Executive Summary / Key Takeaways

• Côté Gold Ramp-Up Delivers Record Cash Generation: The mine achieved nameplate capacity 20 months ahead of schedule, generating $135.6 million in mine site free cash flow in Q3 2025 alone and positioning IAMGOLD as a 360,000-400,000 ounce annual producer at industry-leading unit costs, fundamentally transforming the company's earnings power.

• Strategic Pivot to Safe Jurisdictions Redefines Risk Profile: With approximately 80% of measured and indicated ounces and 90% of inferred ounces now located in Canada, IAMGOLD has executed a dramatic shift from geopolitically risky West African exposure to a proudly Canadian asset base, materially reducing sovereign risk while concentrating growth in stable mining districts.

• Capital Allocation Inflection Signals Management Confidence: The completion of gold prepay arrangements, $680 million Essakane dividend stream, $210.7 million net debt reduction, and approval of a 10% share buyback program mark a clear transition from survival mode to disciplined capital returns, with management explicitly targeting debt reduction, internal growth, and shareholder returns simultaneously.

• Cost Pressures Are Temporary, Not Structural: While Q3 2025 costs exceeded guidance due to record gold price royalties and temporary crushing bottlenecks, management has identified specific mitigation paths—Q4 cone crusher installation, stope design refinements at Westwood, and mining sequence optimization—that should drive unit costs toward $12/tonne milling and $3/tonne mining by 2026.

• Valuation Discount to Peers Persists Despite Execution: Trading at 16.4x operating cash flow and 10.4x EBITDA despite generating record margins and accelerating growth, IAG remains priced as a turnaround story rather than the restructured, cash-generating Canadian gold producer it has become, creating potential for multiple expansion as the market recognizes the durability of its transformation.

Setting the Scene: From International Diversification to Canadian Cash Flow Powerhouse

IAMGOLD Corporation, incorporated in 1990 and headquartered in Toronto, Canada, has spent the past five years executing one of the most dramatic strategic pivots in the mid-tier gold mining space. The company that once operated a portfolio of geographically dispersed assets has deliberately concentrated its future in Canadian mining jurisdictions, with approximately 80% of measured and indicated gold ounces and 90% of inferred ounces now residing in Ontario and Quebec. This isn't merely a portfolio rebalancing—it's a fundamental redefinition of the company's risk profile and growth trajectory.

The transformation centers on three strategic moves. First, the successful ramp-up of Côté Gold in Ontario, where IAMGOLD holds a 70% interest, has created a flagship asset that alone will produce 360,000-400,000 ounces annually at cash costs targeted below $1,200 per ounce. Second, the consolidation of the Nelligan Mining Complex in Quebec through the $267 million acquisition of Northern Superior and Orbec assets positions IAMGOLD with the fourth-largest pre-production gold camp in Canada, containing over 3.8 million indicated and 8.7 million inferred ounces. Third, the managed decline of West African exposure—while maintaining the highly cash-generative Essakane mine in Burkina Faso—reduces jurisdictional risk without sacrificing near-term cash flows.

This strategic repositioning matters because it addresses the primary valuation discount that has plagued IAMGOLD for years. Mid-tier gold producers trade on a spectrum defined by asset quality, jurisdictional risk, and execution certainty. Companies with predominantly Canadian assets and clear growth pipelines command premium valuations, while those with significant exposure to politically unstable regions trade at discounts. By shifting its asset base northward while simultaneously delivering on aggressive operational targets, IAMGOLD is forcing a re-rating from the latter category to the former.

Technology, Products, and Strategic Differentiation: The Côté Gold Advantage

Côté Gold represents more than a new mine—it's a technological and operational blueprint for IAMGOLD's future. The operation utilizes autonomous haul trucks and drills, achieving nameplate throughput of 36,000 tonnes per day in June 2025, well ahead of the initial 20-month estimate. This acceleration wasn't accidental; it resulted from deliberate decisions to deploy supplementary crushing capacity and optimize the processing circuit, even at the cost of temporarily higher unit costs.

The economic implications are substantial. Côté's combined measured and indicated resources exceed 16.2 million ounces, with an additional 4.2 million ounces inferred, supporting a mine life exceeding 20 years at current processing rates. The strip ratio is low, mining costs averaged $4.51 per tonne in Q3, and management's strategic target of $3 per tonne mining and $12 per tonne milling would place Côté in the lowest quartile of global gold production costs. This cost structure creates a natural hedge: when gold prices fall, Côté remains profitable; when prices rise—as they have to record levels—the operational leverage generates exceptional margins.

The Nelligan Mining Complex consolidation amplifies this differentiation. By acquiring Northern Superior's Philibert deposit (2 million ounces at 1.1 g/t) and Orbec's properties, IAMGOLD is creating a district-scale opportunity in Quebec's Chibougamau region. The vision—a central processing facility fed by multiple open-pit and underground sources—mirrors the successful hub-and-spoke models employed by leading Canadian producers. With over 3.8 million indicated and 8.7 million inferred ounces, Nelligan ranks as Canada's fourth-largest pre-production gold camp, offering a clear growth pipeline that requires minimal additional corporate infrastructure.

Why does this consolidation strategy matter? Because it transforms IAMGOLD from a single-asset growth story into a multi-asset Canadian platform. The market typically assigns higher multiples to companies with visible, low-risk growth pipelines. Nelligan provides that visibility, with a two-year drilling program designed to expand resources toward a 15-20 million ounce target before initiating formal development studies.

Financial Performance & Segment Dynamics: Evidence of Strategic Execution

Q3 2025 results provide compelling evidence that IAMGOLD's transformation is delivering tangible financial results. Revenue from continuing operations reached $706.7 million, driven by sales of 203,000 ounces at a record realized price of $3,492 per ounce. Adjusted EBITDA hit a record $359.5 million, up from $221.7 million in Q3 2024, while mine site free cash flow reached an all-time high of $292.5 million. These aren't incremental improvements—they represent a step-change in earnings power.

Segment performance reveals the underlying drivers. Côté Gold delivered record production of 106,000 ounces (100% basis) and mine site free cash flow of $135.6 million, demonstrating the mine's ability to generate approximately $1,280 per ounce in operating leverage after costs. Essakane produced 108,000 ounces (100% basis) and generated $150.5 million in mine site free cash flow, proving that despite the 85% ownership interest and higher royalty regime, the asset remains a world-class cash generator. Westwood's 23,000 ounces fell short of guidance, but management's commentary indicates October grades exceeded 9 grams per tonne, suggesting a sustainable turnaround is underway.

The cash flow inflection is particularly significant. IAMGOLD completed its final gold prepay delivery in June 2025, eliminating a structural drag on liquidity. Net debt decreased by $210.7 million to $813.2 million, while total liquidity stands at $707.2 million, comprising $314.3 million in cash and $391.9 million available on the credit facility. The Essakane dividend declaration of $855 million (IAMGOLD's 85% share net of taxes is $680 million) will be paid over the next 12 months through a revised framework, providing a predictable cash inflow that directly supports debt reduction and capital returns.

What does this financial transformation imply? First, IAMGOLD has achieved sustainable positive free cash flow across all three operating mines, a milestone that eluded the company during its development phase. Second, the balance sheet has de-risked materially, with S&P upgrading the credit rating from B to BB- and net debt-to-EBITDA trending toward 1x. Third, management now has the financial flexibility to execute its capital allocation framework: roughly one-third for internal growth, one-third for credit facility repayment, and one-third for share buybacks.

Outlook, Management Guidance, and Execution Risk

Management's 2025 guidance frames a clear trajectory: attributable production of 735,000-825,000 ounces, with Côté delivering 360,000-400,000 ounces (100% basis) and Essakane contributing at the lower end of its 360,000-400,000 ounce attributable range due to the ownership reduction to 85%. Cost guidance has been revised upward, with cash costs expected at the top end of $1,375-$1,475 per ounce and AISC at $1,830-$1,930 per ounce, primarily reflecting higher royalties and temporary operational factors.

The critical question is whether these cost pressures are structural or transitory. Management has provided specific mitigation timelines. At Côté, installation of a second cone crusher in Q4 2025 will eliminate the temporary aggregate crusher that added $6 per tonne in Q3, with cost benefits visible from Q2 2026. At Westwood, refined stope designs and modified blasting techniques have already improved October grades to over 9 grams per tonne, positioning the mine for a "very strong Q4" and sustainable performance at 10,000 ounces per month with sub-$2,000 AISC. At Essakane, mining deeper into Phase 7 is delivering higher grades, with the reserve replacement in 2024 (2.3 million ounces) supporting a potential mine life extension to 2033.

The Nelligan Mining Complex development provides a longer-term growth vector. Management's objective is to "drill, drill, drill" through 2025-2026, building toward a resource update in late 2026 that could support a 15-20 million ounce camp. This timeline matters because it aligns with Côté's mature cash generation phase, allowing IAMGOLD to fund Nelligan's development internally rather than diluting shareholders or taking on additional debt.

Management's capital allocation commentary reveals a disciplined mindset. The Board-approved share buyback program for up to 10% of outstanding shares, combined with the explicit "thirds" framework, signals that management views the stock as undervalued relative to long-term cash generation potential. This is reinforced by the decision to repurchase the 9.7% Côté interest from Sumitomo for $267 million, restoring full 70% ownership just as the asset enters its optimal cash flow phase.

Risks and Asymmetries: What Could Break the Thesis

The most material risk remains jurisdictional exposure in Burkina Faso, where IAMGOLD's 85% interest in Essakane represents approximately 44% of attributable production. The new royalty regime, combined with record gold prices, increased royalty costs by 61% year-over-year to $283 per ounce in Q3. While management maintains strong government relations and keeps 48 days of fuel inventory on site, the mining lease expires in 2028, requiring renewal negotiations. Any deterioration in the security situation or government relations could disrupt operations and impair the $680 million dividend stream.

Execution risk at Côté, while diminished by the successful ramp-up, hasn't been eliminated. The processing plant's single secondary cone crusher created a bottleneck that required temporary supplementary crushing. If the Q4 installation of the second crusher is delayed or fails to achieve the expected throughput, unit costs could remain elevated above the $12 per tonne target. Similarly, the HPGR wear issues that caused unplanned downtime in 2024 could recur, impacting availability and costs.

Westwood's turnaround, though promising, remains fragile. The mine's Q3 production of 23,000 ounces tracked below guidance, and cash costs of $1,924 per ounce significantly exceeded the $1,275-$1,375 guidance range. While October grades exceeding 9 grams per tonne are encouraging, the mine has a history of ground condition challenges that could persist. If the Grand Duc open pit expansion doesn't materialize or underground dilution remains high, Westwood may not achieve its targeted 10,000 ounces per month at sub-$2,000 AISC.

Gold price volatility presents a double-edged sword. While record prices drove Q3's exceptional margins, they also inflated royalty costs and increased working capital requirements. A sustained price decline below $2,500 per ounce would compress margins materially, particularly at Essakane where royalties are price-sensitive. Conversely, further price increases could trigger additional government levies or renegotiation of fiscal terms in Burkina Faso, offsetting operational gains.

Valuation Context: Trading as a Turnaround Despite Transformation

At $15.40 per share, IAMGOLD trades at 16.4x operating cash flow and 10.4x EBITDA, metrics that place it at a discount to Canadian-focused peers despite superior growth prospects. Kinross Gold (KGC), with slower growth and mature assets, trades at 10.0x operating cash flow and 8.8x EBITDA. Alamos Gold (AGI) commands 20.6x operating cash flow, reflecting its pure-play Canadian exposure and lower cost structure. The valuation gap suggests the market still prices IAMGOLD with a risk premium associated with its historical West African exposure and past execution challenges.

The balance sheet improvement supports a higher valuation multiple. Net debt of $813.2 million represents just 0.8x annualized EBITDA, down from over 2x at the peak of the Côté development phase. Liquidity of $707.2 million provides ample cushion, while the Essakane dividend stream offers near-term debt reduction visibility. S&P's upgrade to BB- with a stable outlook reflects this de-risking, yet the stock's multiple hasn't expanded commensurately.

Cash flow-based metrics tell a similar story. Price-to-free-cash-flow of 42.3x appears elevated until one considers that Q3's $292.5 million mine site free cash flow annualizes to over $1.1 billion, a figure that would imply a 12.7x multiple if sustainable. The key question is whether Côté can maintain its performance and whether Essakane's dividends flow through as planned. Management's guidance suggests 2025 will be a transition year, with full cash flow potential realized in 2026 as cost mitigation measures take effect.

Peer comparisons highlight IAMGOLD's unique position. B2Gold (BTG) trades at 11.5x operating cash flow but faces higher geopolitical risk in Mali and ramp-up challenges at Goose. Eldorado Gold (EGO) trades at 8.7x operating cash flow but carries Turkish regulatory risk. IAMGOLD's Canadian transformation should command a premium to these peers, yet it trades at a discount to Alamos, suggesting the re-rating remains incomplete.

Conclusion: A Transformed Company Awaiting Market Recognition

IAMGOLD has executed a strategic transformation that few mid-tier gold producers have attempted, let alone achieved. The company has shifted from a geographically diversified, capital-intensive developer to a Canadian-focused cash flow generator precisely as its flagship Côté Gold asset reaches optimal production. The financial results—record revenue, record EBITDA, and record mine site free cash flow—provide clear evidence that this transformation is working.

The investment thesis hinges on two critical variables: sustained execution at Côté Gold and successful navigation of Burkina Faso's jurisdictional risks. Côté's performance to date, including the 20-month-ahead-of-schedule ramp-up and 16.2 million ounce resource base, suggests the asset can deliver 400,000+ ounces annually at industry-leading costs for over a decade. Meanwhile, management's demonstrated ability to maintain operations through Burkina Faso's security challenges and negotiate a $680 million dividend framework indicates the Essakane risk is manageable rather than existential.

Valuation remains the final piece of the puzzle. Trading at a discount to Canadian-focused peers despite superior growth and improving margins, IAMGOLD offers an attractive risk-reward profile. The 10% share buyback program and "thirds" capital allocation framework signal management's confidence that the market hasn't yet recognized the durability of the transformation. For investors willing to look past the historical stigma of West African exposure, IAMGOLD presents a rare combination: a restructured asset base hitting its stride, a clear path to debt-free cash generation, and a valuation that hasn't caught up to the new reality. The story that began in 1990 as a Canadian gold explorer has come full circle, and the market is still pricing the old version.