Iamgold Corp. (IMG) is hunting for acquisitionsExcerpt..........
By Liezel HillDec 23, 2014 4:38 PM ET
Iamgold Corp. (IMG) is hunting for acquisitions and is open to being acquired itself in 2015, fueled by a $500 million cash injection and an industry adjusting to a lower-price reality, according to the Canadian miner’s chief executive officer.
Iamgold could make purchases valued at about $800 million alone or consider larger transactions with a partner, said CEO Steve Letwin, who said he recently met with companies and funds in China that showed interest in partnerships. Iamgold is in active discussions about potential transactions and a deal will probably come next year, he said.
“We would look for an acquisition that adds value, that would change our mix so that we have a lower all-in cost,” Letwin, 59, said in an interview yesterday at Bloomberg’s office in Toronto, where Iamgold is based. “We would look at corporates that would do the same thing. Either we use our paper and cash to create a better entity overall, with a smaller player, or we become part of a bigger player.”
Iamgold, which has mines in Burkina Faso, Canada and Suriname, wants to add assets that produce gold at lower cost than its current operations after the metal’s decline squeezed industry profit margins. The miner will look at companies with assets in the Americas and Africa and is interested in projects that are close to or already in production.
Gold declined 0.2 percent to $1,178 an ounce today in New York. The price is down 2 percent this year and remains 39 percent below its 2011 high of $1,923.70 an ounce. The 38-company S&P/TSX Global Gold Sector Index has dropped 53 percent in the past two years.
Iamgold will get $500 million in cash next month after the pending sale of a Canadian mine and could use the money to help pay for a purchase or to develop a project it buys with shares. The company’s cash position will make it more attractive as a buyer or partner, Letwin said.
The miner’s criteria mean the list of potential targets is limited, with “at most” 10 companies that Letwin says he’d be seriously interested in.
https://www.bloomberg.com/news/2014-12-22/iamgold-ceo-predicts-2015-deal-as-industry-consolidates.html