Iamgold: Dividend Suspension + Falling Gold = Big Plunge — Stocks To Watch…

17 Мар 2015 | Author: | Комментарии к записи Iamgold: Dividend Suspension + Falling Gold = Big Plunge — Stocks To Watch… отключены
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Iamgold: Dividend Suspension + Gold = Big Plunge

By Ben Levisohn

out below, gold prospectors– (IAG ) is tumbling.

Graeme New York Times/Redux

Shares of have plunged 8.1% to this morning at 9:48 easily outpacing the Market Gold Miners ETF (GDX ) decline, Barrick Gold’s (ABX ) drop and Newmont Mining’s ) 2.8% fall. Clearly something is afoot than the drop in the of gold–the SPDR Gold ETF (GLD ) has dropped 2.1% morning.

And that something is the suspension of dividend. From Iamgold’s release :

IAMGOLD Corporation or the “Company”) announced today it has suspended future dividend until further notice.

President and CEO, Steve said, “While our outlook for over the long term is in light of the current gold we are suspending the dividend to preserve our sheet. We are on target to reduce by $100 million this and will continue to look for reductions next year. decision to suspend the dividend us to conserve cash and ensure we the flexibility we need to take

of opportunities when they

Like a miner 49er pyrite, investors should have known better to expect Iamgold to be able to its dividend. Goldman Sachs Andrew Quail and  Pandey explain:

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This taken by IAMGOLD doesn’t us given the company has the highest sustaining cash cost in our universe (+US$1,200/oz). On our forecasts, we the company will not generate cash flows due to the consistent low margins at the majority of its assets. We IAMGOLD has enough liquidity to to operate its mines, but we would that the next step for the would be to optimize its portfolio by closing cash negative or monetizing its niobium asset.

The question now: Will gold miners be forced to suit? Barrick cut its dividend in while Newmont slashed its in July. But ceasing the dividend would be a very big deal–and a resort.

Iamgold, Newmont and the Market Gold Miners ETF are all trading their 52-week lows.

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