IAMGOLD shares dip on cost hikes

[Ben Graham]

IAMGOLD (NYSE: IAG) (TSX: IMG) shares fell on Friday after the company reported a decrease in net earnings in the second quarter compared to a year ago despite benefiting from rising gold prices.

During the three months to June 30, 2025, the Canadian gold miner saw a 4% increase in production to 173,000 oz. over last year, which, combined with higher gold prices, propelled its revenue to $580.9 million, a more than 50% increase.

However, its adjusted net income attributable to shareholders fell by 7% to $77.3 million, resulting in a lower earnings per share of $0.13 compared to $0.16 in Q2 2024.

The declines are connected to higher costs incurred across its operations. For the quarter, IAMGOLD’s cash costs for its gold production were $1,556/oz., versus $1,071/oz. last year. All-in sustaining costs (AISC) also rose to $2,041/oz., compare to $1,617/oz. in 2024.

Citing market conditions as well as regulatory dynamics, the company has raised its cost guidance for the year, with annual cash costs expected to be approximately $150 higher per ounce sold at between $1,375-$1,475 (from $1,200-$1,350), and AISC to fall between $1,830-$1,930/oz. (from $1,625-$1,800). 

The revision, IAMGOLD says, is primarily attributed to higher royalties from surging gold prices and a change in the royalty structure. The company also cited the impact of foreign exchange on costs at its only producing mine abroad, Essakane mine in Burkina Faso, and higher operating and non-recurring capital at the Côté mine in Ontario.

Shares of IAMGOLD were down by 2.4% as of Friday afternoon, trading at C$10.38 apiece with a near C$6 billion ($4.4 billion) market capitalization. The stock had been rallying earlier this week, but failed to test its 52-week high of C$11.63.

Production outlook

IAMGOLD currently has three operating mines: two in Canada (Côté and Westwood) and one in Burkina Faso (Essakane).

Production from Westwood and Essakane both declined year-over-year during the latest quarter, at 77,000 oz. and 29,000 oz., respectively. Meanwhile, the Côté mine, which came online a year ago, more than tripled its attribute production to 67,000 oz. (based on a 70% share), owing to a successful ramp-up to nameplate capacity.

The combined production takes IAMGOLD’s first half output to 334,000 oz., a slight improvement over the 317,000 oz. from a year ago.

The company’s 2025 guidance is set at 735,000-820,000 oz., which management says it still expects to meet due to increased mining activity in the second half, with forecast production of between 400,000-485,000 oz.

The stronger second half is due to continued improvements at the Côté mine during its first full year of operations, coupled with an increase in expected grades at both Essakane and Westwood based on the respective mining sequences, IAMGOLD stated.