Shares of IAMGOLD (NYSE:IAG) slumped more than 16% by 12:15 p.m. EDT on Thursday. Driving down the gold mining stock were its second-quarter results.
IAMGOLD reported an adjusted net loss of $15.5 million, or $0.03 per share, which was $0.02 per share more than analysts expected. Driving the bigger-than-expected loss was a combination of lower production and higher costs. Overall, the company produced 198,000 ounces of gold, which was 4% below the prior-year period. Gold sales, meanwhile, were lower than production at 187,000 ounces due to inventory timing issues at its Rosebel mine. As a result, the company's all-in sustaining costs (AISC) rose 5% to $1,132 an ounce. That cut into the company's margins, since it only realized $1,314 per ounce of gold sold during the quarter.
The gold miner also said that a temporary suspension of its Rosebel mine would negatively impact its 2019 forecast. As a result, IAMGOLD lowered its gold production guidance range to between 765,000 and 810,000 ounces. Based on that, it also increased its AISC projection to $1,090 to $1,130 an ounce, since it must now spread its expenses across the lower volume.
IAMGOLD's production issues are coming at the wrong time, since gold prices have been on the upswing in recent months and are up double digits for the year. However, instead of delivering strong production results to capture these higher prices, the company's output will come in below expectations, which will weigh on its margins. IAMGOLD's lack of execution is why it's not an ideal gold stock to consider buying, even if it is cheaper after today's sell-off.