Mackie Research can't see any reason to own shares in gold miner IAMGOLD (TSE:IAG, NYSE:IAG).
It has released a note on the firm, which operates four mines in three continents, following its third quarter report yesterday, which said the company was making "excellent progress" in further reducing all-in sustaining costs.
For 2015, the firm now guides for all-in sustaining costs to be between $1,075 and $1,175 from $1,050 to $1,150 per ounce.
For the third quarter, all in costs were $1,027 an ounce - compared to $1,076/oz in the second quarter and $1,115/oz in the third quarter of 2014.
Gold output in the quarter was 197,000 ounces, with record production from the Essakane mine in Burkina Faso - up 29% from Q3/14. Overall group sales were 186,000 ounces of the yellow metal.
Revenue was $207.6 million, down 28% from the same period last year, mainly due to lower sales volume at Westwood and Rosebel due to lower production, a lower realised gold price, the closure of Mouska in 2014, and lower royalties following the sale of the Diavik royalty asset.
The net loss was $85.0 million ($0.22 per share), up $0.5 million from the same period last year.
Mackie analysts had this to say on the statement: "An absence of any initiative other than to “protect” cash does not generate any excitement or potential for an equity re-rating.
"While there is much attention paid to a working capital position that is US$800 million, we also note there is US$930 million of debt and long-term provisions.
"With a high all-in-sustaining-cost (AISC) of US$1,027/oz, there is little working margin at current gold prices, and operations are slowly consuming the balance sheet."
It also reckons the financials were "messy".
EPS was a loss of US$0.22, and even if losses on oil hedges are thrown out, the EPS loss was still US$0.12, says analyst Barry Allan.
Mackie had expected a loss of US$0.03.
IAMGOLD shares are today down 6.52% in Toronto at C$2.15.
Mackie rates the shares 'hold' targeting C$2.40.