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Iamgold completes sale of Niobec mine for $530m

23rd January 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Midtier gold miner Iamgold has completed the sale of its Quebec-based Niobec mine to a group of companies led by Magris Resources, significantly shoring-up its coffers as the company looks toward further investments.

On closing, Iamgold received $500-million in cash after tax for the niobium business. When combined with the company's current cash, cash equivalents and gold bullion (at market), the balance increased to about $800-million, exceeding the value of the company's $650-million unsecured notes due in October 2020.

Iamgold also had access to an undrawn $500-million revolving credit facility.

“As a result of the completed sale of Niobec, Iamgold is left in a very strong financial position with the ability to invest further in its existing portfolio of assets and to consider acquisition opportunities that will contribute to positive cash flow,” it said in a statement on Thursday.

Iamgold, which is reportedly targeting assets that have all-in sustaining costs (AISC) of $1 000/oz, expected AISC for the fourth quarter to come to between $1 100/oz and $1 120/oz, in line with the previous quarter's $1 115/oz. The company had last year reduced its senior management complement by 40%, cutting most of its project development team and relinquishing its membership of the World Gold Council.

Iamgold reported full-year revenue of $1.2-billion, up from $1.1-billion in 2013.

In the second half of 2014, as part of the company's risk management strategy, it entered into a number of fuel contracts to hedge a portion of the expected fuel consumption. However, oil prices continued to decline significantly, resulting in noncash unrealised losses of $49.9-million being recorded in the fourth quarter.

For 2015, Iamgold expected to produce between 820 000 oz and 860 000 oz of gold at AISC ranging between $1 075/oz and $1 175/oz, and at a lower range of $1 050/oz to $1 150/oz at its owner-operator mines.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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