IAMGOLD Misses In First Quarter Due To Higher Interest Expense, Lower Production

After market closed on Tuesday; IAMGOLD Corporation (IMG: CN) posted EPS of $0.06 and adj. loss of $0.07. This compares to our forecast of a loss of $0.03 and consensus of a loss of $0.05. “Last year we said we would continue to focus on cost containment, capital discipline and cash preservation,” commented Steve Letwin , IAMGOLD’s President and CEO. In the first quarter we delivered on that plan, performing well across key metrics. Production was up 21% year-over-year, all-in sustaining costs were down 7%, capital spending was down 43%, net cash from operating activities was up 7%, and we ended the quarter with nearly $900 million in cash and bullion.

“Rosebel and Essakane continue to generate positive free cash flow, and the pace of ramp-up at Westwood is aligned with our goal of achieving positive free cash flow at a consolidated level while executing on our growth strategy. We are evaluating options for investing cash in excess of our capital commitments that will sustain growth and offer attractive returns. Exploration continues to build a strong growth pipeline for our future, with recent positive drilling results at the Boto Gold project and Essakane’s indicated ounces increasing 6% with the 84% increase at the Falagountou deposit.”

First Quarter 2015 Highlights:

  • Attributable gold production and gold sales of 208,000 ozs.
  • All-in sustaining costs1 – gold mines2 of $1,113/oz.
  • Total cash costs1,3 – gold mines of $846/oz.
  • Cash, cash equivalents and gold bullion (at market value) of $889.1 million at March 31, 2015 compared to $321.0 million at December 31, 2014.
  • Net cash from operating activities of $30.0 million.
  • Maintaining production guidance of 820,000 to 860,000 ounces at total cash costs of $850 to $900 per ounce produced and all-in sustaining costs of $1,075 to $1,175 per ounce sold.
  • January 22, 2015 – received $502.6 million cash from sale of Niobec; recorded an after-tax gain of $37.8 million.
  • February 2015 – issued flow-through shares for net proceeds of $39.3 million.
  • March 23, 2015 – completed sale of Diavik royalty for proceeds of $56.8 million, with $52.5 million cash received in the quarter; recorded an after-tax gain of $43.5 million.
  • March 2015 – repurchased $5.4 million (face value) of long-term debt.
  • Announced retirement of current Chairman of the Board, Bill Pugliese , and a reduction in board size from ten to seven directors.
  • April 23, 2015 – announced updated resource estimate for the Falagountou deposit at Essakane. The indicated resource increased by 84% to 613,000 ounces and the average grade by 10% to 1.52 g/t Au, contributing to a 6% increase in Essakane’s estimated indicated resource to 5.0 million ounces.

We reiterate “Sector Perform” rating.

About

Neil Kwan, Post graduate in Finance, is editor and financial analyst and reports Basic Materials, Financial & REIT and Healthcare sectors. Prior joining Equities Mogul, Neil Kwan worked with Cleveland Research. If you have a great story idea for Neil Kwan, you can write at [editor@equitiesmogul.com ].

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