CA - Iamgold At 90% Off Its Peak

2023-05-31 01:11:54 ET

Summary

• IAMGOLD Corporation, a mid-cap gold producer and developer, has experienced a volatile decade with no stock price appreciation.
• The company has two operating mines and is constructing the Côté Gold project in Canada, expected to start production in 2024.
• IAMGOLD is not the top choice for investment in the precious metals sector, but it is worth keeping on the watchlist for potential opportunities.

Introduction

We have traded IAMGOLD Corporation ( IAG ) over the years but at the time of writing we have no stock or options position in this company. In the heady days of 2011, IAG stock traded at just above $22.00 and today it is trading at around $2.69 or 90% off its peak price. On the face of it, looks like a bargain that should be snapped immediately as such opportunities don’t come along every day. The chart below shows that IAMGOLD has experienced a volatile decade or so without gaining anything in the way of stock price appreciation.

However, it should be noted that there are many gold and silver miners that have been on a similar journey. This is evident by the Gold Bugs Index (HUI) which shows us that back in 2011 it stood at 630 and today it is down to 239, registering a loss of 62% over that period.

The precious metals sector has suffered considerably, but maybe the worst is now behind us, and this unloved sector of the market is offering us the opportunity to make some profitable trades. IAMGOLD could be one of those opportunities, especially with a big construction project about to come into production. No doubt there will be bumps in the road around start up time so patience may be required if you take the plunge.

IAMGOLD Corporation : Brief Description

IAMGOLD is a mid-cap gold producer and developer headquartered in Canada. Its main assets are its two operating mines: Essakane in Burkina Faso, West Africa, and the Westwood project not far from Québec, Canada. IAMGOLD is also constructing a large, long life mine called the Côté Gold Project in Canada which is expected to start production in the beginning of 2024. The Company also has a portfolio of development and exploration projects in North America.

Financials

A news release on 16th May 2023 stated that IAMGOLD had entered into a $400 Million Term Loan Financing for the Côté Gold Project which is nearing completion and is on track for production in early 2024. According to Renaud Adams, President, and Chief Executive Officer of IAMGOLD

“ this project a key pillar in our strategy to position IAMGOLD as a leading high margin gold producer”

Something we will observe with great interest.

IAMGOLD Corp. has a market capitalization of $1.294B, a 52-week trading range of $0.92-$3.34, and an EPS ((TTM)) of -0.14. The liquidity is good with an average Volume 3,164,165 shares traded per day enabling both speculators and investors to enter and exit this stock with relative ease. This company is quoted on both the NYSE under the ticker symbol of IAG and on the Toronto Stock Exchange under the symbol of IMG.

Conclusion

Be warned that as a gold and silver bug I am biased towards the precious metals sector and firmly expect this bull market to develop and go a lot higher from here.

I am not sure that IAMGOLD is the one for me as there is a lot of competition in this space that also deserves our attention.

A quick look at Seeking Alpha Quants which has this company as a Hold and ranked in sector as 50 out 274.

There are also a number of ‘Royalty’ companies that are doing well and have good prospects in my view, so for now I will not invest in this company but will retain it on our Watch List for observation purposes.

For the record, I have been long physical gold and silver for a number of years and also own a portfolio of stocks in the precious metals sector including Sandstorm Gold Ltd (SAND), Wheaton Precious Metals Corp . (WPM), Agnico Eagle Mines Limited (AEM) and SSR Mining Inc. (SSRM).

Your comments are very much appreciated whether you agree with us or not, so please fire them in, and I will do my best to address each and every one of them.

Go gently.

For further details see: