This stock pops when we finally hear something positive about Westwood. Unfortunately, I think Cotes is a long way off from producing anything due to the drop in POG in recent years. It's all about Westwood right now. Check out the cash costs from a source I found back in 2010:
The Westwood mine is expected to produce an average of 191,000 oz/y of gold during its first five years of operation at average cash costs of $352/oz; and over a projected mine life of 16 years, based on current resources, the mine is expected to produce an average of 186,000 oz/y of gold at average cash costs of $358/oz. The deposit remains open both at depth and along strike on the three main zones that have been identified to date. Preliminary mine planning anticipates that 77% of the resources will be mined by a longitudinal long-hole mining method, on 15-m sublevels. High-lift and cut-and-fill mining methods are expected to be applied to 15% and 7% of the resources, respectively.
Very disappointing session. Gold up near 1336 and this thing tanks 5+%. Now the third worst performing gold miner in the past month (out of 36 total miners).
Probably just a short term blip that will be forgotten if we ever receive some positive news that is actually relevant to the current quarter (Westwood) and near-term future (coherent plan of action with regards to Niobec). Getting rid of Letschit and replacing him with a CEO that has a clue would also be favorable.
Support will come in the form of a Westwood ramp-up announcement. The mine is supposed to be online now in the 3rd quarter. Gold was near 1340 this morning, so a 4% drop today is completely unwarranted, unless one subscribes to the max pain theory - there is a ton of open interest on the call side at 3.5 and 4.
If someone would contact IR and ask for a Westwood update, that would be greatly appreciated. I'd shoot them an email myself, but I never receive a response. They must not care for my negative but correct opinions of the CEO.
The IAG/GLD correlation has been very high since June - about .80.
But from April to present, the two are only correlated .47 and from May to present, only .54.
So short term, since the unexpected heavy buying incident, we are highly correlated with GLD. The market is primed and begging IAG for substantial, material information, but Letwin is providing drill hole results for mines that may produce gold two presidencies from now.
There is actually a penny stock, NIOBF, which claims to be a niobium producer or will be one in the future, but is likely just another penny stock scam. I watched it run from just over a dime to about three quarters. Could probably short that and/or ride the pump. The big niobium producer is CBMM out of Brazil, but I think it is private and cannot be shorted.
Where is the update on Westwood?
We are finally in Q3 with POG actually popping and nothing but radio silence from Letschit and cronies with regards to Westwood.
Second half production supposed to substantially increase right as we are starting to finally get a pop in the POG. Looks like the perfect storm.
With the alleged ability to lower costs by another $100/ounce by early 2015, IAG could become highly profitable if they were to hedge wisely as we approach $1400. Will they actually manage risk now that cash is under $200M or will Letwin continue rolling the dice with no actual plan in place for anything?
Check back in another month. Volume is very high today and we may be ready for the next leg up.
I sold some July 4 puts this morning for a nice, fat premium.
I'm surprised there were no 13D's filed after we witnessed such historic volume. The volume came out of nowhere and at a time when gold was depressed. There had to be a reason for it and it had to be a big buyer. Maybe a foreign entity is currently making a play for the company.
Would be nice to hear that Westwood is ready to go as Q3 is right around the corner. Would probably be more welcome news than a dopey report about a Brazilian mine that is 5 years away from producing anything.
Average Q2 POG is still around 1286 right now, which is not too bad considering we dipped to the 1240's for a bit, but not enough to boost PPS much higher than it was last quarter IMO.
If the POG remains here or higher for Q3, however, we could have a very good quarter with Westwood finally producing after long delays.
Every day a major waits, the asking price for IAG rises.
To think a few weeks ago, this company could have been scooped up for basically the niobium value and the acquirer would have received the gold for free. As the POG heads towards 1350 and beyond, the buyout price will just continue to rise. There has to be immense pressure on the majors to expand their holdings and production levels, especially if the POG continues its ascent.
I think there will be a lot of wheeling and dealing within the sector very shortly.
It's all been scripted. Big money was loading up on miners as gold dipped to the 1240's, all while telling you that gold was heading lower. The idiots listened to them, while the smart ones scooped up depressed stocks at multi-year or even all time lows.
Now big money will ride the wave all the way to the top as the major indices correct, faulty monetary policies become exposed, and inflation rages on.
IMO there will be no better place to park ones money than this sector as the POG smashes through 1500.
Without a doubt.
Bouncing off $3 with 56 million volume in a little more than 2 sessions is more than enough evidence that a bottom has formed.
The question will be how many morons that were robbed of their shares at $3 due to fear and stupidity will be scurrying back like desperate rats as the stock continues to climb without them.
There was a PR in June 2011 with the following headline:
IAMGOLD Files Independent Technical Report for Niobec Mine Confirming 691% Increase in M&I Niobium Resources and a Potential Net Asset Value for Niobec of Up to $2.0 Billion
In the release, the company states: "After-tax net asset value ("NAV") in the range of $1.6 to $2.0 billion;"
Iamgold investors are looking for a way out, and a takeover could stem from them talking to other gold companies or private equity, and asking them to take a look at the miner because “it is dirt cheap,” said Mr. Stephenson. “All of a sudden the company is in play.”
Another possibility is that Iamgold could spin off, or sell some of its assets, similar to a break-up of the company because “it can’t surface any value as a stand-alone entity,” he said. Imagold could even split off part of itself as a royalty streaming company like Franco-Nevada Corp., and create a subsidiary that holds some part of the production, he added. Under either of these scenarios, he could see Iamgold’s share price easily reaching $12 to $12.50 a share.
Recent history: Shares of the mid-tier gold miner, which has projects in West Africa, South America and Canada, have taken a nearly 50 per cent haircut over the past year. The latest drubbing came last month after analysts cut their price targets when Iamgold forecast that mining costs would increase to between $850 (U.S.) and $925 an ounce, against expectations closer to the $700- to $730-range. The miner also reduced exploration activity recently in Mali because of political instabilty. Amid these woes, it hasn’t helped that the price of gold has been stuck in $1,600-range over the past year. There is also, perhaps, some lingering skepticism by investors about the leadership of Iamgold’s chief executive officer Steve Letwin, who came from the energy as opposed to mining sector just over two years ago.
Manager insight: Major shareholders are unhappy with Iamgold’s battered share price, and are quietly agitating for change. “People are frustrated,” says John Stephenson, a portfolio manager with First Asset Investment Management Inc., who has owned Iamgold shares for about two years. “The stock price is doing nothing, and getting cheaper and cheaper.... Pressure is coming from the big shareholders in particular, like Royal Bank and BlackRock.”
Iamgold, which is trading at a substantial discount to its peers, could be ripe for a takeover by a large miner, he said. Eldorado Gold Corp., Agnico-Eagle Mines Ltd., Goldcorp Inc. or even Newmont Mining Corp. could be be potential buyers, he suggested. No one foresaw Alamos Gold Corp. making a $780-million hostile bid for Aurizon Mines Ltd., but “you had an investor base that was fed up,” he said. “[Iamgold] is in the same camp.”
One sell order at $4.20 will do, you don't have to place "many sell orders." LOL.
But then again, you don't really have any shares anyway.
Letwin should have been tossed in the dumpster 7 months ago, along with the dividend. He is a moron of epic proportions and the stock has sunk 85% since he took over. How he still has a job is beyond me.
The idea of selling Niobec has been on the radar for years. I would thus conclude that the offers they are receiving must be very low. But based on the damage Letwin and pals have done to the balance sheet and their inability to lower costs significantly, they almost HAVE to accept any offer north of 1 billion in cash for it, despite it probably being worth much more. Best scenario IMO would be to just sell the entire company for 2.5B - 3B or approx $6.50-$8.00/share and get it done with already.
Total revenue for the Niobec mine in 2013 was $199.6M. They produced 5.3 million kg Nb at an operating margin of $18/kg Nb, which provides full year earnings of $95.4M. That operating margin increased to $20/kg Nb in Q4 2013 and Q1 2014. Assuming the $20/kg operating margin holds up and production remains the same, we are talking about $106M in earnings in 2014.
What might be compelling for a potential buyer would be the expansion project. According to IAG, expansion would cost $2B in total costs, but would triple annual production and prolong the life of the mine 46 years.
With current production and future potential taken into account, I would think Niobec would have to be worth at least $1.5B right now.