Dallas, Texas 08/06/2014 (FINANCIALSTRENDS) – IAMGOLD Corp (USA) (NYSE:IAG) the Toronto-based precious metal miner has announced on July 31, that it will begin the commercial production at two of its Canadian sites. The first site to begin production would be the Westwood Project to be followed by Abitibi Gold Belt off Quebec.
For IAMGOLD Corp (USA) (NYSE:IAG) the commercial production at these respective sites is expected to add additional stockpile, estimated to be at 200,000 ounces in gold alone. This would technically be about 25% of the company’s total. The reasons for the localized production would offset the current risks of production in geopolitically risky sites. However, the localized production target expressed would be much lesser than the average production costs.
Promising Gold Play
Analysts and investor community remain positive on this gold miner as the read the strengths of the Canadian mining sites- Westwood and Niobec to better value to the company.
IAMGOLD Corp (USA) (NYSE:IAG) expects that the commencement of production in these two sites will minimize its production risks and off-set the product costs as well. It also noted that much of the production would continue to be augmented by production from its other sites, namely Burkino Faso as well as Suriname. But it continues to ride a few hardships as its expenses across the company are high and it continues to be saddled with debt of $640 million. The pressures have also led to dividend cuts, following a policy of money saved for management of capital needs. The paring of dividends is expected to move the Westwood production phase forward.
Westwood Boost To IMAG
Under current estimates, the production of gold at Westwood would be profitable as this site is viewed to be a long-life, but low cost production mine. By localizing production IMAG should see cash-flow generation to the tune of $70 million in operating cash-flow each year for the next two decades.