Shares of Iamgold Corp. fell 8 per cent after the gold producer suspended its dividend to conserve cash.
Toronto-based Iamgold is the latest gold company to hack its dividend amid a nearly 30 per cent drop in the price of gold.
“In light of the current gold price we are suspending the dividend to preserve our balance sheet,” Iamgold’s chief executive Steve Letwin said in statement announcing the suspension late on Wednesday.
Iamgold, which operates mines in Canada, South America and West Africa, has already reduced expenses by cutting jobs, reducing exploration and overhauling operations.
But with bullion trading around $1,220 (U.S.) an ounce, Iamgold had to cut into its dividend.
For the year, the company expects to spend between $1,100 and $1,200 to produce an ounce of gold from the mines that its owns and operates.
Larger gold companies, Kinross Gold Corp. and Barrick Gold Corp., have also revamped their operations. Kinross suspended its dividend and Barrick reduced theirs.
Iamgold said it is on track to reduce expenses by $100-million this year.
By midday, Iamgold stock was down 8 per cent at $3.74 (Canadian) on the TSX exchange.