IAMGOLD Finds Gold In Westwood Sludge — Recovery Remains Outside Its 2026 Guidance
Refining batches should clarify the recovery by year-end, while Cote faces higher costs and a planned royalty repurchase.
IAMGOLD, which operates gold mines, found gold-bearing sludge in Westwood’s processing circuit, but any recovery remains outside its 2026 production guidance, Chief Operating Officer Bruno Lemelin said on the company’s Friday earnings call. An illustration of approximately 30,000 ounces is no promise of production or payment: management must wait for the refinery to establish what the material can yield.
Drums Are Not Gold Production
The sludge was collected from the bottom of a tank during a review of the circuit that extracts gold from solution. Management believes the material accumulated over several years; the drums weigh 14,700 kilograms in total, including substances other than gold.
Samples put solids at 19% to 27% of the material and gold at 6% to 47% of those solids. The approximately 30,000-ounce illustration uses the averages of those ranges, rather than a representative sample. Lemelin said it “should not be regarded as a reliable estimate.”
President and Chief Executive Officer Renaud Adams rejected the idea that the discovery meant gold had been lost. “We do not feel that there's been loss of gold over those years,” Adams said. He described accumulation in an area the team had not previously noticed.
Batch Refining Will Determine Recovery
Chief Financial Officer Martin Theunissen told a National Bank Financial analyst that material was being shipped to an external refinery in batches and processing had started that week. He expects work through November and the first half of December to produce assay results—measurements of gold content—and allow sales batch by batch.
Management expects recovered gold to enter fourth-quarter production, subject to refining and testing, but Lemelin cautioned that both quantity and timing remain uncertain. In response to an RBC Capital Markets analyst, he said revised procedures would capture material escaping the recovery cells each month.
Of Westwood’s 97,100 ounces from regular operations through nine months, 28,500 ounces came in the third quarter. Management expects annual output at the upper end of its 110,000-to-130,000-ounce guidance. The mine generated $51.7 million of mine-site free cash flow in the quarter and $218.2 million year to date.
Cote Costs Exceed The Range
The separate pressure on IAMGOLD’s costs comes at Cote. Lemelin expects annual cash costs excluding royalties above the $900-to-$1,050-per-ounce guidance range, even as operating efficiency improves. Third-quarter cash costs excluding royalties were $1,243 per ounce; milling costs fell to $18.92 per ton from $20.85 in the second quarter, reaching $15.36 in September.
IAMGOLD also plans to repurchase half of Franco Nevada’s 7.5% gross-margin royalty at Cote for approximately $525 million. Sumitomo declined to participate, leaving IAMGOLD to fund the purchase and retain its full economic benefit. Theunissen said balance-sheet cash would fund it, with a possible short-term credit-facility draw if needed.
Management expects the transaction to close in December and take economic effect on January 1, 2027. IAMGOLD expects its effective royalty rate to fall to 2.14%, reducing cash costs including royalties by approximately $150 per ounce.
For Westwood’s sludge, Theunissen expects a better understanding of the actual recovery by year-end; the refinery’s results, rather than the drums’ weight, will determine the gold available for sale.
Sources
- Iamgold Q3 2026 Earnings Call Transcript — benzinga.com
- Iamgold: Q3 Earnings Snapshot — Associated Press
- Iamgold: Q3 Earnings Snapshot – WTOP News — wtop.com
- Iamgold: Q3 Earnings Snapshot | wusa9.com — Associated Press
- IAMGOLD Reports Third Quarter 2026 Results - The Globe and Mail — theglobeandmail.com
