Goldcorp was willing to pay 3.01B for Osisko, which to me, seems like far less of a bargain than IAG.
I agree the price goes up the closer we get to 2016 and the annual 1.6M ounce production, so now would be the optimal time to buy IAG. Especially since Goldcorp now has an used 3 billion dollars lying around.
The one thing I've learned over the past 6-9 months in this sector is that the management teams of these mining companies are real dumb and have no foresight.
Buyout price is a whopping $3.5B US and represents 2x book value. Company only had revenues of 675M, cash of 161M, and debt of 317M (according to Yahoo numbers).
Goldcorp could probably buy IAG right now for much less.
Someone dumped half a billion in gold futures contracts just before 8:30 this morning sending gold down $12 instantaneously. Even with the obvious manipulation, they couldn't keep gold down in the 1280's, let alone under $1300. This is setting up as a huge reversal off 1285 again, setting up the march to 1400 as Ukraine heats up.
Goldman Sachs stinks of desperation.
How many times are they going to reiterate their 1050 price target?
IAG earns $200/ounce profit at the current price of gold.
Q2 is shaping up to be a 1300+ average POG quarter and with the prospects of Westwood coming online by the start of Q3, the analysts with their fraudulent downgrades and constant downward price target revisions, will no longer be able to control the stock. In fact, since they have been purchasing all the shares from scared peon retail investors at recent rock bottom prices, they will begin to upgrade.
Gold drops less than a buck and this thing trades down almost 2%. Yet gold rises from 1285-1320, and we barely see any kind of sustainable pop in share price.
Confirmation that Westwood is on track for full operations in Q3 (only about a month and a half from now) would probably help to stabilize the stock.
The way this thing is trading, we may break through the key 3.41/3.42 level if POG tests 1300 again.
Calm down, the stock was trading at 4.35 about 3 weeks ago.
The stock is only moving because this CEO removed his thumb from his a zz and released some news, like I've been suggesting for weeks/months now. Not even real, material news, but better than nothing. At least it shows the company is alive.
IAMGOLD provides update on advanced exploration projects maiden resource estimate - Pitangui project, Brazil diamond drilling results - Boto Gold project, Senegal
TORONTO, April 9, 2014 /PRNewswire/ - IAMGOLD Corporation ("IAMGOLD" or the "Company") today provided an update from ongoing exploration activities at the Pitangui project in Minas Gerais State, Brazil and the Boto Gold project in Senegal. Drilling programs are currently underway at both sites with the objective to delineate and expand current mineral resources in alignment with the Company's strategic mandate for organic growth.
Only 6 miners are closer to their 52-week-lows than IAG in terms of percentage - AUY, KGC, LODE, DRD, AGI, and GORO.
That means that 31 miners have bounced off their lows better than IAG.
Anyway you slice it and using any time frame possible, IAG is a huge laggard in the industry right now. It will only change when management wakes the F up.
A complete and utter joke.
It is being relentlessly sold on every minor pop. There is absolutely no fear that Letwin the Loser will release something positive to help support the stock.
I agree that $1300 is too low for the sector, but IAG is insulated to some degree due to their highly profitable niobium business. Gold really needs to drop below ~$1130 for IAG's profitability to be in serious jeopardy. This is a distinct advantage over many of its peers. Further, the balance sheet, while no longer pristine (thanks Letwin), is still manageable. The debt doesn't come due until 2019/2020 and really isn't an absurd amount. Again, this is a distinct advantage over many of its debt ravaged competitors (ANV and its ilk). Access to $750m in funding is also something that is not available to many of its competitors and would be a positive. As you suggested, Westwood is supposed to come online within the next two months and production should start picking up from that end. So for these reasons, there is no justifiable reason why IAG should be THE laggard of the entire industry. But it is. And I posit it is due to a constant barrage of negative comments and actions by the company (dividend review, then dividend cut, production estimate cuts, Westwood delay, constant complaining that they need partners to fund projects), with zero mention of anything positive.
When everything coming out of the company is negative and nothing is positive, it drives the share price down and looks awfully intentional.
In Q4 2013, the average price of gold was $1274/ounce and average share price was $4.33/share.
In Q1 2014, the average price of gold was $1293/ounce and average share price was $3.77/share.
Gold closed today at ~$1303/ounce and we trade at $3.52/share.
The trend is not good and this stock appears DEAD until management comes out and supports it. The only news we have received in the past two quarters is dividend termination, poor production estimates for 2014, $800 million write-offs, and Westwood delays. At some point, one must ask if the management and CEO are INTENTIONALLY trying to drive the share price down???
No other miner trades this low with regard to book value.
I think it was about 600M for very low grade. But factor in that it will have taken 100's millions in additional development and 6 years before an ounce is produced. It is true that by 2016, if it is producing as expected, all will be forgotten and we should be riding high again. But at the time of the purchase, many analysts were in agreement that there were better and more immediate options available.
Buying back shares while the stock is trading in the 3.50 range would be a much better decision IMO. As production hits 1.5 million ounces (hopefully) by 2016, it would be nice if total share count could be reduced to 300 million or less by then. It would be a great long-term move for earnings. Then once the buyback is complete, swap it for a dividend and you are in business.
And inexplicably, as soon as we crossed 1300, the sell orders come out. Gold up 19 bucks, and we are up a paltry 4.5 cents.
The 3 year numbers are even worse for IAG vs peers.
In IAG's case, they haven't cut costs enough and the CEO went on a buying spree during peak gold levels, destroying a once pristine balance sheet. Doesn't help that he is ineffective in communicating the true value of this company. How does a company trade at $1.3B when it has a niobium asset pegged at $1.8B alone, in addition to numerous operating mines and soon-to-be operating mines.
So basically reckless spending and an incompetent d-bag as CEO would be the problem...
If they take every possible stance on IAG, one of those stances will likely be correct and they can tout the correct one to their readers.
The latest article is not even factually accurate - book value is a little more than two times the current price (not three) and I wouldn't call the cash balance "healthy."
Nonetheless, the company is very cheap and should be purchased here.
Motley Fool with a bullish article on IAG:
Shares in IamGold (TSX: IMG)(NYSE: IAG) have been perhaps the worst performing in the sector, shedding more than 80% from its highs.
IamGold’s balance sheet is rock solid. The company has a book value more than three times the value of the stock, is currently sitting on a healthy cash balance, and its long-term debt is less than 15% of total assets. The company is on record saying that its strong financial position will allow it to explore acquisition opportunities, which could be a boon for stock price.
It has diversified operations, with mines in North America, South America, and Africa. It also has a niobium mine in Quebec, which is used mostly in alloys that end up in gas pipelines.