Iamgold (IMG-T, IAG-N) has reported production of 253,000 attributable gold oz. in the fourth quarter of 2011, the company’s best quarter of the year. Full-year production, including the company’s production from discontinued businesses, was 972,000 attributable gold oz. at an average cash cost within the guidance range of US$620 to US$650 per oz.
This year Iamgold expects to produce between 840,000 and 910,000 attributable gold oz., excluding ore stockpiled at the Mouska mine in Quebec, which will be processed in 2013. Cash costs for the year are expected to be between US$670 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 1.0 million to 1.1 million oz. with the increase coming largely from the planned startup of its Westwood gold mine in Quebec.
As for niobium production, it reached 4.6 million kilograms in 2011 and Iamgold anticipates 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 expansions of the Essakane gold mine in Burkina Faso; continued development of the Westwood project for start-up in early 2013; the expansion of the Rosebel gold mine in Suriname; continued underground development of the Niobec niobium mine in Quebec; and the expansion of the Sadiola joint-venture gold project in Mali.
The budget for capital spending in 2013 will be US$900 million and US$950 million in 2014.
Iamgold will spend about US$130 million this year on exploration, of which US$83 million will go towards 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 Jan. 17 note. “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 six percent 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. He maintains his “buy” rating.
In New York, Iamgold fell 3.96% or US67¢ to 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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