Iamgold, the owners of Mupane Mine outside Francistown, said it continued to benefit from high gold prices as it reported a record first quarter earnings for the new year, compared to the same period in 2010.
The gold miner saw its net earnings growing to $162.3 million ($0.41 per share), an increase of $102.1 million compared to the first quarter of 2010 while operating cash flow was $205.8 million ($0.55 per share, representing an increase of 177 percent from the first quarter of 2010).
The Chief Executive Officer of the Botswana Stock Exchange (BSE) quoted miner, Steve Letwin, said the company’s strong first quarter results reflect the company’ focused strategy to maximise the value of mines that it operates.
“Attributable gold production was up 41 percent year-over-year, driven chiefly by the inclusion of Essakane, along with higher recoveries at Rosebel,” Letwin said.
“We continue to benefit from higher gold prices and are implementing various initiatives to reduce our cash costs,” he added.
The company recorded revenues of $432.5 million, a difference of up to 80 percent from $240.1 million in the first quarter of 2010.
The results showed that the financial position was strengthened with cash, cash equivalents and gold bullion (at market) of $621.4 million and availability under the credit facility of $350.0 million at March 31, 2011.
For Iamgold’s operations and joint ventures, the number of ounces of gold sold increased by 57 percent while the average realised gold price rose by 26 percent compared to the first quarter of 2010.
The company’s financial position will be further boosted by the sale of one of its asset following the April announcement over the agreement to sell its 18.9 percent interest in the Tarkwa and Damang gold mines in Ghana, West Africa, to Gold Fields Limited for $667 million in cash.
The deal is expected to close no later than July 31, 2011.
“On our strategic agenda, we have also taken the first two steps to enhance shareholder value. The sale of our minority interests in Ghana for $667 million, as announced in April, is aligned with our overarching financial objective to invest in assets where we can maximise return on capital,” said Letwin.
“The second step is to execute our recently announced plan to realise the value of Niobec and examine opportunities to monetise the value of the asset,” he added.
The company revealed that its exploration efforts remain focused in West Africa, select countries of South America, and the province of Quebec in Canada.
It added that with a strategic mandate for organic growth, the company has numerous projects already underway and continues to pursue additional advanced exploration joint venture or acquisition opportunities that will provide the foundation for future growth.
In the first quarter of 2011, Iamgold incurred $18.9 million on exploration projects, a 17 percent increase from $16.2 million in the first quarter of 2010.