Iamgold (IAG) Q3 2026 earnings review
Gold prices lift Iamgold's profit, but Côté costs exceed plan
High gold prices lifted Iamgold's cash and profit even as its newest Canadian mine produced less gold than a year ago. Third-quarter revenue rose 21% to $857 million because realized gold prices climbed, while production at the Côté mine in Ontario fell 14% after an August shutdown and mill downtime. Chief executive Renaud Adams kept the full-year production outlook intact, but by our math Côté must increase output by a third in the fourth quarter just to reach the bottom of its annual target.
| Attributable gold production | 186,900 oz -1.4% from a year ago |
|---|---|
| Realized gold price | $4,277/oz +22.5% from a year ago |
| Profit per share, excluding one-offs | $0.42 +40% from a year ago |
| Full-year production and cost outlook | Mixed Production held; Côté cash costs and total AISC to exceed plan |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because smart capital deals balanced out higher operating costs and Côté's slower ramp. On the positive side, the company will pay $525 million in December to buy back half of Franco-Nevada's royalty on Côté — including partner Sumitomo's share — which cuts Iamgold's effective royalty rate there from 7.5% to 2.14% next year, and it pulled another $224 million of cash out of Burkina Faso to fund share buybacks. The bad news: management admitted Côté cash costs and company-wide all-in sustaining costs will breach their 2026 ranges, shifted $30 million of Côté capital budget into Essakane waste stripping, and disclosed a November local-refining mandate in Burkina Faso from which it holds only a temporary exemption.
The question now is whether Côté's September plant performance can carry through a full quarter and bring unit costs down. Either the removal of outside crushing contractors lets Côté hit 86,000 ounces in the fourth quarter and sets up a strong 2027 mine plan, or high mining costs and deferred capital keep eating into the royalty savings. Fourth-quarter Côté production and the year-end technical report will settle it.
🐂 Bull Case
Iamgold Buys Out Partner's Share of Côté Royalty
Iamgold operates the Côté gold mine in Ontario as a 70-30 joint venture with Sumitomo Metal Mining. The mine pays a 7.5% gross margin royalty — a share of revenue minus operating costs — to Franco-Nevada. On November 5, the Canadian miner sent "an irrevocable notice exercising its contractual right to repurchase 50% of FNV's existing 7.5% Gross Margin Royalty".
Sumitomo chose not to take part, so Iamgold will pay the full $525 million price in December and keep all the savings. That cuts the royalty rate on Iamgold's 70% share of the mine from 7.5% to an effective 2.14% starting in January 2027. Because net cash excluding leases rose to $317.6 million this quarter and the company sold its Bambadji project in Senegal for $48 million net, it can pay the bill from its $1.61 billion of available cash and credit.
What to watch: Côté royalty expense per ounce in the first quarter of 2027. At a $4,000 gold price, the company calculates Côté royalties at $300 per ounce today, so a drop of more than two-thirds will directly lower next year's production costs.
Essakane Cash Transfers Fund Another Buyback Plan
Iamgold uses cash from its Essakane mine in Burkina Faso to buy back its own stock, and the transfers sped up after the quarter ended. In June, Essakane declared a $500 million dividend from last year's profit, of which Iamgold's 85% share after local taxes is about $400 million. The miner brought $87.8 million back to Canada in the third quarter and another $135.8 million after September 30.
That $223.6 million total leaves $176.4 million still to come through late 2026 and early 2027. The company spent $134.7 million to cancel 7.6 million shares in the quarter, bringing total buybacks since December 2025 to $592.6 million. Its board now plans to apply for a new twelve-month buyback programme for up to 10% of its shares, and it is considering starting a regular shareholder dividend in 2027.
What to watch: the remaining $176.4 million of Essakane dividend transfers by early 2027. Completing the transfer on schedule will show that currency and banking rules in Burkina Faso have not slowed cash returns.
Westwood Grades Rise and Tank Sludge Adds Gold
Westwood, the company's underground mine in Quebec, is making up for slower output elsewhere. Third-quarter gold production rose 25.6% from a year ago to 28,500 ounces because underground ore grades — the concentration of gold in the rock — climbed to 8.09 grams per tonne from 6.42 grams. Higher volumes pushed Westwood's all-in sustaining cost (AISC), a measure of operating and ongoing capital costs, down 24.2% to $2,118 per ounce.
Workers also found 14,700 kilograms of "gold-bearing sludge type material that had accumulated at the bottom of the pregnant solution tank" over several years. Early samples suggest the sludge could hold roughly 30,000 ounces of gold, though the company cautioned the figure is uncertain until an outside refinery processes it in the fourth quarter. In Quebec exploration, the miner also expanded its 2026 drilling at the Nelligan deposit from 18,000 metres to 30,000 metres ahead of an economic study in mid-2027.
What to watch: fourth-quarter refined ounces from the Westwood tank sludge. Any payable gold will add directly to fourth-quarter sales because management excluded the material from its 110,000 to 130,000 ounce outlook.
🐻 Bear Case
Côté Misses Cost Plan and Faces Fourth-Quarter Hurdle
Chief executive Renaud Adams said Côté finished its first quarter without outside crushing contractors and ran above design capacity in September, "positioning the mine to deliver its strongest quarter of the year in the fourth quarter". Yet the third quarter fell short: Côté's attributable output dropped 13.7% from a year ago to 64,400 ounces because of an extended August shutdown and downtime on a grinding mill that lowered gold recovery to 90%.
- Full-year Côté production: now expected at the bottom of the 270,000–310,000 ounce plan, requiring 86,000 ounces in Q4 (+33.5% from Q3) by our math
- Côté cash costs excluding royalties: $1,283 per ounce year-to-date, now expected to breach the $900–$1,050 full-year plan
- Côté unit costs in Q3: milling fell to $18.92 per tonne ($15.36 in September), but mining rose to $4.77 per tonne and site overhead rose to $8.45 per tonne
- Côté sustaining capital: cut $30 million to $130 million "due to the reprioritization of resources and deferral of less critical projects to 2027"
Dropping the outside crusher worked in September, but full-year Côté costs will still miss the target and $30 million of capital work simply moved into next year. Meanwhile, the fourth-quarter mine plan will focus on raising plant capacity to 40,000 tonnes per day, while a larger plant expansion remains in study.
What to watch: Côté fourth-quarter attributable production and the updated mine plan due before year-end. Anything below 86,000 ounces would miss the bottom of the annual target, and the study will show how much capital the next expansion requires.
Burkina Faso Orders Local Refining as Stripping Costs Rise
Essakane generated $271.1 million of mine-site free cash flow this quarter — two-thirds of the company's total — so rules in Burkina Faso matter to every shareholder return. On October 12, the government ordered mining companies to deliver all unrefined gold bars to approved refineries inside Burkina Faso starting November 1. Iamgold received a temporary exemption and is in talks with officials to ensure local refining meets international standards.
Government take and capital spending at the mine are already climbing. Following a 2025 decree that ties royalty rates to gold prices without a cap, Essakane paid an 11% royalty rate ($481 per ounce) in the third quarter, up from 9% a year ago. In addition, the company raised Essakane's 2026 sustaining capital plan by $30 million to $195 million because a change in the mining sequence required extra waste rock removal at the Lao pit.
What to watch: the status of the temporary refining exemption in the fourth-quarter report and the mid-2027 Essakane life-extension study. Losing the exemption before international-standard refining is ready could delay gold sales and cash transfers.
Higher Gold Prices Mask Rising Per-Ounce Costs
Iamgold's gross margin rose 8.8 percentage points from a year ago to 47.4% because cost of sales fell from 61.4% of revenue to 52.6%. That improvement came entirely from gold prices, which rose 22.5% to $4,277 per ounce while attributable gold sales volume slipped 1.9% to 183,100 ounces.
Per ounce sold, costs moved the other way. Consolidated all-in sustaining cost including royalties rose 11.7% from a year ago to $2,184 per ounce, and reached $2,191 year-to-date. Management now expects to exceed its $2,000 to $2,150 full-year plan, blaming $45 per ounce of extra price-linked royalties and noting that Middle East conflict pushed Essakane fuel prices up 3.5% in September.
What to watch: fourth-quarter cash costs excluding royalties against the $1,100 to $1,250 full-year plan. Year-to-date cash costs sit at $1,251 per ounce, so fourth-quarter unit costs must drop even before counting royalties.
💲 Other KPIs
Fell 1.3% from a year ago and dropped by 9.1 million shares from the second quarter. Until this quarter, shares issued for the late-2025 Northern Superior and Orbec acquisitions had kept the share count above prior-year levels despite the buyback.
Rose 64.2% from $280.8 million a year ago and increased from $445.1 million in the second quarter. After subtracting $103.0 million of property and equipment spending, consolidated free cash flow was $358.1 million, or 41.8% of revenue by our math.
Increased 44.5% from $14.6 million a year ago, close to the $21.8 million spent in the second quarter. The gold producer said $5.3 million of planned cloud software setup costs and $2.8 million of higher staff pay caused the increase.
🔮 Guidance
Unchanged. The middle of the range calls for 770,000 ounces, up 0.5% from 2025. By our math, hitting the middle requires 211,400 ounces in the fourth quarter, a 13.1% jump from the third quarter and a 12.8% drop from last year's fourth-quarter record. Côté is now steered to the bottom of its 270,000–310,000 ounce range and Westwood to the top of its 110,000–130,000 ounce range.
Unchanged on paper, but Côté's portion was cut. Consolidated costs sit at $1,251 per ounce after nine months, and the company still expects to finish in the upper half of the range as fourth-quarter volumes rise. However, it now expects Côté cash costs excluding royalties ($1,283 year-to-date) to finish above its $900–$1,050 target.
Unchanged. Year-to-date costs are $1,821 per ounce after $1,836 in the third quarter, and management expects the full year to land at the top of the range. By our math, finishing at $1,825 per ounce allows fourth-quarter costs of about $1,836 per ounce, matching the third quarter.
Worsened. While the printed table still shows $2,000–$2,150 based on a $4,000 gold price, management stated it now expects to exceed the top end of the range. Realized gold prices of $4,514 per ounce year-to-date added $45 per ounce of extra royalty charges, pushing nine-month costs to $2,191 per ounce.
Unchanged in total ($380 million sustaining and $120 million expansion), but shifted between mines. Iamgold cut Côté sustaining capital by $30 million to $130 million by deferring projects to 2027, and raised Essakane sustaining capital by $30 million to $195 million for extra waste stripping. With $329.4 million spent year-to-date, the plan leaves $170.6 million for the fourth quarter.
Raised by $10 million (a higher cash outflow). The company has paid $184.5 million across the first nine months after paying $83.6 million in the third quarter, driven by higher profits at Essakane and withholding taxes on dividend transfers. By our math, the new middle of the range leaves $35.5 million of tax payments for the fourth quarter.
Unchanged. Exploration spending reached $36.9 million after nine months, leaving $17.1 million for the fourth quarter, mostly at Nelligan. Depreciation reached $360.8 million year-to-date, leaving $119.2 million for the fourth quarter at the middle of the plan.
❓ Key Questions
How long does the Burkina Faso refining exemption last?
Burkina Faso ordered miners to refine all gold inside the country starting November 1, and Iamgold received a temporary exemption. How long is that exemption valid, and what happens to Essakane sales if it expires before local refineries meet international standards?
Which Côté projects were deferred into 2027?
Management cut 2026 Côté sustaining capital by $30 million by deferring projects to 2027, while guiding Côté cash costs above the annual plan. Which projects moved, and how much will they add to 2027 all-in sustaining costs?
Why did Côté mining and overhead costs rise in Q3?
Ending outside crushing cut Côté milling costs to $15.36 per tonne in September, near the $15 year-end goal. However, mining rose to $4.77 per tonne and site overhead jumped to $8.45 per tonne from $6.14 a year ago. Can Côté still hit $4 mining costs by December?
How will the $525M royalty purchase affect 2027 dividends?
Funding Sumitomo's share lifts the December Côté royalty buyout price to $525 million from earlier estimates around $350 million. With $766.6 million of cash on hand ($321.0 million of it in Burkina Faso), will the company draw its credit line or delay its planned 2027 dividend?