That's the truth, but I added 10K and will add another 10K next month. I like IAG out of all junior miners. While, their latest PR is nothing great to investors, it's shows the Human side to difficult decisions.
What did I want him to do? I wanted him to quit and give back all the money he has stolen from shareholders the past 5 years. Of course they have to announce the layoff - I was just pointing out that every time he opens his mouth in any regard, the stock tanks.
Firing working people that actually produce something, ruining their lives, etc is always a hard decision. Unfortunately the doofus DIRECTLY responsible for it, Letwin, gets to keep his job. Firing 200 people isn't going to bring back the $600 million he flushed down the crapper on Cote or the $100 million+ he lost by gambling in the currency and oil market, or the $650 million note he used to put this company in debt so he could build Westwood into the pile of garbage it is today.
Positive progress = POS CEO fired. Anything short of that will ensure that IAG never trades higher than 1/3 book value.
sandie, very much a contrarian here, especially when valuation, and the price of commodities seems outta' whack, respect to the "strong dollar" and the other numerous countries with various finances teetering precariously on the brink. That said, I follow IAG, AUY, HL, and NGD closely. What's on your radar, for if there's another dive to the downside? Thanks.
Yesterday they pre announced a 10% increase in production Q/Q. I am pretty sure that increase came from their lower cost mines. They don't have much cash left. I don't recall exactly how much - I think it was a total of about 25-30M last Q. But, with the right adjustments made at the high cost mines (slowing and shutting) they can survive. I think they were offered $2B for their share of Golpu when pog was at its ATH in 2011. If pog gets back to 1400+, it would probably be valued at $1B+. TBH, most of their other mines are near EOL and very high AISC but they are worth something at 1400+ gold. Nevertheless, what I believe investors are betting on here, is that HMY can simply stay afloat to keep the vultures at bay until pog gets above 1400. There would then be a bidding war for Golpu. I am sure the big players are hoping to buy it from the receivers for chump change. They have the wage negotiations to resolve (most of their workers are in the union who has agreed a wage increase, so that is positive) and they will probably have to R/S but as long as they don't have to dilute down here, I think that is priced in. I think the risk/reward is well worth it with this one. It's very different from the ANV mess, which I didn't touch on the way down.
Also, it is a truth that almost all investors sell at the bottom and buy at the top. It is hard to buy something that is down 95%.
I personally believe that the bottom is in for the miners but time till tell. Over on Kitco there is a great article by a guy named Avi Gilbert who talks about how "anecdotally" there is a big shift in the mind sets of investors and hardly anyone is bullish now. Whereas near the peak he suggested getting out, albeit 6 mos early, as everyone was bullish and there was no reason to sell. Now there is no reason to buy, interest rate hikes, etc. So even the diehards are hedging. Look at the message boards. I posted for 4 weeks on NGD board with nothing but crickets. Nobody believes this is a real rally. They are ready for the next leg down. Look at Angie. Sold it all and she was pretty much a die hard....... I think she is even going short.
NGD by the way is on a tear!
Gold miners are intriguing when there is serious conversation regarding negative interest rates, which means paying banks to hold your money.
are you suggesting that there will be more fire sales in the sector, pushing the prices of IAG etc lower, until all the over leveraged institutions have sold/folded? There were many trading days over the past couple months where gold was up and the entire gold mining sector was down, big. I commented at the time that the gold mining babies where being thrown out with the entire commodities bathwater. Do you anticipate more redemptions like that?
Very thoughtful post although your comment on Avnel is a bit out there. Compare Avnel stock with what IAG stock is down since they abandoned Kalana and Avnel looks pretty good. This becomes compounded because the appetite for small juniors is just about zero right now. The TSX Venture index was 2400 in 2011 and it is now about 550. So Avnel looks like a star. Also, Avnel is almost entirely (over 80% if I recall) held by wealthy insiders who have deep, patient pockets and that's not attractive to many investors.
You're completely right that a company should multiply what they are knowledgeable of and successful at. IAG is no exception to that. Unfortunately, the rise in gold price made them intoxicated to where they thought that anything they did would be successful, and now they are still trying to fix the hangover.
Avnel is down 21% since IAMGOLD let the option expire. Kalana is looking like a nice project but it's not like we're talking about a runaway success here.
5 years ago IAMGOLD was mining saprolite at all its deposits and had low-capex underground mines in production: of course the company looked great. In recent years, IAMGOLD mined out much of that saprolite, bought a too-expensive low-grade deposit just before gold prices dropped, and put a bunch of CapEx into Westwood and Essakane. Timing here was bad, but hindsight is also 20/20. I don't recall many people calling these horrible ideas when gold prices were high.
IAMGOLD should stick to what they know best and what has worked for them in the past: West African/Guyana shield open pits with high saprolite contents = fast payback. This worked for Omai, Rosebel, Sadiola, Yatela and Essakane and is pretty much how they've made all of their money...ever. Why fight the formula?
In the absence of compelling M&A opportunities which deliver high-saprolite deposits with low payback periods, I would like to see the company focus on efficiencies, and I'm glad that they're doing so rather than just senselessly expanding because they have the cash. The news out of Rosebel is what we need. Management doesn't seem to be distracted by new projects - they're focusing on what's on their plate.
But here's something I don't understand: IAMGOLD has a bunch of qualified, competent French-Canadian underground miners and with the exception of the rock issues at Westwood, an impressive track record of underground mining in Canada. Doyon, Mouska and Niobec were all successes - why not try to leverage that success in West Africa? I mean both regions speak French and how many companies are actually going underground in West Africa? I look at a project like Yaramoko and I think that IAMGOLD is the more logical owner. The company has the infrastructure, the people, and the footprint in BF and WA. It's time to realize some synergies.
What did you want him to do? They are firing 10% of Rosebel's workforce in order to trim costs: is this not exactly what you wanted? This is a hard decision with a real impact. It's also a decision that has to be announced. You can't just stealth fire a bunch of people.
Think beyond the stock price for the next week: these are the kind of difficult, long-term decisions that the company needs to make in order to succeed. I, for one, am glad that IAMGOLD is actually taking these steps. Are you really upset about this news or are you upset that we bought a higher-cost gold miner, leveraged to the gold price, in a period of declining gold prices?
The announcement is unsurprising in the context of other global firings, but is positive progress for the company nonetheless.
"We are taking further steps to reduce costs and capital expenditures to continue to strengthen our financial position during a period of weak and uncertain market conditions. While we have strived to avoid impacting jobs at the operations, this is a necessary step for the long-term viability of the Rosebel mine for the mutual benefit of Suriname, the employees and our investors. On behalf of IAMGOLD and the Board of Directors, I express appreciation to all of our employees at Rosebel for their hard work and commitment in these challenging times."
Letwin opened his fat, useless, trap and IAG proceeds to tanks. When will the board realize that literally EVERY time this piece of trash speaks, the stock declines.
Sorry to see you go. Perhaps if it can stay in the upper 1's for a few weeks you may get back in for a possible next leg up. I can't blame you though considering it was $1.15 not that long ago! Best of luck.
angie, this is just a primer for the next 3-4 years. there is a reason miners were heavily traded today. Glencore, Deutsch Bank, and others are just the beginning. The commodity carnage has wiped out hedge funds and quite likely put some derivative action in play. By next summer we will see. Good luck.
Look again, it appears to be. Again, SELFISHLY, I'm HOPING for it to SWING LOW once again. We shall see ...