Iamgold Corp., a producer of gold in Suriname and Burkina Faso, dropped the most in two months after forecasting higher operating costs for 2013 as it mines lower-grade ore and starts up its Westwood project.
Iamgold fell 15 percent to C$9.22 at the close in Toronto, the most since Nov. 14. The shares have declined 19 percent this year.
Total so-called cash costs will be $850 to $925 an ounce, the Toronto-based company said in a statement yesterday after the close of regular trading. For 2012, costs were probably within 3 percent of the upper end of an Aug. 13 forecast of $670 to $695, it said.
The company’s estimated net present value was cut by about 10 percent because of higher costs, David Haughton, an analyst at BMO Capital Markets in Toronto, said in a note yesterday. Haughton lowered his target price to $14 from $16 and revised his recommendation to hold from buy. Steven Butler, an analyst at Canaccord Financial Inc. in Toronto, reduced his target to $12.75 from $15.25 and cut his rating to hold from buy.
Iamgold also said 2013 attributable gold production will be 875,000 ounces to 950,000 ounces, compared with 830,000 ounces last year. Gold output will grow by about 80 percent over the next five years to 1.4 million to 1.6 million ounces by 2017, the company said.
Project feasibility studies at the Rosebel mine in Suriname and Niobec, Iamgold’s niobium operation in Canada, “may improve the outlook for the company,” Haughton said.
Iamgold also published an updated resource update for its Cote gold project in northern Ontario, which the company acquired when it bought bought Trelawney Mining and Exploration Inc. last year. Indicated resources at the project more than doubled, the company said.