Iamgold CorporationIAG announced that it has acquired around 27.8 million common shares of TomaGold Corporation, or roughly 19.98% of the outstanding common shares of the latter, for $2.5 million or 9 cents per share. Prior to this transaction, the company did not own any common shares of TomaGold.
According to Iamgold, the company does not intend to acquire control of TomaGold through this deal. However, it will monitor the business, financial condition, prospects and potential capital requirements of the latter. Depending on the evaluation of these and other critical factors, Iamgold may decrease or increase its ownership in future.
Iamgold and TomaGold currently hold a 50:50 joint venture (JV) at the Monster Lake project, located southwest of Chibougamau, Quebec, Canada. Iamgold is the operator of this JV and it has the option to earn an additional 25% undivided interest for a total 75% undivided interest in the project by completing additional exploration expenditures by Jan 1, 2022.
The company has been conducting consecutive exploration campaigns on the property which is underlain by Archean volcanic rocks of the Obatogamau Formation. Iamgold is targeting high grade gold mineralization mainly along a 3 kilometer range of the Monster Lake Structural Corridor.
Shares of Iamgold have moved up 22.1% in the last three months versus the 1.6% decline of its industry .
Iamgold posted net earnings (as reported) of $506.5 million or $1.09 per share in second-quarter 2017, against a net loss of $12.2 million or 3 cents recorded a year ago. Barring one-time items, adjusted earnings came in at a penny per share for the quarter, compared with a break-even result reported a year ago. The figure came in line with the Zacks Consensus Estimate.
Iamgold, during second-quarter earnings call, announced that its Essakane and Rosebel projects are benefiting from operational improvements while developments at Westwood continue to be on track. The reserves at Rosebel concession increased by 80% and the company has also entered into a joint venture for its Cote Gold Project, which demonstrated low operating costs, significant conversion of resources into reserves and attractive returns.
Moving forward, the company has maintained cost and production guidance for 2017. It expects gold production in 2017 to be in the band of 845,000 to 885,000 ounces. Also, total cash cost is expected to be between $740 and $780 per ounce. All-in sustaining cost is anticipated between $1,000 and $1,080 an ounce.
Iamgold Corporation Price and Consensus
Iamgold currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the basic materials space are The Chemours Company CC , POSCO PKX and Kronos Worldwide Inc KRO . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 stocks here .
Chemours has expected long-term earnings growth rate of 15.5%.
POSCO has expected long-term earnings growth rate of 5%.
Kronos Worldwide has expected long-term earnings growth rate of 5%.
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