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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good morning, ladies and gentlemen. Welcome to to the IAMGOLD Corporation second-quarter financial results conference call. At this time all participants are in a listen-only mode.
Following the presentation, we will conduct a question and answer session. Instructions will be provided for you to cue up for questions. (OPERATOR INSTRUCTIONS)
I would like to remind everyone that this conference call is being recorded recorded on Friday, August 8th, 2008, at 11 am Eastern time.
Please note that certain statements constitute forward-looking statements according to applicable laws and Security Regulatory Authorities.
IAMGOLD Corporation recommends you review the information disclosed in the press release and in this conference call. I would like to turn the call over to Mr. Conway. Please go ahead, sir.
JOSEPH CONWAY, CEO, PRES, IAMGOLD CORPORATION: Thank you, operator. Good morning, everyone, and welcome, to the second-quarter 2008 IAMGOLD Corporation conference call.
Before we begin I would like to make a few introductory remarks. One of the comments I would like to start with is that if you look at this industry, those who observe it closely over the last couple of quarters, three broad things we see. One is certainly a cost escalation from a operational point of view. Production short falls, relative to the guidance. And particularly this year and next.
Then also the short and long-term trend of significant increases in capital expenditures relative to budgets outlined earlier or guidance that was outlined earlier.
However, when we look at IAMGOLD Corporation, we made significant progress in mitigating costs, where we actually seen costs from a Q1 to Q2 basis decline slightly.
I think we are actually one of the few companies that has reduced the cost structure on a quarter over quarter basis. When we look at our production, it increased from 2300 -- 234,000 ounces in Q1 to 255,000 ounces in Q2. Many of our peers have announced reductions in the 2008 production guidance, some significant.
We are one of the few companies that has increased our guidance in terms of production.
In terms of capital, really must be noted there are folks slipping in terms of 2008 time lines and also reporting significant capital reductions, capital revisions upward even for this year.
We are on time and budget for all capital of 2008 capital programs and we are very focused on operations in achieving results, which we think will drive share value as we go forward.
Expiration and development fronts, we made significant progress. The recent release of the (inaudible) study clearly indicates we got an attractive project. During the quarter, despite there was a decision made by the government for delay, despite the decision by the government during Q2 we remain confident this will become an important production asset for us in the future.
Likewise at Westwood, which is our project in Quebec, as you may know this is a project that we think we will do a minimum of 200,000-ounces as year. but over the quarter our understanding the geologic controls and economic potential has also increased significantly.
We identified a number of ways to accelerate the project. Whether it is early access to the [[Nornmac]] lands or early decision if you like to begin shafting because we are committed to moving the project forward and continually reviewing our development plan seeking ways to improve the economics further or shorten the time line to a commercial production.
In terms of expiration, we made project increasing our resources at Buckreef, as well as, identifying other projects, such as Boto and Sarah creek, we encountered significant gold mineralization to date.
In terms of our nongold assets, Niobec had another stellar quarter. With net cash flow -- cash flow of roughly 60 million and we believe that Q3 may even be better than that. We substantially increased our disclosure on Niobec. The attention around that is to insure that the investment community truly understands the value of this asset. We outlined the impact of the capital program as well during the quarter for a pace back fill plant, which doubles the reserve base.
Overall, Q2 was a strong operating quarter for the Company, and my thanks to all the IMG team for the contributions to our success. We are now going in the presentation.
You will note on the the first slide after the cautionary statement that we, there are three speakers but myself and Carol Banducci as our CFO, and Gordon Stothart. Those two individuals will carry the bulk of the presentation.
But whether it is the African operations, project development, leadership, as well as exploration and communications group, they are all in the room to address any questions during the q-and-a period.
So looking at the Q2 highlights, again net earnings were 33 million, or $.011 cents per share, that's 170% increase on the time period a year ago. Operating cash flow up 219% to 45 million, revenue up 35% to 225, relative to last year.
Those three facts are very critical to demonstrate this Company has significant operating and gold price leverage cash flow leverage to the gold price, now. We have production of 255,000-ounces and sales to slightly below that, at 248,000-ounces.
Importantly cash costs 472 and that's a slight reduction from where we were in Q1. Our financial position remains strong. Cash and bullion position of $300 million despite capital expenditures over the first half of the year.
In terms of accomplishments, we have increased our space at Westwood to 3.5 million. Importantly, we also accelerated the …