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Iamgold to trim capital spending 30%, says to benefit from cheap oil, high gold prices

Iamgold to trim capital spending 30%, says to benefit from cheap oil, high gold prices

Iamgold (TSE:IMG), a producer of gold in Suriname and Burkina Faso, said it expects its spending will be cut by about 30 percent and output will shrink, but costs will also be lower.

The Toronto-based miner said in a statement today that it’s benefiting from improved efficiency at its mines, lower oil prices, higher gold prices and the strengthened U.S. dollar compared with the Canadian dollar and euro.

The 2015 capital spending budget has been set at between $220 million and $240 million, down from $325 million last year.

Iamgold estimates all-in sustaining costs for 2015 to be in the range of $1,075 and $1.175 per ounce of gold overall. That would be down from a revised 2014 estimate of between $1,100 and $1,120 per ounce of all-in sustaining costs overall, which is below the $1,150 per ounce cost at the low end of its previous guidance.

The miner said it expects 2015 attributable gold production in the range of 820,000 and 860,000 ounces. The midpoint of the range would be slightly below the 844,000 ounces produced in 2014.

“Our strategy is to build on our achievements in 2014 to optimize the performance of our operations and to continue focusing on cost reduction, disciplined capital spending and cash preservation," Steve Letwin, chief executive officer of Iamgold, said in the statement.

Gold futures climbed 9.9 percent in January to $1,301.40 an ounce as of 12:29 p.m. on the Comex in New York, heading for the biggest monthly gain in three years.

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