IAMGOLD to Fund Buyback of Half of Côté Royalty for $525 Million
Key Facts
On November 5, 2026, IAMGOLD said it had given Franco-Nevada final notice that it was exercising its contractual right to buy back half of the gross-margin royalty on the Côté mine. The current royalty is 7.5%, and the company estimated the buyback price at about $525 million. IAMGOLD will fund the full amount after Sumitomo elected not to participate, retaining the full economic benefit of the transaction, according to its third-quarter results release. The company expects to close the transaction in December 2026, with its economic impact beginning on January 1, 2027. The change is intended to reduce the royalty burden on the company's share of the mine, while the earnings-call summary estimated a reduction in cash costs of about $150 per ounce starting in 2027.
After the arrangements related to the buyback and the exercise of the associated options, IAMGOLD expects the effective royalty rate on its 70% share of Côté to fall to 2.14%. This comes as the mine's cash costs, including royalties, reached $1,544 per ounce sold in the third quarter of 2026. That cost rose 17% from the year-earlier period, while royalties were $301 per ounce, according to company data. The agreement therefore changes one component of the costs IAMGOLD bears for its share of the mine, but its economic impact will not begin before January 1, 2027. The estimated reduction of about $150 per ounce was cited in the earnings-call summary as a target for the transaction starting that year.
The move coincided with operating challenges at Côté in the third quarter: IAMGOLD's attributable production from the mine was 64,400 ounces, down 14% from the year-earlier quarter. The company attributed the decline to a lower processing rate following an extended annual shutdown in August and the transition to company-managed crushing. The mill's average feed grade also fell 7% year over year. Companywide, attributable production was 186,900 ounces in the third quarter and 558,600 ounces from the start of the year through September 30. IAMGOLD said it remained on track to meet its 2026 annual production guidance of 720,000 to 820,000 ounces.
Financially, IAMGOLD's third-quarter revenue was $856.5 million, up 21% from the year-earlier period. The company said revenue increased by $149.8 million, attributing the rise to a $785-per-ounce increase in the realized gold price despite lower sales volume. The CEO also said the company generated $404 million in free cash flow from its mine sites during the quarter. Available liquidity stood at $1.6134 billion on September 30, 2026, compared with $868.6 million on December 31, 2025. On the same date, the company reported net cash of $213.9 million, after net debt of $344.4 million at the end of 2025.
These figures provide context for the decision to fund the buyback in full: IAMGOLD said it had moved from net debt to net cash between the end of 2025 and the end of September 2026, alongside an increase in available liquidity. The company will, however, allocate about $525 million to complete the transaction, based on its current estimate. It said acquiring half of the royalty would allow it to retain the full economic benefit of the buyback. Separately, the earnings-call summary links the transaction to a targeted reduction in Côté's cash costs of about $150 per ounce starting in 2027. The deal's economic impact will not begin before the specified January date, while closing is expected in December.
Operationally, IAMGOLD plans to release an updated plan for the Côté mine and a new mineral reserve estimate in the fourth quarter of 2026, with the assessment to include the Côté and Gosselin deposits. It also aims to gradually raise the plant's processing rate to about 40,000 tonnes per day through debottlenecking and targeted improvements, while continuing to assess a larger plant expansion. The company said it is also considering beginning dividend payments in 2027. These steps follow third-quarter results that showed lower Côté production and higher cash costs per ounce, while IAMGOLD remained on track to meet its annual production guidance. The next milestones set by the company are the release of the mine plan and reserve estimate during the fourth quarter, followed by the start of the royalty buyback's economic impact on January 1, 2027, if the transaction closes on the expected schedule.