New Maiden Resource Could Lift Value of Gold Miner

(MENAFN- Investors Ideas) August 29, 2017 (Investorideas.com Newswire) Analyst Andrew Kaip with BMO Capital Markets upgraded his rating and target price on this Canadian gold company after modeling the impact of an upcoming estimated resource on its overall production.

An Aug. 22 research report by BMO Capital Markets reported that "intends to complete an NI 43-101 compliant resource estimate at the [Saramacca] project in September 2017," after having released "a number of encouraging results" from drilling there, Kaip indicated.

BMO expects the numbers to be conservative, according to the report. "We are of the view that the resource, when announced, will be higher grade and potentially larger than the company's initial estimate, which we believe, despite the shares being up about 50% year to date, is not being fully reflected," wrote Kaip.

Upon modeling Saramacca as "a future contributor to Rosebel's production," BMO's calculations revealed possible upside for IAMGOLD, Kaip said. "Based on our initial development capital scenario of $75M and assuming 2.67 g/t gold across a 1.15 Moz resource, we see a 20% lift to our net asset value (NAV)/share estimate for IAG," he detailed.

BMO also expects the project to have "a declining all-in sustaining cost profile through 2020," Kaip said, which "will mean additional cash-generative ability for IAG on a corporate level" and "may support additional exploration at the Saramacca deposit, which remains open along strike and at depth."

Further, IAMGOLD is trading below its peers, Kaip pointed out. "Our NAV/share estimate for the company has increased by about 20%, to $5.48, from $4.65. As a result, price:NAV multiples for IAG have declined from 1.3x to 1.1x, placing it well below the average for both the large and medium producers of 2.1x and 1.5x, respectively," he described.

Consequently, BMO revised its stance on the mining company. "On the back of the increase to our NAV/share estimate, we are upgrading the shares of IAG to Outperform and increasing our target price to $7.50 (from $6)," stated Kaip.

The analyst reiterated the gold miner's recent history with the Saramacca acreage, which, he noted, "is sitting ~30 km southwest of the Rosebel mill and immediately southeast of the Sarafina property" in Suriname.

IAMGOLD, which entered into an agreement to acquire an interest in Saramacca in mid-2016, "made an initial payment of $0.2M," Kaip stated. It also paid "$10M on completion of due diligence" and one of three "tranches of 3.125M in common shares." The remaining share payments are due in December 2017 and December 2018. The Suriname government "holds a 30% interest in the joint venture," he added.

Kaip explained that BMO anticipates Saramacca will "serve as an important satellite with a short hauling distance and the potential to add higher-grade material at Rosebel and extend the mine life using existing infrastructure."

On Sept. 12, IAMGOLD will hold a tour of its Saramacca property and Rosebel mill, Kaip reported.

BMO Capital has an Outperform rating and $7.50 per share target price on IAMGOLD, whose stock is currently trading at roughly $5.76 per share.

Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, securities of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal . This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact each company directly regarding content and press release questions. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. More disclaimer info:

Additional info regarding BC Residents and global Investors: Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: . Global investors must adhere to regulations of each country.

MENAFN3108201701420000ID1095796201

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.