Iamgold raises guidance on gold production
Thursday, June 18, 2009
TORONTO Iamgold Corp., a Toronto-based miner with gold projects in Quebec, Africa and South America and specialty mineral output from Quebec, says it expects higher production and lower costs for this year.
The company said Thursday it now projects production of about 910,000 to 920,000 ounces of gold in 2009, an increase of 30,000 to 40,000 ounces over previous guidance.
This increased 2009 production guidance primarily reflects productivity increases at the company's Rosebel Mine in Suriname and the extended life of the Doyon mine in Quebec into the third quarter, partly offset by lower grades at its Mupane operation in southern Botswana.
“We have had an excellent start to 2009 with outstanding productivity improvements at several mines and an extension of the Doyon mine life. We're extremely pleased to announce this improved production guidance with lower cash costs,” president and chief executive Joseph Conway said in a release before stock markets opened.
“We will continue to pursue opportunities to optimize our operations and development projects for the remainder of 2009. We have already announced investments to improve cash flows from Niobec, our niobium mine in Quebec, and we are working to achieve significant improvements at our joint venture mines in West Africa.”
In its report, which assumed a gold price of $900 (U.S.) an ounce and a fuel price of $55 a barrel of oil, Iamgold estimated:
– Full year production at an average cash cost of between $460 and $470 an ounce, a decrease of $10 per ounce from previous guidance and due mainly to improved productivity at Rosebel.
– Annual niobium production from the Niobec mine in Quebec of between 4,200 to 4,400 tonnes, slightly below forecasts, with operating margins of between $20 and $22 per kilogram. Niobium is used in steel alloys and has widespread use in gas pipelines.
– Capital spending of about $448-million for 2009 and exploration spending on new projects remains forecast at $34-million; Iamgold, which reports in U.S. dollars, is a mid-tier gold miner producing about one million ounces of gold from seven mines on three continents. The company has a target to reach 1.8 million ounces of gold production by 2012.
Iamgold trades on the Toronto and New York stock markets and is focused in West Africa, the Guiana Shield of South America and in Quebec where it has a pipeline of development and exploration projects.
In February, the company completed the acquisition of Orezone Resources Inc. and its 90 per cent-owned Essakane gold project in Burkina Faso, West Africa.
In its last financial statement, Iamgold reported net profits increased by 53 per cent to $52.5-million or 17 cents a share in the first quarter, compared with $34.4-million or 12 cents a share for the same year-earlier period.
First quarter revenues of $188.6-million were down from $208 a year earlier.
The first quarter earnings reflected a tax gain on sale of gold bullion of $29.4-million, partially offset by a foreign exchange loss of $5.3-million due to higher Canadian dollar-denominated cash balances.
In early Thursday trading on the Toronto Stock Exchange, Iamgold shares rose 38 cents to $10.50, a gain of 3.5 per cent.