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IAMGOLD Profit Drops, Backs FY Production Outlook - Update

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5/11/2012 7:48 PM ET

Canada-based gold miner IAMGOLD Corp. (IAG: Quote, IMG.TO), Friday reported a 22 percent decline in first-quarter earnings, on lower gold sales and increased mining costs. Nonetheless, results were somewhat helped by an increase in gold prices and margin.

Moving forward, IAMGOLD maintained its gold production outlook for fiscal year 2012.

IAMGOLD's first-quarter 2012 revenues fell 2 percent from last year as timing of shipments partly impacted gold sales.

Attributable gold sales for the quarter slid 22 percent from last year to 195,000 oz, and gold production slid 29 percent to 207,000 oz. This was somewhat offset by a 22 percent year-over-year rise in average realized gold prices to $1,702 per oz. Gold margin per oz was up 20 percent to $1,023.

The company said its niobium sales for the quarter rose 16 percent from last year to 1.18 million kilograms.

IAMGOLD reported first-quarter net earnings of $119 million or $0.32 per share, compared to $153.4 million or $0.41 per share last year.

Excluding items, adjusted earnings for the quarter were $92.4 million or $0.25 per share, compared to $117.8 million or $0.32 per share last year.

On average, 10 analysts polled by Thomson Reuters expected earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude items.

Revenues from continuing operations for the quarter were $404 million, compared to $414 million last year.

Analysts expected revenue of $435.27 million for the quarter.

IAMGOLD continues to expect gold production in the range of 840,000 to 910,000 oz for fiscal year 2012. The company expects average gold price of $1,700 per oz. Niobium production for the period is expected between 4.6 and 5.1 million kilograms.

IAMGOLD last month agreed to acquire Canada-based Trelawney Mining and Exploration Inc. for C$3.30 per share in cash. The fully diluted in money value of the transaction is about C$608 million. IAMGOLD expects the acquisition to raise its resources by about 30% or 7 million ounces of contained gold with potential for significant exploration and expansion.

IAG closed Friday at $10.85, down $0.08 or 0.73%, on a volume of 2.4 million shares on the NYSE. In after hours, the stock slid 0.83%. In the past year, the stock has traded in a range $10.50 - $23.88.

IMG.TO closed on the Toronto Stock Exchange at C$10.82, down C$0.15 or 1.37%, on a volume of over 1 million shares.

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by RTT Staff Writer

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