Iamgold Q3 Adj Profit Misses View, But Revenues Top

(RTTNews) - Canadian gold miner Iamgold Corp. (IAG, IMG.TO) reported Wednesday a net loss for the third quarter compared to a profit last year, despite revenue growth amid higher gold sales, reflecting primarily higher cost of sales, higher income taxes and net derivative loss. Adjusted earnings per share missed analysts' expectations, while quarterly revenues missed their estimates. The company also narrowed its gold production guidance range for fiscal 2014.

"We delivered strong results across a number of key performance metrics in the third quarter, and are encouraged by the positive trends in production, costs and cash generation. Westwood is performing very well and we expect its high grades and low cost structure to enhance our overall production and cost profile," President and CEO Steve Letwin said in a statement.

The company noted that Westwood completed a strong first quarter of commercial production, with 35,000 ounces at a total cash cost of $772 an ounce produced.

The Toronto, Canada-based gold miner reported a net loss of $72.5 million or $0.19 per share for the third quarter, compared to net earnings of $25.3 million or $0.07 per share in the prior-year quarter.

Excluding items, adjusted net earnings for the quarter was $0.2 million or breakeven per share, compared to $26.2 million or $0.07 per share in the prior-year quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew to $341.5 million from $293.50 million in the same quarter of last year, mainly due to higher gold sales volume, and topped five Wall Street analysts' consensus estimate of $324.58 million.

Operating cash flow, before changes in working capital, was $88.9 million or $0.24 per share, compared to $67.4 million or $0.18 per share in the prior-year quarter.

Attributable gold production for the quarter declined to 225,000 ounces from last year's 223,000 ounces, mainly due to lower grades at Rosebel, lower production at Westwood and the winding down of mine operations at Yatela.

Total cash costs grew to $851 per ounce from $807 per ounce, while gold margin declined to $421 per ounce from $527 per ounce in the year-ago quarter.

Attributable gold sales were 233,000 ounces at average realized gold price of $1,272 per ounce, compared to 195,000 ounces at an average realized gold price of $1,334 per ounce, in the year-ago quarter.

"We're on track to meet overall guidance as set out at the beginning of the year, and have narrowed the production guidance to reflect our performance expectations for the final quarter. The closing of the transaction to sell the Niobec mine for $530 million will put us in a stronger financial position to continue investing in the profitable growth of our gold business," Letwin added.

The company agreed on October 3 to sell Niobec, Inc. for total consideration of $530 million, which includes after-tax cash proceeds of $500 million upon closing and $30 million when the adjacent rare earth element deposit commences commercial production. The deal is expected to close by the end of January, 2015, subject to the receipt of regulatory approvals.

Looking ahead, the company said it is on track to meet 2014 gold production, with production range narrowed to 835,000 to 850,000 ounces from 835,000 to 900,000 ounces. The company also continues to project Niobium production between 5.2 million and 5.5 million kilograms.

However, the company is reducing its 2014 capital expenditure guidance by 10 percent to about $360 million.

IAG closed Wednesday's regular trading session at $1.91, down $0.01 or 0.52% on a volume of 8.92 million shares. The stock lost a further $0.03 or 1.55% in after-hours trading. IMG.TO closed on the TSX at C$2.17, down C$0.01 or 0.46% on a volume of 1.37 million shares.