IAMGOLD Corp

TSX:IMG

Earnings Call Transcript 2022-Q3

[Operator]

Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD Third Quarter 2022 Operating and Financial Results Conference Call and Webcast. As a reminder, [Operator Instructions] and the conference is being recorded. [Operator Instructions]

I would now like to turn the conference over to Graeme Jennings, VP, Investor Relations and Corporate Communications for IAMGOLD. Please go ahead, Mr. Jennings.

[Graeme Jennings, executive]

Thank you, operator, and welcome, everyone, to the IAMGOLD third quarter 2022 operating and financial results conference call. Today joining me on the call are Maryse Belanger, Chair of the Board and Interim President and CEO; Maarten Theunissen, Interim Chief Financial Officer; Bruno Lemelin, Senior Vice President, Operations & Projects; Craig MacDougall, Executive Vice President, Growth; and Tim Bradburn, Senior Vice President, General Counsel and Corporate Secretary.

Our remarks on this call will include forward-looking statements. Please refer to the cautionary statement included in the presentation under the heading cautionary statement regarding forward-looking information and be advised that the same cautionary language applies to our remarks during the call. Non-GAAP measures will also be referenced on the call and we direct you to review the cautionary statement included in the presentation and the reconciliations of these measures included in our most recent MD&A, each under the heading non-GAAP financial measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading qualified person and technical information. The slides referenced on this call can be viewed on our website.

I will now turn the call over to our Chair and Interim President and CEO, Ms. Maryse Belanger.

[Maryse Belanger, executive]

Thank you, Graeme. Good morning, everyone, and thank you for joining us today. IAMGOLD reported another strong quarter building on operational and productivity initiatives put in place earlier in the year. Based on the exceptional performance of our operating teams, we forecast that 2022 production will exceed the top end of our guidance. Consequently, we increased our production guidance for the year to between 650,000 and 705,000 ounces, up from 570,000 to 640,000 ounces as previously guided. On behalf of the Board and the executive team, we applaud the tireless efforts of the IAMGOLD team for their continued commitment to operating safely, responsibly and consistently. The Cote Gold project saw a significant ramp-up in activity and is advancing well. It is following the schedule and cost rebase line provided to the market in the summer.

Currently, Cote is over 64% complete and is nearing peak manpower capacity with approximately 1,500 workers at site. The site recently celebrated 6.9 million hours without a long-term injury, which is a testament to the safety commitment, skills and dedication of the Cote Gold team. Financially, the company took a significant step in addressing its funding requirement for the Cote Gold project with the announcement of the sale of our interest in the Rosebel Mine Complex to Zijin Mining for $360 million in cash and $40 million in assumed liabilities. The transaction also showed the strong support from our lenders as they provided consent to release Rosebel from their security package. The remaining funding alternatives are well advanced and we expect to be able to provide further updates in the fourth quarter.

I am 100% confident in our ability to address the near-term challenges in order to [ develop ] Cote on its updated schedule for initial production early in 2024. Our goal remains the same to be a leading high margin gold producer and we will better position IAMGOLD as a more resilient and agile company. Now starting with health and safety. Our performance continues to improve and trends below our annual targets with a days away, restricted and transferred with a range of 0.27 and total recordable injury rate of 0.72. Ensuring all of our employees go home safe after every shift is fundamental and core to our business. Every gold ounce produced has to be done safely. In the third quarter, IAMGOLD reported 184,000 ounces of attributable production, achieving the highest quarter of production in over 2.5 years.

This outperformance was driven by record production at Essakane, steady performance from Rosebel and early signs of operating improvements at Westwood. The strong production results and sales volumes translated to cash cost of $1,126 per ounce sold and all-in sustaining cost of $1,559 per ounce sold. We have seen continued cost pressure from inflation though these pressures stabilized during the third quarter of 2022 relative to the first half of the year. Further, the impacts of these cost pressures on mining and processing costs were partially mitigated through the production performance of our operations. Based on the strong operating performance this year, the company expects that annual production will exceed the top end of the previous guidance range of 570,000 to 640,000 ounces and is revising its guidance upward to between 650,000 and 705,000 ounces.

The primary driver of this increase is at Essakane where we have increased guidance to 410,000 to 430,000 ounces, up from 360,000 to 385,000 ounces previously. We also adjusted guidance on cost with all-in sustaining cost forecast to be below original expectations coming in between $1,600 to $1,650 per ounce sold, down from the original $1,650 to $1,690 per ounce. As noted on the prior slide, we are seeing continued cost pressures from external market forces, which are shown to stabilize and have been partially mitigated through our operating performance. Further, we continue to see benefits from our oil and foreign exchange hedges. For example this year, we have a 80% hedge ratio on WTI and a 71% ratio on Brent contracts at price points between $38 and $65 per barrel. These hedges further insulated us from rising cost in the first 9 months of the year.

I will now turn it over to Maarten to walk us through financial review.

[Marthinus Theunissen, executive]

Thank you, Maryse, and good morning. The following are some key highlights of our third quarter financial results. Gold revenues in the third quarter totaled $343 million for a year-to-date total of just over $1 billion. The average realized sales price for gold for the quarter was $1,690 per ounce and that includes the impact of delivering 37,500 ounces at $1,500 per ounce under our 2019 Prepay Arrangement. We have 37,500 ounces remaining to be delivered in the fourth quarter under the Prepay Arrangement. Adjusted EBITDA came in at $103 million for the quarter and exclude the $74 million after tax noncash impairment charge recognized to align the carrying value of the Rosebel cash generating unit with the sales price of the asset as well as the impact of unrealized non-hedged derivatives and foreign exchange losses mainly due to the impact of the weakening Canadian dollar on the cash balances held in Canadian dollar. Year-to-date adjusted EBITDA was $350.6 million.

The company reported a third quarter net loss of $129.1 million and an adjusted net loss of $13.7 million or $0.03 per share bringing the adjusted earnings year-to-date to $6.1 million or $0.01 per share. The adjustments mainly relate to the noncash impairment charge in Rosebel and the foreign exchange differences previously mentioned. Operating cash flow before changes in working capital was $108.8 million for the quarter and $336.6 million for the year-to-date. And mine site free cash flow increased to $59.2 million in the quarter and totals $189.3 million for the year-to-date. In terms of our financial position, we ended the quarter with approximately $536 million in cash and cash equivalents and short-term investments and we had approximately $107 million available under our credit facility after drawing down $380 million year-to-date and accounting for the letters of credit in the amount of $19.3 million issued under the credit facility as collateral for certain surety bonds issued as environmental indemnities.

Taken together, this translates to approximately $637 million in total liquidity at quarter-end. Of note, $238 million of our cash and cash equivalents entailed by Cote Gold and Essakane as the Cote Gold JV requires its joint venture partners to fund in advance 2 months of future expenditures and at Essakane, the company uses dividends and intercompany loans to repatriate funds from its operations and the timing of dividends is usually in the second and third quarter of every year. As a result, we typically hold between $200 million and $250 million of cash on our balance sheet for normal course business purposes. At the end of the third quarter, the remaining attributable spend to complete the construction of the Cote Gold project is estimated to be between $1 billion and $1.1 billion.

Based on information currently available and prevailing market conditions, we continue to expect that IAMGOLD will require additional liquidity in 2023 in addition to the proceeds expected to be received from the sale of Rosebel to complete the construction of the project. The company is actively pursuing various alternatives to increase its liquidity and capital resources, including the options listed here. The funding alternatives are advancing well and we expect to be able to provide an update later in the fourth quarter. It is worth highlighting that the strategic review of our development and exploration assets in the Bambouk region of West Africa is active and ongoing, and we will provide further updates in due course.

[Maryse Belanger, executive]

Thank you, Maarten. Now look on the operations. I will talk first about Essakane. Essakane achieved its highest quarter of production ever reporting attributable gold production of 115,000 ounces. The mine continues to benefit from the higher grade mineralization in the lower portion of the phase 4 pit with higher amounts of coarse gold. Mining activity of 12.6 million tonnes increased from the prior quarter as mining operation resumed at full capacity in September thanks to an easing of supply chain challenges in country and abroad. Mill throughput increased in the third quarter to 3 million tonnes benefiting from improved grind size and a higher plant availability at 93%. Head grades were reported at 1.5 grams per tonne and recoveries at 90%, remaining at the same level as seen in the second quarter. As announced subsequent to quarter-end, there were political developments in Burkina Faso with a change of leadership within the military led government.

All IAMGOLD personnel were safe and the Essakane operation continues to operate as per the business plan. The company continues to take proactive measures to ensure the safety and security of our in-country personnel and we continue to adjust protocols and activity levels at site according to the security situation. As we look to the end of the year, we have increased our production guidance for Essakane to between 410,000 and 430,000 ounces, up from 360,000 to 385,000 ounces previously. Essakane is well positioned to have its best production year ever and that's the best year on record. We are continuing to review the positive reconciliation between head grades and the updated block model while we are also executing on targeted operational improvements. Recent initiatives focused on increasing mill throughput and recovery with improved blast fragmentation and enhanced gravity circuit recoveries through the planned addition of a double deck screen.

Now turning to Rosebel. Operationally, the turnaround at Rosebel has continued with Q3 attributable production of 50,000 ounces. This is the fifth progressive quarter of higher production as a result of the infrastructure improvements initiated at the end of last year and the new life of mine plan announced earlier this year document a roadmap to return Rosebel to being a 300,000 ounces plus producer by 2025. Subsequent to quarter-end on October 18, the company announced that it had entered into a definitive agreement with Zijin Mining Group to sell its interest in the Rosebel mine for total consideration of $401 million with cash consideration of $360 million and the assumption of $41 million of liabilities related to equipment leases. When we initiated our strategic review process for Rosebel, our goal was to find a new owner committed to the future of the Rosebel complex and who would make the necessary investments in the operation and place it on a path for long-term success.

Rosebel has been an important contributor to IAMGOLD and we are pleased that a company with the capabilities and reputation of Zijin, a leading global mining company, will be taking over this operation for the benefit of all stakeholders. The transaction is expected to close in the first quarter of 2023 or earlier subject to some regulatory approvals. With the exceptional diligence and efforts of our Rosebel employees and management, Rosebel is expected to produce 175,000 to 200,000 ounces, up from our prior guidance of 155,000 to 180,000 ounces. Cost pressures remain in Surinam as the country is heavily exposed to the US dollar and a net importer of goods though oil prices continue to be partially mitigated by our existing hedge program. On Westwood, gold production was 19,000 ounces in the quarter as a result of higher volumes of underground ore at a higher grade and higher tonnages from the Grand Duc satellite open pit.

Lateral development in the third quarter was 951 meters, lagging from the previous quarter due to continued labor constraints and lower mechanical availability of underground equipment. However, underground rehabilitation progress at the planned rate despite challenging ground conditions and impacts from supply chain challenges. Underground mining activity in the third quarter focused on accessing additional stope sequences in the Eastern Zones to supplement the recently opened higher grade Western and Central Zones in order to secure multiple ore faces, which will allow for simultaneous exploitation underpinning the 2023 production plan. As a result of the improvements seen in Q3 and expectations for Q4, we raised the bottom end of our production guidance to 65,000 to 75,000 ounces, up from 55,000 to 75,000 ounces previously.

Now turning to Cote Gold. The project has made significant progress over the last few months. Progress rates are currently at peak levels in line with the updated project plan. The site is currently near capacity with approximately 1,500 workers. I visited that site a couple weeks ago and I have to commend the project management team for diligence and focus to keep everyone on task. As of September 30, the company's estimated attributable remaining project spend to complete construction and bring Cote Gold into production is $1 billion to $1.1 billion net of leases and working capital. It is worth noting considering current market that this estimate also assume a Canadian to US exchange rate of 1.25 to 1 so any further strength in the US dollar provides a benefit to Cote Gold's construction cost are our contracts and expenses are Canadian dollar denominated.

The company is putting in additional Canadian dollar foreign exchange hedges in addition to its existing hedges to increase exposure to current rates over the construction period. The project at the end of September was 64.2% complete with monthly project advancements estimated to be approximately 3% to 4% per month during this peak construction period. Detailed engineering is now 100% complete so all focus is on execution and mechanical installation.

Key progress milestones in the third quarter include ramp-up of structural, mechanical and piping activities in the processing plant with the ball mill now mounted on the reception cradle and the pump box set in place. Significant progress on the tailings management facility, water realignment channel, publishing pan dam and other volume management infrastructure dams. The handover and assembly of the Autonomous Control Room, completion of the primary crusher concrete to the 409 elevation with just 1 more vertical lift remaining and concrete foundations for the HPGR/secondary crusher, screening building and fine ore bins handed over to SMPEI contractors.

So Cote Gold continues to track well to the updated project schedule towards initial production in early 2024. IAMGOLD and our partner Sumitomo are aligned and focused on building Cote safely on time and to the current scope and budget. At this time, the critical path for the project continues to be through the processing plant and all teams are focused on ensuring outdoors work has been executed to facilitate mechanical installation within the plant once the winter season hits. The company cautions that potential further disruption including without limitation caused by COVID-19, the Ukraine war, weather, potential labor disruption and the tight labor market could continue to impact the timing of activities, availability of workforce, productivity and supply chain and logistics and consequently could further impact the timing of actual commercial production and project cost.

Now right next to Cote, Gosselin. At the end of last year we announced an initial resource for the Gosselin deposit, which is located immediately adjacent to Cote. Gosselin contains 3.4 million ounces of measured and indicated resources and an additional 1.7 million ounces of inferred resources. Notably, Gosselin has only been drilled to have the depth of Cote and is open along strike and at depth. This year we conducted a 16,000-meter diamond drill campaign targeting further delineation of the modeled resource and extension of the mineralization zone outside the resource boundaries. Results of this program will be reported once it's complete. It is worth reminding everyone that the Cote Gold life of mine plan as defined today is based on mineral reserves of 7.2 million ounces contained within the Cote deposit.

Taken together, Cote and Gosselin have a total of 13.5 million ounces in measured and indicated results. We firmly believe that Cote Gold is not just a project, but the start of a new mining district and there is significant upside to be uncovered as there has been minimal historical exploration targeting these Cote, Gosselin installed intrusion-hosted deposits within our 596 square kilometer land package.

With that update, I would like to pass the call back to the operator for Q&A.

[Operator]

[Operator Instructions] Our first question comes from Tanya Jakusconek with Scotiabank.

[Tanya Jakusconek, analyst]

Great. Maryse, Maarten, thank you for the insights. Maryse, can I ask a couple of things? I have 3 questions. So I'm going to start number one on inflationary pressures. I want to get an understanding are you starting to see any easing of inflation in your costs in either labor and/or diesel and/or consumables? Just are you starting to see that ease a little bit? That's my first question.

[Marthinus Theunissen, executive]

Tanya, if you don't mind, I'll answer the question. We have seen sharp increases like our peers in the first half of the year with inflation for oil type costs and oil linked commodities such as our grinding media. In Q3 we started seeing those costs plateau so we have not seen further increases, but the costs remain elevated at those levels that we saw in Q2.

[Tanya Jakusconek, analyst]

Okay. All right. And where would you -- so you're seeing it mainly in diesel and other consumables related to fuel, petrochemicals and other?

[Marthinus Theunissen, executive]

Yes. And items like steel grinding media that requires energy to produce.

[Tanya Jakusconek, analyst]

Okay. Nothing in labor.

[Marthinus Theunissen, executive]

No.

[Tanya Jakusconek, analyst]

Okay. My second question again is another technical question, which has to do with the reserves. I'm just interested to understand what exactly is happening at Essakane that you're getting this positive block model reconciliation on the grade. Like what do you think is happening with this complex geology? And my second part would be as you look at your reserves in year-end 2022, are you thinking about adjusting the gold price upward to reflect these additional or higher costs? I don't know, Maarten, you or Maryse on that one.

[Maryse Belanger, executive]

Okay. I'll take the question on Essakane. We've added few consecutive months of positive reconciliation at Essakane. It is linked to really coarse gold in the Phase 4 pit and that coarse gold in fact seems to report directly to gravity. So we have great benefits from that. And we are into process of validating our block model and further, we are now drilling and trying to better understanding the type of mineralization and what's going on. So I would suspect next quarter we would be able to provide more visibility to what we see Essakane adapt. And talking about cost and all of the technical aspects, we are not seeing any changes to our kind of grade at Essakane.

[Tanya Jakusconek, analyst]

Maryse, what about the company itself for 2022 year-end?

[Maryse Belanger, executive]

Sorry, Tanya, would you please repeat?

[Tanya Jakusconek, analyst]

I guess it was just you're only left with really Westwood so it's an underground operation. That's fine, I just answered my own question there. So my last question, if I could, was just on the additional liquidity that you're looking to put in place by year-end. You mentioned that the Boto and exploration is well advanced. I thought my understanding was that you wanted to get all of that drilling done and then sort of get additional like a resource and/or other before that would be sold. Does it appear that you can get all of this done before year-end to give us an update in Q4?

[Marthinus Theunissen, executive]

Tanya, so our discussions with the various bodies is commercially sensitive. But what I think we can say is that for these assets, we continue to make sure that we get the value for the asset as part of the sales process and that it's not a prior sale. So we are looking closely at the proceeds and the underlying value that bodies are offering for it.

[Tanya Jakusconek, analyst]

Okay. So you feel you could get this done in Q4?

[Marthinus Theunissen, executive]

Yes.

[Tanya Jakusconek, analyst]

Okay. And then I noticed in your language in your release that you removed joint ventures off as one of your options -- joint venture partnerships. We had mentioned these on previous calls. So we're still looking to keep 100% of Essakane and Westwood. Is that a fair statement?

[Maryse Belanger, executive]

Yes, it is, Tanya.

[Tanya Jakusconek, analyst]

Okay. And then my last question just on this funding gap. Just once we sell or get value for Boto and other exploration, would you put your picking order as options on royalties and streams as preferred option to debt and/or equity? I'm just trying to understand the ranking of the remaining funding.

[Marthinus Theunissen, executive]

So we are looking at the options with the various solutions in the capital structure and it's a trade-off between the cost of capital and the permanency of solutions. So we have not decided a picking order. We are looking through the various options with that competitive tension between the cost of capital and the permanency of the solutions.

[Tanya Jakusconek, analyst]

I guess I'll stay tuned. Do you think you will have the full funding so including your other option in addition to the sale of Boto and other by year-end?

[Maryse Belanger, executive]

Yes, we will be able to communicate this to the market before year-end.

[Operator]

The next question is from Anita Soni with CIBC World Markets.

[Anita Soni, analyst]

First question, you mentioned the amount of cash that is held between Essakane and Cote. Could you give us a breakout of that? I think it's probably -- it's critical to my thinking in terms of how much is actually put ahead for the Cote construction already.

[Marthinus Theunissen, executive]

So Anita, the way that the Cote spending or cash cost work is we have to provide 2 months of funding, but the cash cost is on the beginning of the month. So at the end of the month, we have approximately 1 month of expenditures remaining and then we need to fund on the next day. So we see it as 2 months of cash. I would say that it's roughly 50-50 of that amount that we've included in the MD&A.

[Anita Soni, analyst]

Okay. So 50-50 between Essakane and how long does it take you to upstream cash from Essakane to go into Cote?

[Marthinus Theunissen, executive]

It doesn't take us long at all. However, we only can do it in a certain window and that window is normally Q2 and Q3. So that's why the cash balance build up in Q4 and Q1 and then we start repatriating cash again in that window.

[Anita Soni, analyst]

Okay. And then as I look to just a minor point, but going into Q4 the guidance for the year at Essakane would imply a weaker quarter so somewhere around the range I think it was about 85,000 ounces or so. And you did mention that you'd be focusing on stripping to prepare yourself for the grade profile in 2023 and 2024. So is that accurate my assumption that you'd be focused more on stripping and less on delivering ore to the mill at Essakane in Q4?

[Maryse Belanger, executive]

Anita, thanks for the question. First of all, we do expect grades to normalize closer to reserve grades in the fourth quarter. We also expect the mill to be processing 100% hard rock as opposed to a combination of saprolite and hard rock. And also we have noted the security situation in the country. That's putting a bit of pressure on our people. The situation is managed. But at this point, I would rather be a little conservative when it comes to Essakane.

[Anita Soni, analyst]

Okay. And then just moving backwards to the funding gap in the Bambouk package of assets. I believe you carry it on the balance sheet right now for about $258 million. Is that an accurate assumption of the value that you're trying to achieve when you sell that or is there something else that we should be thinking about?

[Marthinus Theunissen, executive]

Anita, thanks for the question. It is very commercially sensitive at this stage in our process and we cannot comment on value. That is not our carrying value of these assets on our balance sheet. For Boto, it's closer to $80 million.

[Anita Soni, analyst]

No, I meant the package of assets, all of them together were $258 million I thought, but Boto itself is $80 million you said?

[Marthinus Theunissen, executive]

So the other assets is exploration assets and we don't -- we expense our exploration expenditures so we don't have significant value on the balance sheet. But value of the carrying -- accounting carrying value is not represented of the value of the package in our view.

[Operator]

[Operator Instructions] The next question is from Lawson Winder with Bank of America.

[Lawson Winder, analyst]

Thank you for the update. On the African asset sales, I just wanted to sort of drill down a little bit more on your previous comment. So when you say you expect to have some sort of announcement with regard to the strategic alternatives for West Africa by the end of Q4, do you mean for Boto plus the 2 smaller exploration stage assets?

[Maryse Belanger, executive]

Yes, it would be for the package. It would be for the 3 properties, yes.

[Lawson Winder, analyst]

And is the idea that they would all be sold together as a package or could there be multiple buyers for each of those assets within that package?

[Maryse Belanger, executive]

They could be sold separately, 2 of them, 3 of them together. It really depends on where we see the value and where we can create some value for the company. So no definitive answer yet on this and it's still work in progress.

[Lawson Winder, analyst]

Okay. Got it. And then just on Rosebel, with the higher guidance, I mean I think it's great that you're getting the benefit of that improved guidance. What I want to understand will there be any sort of adjustments upon closing as a result of that higher guidance or will IAMGOLD be able to fully benefit from that?

[Marthinus Theunissen, executive]

So for Rosebel, the purchase price is $360 million would not be adjusted based on the agreement, but there is certain working capital adjustments that will be made based on the standard working capital. And the company also receives the cash on the balance at the time of the sale. So if there is overperformance, it could result in an increase in proceeds. In our negotiations, we have shared these forecasts with the purchaser as well. So it's in line with what they are seeing as well.

[Lawson Winder, analyst]

Okay. And then just going to Essakane with the CapEx now running at -- sorry for this $75 million of sustaining CapEx. And if you look into 2023 I mean and even beyond, is that kind of the correct level for maintaining that operation?

[Marthinus Theunissen, executive]

We are currently working on the budget, Lawson, right now. I think it's too early to tell. There will be some stripping to be to be done in 2023 and 2024 for sure. But again to give you the best level of the capital for the coming years, we are actually finalizing our budgets.

[Lawson Winder, analyst]

Okay. We'll stay tuned for that. And then just finally I'm not sure if, Maryse, you can provide any color on the search for a permanent CEO. Is there sort of any sense of timing at this point?

[Maryse Belanger, executive]

Well, the CEO search is active and ongoing and the Board has been conducting an extensive process because we really want to find the right candidate for the job. And I would say in terms of timing, we'd expect to be able to make an announcement before the end of the year.

[Operator]

We have a follow-up question from Anita Soni with CIBC World Markets.

[Anita Soni, analyst]

Can I just get I guess some color, I'm sure I could probably find in the technical report if I looked, but the working capital requirements that you would have for Cote sort of leading up into the commercial production declaration early 2024. Could you give me a ballpark number of what you're looking at there?

[Marthinus Theunissen, executive]

The technical report does have information in there I think. What is important because it's an unincorporated joint venture, we will continue to have to fund 2 months of expenditures going forward and then each partner gets the gold credits back. So the working capital is included in the cost assumptions for the construction period, but also included in the technical report once it's in operation. So from a IAMGOLD perspective, we need to continue to fund the cash costs for the ongoing cash outflows of the project.

[Operator]

The next question is from Sean Wondrack with Deutsche Bank.

[Sean-M Wondrack, analyst]

Just the first question. I believe you provide a liquidity bridge on Slide 9. Your cash balance went up about $130 million quarter-over-quarter. Can you just describe what exactly drove that? Sorry if I missed it.

[Marthinus Theunissen, executive]

We drew down on our credit facility at the end of September and that was to assist us to make the cash call for Cote at the beginning of October. We also drew down a bit more and for a bit longer period to take advantage of savings in an increasing interest rate environment. So we drew down more on the facility than we needed in the short term.

[Sean-M Wondrack, analyst]

Okay. That makes sense. And then as I take a look at your income statement, it does appear that exploration and SG&A expense both came down a little bit. Is this a fair run rate to use moving forward?

[Marthinus Theunissen, executive]

We are working through our updated plans and budget process and we would be giving an update on that in our guidance. So I don't think we're in a position to say that that is our run rate. And we're also kind of looking at our exploration expenditures and levels based on what happens with the asset disposition of exploration assets in West Africa for example as well. So we just need to complete our assessment of our planned activities.

[Sean-M Wondrack, analyst]

Understood. And then is there any concern out there around the Rosebel sale closing? Anything in particular that could slow the closing or gives you any pause with it?

[Maryse Belanger, executive]

At this point no, there's nothing that gives me pause. We have the normal regulatory requirements and we are proceeding through those. As a matter of fact, I'm on my way to Surinam today with the Zijin representatives to do a joint visit and it's really just about customary regulatory approvals at this point.

[Operator]

This concludes the time allocated for questions. I'd like to hand the conference back over to Maryse Belanger for closing remarks.

[Maryse Belanger, executive]

Thank you very much, operator. And thanks to everyone for joining us this morning and for your continued engagement with IAMGOLD. As always, should you have any additional questions, please do not hesitate to reach out to myself or Graeme Jennings if you would like to set up a meeting. Thank you all and have a great day.

[Operator]

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.