Toronto, Canada-based gold producer, IAMGOLD Corporation (IAG - Free Report) announced the commencement of operation at its gold processing plant in Westwood, Quebec. IAMGOLD expects its first gold production from the Westwood Mine by the end of March, which will later be sold to a gold refinery by the second quarter of 2013.
IAMGOLD expects to produce roughly 140,000 ounces of gold in 2013, of which, 60,000 ounces of gold will come from the 30-year old Mouska Mine and the remaining 80,000 ounces of gold from the new Westwood Mine.
IAMGOLD announced a $100 million cost reduction program on Mar 4, 2013, in order to consolidate its already strong financial position and improve its return on capital. IAMGOLD plans to achieve this program through cost-cutting initiatives aimed at reducing mine operating costs, exploration expenditures and mine site and corporate general and administrative costs.
IAMGOLD has further segregated the total cost saving target (of $100 million) in the Operations, Exploration and General and Administrative (G&A) areas of the business. In the Operations area, the company expects cost savings of $43 million. The Exploration and General and Administrative at site are expected to fetch savings of $40 million and $11 million, respectively, whereas the Corporate G&A is expected to save $6 million in costs.
IAMGOLD, one of the prominent gold mining companies along with Agnico-Eagle Mines Ltd. (AEM - Free Report) , released mixed fourth-quarter 2012 results last month.
The company’s adjusted earnings (excluding one-time items) of 24 cents per share missed the Zacks Consensus Estimate of 27 cents. Earnings, as reported, fell to 22 cents per share from 35 cents per share a year ago due to lower revenues, higher cost of sales, higher exploration costs and lower gains on sales of assets.
Revenues came in at $468.4 million in the quarter, down 3% from $481.6 million in the year-ago quarter, exceeding Zacks Consensus Estimate of $459 million. The year-over-year decline was due to lower volume of gold sales.
IAMGOLD expects gold production to be in the range of 875,000 to 950,000 ounces in 2013. This projection reflects lower grades at Essakane and Rosebel, slower ramp up at Westwood and the expected lower performance at Sadiola. The company expects total cash costs, including royalties to increase to a range of between $850 and $925 per ounce for 2013.
IAMGOLD currently carries a short-term Zacks Rank #3 (Hold).
Other mining companies having favorable Zacks Rank are Sandstorm Gold Ltd. (SAND - Free Report) and Seabridge Gold, Inc. (SA - Free Report) with both carrying a Zacks Rank #2 (Buy).