canadian gold producer. The successful ramp-up of Côté Gold, its technological advancements, and the strategic vision for a "super pit" underscore a compelling growth narrative. Supported by the consistent cash flow generation from Essakane and the revitalized Westwood mine, the company is well-positioned to significantly enhance its financial flexibility through disciplined debt reduction.

While facing inherent operational and geopolitical risks, IAMGOLD's focus on maximizing its Canadian asset base and leveraging a favorable gold price environment provides a clear pathway to increased shareholder value. The ongoing efforts to optimize Côté's performance, extend mine lives, and advance high-potential exploration projects like Nelligan and Monster Lake solidify IAMGOLD's trajectory towards becoming a leading, modern gold producer with a robust organic growth profile and a strengthened balance sheet.