IAMGOLD Corporation Essay

Submitted By rut123
Words: 663
Pages: 3
Open Document
Page: 1
The Project

Industry and firm characteristics
IAMGOLD Corporation (IAMGOLD) is a mining company. IAMGOLD’s interests include five operating gold mines, a niobium mine, a diamond royalty, and exploration and development projects located in Africa and the Americas. IAMGOLD is focused in West Africa, select countries in South America and in the Canadian province of Quebec. The Company's operating mines include Rosebel Gold Mine, Essakane Gold Mine, Doyon Division Gold Mines and Niobec Niobium Mine. The Company's development projects include Westwood Project, Quimsacocha Project and Camp Caiman Project. In November 2012, the Company sold IAMGOLD Ecuador S.A., which includes the Quimsacocha project in Ecuador. In April 2013, IAMGOLD, through an undisclosed subsidiary, raised its stake to 18.373% from 7.778% by acquiring a further 10.595% in GoldON Resources Ltd.
The price of gold has risen steadily since 2001. The greater volatility of the major world currencies will boost demand for gold as a monetary reserve asset. Gold demand stood at 1084.6 tons in third quarter 2012, down 11% from the historic high level in the third quarter of 2011.Despite the higher gold price, global mine production has been stagnant for over a decade. The production will remain stagnant for the next several years, as old mines are depleted and are not being replaced to the extent needed to lift output. The cost increases need to be controlled in order to rake in profits. On the other hand, gold producers are expected to suffer from lower ore grades that subdue production levels, increase mining costs and negate the benefits of rising gold prices.
Page: 2

Capital Structure

Page: 3

Payout Policy
IAMGOLD has a very low debt and the rich dividend. The company consistently has raised dividend payments.

Page: 4

Iamgold is a great LBO target
The stock price for IAMGOLD (IAG) has been cut in half over the past 12 months and is currently trading near a 4-year low. The last time the stock was at this level was in January 2009 when the financial system was still on the brink of the abyss. Since that time, the financial system has mended and both the S&P 500 and the price of gold have increased by +85%, yet IAMGOLD's stock remains at the same level.
Not much has been golden at IAMGOLD lately. IAMGOLD has released negative news for just about every possible variable that impacts a mining company. The company's list of woe includes an employee fatality, higher cash costs, lower production guidance, and geopolitical unrest. Despite all of the deserved pessimism, a
Show More

Related Documents: IAMGOLD Corporation Essay

Gold Mining and French Guiana Essay

purposes, such as jewelry making, currency backing, medicinal treatments, and etc. (Corti and Holliday 2004). Because of this high demand for gold as well as its increasing prices globally, gold mining has become a very lucrative industry. Gold mining corporations have great interests in extracting gold deposits because it gives them control over the international markets, which are highly dependent on gold stocks and transactions (Blose and Shieh 1995). Thus, mining industries seek to exploit gold mines…

Words 3046 - Pages 13