What happened

With the price of gold inching moderately lower today, it's unsurprising that most gold-oriented stocks are also dipping a bit. But the free fall that shares of IAMGOLD (IAG 1.17%) are experiencing transcends the declining market price of the yellow metal. Instead, there are two catalysts leading investors away from the gold mining stock today: an update on the company's Cote project and a wave of bearish sentiment from analysts.

As of 12:34 p.m. ET, shares of IAMGOLD are down 28%.

So what

Reporting first-quarter 2022 earnings yesterday after the market closed, IAMGOLD shined brightly in several ways, including strong year-over-year growth in revenue, net income, and operating cash flow. But that's not what the market is interested in today, evidently. Instead, investors are clicking the sell button due to the company's update on its Côté Gold project located in Ontario, Canada.

A person sits in the grass and holds a Canadian flag.

Image source: Getty Images.

The Côté Gold project is currently under construction and is expected to commence operations in the second half of 2023. The problem for investors, though, is that management now believes the project will cost more to develop than it had originally planned. In January, IAMGOLD estimated that the remaining cost for developing the project was $710 million to $760 million; however, the projected costs for completing the project have skyrocketed to between $1.2 billion and $1.3 billion. Unsurprisingly, investors aren't happy with the significantly higher price tag.

Following the company's earnings report, several analysts decided to revisit their takes on the stock, according to Thefly.com:

  • Canaccord Genuity downgraded the stock to sell from hold.
  • Credit Suisse downgraded the stock to underperform from neutral and slashed the price target to $2.50 from $3.50.
  • Raymond James downgraded the stock to underperform from market perform and reduced the price target to $2.25 from $3.

Now what

It's no wonder the less-than-glittering update on the Côté Gold project is leading investors to leave their positions today, since the project plays an important role in the company's growth plans for the coming years. Gold bugs who are interested in the gold mining company won't have to wait long for additional insight into the project's future; management plans on providing an additional update before the end of the second quarter.