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Analyst Actions: IAMGold Corp Downgraded, Target Cut $5 at Credit Suisse

Downgrading to Underperform, TP at $12: "Lower production forecasts drive the revision to our 2013 FY OpCFa from $1.29/sh to $0.80/sh. We revised our 2013 & 2014 FY production forecasts by -9% and our 2012/13/14 EPS to $0.84/1.32/1.03 (from $1.00/$1.72/$1.19) to reflect reduced production forecasts. Additionally, we believe there is further downside risk to 2014 FY (Westwood ramp up) and 2015 FY (Sadiola expansion). 2013 production guidance reduced ~13% to 875-950kozs (from +1,000kozs) and was attributed to poor performance at Sadiola and a slower ramp-up at Westwood. Credit Suisse 2013 FY est. of 956kozs is revised to 867kozs."

No Major Positive Catalysts: "We believe that IAG's upcoming catalysts are risked to the downside and we do not see any other major positive catalysts on the horizon. Early in 2013, IAG is expected to provide production, costs and capital guidance which we expect to have further negative implications. Information on which assets, and the extent to which they could be impacted, was insufficient to model. At this stage we take a 'wait and see' approach. We have revised our P/NAV TP multiple from 1.1X to 1.0X to reflect the reduced growth profile in 2013-2014 and execution risk. We believe IAMgold will underperform its peers as investors seek more operationally consistent intermediate gold stocks such as EGO, AEM, AUY and DGC while IAG resolves its issues. Areas of concern are (i) the details of the Westwood ramp up and achievement of the expected production and costs there; (ii) Essakane production and cost profile in 2013 and 2014 given the harder ore and the expansion coming on stream (iii) concerns regarding whether the Sadiola sulphide expansion receives go ahead from Anglogold (if not, a further +10% of growth would be removed from our 2015 onward profile) (iv) low operating cash flow less non-growth related capex in 2013 to sustain 2012 levels of production (largely at Essakane)."

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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