11.24
RBC CM is increasing its target multiples for IAMGOLD after a solid Q3/09. Backing out non-cash and extra-ordinary items, operating EPS remained $0.18/sh, beating both RBC CM’ $0.07/sh estimate and consensus at $0.10/sh. CFPS of $0.28/sh was also better than RBC CM’ $0.18/sh estimate and consensus at $0.20/sh. IAMGOLD produced of 244Koz of gold, higher than RBC CM’ 222Koz estimate, and at cash costs of $457/oz were better than RBC CM’ $469/oz estimate. Higher gold output from the Rosebel mine in Suriname was the main cause for the variance with RBC CM’ estimates. The company raised guidance by 30Koz to 940-950Koz of gold output at the same cash cost of $460-470/oz (previously 910-920Koz gold output). With solid cash flows from operations, and a strong balance sheet, RBC CM believes IAMGOLD shares can achieve higher trading multiples. It is increasing its target multiples from 1.5 to 1.75x NAV and from 15 to 17.5x CF. With the current growth phase not expected to begin delivering results until H1/11, RBC CM thinks it unlikely that IAMGOLD shares will be able to achieve premium multiples to the peer group of Tier II gold producers in the short term.
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