STORY BEHIND TD REPORTSTORY BEHIND STORY:
Shareholders, please read carefully the up-dated TD Report. The underlying message is very clear regarding IMG’s Q2 production update, as well as the company announcement that they are reducing production guidance and increasing their capex estimate on the Cote Project. Aside from the production downgrade and ongoing operational rising costs, our worst nightmare is about to unfold, the Cote Project will turn out to be another Westwood failure.
I’ve spent a lifetime in the mining business and this is not my first rodeo in the mine construction business. The TD NEWS is only the tip of the iceberg of what’s really going to unfold in the next few years regarding the Cote Project. Note that this project is estimated at 27 % complete and we are only in the infrastructure phase and the estimated costs are already starting to rise! Wait until, we get into the structural construction phase and you will see costs skyrocket!
Here’s the real back-breaker about the Billion dollars sitting idle in the bank.
Per TD announcement. “IMG remains well funded and has estimated $930-$980mm in remaining spending at Cote. The project is on schedule and is ~27% complete. IAMGOLD remains well-funded, in our view, with available liquidity of approximately $1.5B as of March 31 (cash of $968mm and undrawn credit of $500mm)”.
You can forget about share buybacks, and declaration of dividends. Their operating strategy has never been about growth or supporting the share price. It isn’t going to happen. The picture painted by TD is about the best you can wish for under the circumstance. Be aware of wolves in sheep skin!
TD Investment Conclusion: We are maintaining our BUY recommendation and decreasing our target price to C$6.00 from C$7.50 previously.
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