On May 9, IAMGOLD Corp. (IMG:TSX; IAG:NYSE) reported first quarter gross profits of $35 million, an increase of $28 million from Q1/16. The company also reported gold production of 214,000 ounces, a 23,000-ounce gain from the same quarter last year.
"It was an outstanding quarter," said Steve Letwin, president and CEO of IAMGOLD. "Gold production increased by 12% as all owner-operator sites recorded increases. Notably, Westwood doubled its production over the preceding year. Gross profit rose by 438% to $35 million due to higher sales volume and a slight increase in realized gold prices. Net operating cash flow also increased, and we strengthened our balance sheet by reducing our debt and extending the maturity date to 2025."
This news was noted by a pair of analysts. David Haughton with CIBC stated that IAMGOLD is continuing its positive momentum: "IAMGOLD reported a solid Q1 with adjusted EPS of $0.01, beating both our estimate of $0.00 and consensus of $-0.01. The beat in earnings was attributed to better cost performance across the key operations (except Sadiola), and higher production from Essakane and Westwood (on higher throughput)."
According to Haughton, "the good start to the year should be positively received, and continues to build on the positive momentum from last year."
Andrew Kaip, an analyst with BMO Capital Markets, noted that IAMGOLD's production was "slightly above our expectations. . .operating cash flow of $68M was above our estimate of $55M, while free cash flow of $22M was also ahead of our forecast for ($12M)."
Kaip also noted that "on the development front, the Cote Gold PFS is progressing and IAG continues to expect the delivery of the study to be completed by late Q2/17."
Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsor of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
Analyst Certification: Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.
Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.
In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.
Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.
Important Disclosure Footnotes for IAMGOLD Corporation (IAG):
IAMGOLD Corporation is a client for which a CIBC World Markets company has performed investment banking services in the past 12 months.
CIBC World Markets Inc. has managed or co-managed a public offering of securities for IAMGOLD Corporation in the past 12 months.
CIBC World Markets Inc. has received compensation for investment banking services from IAMGOLD Corporation in the past 12 months.
CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from IAMGOLD Corporation in the next 3 months.
Disclosures from BMO Capital Markets, IAMGOLD, May 9, 2017
Analyst's Certification: I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 8A: BMO Capital Markets or an affiliate has a financial interest in 1% or more of any class of the equity securities of IAMGOLD.
Disclosure 8C: BMO Capital Markets or an affiliate has a financial interest in 0.5% or more in the issued share capital of IAMGOLD.
Disclosure 9: BMO Capital Markets makes a market in IAMGOLD.