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The Mid-Cap Miner With $1 Billion to Invest

By Christopher Barker | More Articles
April 18, 2011 | Comments (0)

IAGIAMGOLD Corp

CAPS Rating 3/5 Stars

$20.14 $0.11 (0.52%)

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I do not like green eggs and ham, but of IAMGOLD (NYSE: IAG ) I am a fan.

The growth-hungry mid-tier miner -- whose shares have easily outshone the likes of deep value sensation Yamana Gold (NYSE: AUY ) and the newly resurgent New Gold (AMEX: NGD ) over the past five years -- amassed liquid wealth of more than $1 billion with a $667 million injection from the sale of non-core assets.

IAMGOLD held an 18.9% stake in two producing gold mines -- the Tarkwa and Damang mines -- in Ghana, West Africa. Gold Fields (NYSE: GFI ) , the majority owner and operator of the mines, will achieve a quick, coveted production boost by consolidating its stake in these mines at an attractive price. Meanwhile, IAMGOLD will pursue its growth in projects where the company's proven mine development and operating expertise are more fully leveraged in pursuit of that growth.

While it is never particularly easy for investors to watch a miner unload profitable, producing assets, Fools are encouraged to note that IAMGOLD is unloading mines that were exerting upward pressure on the company's consolidated cost structure. Tarkwa and Damang delivered their gold at a cost of $611 and $673 per ounce, respectively, during the fourth quarter of 2010. Both those figures exceeded IAMGOLD's consolidated cost of $574 per ounce. Gold Fields expects its 2011 cash costs to average $760 per ounce of gold, so the transaction will assist the company in its bid to get operating costs under control.

For the record i have been with this company since 2008 when stock traded below $4 dollars. They have the best management team in mining, imho. Even with the loss of Joseph conway former Ceo, they have been increasing dividends and always give back to there shareholders via yields and sp increase. The article says it all. 1 billion to spend for a company that loves canada. I will make a pitch since im already a shareholder.

Regards

glen