Iamgold (IAG) has spent most of 2011 streamlining its project portfolio and moving ahead on a number of development fronts.
Revenue for the third quarter totaled $432 million on the back of 222,000 ounces of gold production with the gold margin increasing to $1,001 per ounce. Cash flow from operating activities rose by 116% to $211 million and year-to-date adjusted operating cash flow reached $1.55 per share, up significantly from $0.75 per share in 2010.
The value of cash and gold bullion on the balance sheet totaled $1.57 billion as of September 30, 2011, reflecting much higher gold prices and operating cash flow and as a sign of financial strength Iamgold increased the dividend by 233% to $0.20 per share.
Operationally, the Essakane expansion feasibility study is expected in the fourth quarter of 2011 and construction is to begin in the first quarter of 2012. The expansion will pull forward production taking advantage of high gold prices shortening the mine life by approximately 7 years.
A majority stake in the Mupane mine, reclassified as discontinued operations last quarter, was sold to Galane Gold for $34 million dollars.
Developmental and exploration projects continue to move forward on a number of fronts. Westwood in Canada, is expected to add 130,000 to 150,000 ounces of gold in 2013 and provide a greater geographical production diversification.
$20 million dollars was spent in November to acquire stakes in 3 juniors with exploration projects in Columbia, further diversifying Iamgold’s reach.
Exploration efforts at Rosebel have yielded the Charmagne discovery, and Inferred resource of 392,000 ounces.
Iamgold remains on the acquisition trail, looking for a 150,000+ ounce producer with at least 2 million in reserves.
The Niobec mine in northern Quebec, continues on the path to monetization with the Measured and Indicated Resource rising by 691% this year alone. A pre-feasibility study should be delivered shortly in an attempt to determine the best bulk mining method.
A 22-hole drill program has been completed with 4 holes showing elevated light rare earth metals with 18 holes still to come.
Iamgold has spent the year refocusing the company on unlocking the value from Niobec and its mine portfolio. As the year comes to a close investors should take a closer look at Iamgold for its refocused operations and developmental growth.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in IAG over the next 72 hours.
