Iamgold shares plunge as it suspends future dividend payments
TORONTO (miningweekly.com) – Midtier gold miner Iamgold’s TSX-listed shares on Thursday plunged C$0.44 a share as investors punished the stock following news late on Wednesday that it had suspended future dividend payments until further notice.
“While our outlook for gold over the long term is optimistic, in light of the current gold price we are suspending the dividend to preserve our balance sheet. We are on target to reduce costs by $100-million this year and will continue to look for further reductions next year,” president and CEO Steve Letwin said.
The decision to suspend the dividend was expected to allow the company to conserve cash and ensure it maintained the flexibility it needed to take advantage of opportunities when they arose.
Iamgold said it continued to maintain $750-million in undrawn unsecured credit facilities.
Last month, the company reported significantly lower third-quarter revenue and earnings, saying lower prices for gold and higher operating costs were to blame.
The miner said during the three months ended September 30, net earnings attributable to shareholders fell 68% year-on-year to $25.3-million, or $0.07 a share, compared with net earnings of $78-million, or $0.21 a share. Revenue fell 13% to $293.5-million, down from $336.2-million, as lower gold prices were partially offset by a higher volume of sales.
The stock had lost 65% in value from the start of the year and on Thursday closed at C$3.63 apiece.
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