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IAMGOLD Corp. Message Board

  • pm_guru_1 pm_guru_1 Feb 16, 2012 7:48 PM Flag

    IAG and AEM best midtiers now

    Both $6B market caps for ~1M oz producers. IAG with the massive cash hoard, and AEM boasts the best geopolitical mix of properties. Incidentally, IAG and AEM both sporting the best dividend yields with exception of NEM and GORO.

    Even though AEM has the great base of properties, I would tend to think IAG is more deeply undervalued due to its ability to build the company with cash and cash flow, and they offer more growth. With Westwood, an aquisition, Niobec, and the mix of other IAG development properties, there is no doubt IAG can easily grow to 1.5-2M ozs in 3 more years. I noticed AEM guided sort of flat thru 2014. Could be they are setting the bar very low to surprise on the upside all the way up. If they are able to remediate Goldex next year, that alone could give a 20% pop.

    I generally ignore senior golds because they tend to underperform whenever the gold price isn't in rally mode. However, KGC looks like excellent value at $10-11. The dividend raises are awesome in this sector.

    IF IAG ane AEM are worth $6B as 1M oz producers, then KGC has to be worth more than $13-14B as a 2.6M+ oz producer! The goodwill writedown at Tasiast is MEANINGLESS. It's a NON CASH writedown. KGC issued too many shares for Red Back, but Tasiast is an awesome property. Hell it's a DISTRICT. They added 9M ozs there in 2011, not too shabby with the drill bit!

    IAG has really grown its production efficiently. The Orezone/Essakane aquisition was brilliant. Despite selling minority positions in the Ghana mines back to GFI, they are still on the verge of being a 1M+ oz producer.

    I'd like to see IAG spend their $1B cash wisely and add about 300k ozs with exploration upside with no shareholder dilution. This would get them to 1.3M ozs not counting Westwood which gets them to 1.5M+. Then IAG would have eps of 2-2.50 at $1700 gold and this would be a $40-50 stock.

    IAG and AEM offer the best "turnkey" buyout candidates for the seniors. You can't get this kind of production and reserves anywhere else at these prices. AEM would be immediately very accretive to GG, keep their production in primo jurisdictions. IAG would be accretive for NEM or ABX or EGO or AUY. It's time for consolidation wave.

    KGC could get a buyout offer at anytime if it lingers around $10 much longer. Kinross produces as much as Goldcorp and also has the massive FDN and L-M megamines up its sleeve.

    IAG needs to get busy and make a move on M and A and also do something with Niobec to create SH value. My thinking is IAG may hold back on Niobec until gold clears $2000 so no one notices the missing earnings after a Nio spinoff.

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