Dallas, Texas 01/02/2014 (FINANCIALSTRENDS) – IAMGOLD Corp (USA) (NYSE:IAG) the small cap Canadian gold mining firm with its HQ in Toronto has been struggling to sustain operations without having to eat into its profitability arther. Readers should note that this $1.25 billion market capped gold mining firm has managed to bring in net income of $92.4 million from operations in the trailing 12 months from sales worth $1.37 billion.
The fact that the small capped gold producer has managed to post profits in spite of the prevailing downcast economic conditions in the international gold business is credible. This is because a lot of bigger sized gold mining firms with larger market caps and exposure to international markets have been struggling and have slipped into the red with respect to their profitability. In fact, bigger mining firms have resorted to cut down in work force and a drastic cut in the projected capital expenditure to tide over the situation.
Unlike its peers, IAMGOLD Corp (USA) (NYSE:IAG) has taken a more debatable approach to beef up its bottom line. In early December, management disclosed that it would be temporarily halting its dividend payout timetable as a direct result of the deceleration seen in the global gold business.
As per the previously announced dividend plan, share holders were expected to receive 25 cents per share dividend cumulatively for the year. For the reminder of the fiscal, this no dividend move, means the gold firm would be saving up close to $94 million of operating cash.
While investors in the stock might grumble and wring their hands in frustration, analysts are of the opinion that IAMGOLD Corp (USA) (NYSE:IAG) had not too much elbow room to manuver to sustain operations without impacting its long term financial viability at these depressed gold rates. Readers should note that in the last week of December, the price of gold per ounce had recorded the lowest levels in a prior 36 months time frame.