Iamgold (IMG-T, IAG-N) reported production of 253,000 attributable ounces of gold in the fourth quarter of 2011, the company’s best quarter of the year. Full-year production in 2011, including production from discontinued businesses, was 972,000 attributable gold ounces at an average cash cost within the guidance range of US$620 per oz. and US$650 per oz., Iamgold said.
Next year the company expects to produce between 840,000 ounces and 910,000 ounces of attributable gold (excluding ore stockpiled at Mouska that will be processed in 2013) at a cash cost of between US$670 per oz. and US$695 per oz., including royalties of about US$95 per oz.
In 2013 and 2014 Iamgold forecasts attributable gold production will rise to a range of 1 million ounces and 1.1 million ounces with the increase coming largely from the planned startup of its Westwood mine.
As for niobium production, it reached 4.6 million kilograms in 2011 and Iamgold forecasts it will produce between 4.6 million and 5.1 million kilograms in 2012.
Capital expenditures in 2012 are budgeted at US$880 million and include the expansion of the Essakane gold mine in Burkina Faso; continued development of the Westwood gold project for start-up in the first quarter of 2013; the expansion of the Rosebel gold mine in Suriname; continued underground development of the Niobec niobium mine in Canada; and the expansion of the Sadiola joint-venture gold project in Mali.
Capital spending plans will amount to US$900 million in 2013 and US$950 million in 2014.
Iamgold plans to spend about US$130 million this year on exploration of which US$83 million will be spent on greenfield projects.
“Given the current price environment we believe IMG is likely to invest strongly in greenfield and brownfield growth opportunities,” Dan Rollins, an analyst at UBS Investment Research, said in a note to clients on Jan. 17. “As a result of the above view; guided capital expenditures; and ongoing industry wide inflationary pressures, we have revised our near-term (growth) and long-term (sustaining and exploration) expenditure forecasts higher, which has resulted in a 6% decline in our net asset value.”
With a lower NAV estimate, Rollins has cut his price target on the stock trading in New York to US$27.50 per share from US$29.50 per share. His buy rating remains unchanged.
In New York, shares of Iamgold closed down 3.96% or 67¢ at US$16.24 per share on Jan. 17. In Toronto, Iamgold closed at $16.49 per share, down 23¢ or 1.38%.
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