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IAMGOLD Makes A Major Discovery


  • The Rosebel mine is an extremely important operation for the company, but there are only 3-4 really strong years left.
  • Recent exploration at Saramacca, which is only 25 km away from the Rosebel mill, has been wildly successful.
  • The impact of Saramacca added to the mine plan will be substantial.
  • There are still several catalysts in place that could result in further stock price appreciation for IAG.
  • The stock looks like it wants to run to $8-$10.

I have been bullish on IAMGOLD (NYSE:IAG) as they are really starting to see a turnaround. I've certainly been critical in the past of the company and their CEO, Steve Letwin, but I must say that lately they are on a much better path. The stock price has been outperforming other gold miners as positive news continues to pour in. Year-to-date, IAG is up almost 30%, while the rest of the sector continues to languish.


IAG data by YCharts

There are several reasons why IAG is rising in value as other gold stocks have been flat for the year. The main one being the widely successful exploration results coming out of Rosebel. This will continue to be one of the major catalysts that drives the stock price higher.

All figures below are in USD, unless otherwise noted.

Did IAMGOLD Just Solve One Of Their Biggest Problems?

If you are an IAMGOLD long, you want three things to happen:

  1. Increase the reserves at Rosebel by finding more soft rock that is higher in grade.
  2. Increase the reserves at Essakane.
  3. Get Westwood into full production with no further issues.

If the company accomplishes all of those, then shareholders will continue to be greatly rewarded.

IAMGOLD might have just solved #1, and "solved" is an understatement.

I have discussed before the low reserve issue at their Rosebel mine in Suriname. This is an extremely important operation for the company, as it accounts for 35% of total production. But there are only 3-4 really strong years left, and then the mine output starts to decline dramatically. Costs at Rosebel are also high, as IAMGOLD is mining more hard rock than it was just a few years ago. Other cost pressures have also contributed to the elevated AISC.

Below is the mine forecast for

This article was written by

SomaBull profile picture
Leader of The Gold Edge
In-depth coverage and analysis of gold and the gold mining sector

I’m a private investor with a strong track record of outperformance, and also currently work as a research consultant for high-net-worth clients who invest in the precious metals sector.

My focus was mostly on Tech/Internet when I started investing, but almost 20 years ago I became extremely interested in the gold and silver sector as I anticipated a major bull run.

I’ve been doing in-depth research on gold and silver miners since then. I'm familiar with their stories, their stock patterns, their highs and lows, their operations/projects, their successes and failures, their management teams and turnover at the top, and all other facets of these precious metal companies.

This sector is my singular focus as I expect a massive bull market will unfold. These mining stocks are the cheapest they have been in over a decade, some in fact, are near multi-decade lows as they are oversold and significantly undervalued. I expect strong appreciation in these mining stocks as the bull market in gold and silver recommences.

I believe in buying value, and not chasing the next hot stock. I use several basic investing principles, the main one being buying the balance sheet. I wait for opportunities to present themselves and then establish positions. I believe in doing your homework, and I have a very research intensive focus.

*Disclaimer* I am not a Certified Financial Advisor. My research and articles should not be interpreted as a recommendation to purchase, sell, or hold any security at any time. The accuracy, completeness, or timeliness of the information posted in my articles is not guaranteed. Do not rely on any statement that I make in my articles. All readers and subscribers should always conduct their own research and should consult a professional financial advisor when it comes to making investment decisions.

Analyst’s Disclosure: I am/we are long IAG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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