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Iamgold Corp Moves Up in 2017

- By Alberto Abaterusso

On Wednesday, shares of Iamgold Corp. (IAG) rose 0.82% on the New York Stock Exchange following the release of operational results for 2017. The Canadian mid-tier gold producer released them via its website.


The gold stock is trading at $6.16 per share and has a market capitalization of $2.84 billion, according to a total volume of 464.9 million shares outstanding. Of that, 42.35% is held by institutions, including Van Eck Associates Corporation, which owns the highest stake or 12.18% of shares as of Sept. 29.

According to this chart from Yahoo Finance, the stock is up trending again after a massive pull-back in which Iamgold Corp. lost nearly 30%.

Source: Yahoo Finance

However, for the 52 weeks ending Jan. 17, the gold stock gained 39.05% and outperformed the VanEck Vectors Gold Miners ETF (GDX) by 35%.

With an average price target of $7.63 per share, analysts see a further appreciation of Iamgold on the stock market within the next 12 trading months.

Catalysts to watch in 2018 will be the result of an increase in gold production attributable to the company and the initial estimate of gold reserves at Saramacca, which is adjacent to Rosebel gold mine, and at Essakane. At Essakane, the company is undertaking the heap leaching project.

The estimates on additional resources at Boto in Senegal, at Siribaya in Mali, Monster Lake and Nelligan in Canada, and Eastern Borosi in Nicaragua, should also trigger appreciation of the gold stock.

For 2018, the miner guides an attributable gold production of 850,000 ounces to 900,000 ounces, which is on average 1.2% higher than the prior-year guidance.

But let's take a look at preliminary operational results for 2017:

Iamgold produced 882,000 ounces of gold. It was just a whisper away from the guidance's top end of 845,000 ounces for 2017. The low limit of the guidance was 845,000 ounces.

The chart below illustrates the trend in the yearly gold production of Iamgold Corp. from 2013 to 2017.

The company expects to report an all-in sustaining cost of approximately $1,000 per ounce of metal sold in 2017 versus a guidance range of $1,000 to $1,040 per ounce.

Steve Letwin, the President and Chief Executive Officer of Iamgold Corp, said that the company closed the year with a liquidity of about $1 billion and that Iamgold plans to invest funds at Saramacca, Essakane and the Cote Gold project in Ontario.

Letwin also projects a gold production of 1.2 to 1.3 million ounces in four years and all-in sustaining costs decline of $850 per ounce of metal sold, all in four years.

(Disclosure: I don't have positions in Iamgold Corp or the VanEck Vectors Gold Miners ETF.)

This article first appeared on GuruFocus.


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