IAMGOLD Corp.'s (IAG) Westwood project in Quebec shows potential but more work still needs to be done in order to be a future producer for the company, Blackmont analyst Richard Gray says.
He told clients in a note that an internal scoping study at Westwood inferred a resource of 3 million ounces at a grade of 6.2 grams per tonne and production of 200,000 ounces per year for 15 years beginning in 2012.
Total costs the analyst added are C$360 an ounce with capital expenditures equaling C$316-million. Assuming a C$625 per ounce gold price, Mr. Gray said the project's expected internal rate of return is 13% while its net present value is C$171-million.
He added, however, that more work is still necessary to truly asses the value of the project, including the next steps of lateral development and further drilling to establish mineralization continuity.
Mr. Gray maintained his "buy" rating and left his C$11.05 price target unchanged.
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