Business Analysis: IAMGOLD
IAMGOLD: More Reasons Why the Drop Is an Opportunity
In a previous article on IAMGOLD (IAG), I had discussed why the stock will be under pressure due to an expected decline in gold prices going into the end of the year due to weak gold prices. At the same time, I had also explained that cheap gold prices will continue to spur demand for the yellow metal, while an expected decline in supply on account of a slowdown in gold discoveries will tilt the market balance toward better supply.
But, apart from the anticipated improvement in gold pricing due to demand-supply dynamics over the long run, IAMGOLD’s improving operational performance and strong fundamentals are some more reasons why the company is well-positioned to counter the short-term weakness …show more content…
Encouraged by this progress so far, IAMGOLD has lowered its cost guidance for 2015. The gold miner now expects its total cash cost for the year to be in the range of $825 and $865 an ounce and all-in sustaining costs between $1,050 and $1,150 an ounce.
These cost reduction moves are a result of an improved operational performance at its mines. Although some of its mines unperformed during the quarter on a year-over-year basis, but IAMGOLD is taking the necessary steps to rectify the problems. For example, at its Suriname operations, the Rosebel mine produced 70,000 attributable ounces of gold in the third quarter, down from the same period last year. This decline in production at this mine was a result of lower grades and throughput.
According to COO Gord Stothart, “The decline in grade year-over-year was due to pit sequencing which offset the benefits from better dilution control through our RC drilling. Throughput was lower than the previous year due to an extended time mill shutdown in the quarter and the treatment of a higher proportion of hard rock than we saw a year ago.” However, to mitigate the affect of declining grades, IAMGOLD has taken various measures to improve operating …show more content…
This will enable the company to better align itself with the production profile. Going forward, Rosebel will continue its focus on improving productivity, reducing dilution, and optimizing throughput.
In addition, at Westwood, the company has done an exhaustive review of the seismic events. This has helped IAMGOLD create a recovery plan to rehabilitate the affected area and improve the design strategy for ground control, which will also allow it to mine in new areas. The company has reorganized the site to work in accordance with the revised mining plan, including a reduction in contract employees. A similar adjustment is being done for the mill workforce as well considering the low level of
In a previous article on IAMGOLD (IAG), I had discussed why the stock will be under pressure due to an expected decline in gold prices going into the end of the year due to weak gold prices. At the same time, I had also explained that cheap gold prices will continue to spur demand for the yellow metal, while an expected decline in supply on account of a slowdown in gold discoveries will tilt the market balance toward better supply.
But, apart from the anticipated improvement in gold pricing due to demand-supply dynamics over the long run, IAMGOLD’s improving operational performance and strong fundamentals are some more reasons why the company is well-positioned to counter the short-term weakness …show more content…
Encouraged by this progress so far, IAMGOLD has lowered its cost guidance for 2015. The gold miner now expects its total cash cost for the year to be in the range of $825 and $865 an ounce and all-in sustaining costs between $1,050 and $1,150 an ounce.
These cost reduction moves are a result of an improved operational performance at its mines. Although some of its mines unperformed during the quarter on a year-over-year basis, but IAMGOLD is taking the necessary steps to rectify the problems. For example, at its Suriname operations, the Rosebel mine produced 70,000 attributable ounces of gold in the third quarter, down from the same period last year. This decline in production at this mine was a result of lower grades and throughput.
According to COO Gord Stothart, “The decline in grade year-over-year was due to pit sequencing which offset the benefits from better dilution control through our RC drilling. Throughput was lower than the previous year due to an extended time mill shutdown in the quarter and the treatment of a higher proportion of hard rock than we saw a year ago.” However, to mitigate the affect of declining grades, IAMGOLD has taken various measures to improve operating …show more content…
This will enable the company to better align itself with the production profile. Going forward, Rosebel will continue its focus on improving productivity, reducing dilution, and optimizing throughput.
In addition, at Westwood, the company has done an exhaustive review of the seismic events. This has helped IAMGOLD create a recovery plan to rehabilitate the affected area and improve the design strategy for ground control, which will also allow it to mine in new areas. The company has reorganized the site to work in accordance with the revised mining plan, including a reduction in contract employees. A similar adjustment is being done for the mill workforce as well considering the low level of