IAMGOLD (IAG): Unlocking Cote's Full Potential and Path to Gold Price Exposure

In an era where gold prices have surged past $3,000 per ounce, driven by inflationary pressures and geopolitical uncertainty, IAMGOLD (IAG) stands out as a mid-tier gold producer with a compelling dual strategy: operational optimization at its Côté Gold Mine and aggressive financial de-risking. For investors seeking exposure to a rising gold environment while mitigating downside risks, IAG's trajectory offers a rare combination of disciplined execution and strategic foresight.

Operational Mastery at Côté: A Model of Efficiency

IAMGOLD's Côté Gold Mine in Ontario, Canada, has emerged as a cornerstone of its growth strategy. In Q2 2025, the mine achieved a critical milestone: sustained operation at 100% of its 36,000 tonnes-per-day (tpd) nameplate capacity for 30 consecutive days. This consistency—producing 67,000 attributable ounces (96,000 on a 100% basis)—demonstrates the mine's ability to scale production without sacrificing efficiency.

The mine's operational metrics are equally impressive. A 93% gold recovery rate, aligned with expectations, and a 0.95 grams per tonne (g/t) ore grade underscore robust metallurgical performance. Meanwhile, infrastructure upgrades, such as the planned installation of a secondary cone crusher in Q4 2025, promise to reduce refeed activities, optimize grind size, and extend equipment maintenance cycles. These improvements are not just incremental—they are transformative, positioning Côté to become a low-cost, high-throughput asset.

Financially, Côté's performance is equally compelling. The mine generated $229.2 million in attributable revenue in Q2 2025, with cash costs of $83.6 million translating to a cash cost per ounce of $1,219. This efficiency, combined with $93.9 million in mine-site free cash flow, highlights its role as a cash-generating engine. With full-year production guidance of 250,000–280,000 attributable ounces (360,000–400,000 on a 100% basis), Côté is on track to deliver consistent returns, even as gold prices fluctuate.

Financial De-Risking: A Path to Sustainable Growth

Beyond operations, IAMGOLD's financial discipline is a key differentiator. The company recently completed its gold prepayment obligations, delivering 37,500 ounces in Q2 2025 to fully repay the 150,000-ounce facility used to fund Côté's construction. This move eliminated a near-term liability and freed up capital for debt reduction.

IAMGOLD has since repaid $40 million of its second lien notes, reducing the principal balance to $360 million. As of June 30, 2025, the company's liquidity stood at $616.5 million—comprising $223.8 million in cash and a $391.7 million available balance under its revolving credit facility. This liquidity buffer provides flexibility to navigate volatility and fund growth initiatives, such as the Côté crusher project.

The company's cost structure has also been recalibrated to align with the higher gold price environment. Revised full-year consolidated cash cost guidance of $1,375–$1,475 per ounce sold reflects disciplined cost management, while all-in sustaining costs of $1,830–$1,930 per ounce remain competitive. With gold trading near $3,200 per ounce, IAMGOLD's margin expansion potential is significant.

Strategic Positioning in a Rising Gold Environment

IAMGOLD's dual focus on operational efficiency and financial prudence positions it to capitalize on the current gold price surge. The company's debt reduction strategy, combined with Côté's ramp-up and strong cash flow generation, creates a virtuous cycle: higher gold prices boost margins, which fund further deleveraging and reinvestment.

For investors, this translates to a mid-tier producer with the operational scale of a major miner and the agility of a smaller firm. IAMGOLD's ability to generate robust free cash flow—$151.5 million year-to-date from Côté alone—provides a buffer against cyclical downturns and funds future growth.

Investment Thesis

IAMGOLD's strategic execution at Côté and its proactive financial management make it a compelling play in a rising gold environment. With a strong liquidity position, a clear path to margin expansion, and a production profile aligned with long-term gold price trends, the company is well-positioned to deliver shareholder value. Investors seeking exposure to gold's upside with downside protection should consider IAG as a core holding in a diversified portfolio.

In conclusion, IAMGOLD's operational and financial progress underscores its transformation into a resilient, growth-oriented gold producer. As the sector navigates a new era of higher prices and tighter margins, IAG's disciplined approach offers a blueprint for sustainable success.