Iamgold mining operation in Rouyn Que.John Hryniuk
Iamgold Corp., under pressure to cut costs amid a slump in gold prices, reported a third-quarter loss due to higher operating costs and taxes.
The Canadian company, one of the world's highest-cost producers, said it lost $72.5-million or 19 cents a share for the three months ended Sept. 30. That compared to a profit of $25.3-million or 7 cents last year.
The company said it spent $1,115 (U.S.) to produce an ounce of gold in the three months ended September compared with nearly $1,200 at the beginning of this year.
Iamgold is aiming to get costs below $1,100 an ounce – an objective that has become critical with the precious metal falling below $1,200.
This week, Iamgold slashed its executive team and disbanded its project development unit to save money.
The company, which has mines in Canada, West Africa and South America, is aiming to use $500-million (Canadian) from an asset sale to reduce overall costs.
One of its plans is to buy a lower-cost gold mine, which would allow Iamgold to idle or slowdown some of its more expensive operations. But that may not be easy to do. Low-cost mines have become prized-assets for gold producers. Iamgold would likely have to pay a hefty premium to acquire the better-performing mines.
The company said it was reduced capital expenditures by about 10 per cent to about $360-million. It also cut the top end of its production forecast by 50,000 ounces to 850,000 for the year. Iamgold maintained its previous production costs for the year to between $1,150 and $1,250 an ounce.