Richard Gray, mining analyst with Blackmont, said in a note Tuesday:
Given the still early stage and uncertain economics, we ascribe only a C$25/oz value to this project and as such, the resource increase does not materially change our NAV.
The recent discovery of several new high-grade finds helped Iamgold bump up the resource estimate to 3.43 million ounces.
Mr. Gray is "intrigued" that the Toronto-based company's existing Sadiola mine in Mali may get a new lease on life thanks to a possible deep sulphide project.
"Although we are unconvinced of the economic viability, the deeper potential at Sadiola is intriguing," he said.
Citing elevated political, technical and financial risk for Iamgold's development properties and declining production, Mr. Gray is maintaining his "Sell" rating and C$9.25 target price.
Meanwhile, Paolo Lostritto of Wellington West Capital Markets is more optimistic about the company's prospects. He argues the Rosebel mine in Suriname will boost 2009 production and cash flow.
"However, cash flow and gold production will likely remain a challenge in 2010 until Essakane [in West Africa] start up in the second half of the year," Mr. Lostritto said in the note.
Mr. Lostritto is also maintaining his "Market Perform" rating while upping the target price to C$14 from C$13.