But this is the same exact blunder Letwin made when he purchased Cote!! A huge buy-in price + half a billion USD to expand the mine before an ounce can even be extracted from the third world soil.
If he wants to increase ounces, then just buy a f'kin company that is already producing ounces at a favorable AISC.
This is the most preposterous/stupid/mind-boggling way of going about adding ounces. They will not produce for years and it will cost almost a billion in cash until it does produce. And you still have 640M debt on the books plus a 4M+ monthly interest payment in an uncertain gold environment.
This move makes absolutely no sense IMO.
Don't you get it? The market values our 41% stakes at ZERO!!!!
Why should our POS CEO then turn around and spend several hundred million to acquire the other 41%?? Then spend 500 million to expand the currently useless mine??
I have no problem with them making a purchase if the price is right, but the price is wrong here. There are far better maneuvers to make than acquiring the additional 41% stake. In fact, it is almost the worst possible move he could make. Sell your shares.
I have to think they are making a second acquisition or at least balancing this purchase with some debt repayment.
How much could Anglo's stake possibly be worth? Yatela is as useless as Cote, so would have zero value and Sadiola would cost 100's millions to expand into something worthwhile. I have no way of valuing Sadiola, but he couldn't have spent more than $50 million on it IMO.
When Rosebel, Essakane, Westwood, 41% Sadiola, 40% Yatela, Boto, Cote, Merrex properties, and all other development projects are all currently valued at under $500 million by the market, it is impossible to fathom this POS CEO could spend any significant money on acquiring Anglo's 40% stakes.
If he actually chose to spend upwards of 500M on these garbage properties when he could have bought back shares of IAG at .3x BV or retired the debt in full, he needs to be forcibly removed and imprisoned.
Considering the market values all of IAG's operating mines and future mines (Boto, Cote lol, etc) at less that $500 millio right now, including IAG's own Sadiola and Yatela stake, Letwin better pay about 10 bucks for Anglo's stake.
(Reuters) - Canadian gold miner Iamgold Corp is in talks with AngloGold Ashanti Ltd on buying AngloGold's stakes in two gold mines in Mali in which they are partners, Iamgold said late on Tuesday.
Iamgold and AngloGold each own 41 percent of the Sadiola mine in southwestern Mali. The two miners also each own a 40 percent stake in the nearby Yatela mine. South African-headquartered AngloGold is the operator of both mines, in which the government of Mali owns the remaining interests.
AngloGold, under pressure to reduce its debt, said earlier on Tuesday that it intends to dispose of its stakes in Sadiola and Yatela. It said it had been approached by a potential buyer that meets its criteria and has asked for a binding bid.
The Sadiola mine is nearing the end of its supply of oxide ore, or soft rock, and an expansion to process hard rock is necessary. Iamgold has said that although the expansion will provide growth at lower costs it is not its preference to make the investment on its own.
"Iamgold has been having ongoing dialogue with AngloGold, with respect to how the Sadiola expansion project could move forward and to help facilitate their exit from their share of the assets. Acquiring their share of the assets has always been one of the options," Iamgold spokeswoman Laura Young said in an email. (Reporting by Nicole Mordant in Vancouver; Editing by Peter Galloway)
I know Wanbao Mining out of China placed a bid back in February for the Mali assets. Don't know if they are still in play or it's another entity.
Here is some Sadiola information:
Operating for more than 15 years, the mine is scheduled to close between 2013 and 2015. However, a pre-feasibility study completed in 2009 to mine deep ore sulphides is expected to extend the mine-life by an additional six years until 2019.
Known as the deep sulphides project (DSP), it is the down deep extension of the Sadiola main pit. Based on the positive pre-feasibility studies, AngloGold Ashanti approved a $9m feasibility study (FS) of the DSP in November 2009.
The study was completed in November 2010. Environmental impact assessment (EIA) is currently underway and the preliminary drilling targets identified to commence drilling in 2012.
If approved, the project will increase production levels from 350,000oz/year, as in 2009, to between 400,000-500,000oz/y from 2013 through to 2018 resulting in the total production increase of the mine to about 2.2 million oz in its current mine life.
The project will also witness construction of a new crushing, grinding and carbon-in-leach (CIL) plant to process combined feed of 8.5 million tons (mt) of ore a year. The combined feed includes the existing hard ore stockpiles and the deep sulphides.
Letwin let the cat out of the bag earlier this month when he declared news was pending with regards to Sadiola in Mali. He must have known Anglo was very close to selling their 41% stake, and as usual, couldn't keep his trap shut. Every time this dude opens his mouth, IAG shareholders become poorer.
I see these main possibilities:
1. Another miner is acquiring AngloGold's 41% stake and IAG will partner with this entity as has been Letwin's desire for quite some time.
2. IAG will sell their 41% stake to this acquirer as well (potentially good scenario depending on price)
3. IAG is the one acquiring Anglo's 41% stake (DISASTER scenario)
I have not really followed Mali very closely, but I believe there are quite a few ounces left there. If anyone has any info, please add.
I think it is Wanbao Mining looking to scoop up AngloGold's 41% stake in Sadiola and Yatela. Hopefully, they or whoever placed the bid, is interested in buying IAG's 41% as well. Very interested to see what these Mali mines sell for, since all of IAG's mines and potential mines are impossibly valued under $500 million right now.
JOHANNESBURG, March 31 (Reuters) - Africa's top bullion producer AngloGold Ashanti said on Tuesday it was seeking a partner or buyer for its Cripple Creek & Victor mine in the United States and had received an approach for the purchase of its stakes in two Mali mines.
"AngloGold confirms that it has been approached by a potential buyer who meets its qualifying criteria, and a binding bid has been requested," the company said regarding its stakes in the Sadiola and Yatela mines in Mali. (Reporting by Ed Stoddard; Editing by James Macharia)
Between the obvious under-performance of the stock and the large put bets, it is becoming very clear that someone knows what is going on and it will not be favorable for shareholders. I agree with you - they are probably in very late stages of acquiring a company that will undoubtedly be a disastrous deal for shareholders.
The sad thing is that the combined values of Rosebel, Essakane, Westwood, Boto, Sadiola, the diamond royalty they recently sold, Monster Lake, Merrex JV, and Cote is currently valued at less than what Letwin paid for Cote alone. And yet he still has a job!! You can't even make this garbage up.
I hope you are right. I was not encouraged earlier this year when we pierced 1300 gold and IAG was laboring to hold the $3.15 level. We subsequently dropped 50% from the January high when gold lost about $150/ounce. On paper, this should trade in the double digits with POG at 1500+, but on paper, we should also be trading much higher than $1.90 right now. Something just doesn't seem right.
So this is the third comparison of POG vs IAG I have made over the past 2 weeks:
3/18 POG = 1168, IAG = 1.98
3/20 POG = 1182, IAG = 2.04
3/30 POG = 1185, IAG = 1.91
I laugh at the fools that tell us that IAG tracks the price of gold. Absolute BS. And let's not forget, since 3/18, we have also collected $52.5M cash and ousted 3 useless BOD losers, so if anything, we should have outperformed the POG.
This stock is an utter POS as long as the current CEO occupies that seat.
To Letwin: PAY OFF THE FREAKIN' DEBT, INSTEAD OF COSTING SHAREHOLDERS 44M A YEAR IN INTEREST PAYMENTS ON TOP OF YOUR 70M HEDGE LOSS, YOU SLIMY POS.
All shareholders should bombard IR and the company with a similar type message.
There was a rumor of IAG buying out LSG that I posted a few days ago. Yahoo doesn't allow direct links, but if you Google "iamgold stalking lake shore gold," the article should appear.
"If IAMGOLD were to buy Lake Shore, it could use Lake Shore’s mill to process the Cote Gold ore. Highway 144 would provide reliable access for a steady stream of trucks rolling on down the highway. In this era of squeezing every dollar until the ink runs, filling and owning a functioning mill could accrue significant financial benefits to the IAMGOLD / Lake Shore shareholders. The lower cost of petroleum products adds to the attractiveness of trucking the ore."
If acquiring LSG brings Cote back from the dead, it HAS to be done and I'm not even a proponent of acquiring a company right now as the valuations (except for IAG's) all seem too high IMO.
OK, then the one miner that has fared worse than IAG is ANV and they are currently in Chapter 11. They sported a net debt level of 658M vs IAG's net cash level of 300M and produced 250k ounces annually vs IAG's almost 850k ounces.
So congratulations, we have performed better than the now-bankrupt ANV.
ANV is bankrupt. They had bone-crushing debt and no cash. And they never even came close to producing 800k+ ounces per year. And until the recent bankruptcy filing, even they were trading no worse than IAG.
Many of IAG's fallen brethren deserved their whooping and pretty much all of them still currently get a better valuation than IAG.
Since Nov 2010 when Letwin was hired, IAG is down 88%. I challenge you to find another gold miner still in existence today that has fared worse than IAG in that time frame. And if you are actually able to find one (which I doubt), see if that company can boast a
1. net cash position of 300M or
2. produces 820k+ ounces a year
IAG is by far the most battered and under valued stock in the sector. There is absolutely no doubt about it.
I agree that gold stocks are hated right now, but IAG has been suffocating under an extra special layer of hate, unlike any stock in the sector.
There is no doubt the oil and currency hedges are a disaster and the CEO is an incompetent POS, but for this stock to trade under .3x BV with the largest net cash position in the industry is very hard to fathom. Toss in 850k ounces of production a year (not chump totals) and big things coming out of Boto, it is completely unacceptable for this stock to be trading at 825M valuation when utter schitbag operations like EGO fetch a 3.7B valuation.